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On Wednesday, the oil giants ExxonMobil Corp. and Chevron both face landmark votes on shareholder resolutions that signify just how far the climate movement has come in the past few years. 

There are nine shareholder resolutions pending votes at the annual shareholders meetings of Exxon alone and several more at Chevron. These primarily concern the need for company leaders to take into account the likelihood that countries will enact strict limits to greenhouse gas emissions, thereby affecting fossil fuel sales.

While they are not all expected to pass or even be voted on, the fact that any votes at all are likely to take place is a shift from the more typical annual ritual of oil company boards flat out refusing to vote on climate-focused shareholder resolutions.

SEE ALSO:Exxon and others may have to answer for alleged lies about global warming

Of major oil and gas companies, Exxon and Chevron have been among the most resistant to considering robust actions on global warming in its planning for future oil and gas drilling. 

Exxon has charted essentially a business as usual course even as the momentum behind international climate policies that would cut greenhouse gas emissions and cut oil and gas demand has increased.

At Exxon's meeting on Wednesday in Houston, one of the resolutions scheduled to come up, which is sponsored by the New York State Common Retirement Fund and the endowment fund of the Church of England, asks the company to undertake an annual analysis of how climate policies put in place in the wake of the Paris Agreement would affect the company's investments and economic performance. 

Officials celebrate the adoption of the Paris Agreement on Dec. 12, 2015.Credit: Francois Mori/AP

These investors and others are concerned that the company is not adequately managing its risks, and is planning for greenhouse gas emissions cuts to take shape more slowly than many studies and international organizations are forecasting.

More than two-dozen large shareholders are expected to vote in favor of this and other climate-related resolutions.

While shareholder resolutions at major oil companies may seem like esoteric business issues, they are actually one of the few ways that environmentalists, through various shareholder groups, are able to wield influence over the behavior of fossil fuel giants.

"...This is the one time of the year when investors have the opportunity to speak directly to the board of directors,” said Shanna Cleveland, who leads the climate asset risk initiative at the group Ceres, which is an investor network that advocates for sustainability leadership.

Such meetings can therefore be seen as a key point of leverage for those seeking to alter how Exxon, Chevron and other oil and gas companies operate. 

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“This is a seminal moment in the low carbon transition. The Exxon and Chevron resolutions show how investors are waking up to climate risk and driving big oil to change," said Julian Poulter, CEO of the Asset Owners Disclosure Project, a nonprofit group that works to safeguard retirement savings from climate change-related risks. 

Global temperature anomalies during April 2016.Credit: NASA GISS

Specifically, a resolution calling for a so-called "2-degree stress test" would be aimed at assessing Exxon's risk exposure to a scenario in which global governments actually do what they have said they would do, which is enact policies that would hold global warming to a maximum of 2 degrees Celsius, or 3.6 degrees Fahrenheit, above preindustrial temperatures by 2100. 

A similar resolution is pending before Chevron shareholders as well.

The International Energy Agency has said this would require global greenhouse gas emissions to peak by the year 2020. However, Exxon is not planning on such a peak happening until at least a decade or more later than that.

On March 30, 2014, Exxon told its shareholders that the company does not think that policies to address manmade global warming constitute a risk to the company’s profitability, because global policy makers are not likely to enact strict emissions limits before 2040.

Instead, the company said then that it planned to exploit all of its remaining oil and gas reserves, as well as new discoveries, through 2040.

However, investors want that strategy re-assessed in the wake of the Paris Agreement, which was struck in December and is the first global climate agreement committing developed and developing nations to take action to address global warming. 

Oil demand projections in 2040 from Exxon, the International Energy Agency, Statoil and ConocoPhillips.Credit: Ceres

“Paris really marked a huge turning point in terms of political will to tackle climate change,” Cleveland said.

According to several scientific studies, policies that are consistent with the Paris Agreement would mean many known oil and gas resources would have to remain in the ground rather than be burned. 

The financial industry refers to such unrecoverable fossil fuel assets as "stranded assets" or "subprime carbon assets." Some, including former Vice President Al Gore, have said this constitutes a massive vulnerability that could lead to a full-blown economic crisis if the risk is not managed properly.

"This is a multi-trillion dollar bubble that will ultimately burst when investors realize that all these oil and gas reserves are stranded assets," Gore said at the Investment Summit on Climate Risk in New York on Jan. 27.

The "misery index" on May 19, when India recorded its hottest temperature on record of 123.8 degrees Fahrenheit, or 51 degrees Celsius.Credit: Earth Simulator

To date, Exxon has bet that the transition to a low-carbon economy will happen more slowly than many studies, and even other oil companies think it will. 

Similar resolutions to those that Exxon will address on Wednesday have passed at meetings of the boards of BP and Shell, but Exxon has usually been the most steadfast of oil firms in resisting climate-related shareholder resolutions.

Other fossil fuel giants are also conducting risk assessments focused on climate change. These include Shell, BP and Statoil voting in favor of climate-related shareholder resolutions in 2015. Conoco Phillips is also investigating different scenarios involving a carbon-constrained world. 

Exxon, Chevron and other oil companies have taken a major financial hit this year due to low oil prices, causing investors to reevaluate investments in the most expensive oil exploration projects, including those in the Arctic. 

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