Standing before the chief executive officer of ExxonMobil, in a hall filled with hundreds of shareholders, four Yale students witnessed firsthand this summer how big oil companies can be held accountable by shareholders. 

In May, members of the Dwight Hall Socially Responsible Investment Fund attended the annual shareholder meeting of ExxonMobil — a company in which the SRI Fund has invested almost $2,500 of its $110,000 endowment. With 25.8 percent of shareholder votes, a shareholder resolution filed in January by SRI — which asked ExxonMobil to release the company’s undisclosed lobbying expenditures — failed to pass at the vote in May. Yale has investments in ExxonMobile, though the University does not disclose specific figures. The company has been criticized for downplaying the threat of climate change through lobbying.

But the resolution carries broader significance within the oil industry, and its failure at the shareholder meeting may send Yale a clear message: Shareholder engagement with big oil is not working. The votes supporting SRI’s resolution represent around $100 billion of ExxonMobil stock.

“Our one resolution is not the be-all and end-all. It’s a very small sample. Fossil Free Yale is arguing that shareholder engagement is not effective, and we added an additional test to that hypothesis which seemed to confirm [that argument],” said SRI member Gabe Rissman ’17, who represented the fund at the shareholder meeting. “By publicly supporting the SRI resolution, Yale tried its hand at shareholder engagement.”

The SRI Fund entered the campus divestment discussion in January when — along with United Steelworkers and a Swedish pension fund — the student group filed a resolution with ExxonMobil.

Yale’s investment guidebook since 1972, “The Ethical Investor,” dictates that Yale divest from companies with which shareholder engagement is ineffective. Yale’s Advisory Committee on Investor Responsibility announced support for the SRI resolution, and student activists at the time saw the resolution as a litmus test for the effectiveness of shareholder engagement in reducing climate change.

Yale’s Investments Office, which delegates some of its work to external managers, has recently become more conscious of the risks associated with certain coal and oil companies. In April, Chief Investment Officer David Swensen announced that Yale’s endowment had divested $10 million from these industries on the grounds that they were financially unstable.

ExxonMobil’s financial ties to private interest groups that deny climate change has come under increasing scrutiny by both climate activists and prominent Yale professors. In a June 24 column in The Washington Post, Yale Law School Dean Robert Post decried ExxonMobil’s weak stance on climate change and support for its deniers.

At the May shareholder meeting in Dallas, Texas, ExxonMobil CEO Rex Tillerson gave a brief speech summarizing the company’s activity, and when Tillerson finished, around a dozen resolutions were presented to the body and each put to a vote of the shareholders, with time for questions and answers with Tillerson.

Rissman delivered a speech before the shareholders in which he described many of the contradictions between ExxonMobil’s behavior in denying climate science despite publicly supporting carbon taxes. Rissman asked Tillerson why ExxonMobil remains associated with the American Legislative Exchange Council, a group which has lobbied against climate policy. Tillerson responded by defending the rights of people to disagree over climate change, and called ALEC “a highly competent and very thoughtful policy organization.”

SRI chair Russell Heller ’19 said Tillerson’s answer to the SRI Fund’s question was “not a substantial response in the slightest.”

The SRI Fund — which sees filing resolutions as an educational opportunity for members as well as a chance to incite broader changes in company behavior — is considering filing the same resolution with ExxonMobil again next spring. SRI member Sarah Gomez ’18 said the group will continue to send student representatives to shareholder meetings whenever the group files a resolution.

There may be a long road ahead before ExxonMobil changes its policies on climate change, but Heller said resolutions like those filed by the SRI Fund send a strong message to companies.

“Shareholder resolutions generally aren’t passed. You file, and engage, and discuss … To see that $100 billion worth of your company wants you to change something … it’s just sending a message that a huge portion of your shareholders don’t want you to do something,” Heller added.

Dwight Hall includes over 90 student groups.