Oregon corporate governance program presses companies to bolster long-term share performance through sustainable business practices
Pressure by major investors including the Oregon State Treasury has achieved a landmark objective in the effort to improve reporting transparency on climate-related risks and opportunities, Treasurer Tobias Read announced.
In the vote, 62 percent of shareholders of ExxonMobil approved a resolution at its annual meeting in Dallas, Texas, that calls on company executives to assess and disclose how management’s response to climate change will impact the company’s bottom line. Executives actively opposed the proposal, the passage of which now marks the first successful shareholder proposal regarding climate change reporting transparency at the global oil and gas giant.
“This is a win for Oregonians and transparency will help to better manage our vital public portfolios for more sustainable long-term performance,” said Treasurer Read, who is the custodian of state funds and a member of the Oregon Investment Council. “Investors need to know how companies are managing for the very real risks and opportunities presented by climate change. This is a pragmatic and principled step in the right direction.”
The Oregon Treasury oversees the daily investment of $94 billion in assets including the State Accident Insurance Fund and the Oregon Public Employees Retirement Fund, the latter of which is managed on behalf of the state’s roughly 350,000 public sector workers and retirees.
As part of its regular investment activities, Treasury monitors and manages a variety of operating, investment and compliance risks. Primary factors that impact the long-term value and sustainability of Oregon’s trust fund portfolio include the way companies are governed on behalf of shareholders and the effectiveness of regulations to ensure transparency and accountability in the financial marketplace.
The ExxonMobil vote underscores how Treasury’s corporate governance program, which oversees proxy voting for Oregon public funds, is making a positive difference. As a fiduciary, Oregon Treasury pushes executives and boards of directors to protect shareholder rights and bolster long-term value on behalf of beneficiaries, via proxy votes, direct engagements and securities litigation efforts.
The proxy vote follows a similar shareholder victory at Occidental Petroleum earlier this year as more investors push oil and gas companies and electric utilities for enhanced disclosure. Oregon public funds consistently vote in favor of these and related transparency proposals.
As of March 31, the Public Employees Retirement Fund held 1,333,000 shares of ExxonMobil common stock with a total value of $109.3 million.
The successful Exxon vote requests that the company publish an annual assessment of the expected impacts on its reserves and resources from changes in technology and climate policy, plus a “portfolio resilience assessment” that considers reduced oil demand.
The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs like the Oregon 529 Savings Network and OregonSaves. Treasury oversees public investment, banking, and debt management services. State investment policies are set by the Oregon Investment Council. Treasury also promotes public outreach and education to help Oregonians learn strategies to save money and make smart financial choices.
