CalPERS reinforces commitment to shareholder engagement

July 19th, 2024

The California Public Employees' Retirement System (CalPERS) has reasserted the importance of shareholder rights following ExxonMobil’s AGM.

Speaking at the Investment Diversity Exchange conference, CalPERS’ CEO Marcie Frost said its rift with ExxonMobil presented an opportunity to be “courageous”, Pensions and Investments reports.

She said that the firm is dedicated to investing in “brown assets that have a commitment to green” and that engaging with those companies is crucial to their strategy.

She also noted that this shareholder engagement would require access to reliable data on a company’s transition plans and their progress in achieving their goals.

She said: “We need to understand how an Exxon, a Chevron and Alaska Airlines, how are they looking at this? One: Do they make a commitment? Two: Do they have the ability to measure it? And three: Will they be transparent about it with us?”

The pensions system, which is the largest public pension fund in the US, voted against all sitting members of ExxonMobil’s board of directors at the oil giant’s AGM in May.

The vote was in response to ExxonMobil’s lawsuit against Arjuna Capital over its proposal calling for an acceleration in the company’s emissions reduction plans.

The group withdrew its proposal after ExxonMobil filed the lawsuit, but the company pushed ahead with its legal action, arguing that the shareholder proposal and proxy voting process has become “ripe for abuse by activists”.

The lawsuit was eventually dismissed by a federal judge, who concluded the claim was moot as the proposal was no longer being considered.

CalPERS, and other major shareholders in the company, had urged ExxonMobil to drop the lawsuit before it was dismissed, warning that it represented a threat to shareholder democracy more widely.

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