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Mutual Funds are changing their tune on climate change, but what about lobbying disclosure?

Yesterday, in an historic showing of support, shareholders voted in favor of a resolution at ExxonMobil calling on the company to disclose the impacts of global climate change policies on its business. The proposal received 62.3 percent of the vote with the help of some important stakeholders: mutual funds. However, that support unfortunately did not also extend to the proposal that would have required Exxon to disclose its lobbying activity.

The Washington Post has reported that BlackRock voted in favor of the climate change disclosure proposal and the Post’s sources suspect that Vanguard and State Street likely followed suit. Exxon marks the third company this proxy season to receive majority support for this type of climate impacts disclosure shareholder proposal: the proposal passed at Occidental Petroleum and the electric utility PPL Corporation in May. BlackRock confirmed that it supported the proposal at Occidental and Vanguard is believed to have also supported it.

The historic showing of support for the climate change impacts disclosure proposal indicates a seismic proxy voting shift for these mutual fund giants who have not supported this type of resolution in the past, and this policy shift should be celebrated. However, their converse lack of support for the lobbying disclosure proposal at Exxon identifies a blatant inconsistency in their voting habits. If these funds believe that climate risks should be disclosed to shareholders, then shouldn’t they also support the companion issue regarding disclosure of lobbying on climate issues?

The lobbying disclosure proposal at Exxon that would have required the company to disclose all of its federal and state lobbying, including its funding of lobbying through trade associations, received 27.6 percent support. While that number is the highest total vote the lobby disclosure proposal has ever received at Exxon, the discrepancy between the total percentage of votes in support for the lobbying disclosure proposal as compared to the climate change disclosure proposal indicates the mutual funds in all likelihood opposed lobbying disclosure at Exxon.

The issues of climate change and lobbying are intrinsically linked at Exxon. Exxon is facing investigations into whether it organized a misinformation campaign of think tanks and lobbyists to mislead the public about climate change. The investigations alone present financial and reputational risks for Exxon shareholders, and its undisclosed lobbying through trade associations is an integral part of these risks.

Exxon has publicly stated its support for the Paris Climate Agreement, yet remains a member of trade associations that actively lobby against it, like the Chamber of Commerce. Exxon  disclose its memberships in the American Petroleum Institute, the Business Roundtable, the Western States Petroleum Association, and the National Association of Manufacturers, all of which spend millions of dollars a year lobbying lawmakers. Furthermore, both the American Petroleum Institute and the Western States Petroleum Association have actively sought to mislead the American public on the very real danger presented by climate change.

So the largest mutual funds support disclosure of climate risk at Exxon but, by all indications, do not support disclosure of how Exxon influences climate policy through its lobbying. If Vanguard and BlackRock are ready to acknowledge that a company like Exxon should disclose to shareholders the risks that changing climate policy present to the business, then it would be logically consistent for them to insist that the company also disclose its lobbying, including all undisclosed payments to trade associations that lobby against efforts to address climate change.

Tell Vanguard to change its proxy voting guidelines to support political spending and lobbying disclosure at all of the companies where it invests its clients’ money.

This post originally appeared on the Corporate Reform Coalition website.