MN sold all of its clients’ investments in oil and gas company ExxonMobil. The company’s strategy is not in line with the objectives of the Paris Agreement. The decision follows an intensive dialogue with ExxonMobil. The conversations have not given the confidence that ExxonMobil will adjust the climate strategy. The company is not considering to set medium- and long-term reduction targets for their CO2 emissions. For this reason, the investments of MN’s clients in ExxonMobil have been divested; the shares and corporate bonds have been sold. Pensioenfonds PME sold its investments in the company already in 2018 due to the lack of progress in the engagement.
In dialogue since 2017
MN implements a climate strategy for PMT, PME and other clients. The corporate engagement program has an important place in that strategy. MN has been in dialogue with the company about the it’s climate strategy since 2017. ExxonMobil has indicated, despite a shareholder resolution tabled to that effect, that they will not set long-term reduction targets to reduce their emissions (scope 1 and 2). Other points of concern are that ExxonMobil does not have sufficient insight into climate risks and that the management board is not sufficiently involved in the subject. Furthermore, ExxonMobil reports insufficiently on climate risks, making it difficult to assess where the company stands in the energy transition.
The dialogue with ExxonMobil is an example of the way MN and its clients fulfill the role of being an active shareholder. As a long term investor we engage company’s; encouraging them to adopt a sustainable business strategy, including in the form of an engagement program. The focus is on the subjects that pose the greatest risk and that are important to the beneficiaries: Good corporate governance, Climate and Social.
If an engagement program with a company does not lead to sufficient results, it can be decided to divest. Divestment – as in this case by divesting the shares and corporate bonds – is therefore the last resort.