Exxon lobby exit boosts investor climate activism

DALLAS: Exxon Mobil's decision to dump its membership in a conservative political group will energize its investors' climate activism.

The $350 billion oil giant confirmed to Reuters that it has quit the American Legislative Exchange Council (ALEC), which wants to ease regulation of greenhouse gases.

Exxon's move will make it harder to fend off shareholders pushing it to tackle how climate change will hit earnings. California's progress on cutting carbon emissions suggests changing habits are a growing risk to its business.

ALEC late last year encouraged states to push the Environmental Protection Agency to rescind an Obama-era determination that climate change requires regulation, according to Bloomberg, whose story noted that Exxon disagreed.

The Irving, Texas-based company's decision is hardly altruistic. It is a laggard in ditching ALEC: BP, Royal Dutch Shell and Ford Motor already abandoned the group. Exxon didn't have much of a choice either.

The company just won a lawsuit in California in which it agreed that fossil fuels cause environmental damage.

It is still fighting lawsuits elsewhere, though, and last year its own shareholders passed a resolution demanding more information about how its business was going to adapt to a world pumping out fewer carbon emissions.

Meanwhile broader changes are setting in. This week, the California Air Resources Board released data that said the state is cutting greenhouse-gas emissions faster than planned, hitting its emissions target four years early.

Meanwhile, more Americans think there is solid evidence of global warming than at any time since 2008, according to a recent report from the National Surveys on Energy and Environment.

At Exxon's most recent annual meeting, shareholders tempered their pressure on the company, voting down several measures including one that would have required the company to disclose more about its lobbying efforts.

The company's changing legal and lobbying climate suggests it's a good time for them to reignite the fight.