ExxonMobil pump jack array in Midland, Texas.
ExxonMobil has made headlines again this year for its efforts to curb climate change, doubling down on its lawsuit against two investors for introducing a climate change shareholder proposal to reduce pollution.
Although the resolution was withdrawn ahead of the company’s annual shareholder meeting in May, Exxon is still moving forward with the lawsuit, confirming its insidious intent to further delay and deceive.
ExxonMobil is proving that engaging with fossil fuel shareholders is not only a futile exercise, but perhaps a liability as well. Big Oil is now trying to continue business as usual at its peril, without caring what its shareholders think.
Communities around the world, including here in California, experience fires, floods, heat, and smoke year-round. Record rainfall caused flooding and landslides in Los Angeles, causing part of an iconic coastal road near Big Sur to slide into the ocean. This is exactly why California is suing Exxon, Chevron, and others for climate damage and fraud.
My pension fund, the California Public Employees’ Retirement System, owns $1 billion in ExxonMobil stock. As a CalPERS beneficiary, I am disappointed that my pension is not only fueling the climate crisis, but is not maximizing its benefits.
CalPERS claims that the fund’s influence could be further increased through shareholder engagement, but what does it need to prove? there is nothing. Exxon’s suit is a real slap in the face.
At a board meeting in March, more than 100 community and union members condemned Exxon and called on CalPERS to reduce its $9.4 billion holdings in the top 200 fossil fuel companies.
After years of playing catch-up, Calpers now admits its relationship with Big Oil isn’t working and is considering exiting Exxon. “There needs to be a plan, and that plan needs to include whether or not to keep these people in the portfolio,” CalPERS Chairman Teresa Taylor said, referring to Exxon.
But while CalPERS is making small steps in the right direction, this gradualism cannot overcome fires and floods.
A broad and diverse intergenerational movement of workers, teachers, students, seniors, and unions supports Senate Bill 252, a bill that would protect California’s pensions by establishing a fossil fuel divestment schedule. We rallied together for the sake of The bill already passed the Senate last year and is gaining more momentum than ever. It is currently under deliberation in Congress.
Divorcing Exxon and adopting SB 252 are essential, interconnected actions to protect frontline communities, California pensions, and ultimately our planet. Some fund managers have said shareholder pressure is unlikely to bear fruit when it comes to changing a company’s core business, as Exxon has repeatedly failed to do over the past decade.
A 2023 University of Waterloo study found that CalPERS and CalSTRS lost nearly $10 billion between 2012 and 2022 by not divesting, with CalPERS and CalSTRS each losing an additional $119 billion. It continues the trend of the 2019 Corporate Knights report, which revealed that the company would have generated $5.5 billion and $5.5 billion. If I had sold it 10 years earlier, it would have been by 2019. This equates to $6,072 per CalPERS member and $5,752 per CalSTRS member over 10 years.
As the largest pension fund in the country and the sixth largest in the world, CalPERS is leading the transition and divesting from fossil fuels is not only a fiduciary responsibility, it will help protect the planet for our current and future members. You can send a message.
That would make me a very proud CalPERS beneficiary.
Ruth Holton Hodson has been a consumer and health advocate for 35 years. Before he retired, he worked in the state treasurer and comptroller’s office. She wrote this column for her CalMatters.
