Welcome to the Climate Nexus finance newsletter – a regular update that looks at the big stories and players at the intersection of climate change, finance, regulation, and energy, with tips for the week ahead.
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Exxon goes mask off
ExxonMobil's latest proxy statement reads more like a battle cry against its own shareholders than a corporate disclosure document. The oil giant is drawing a line in the sand, clearly distinguishing between "our [ExxonMobil's] investors" and what it sees as the adversarial "other shareholders." It's a bold move, spotlighting its $21 million spend over the past decade to fight shareholder proposals, which it claims misuse the proxy process for activist agendas. (Quick reminder that $21 million over the decade is still less than the $36.9 million CEO Darren Woods earned last year alone.)
This year’s statement is particularly fiery, laying out the rationale behind their lawsuit against Arjuna Capital and Follow This, and labeling the efforts of the Interfaith Center on Corporate Responsibility (ICCR), Proxy Impact, and As You Sow to hold executives accountable as part of an "ongoing abuse" of the system.
Eli Kasargod-Staub from Majority Action didn't mince words, saying ExxonMobil’s proxy statement doubles down on "the company’s egregious mismanagement of climate risk." As the May 29th shareholder meeting approaches, all eyes are on ExxonMobil. Will shareholder pushback prompt a major board shift, or will ExxonMobil's fortress hold against the growing pressure for ESG reform?
Wonk party over in DC this week
The World Bank and International Monetary Fund (IMF) are gathering in Washington, D.C. this week, and leaders from around the world will be judged on how they handle two particularly poignant issues: debt and climate. Against the backdrop of a “historical reversal” of development trends for the world’s poorest countries, international pressure to address record-setting debt levels is escalating. Even Larry Summers and NK Singh in their surprisingly scathing op-ed call out international financial institutions and assistance agencies for withdrawing $40 billion last year while net concessional assistance was a paltry $2 billion. “Financial defaults have been avoided only by the moral default of slashing health and education spending,” they write. World Bank President Ajay Banja will also use the spring meetings to generate support for replenishment of the International Development Association, the bank’s concessional lending arm for least economically developed countries which he has referred to as the ”single most important thing in the World Bank.”
Interested in learning more about the significance of the debt-climate trap and the role of public finance? Check out these recent reports:
And if you’re in DC this week, be sure to keep your eyes out for these actions around the city!
B.R.E.A.M (BlackRock rules everything around me)
We know we have been covering this financial megagiant a fair bit recently, but BlackRock just got even bigger, and that means even bigger problems. Thanks to a strong market, the world’s largest asset manager topped the $10.5 trillion mark and posted a 36% profit last quarter. You’ll need to take off CEO Larry Fink’s dual-roll glasses to see why this should be a concern for the rest of us — the asset manager will wield even more power and influence.
It would be one thing if BlackRock was a benevolent multi-trillion-dollar firm, which does not exist, but Fink’s recent dance with Texas Lieutenant Governor Dan Patrick points to the CEO’s and firm’s unabashed love of money over everything else. Instead of rooting out greenwashing on its own books, doubling down on clean energy, ending deforestation, or simply standing up to political anti-ESG bullying, CEO Larry Fink is doing the exact opposite by appeasing rightwing climate-denying politicians. Fink even went as far as attempting to coin a new term to avoid political backlash: “Transition Investing.” It’s certainly a cute attempt to keep the deniers at bay, but something tells us it won’t.
Upsetting Offsets
Science Based Targets initiative (SBTi), the world’s most recognized verifier of corporate climate targets, recently came under internal and external fire for allowing companies to meet their Scope 3 climate targets with carbon offsets. Angry staff members called for the resignation of its CEO and board members for making a unilateral decision without consulting staff or its independent technical council, and severalotherNGOs released statements condemning SBTi’s decision. SBTi has since updated its initial statement, clarifying that no change has been made to its current standards and that any change will follow established procedures.
Just a month earlier, SBTi removed more than 200 companies from its list of vetted corporate climate commitments for not submitting concrete net-zero plans. So what prompted this recent change in integrity? According to Bloomberg, the $10 billion Bezos Earth Fund — one of SBTi’s largest funders — may have had a hand in derailing the organization’s stance. At Bezos Earth Fund-hosted meetings last month, SBTi representatives faced implicit and explicit requests from prominent carbon market and lobbying groups to weaken carbon offset standards. No matter how you package them, carbon credits are “scientifically, socially, and from a climate perspective, a hoax,” according to Stephan Singer, who recently resigned from his position on SBTi’s technical advisory group.