gas-863196_960_720With American federal climate policy in retreat after President Trump announced his intention for the US to withdraw from the Paris Accords, where will climate change activists focus their efforts? While recent announcements coming from local politicians indicate that cities from Portland to Pittsburgh, plus many states, are intent on moving forward with strategies to decarbonize, corporations form a key sector whose willingness to embrace strategies to avoid climate risk matters greatly.

Do shareholder activists play a critical role in forcing large businesses, especially those firms holding fossil fuel assets, to acknowledge risks and adopt strategies that directly address climate change? Or are US energy corporations – and their boards of directors – already primed to move forward aggressively to reveal their liability exposure to carbon policies and to state their support for adoption of green policies, such as a carbon tax, even in the face of the federal government’s efforts to roll back policies addressing climate change?

Shareholders have always had the option to express their views about sustainability by publicly divesting themselves of stocks they find objectionable, a movement often led initially by a handful of small colleges and then taken up by larger institutional investors. While carbon-related divestiture efforts continue to gain ground, there also appears to be increasingly successful efforts made by shareholder activists to directly influence the strategy of corporations with large portfolios of carbon-emitting assets through motions related to carbon risk and climate change. For example, at the ExxonMobil annual meeting on May 31, nearly two-thirds of shareholders voted in favor of a resolution forcing the firm to disclose the financial impact of carbon risk on its business. Other energy companies who have seen similar resolutions receive majority support include Occidental Petroleum and the utility PPL