A little more than one-third of ExxonMobil Corp. shareholders voted May 25 to urge the company to closely study its financial risks if society makes rapid moves away from single-use plastics and virgin resin.
The ExxonMobil vote, which was opposed by the company, comes two weeks after a similar resolution at Philipps 66's annual meeting, where 50.4 percent of shareholders favored a plan from green investors to look at risks it faced from stranded plastics production assets.
"What investors are looking for is robust and quantitative disclosure of a company's exposure to the single-use plastics supply chain and how the company can fundamentally change its business model for plastics production," said Joshua Romo, energy and plastics associate at the shareholder advocacy group As You Sow, which brought the resolution.
The issue could be particularly important for ExxonMobil because it's the world's largest maker of virgin plastic intended for single-use applications, AYS said, quoting an analysis from the Minderoo Foundation.
AYS said 37.4 percent of ExxonMobil shareholders voted for its resolution.
In comments to shareholders ahead of the May 25 annual meeting, however, ExxonMobil urged investors to reject the AYS resolution, saying that the company shares concerns about plastic waste and is taking action, including investments in chemical recycling facilities in the United States and France, and plans to build capacity to process about 500,000 metric tons of plastic waste per year by 2026.
As well, it said that it's a founding member of the Alliance to End Plastics Waste, a $1.5 billion industry effort to improve waste management in the developing world.
And it said that plastics demand is expected to continue to grow worldwide, including a push to meet needs for lower-carbon technologies like electric cars and green power, as well as help achieve United Nations Sustainable Development Goals in areas like clean drinking water.
ExxonMobil quoted an International Energy Agency analysis that said that even under a net zero emissions by 2050 strategy, chemical demand will grow by 30 percent from 2020, and plastics will account for half that new demand.
But the green investors argued that the resin industry is at risk because it's not moving fast enough to use recycled materials to meet that demand, and faces financial risks if it doesn't move faster.
AYS said that ExxonMobil's planned investment in new virgin plastic production is eight times its target for recycled resins, and it said those recycling investments would displace at most five percent of the company's virgin plastics production by 2026.
AYS pointed to a report from the Pew Charitable Trust that said ocean plastic pollution can be reduced by 80 percent by 2040 if recycled plastic demand triples and demand for virgin plastic drops by one-third.
"These high votes with Exxon and Phillips 66 send a loud, clear message to the industry to move swiftly to develop a blueprint for an expeditious transition away from virgin plastic and less production of throwaway plastics overall," said Conrad MacKerron, senior vice president at AYS.