According to Bloomberg, the board at Exxon just lost a fairly key shareholder vote on revealing business risks due to climate change. Part of the story is that large institutional shareholders like venture capital funds are concerned about these risks. These aren’t good guys acting out of purely ethical concerns of course – they are concerned about risks to the profits they are expecting.

Growth in support was driven by unprecedented majority votes for shareholder proposals asking Exxon Mobil Corp., Occidental Petroleum Corp. and electric utility PPL Corp. to report on the long-term business impacts of climate change. This proxy season marked the first time that kind of proposal has passed over board opposition. It also marked the first time BlackRock Inc. and likely more of the companies’ largest shareholders voted in its favor.

“When a company as prominent as Exxon Mobil loses a vote,” the board or corporate governance team may change its negotiating stance in the future so that it doesn’t happen again, James Copland, a senior fellow and director of legal policy at the Manhattan Institute, told Bloomberg BNA…

Even though the proposals aren’t binding, boards that fail to respond to climate concerns could be held accountable come director election time. That’s already happened at Exxon Mobil, where BlackRock voted against the re-election of two directors after repeated requests to meet with the board to better understand its oversight of climate risk and other issues were rebuffed.

We are starting to see amoral, conservative actors in the finance and insurance industries demand action to mitigate climate risk. The good news is markets will respond and action will be taken. The bad news is amoral investors and markets tend to react to big and short term risks, and by the time the risks are big and short term, the best chances to take meaningful mitigation action may have passed.