Exxon Mobil Corporation | Petrochemical risks: single-use plastics at Exxon Mobil Corporation

Status
25.30% votes in favour
AGM date
Previous AGM date
Proposal number
13
Resolution details
Company ticker
XOM
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Waste and pollution
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Energy
Company HQ country
United States
Resolved clause
Shareholders request the Board issue an audited report addressing, at reasonable cost and omitting proprietary information, whether and how a significant reduction in virgin plastic demand, as set forth in Breaking the Plastic Wave’s System Change Scenario for reducing ocean plastic pollution, would affect the Company’s financial position and assumptions underlying its financial statements.
Whereas clause
Plastic, with a lifecycle social cost at least ten times higher than its market price, actively threatens the world’s oceans, wildlife, and public health.[1] Concern about the growing scale and impact of global plastic pollution has elevated the issue to crisis levels.[2] Of particular concern are single-use plastics (SUPs)[3] which make up the largest component of the 11 million metric tons of plastic ending up in waterways annually.[4] Without drastic action, this amount could triple by 2040.[5]
In response to the plastic pollution crisis, countries and major packaging brands are beginning to drive reductions in virgin plastic use.[6],[7]
Several studies demonstrate that a significant absolute reduction in virgin plastic demand is critical to curbing the flow of plastic into oceans.[8] One of the most robust reduction pathways is presented in the widely-respected report, Breaking the Plastic Wave, which found that plastic leakage into the ocean can be feasibly reduced by 80% under its System Change Scenario (SCS), which is based on a significant absolute reduction of virgin SUPs.[9],[10]
BP has recognized the potential disruption that global SUP reductions could have on the oil industry in its 2019 Outlook, where it found a global SUP ban by 2040 would reduce oil demand growth by 60%.[11]
The future under the SCS – one built on recycled plastics and circular business models – looks drastically different than today’s linear take-make-waste production model. Several implications of the SCS, including a one-third absolute demand reduction (mostly of virgin SUPs) and immediate reduction of new investment in virgin production, are at odds with Exxon’s planned investments.[12]
Exxon was recently identified as the largest global producer of SUP-bound polymers (5.9 million metric tons in 2019, an estimated 50% of its total polymer production) and exposed for lobbying against plastic pollution laws.[13],[14] While Exxon states it is acting to “address plastic waste,” it fails to meaningfully address the potential for regulatory restrictions and/or significant disruption in demand for virgin plastic, both of which could result in stranded assets.
Supporting statement
• Quantification (in tons and/or as a percentage of the total) of the Company’s polymer production for SUP markets;
• A summary or list of the Company’s existing and planned investments that may be materially impacted by the SCS;
• Plans or goals to shift Exxon’s business model from virgin to recycled plastics and use of recycling technologies that are cost-effective, process and energy efficient, and environmentally sound.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Dana Investment Advisors For
CoreCommodity Management, LLC For
Anima Sgr For As quantification of the company’s polymer production for single-use plastics markets, a summary of the company’s investments that could be materially impacted by the SCS or a similar low-plastics-demand scenario, and plans or goals to shift its business model to recycled plastics such as through recycling technologies could help shareholders assess the company’s strategy related to plastics production and how resilient the company’s plans are to future regulations and changes in consumer preferences.
VidaCaixa For
Irish Life Investment Managers For
Rothschild & co Asset Management For

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.