New York state comptroller Thomas DiNapoli and other ExxonMobil shareholders committed a “failure of epic proportions” late last month, after an earlier push to hold the company’s board to a higher standard of climate risk disclosure fizzled at this year’s annual meeting, according to a blistering assessment by the Institute for Energy Economics and Financial Analysis.

At last year’s Exxon AGM, 62% of the company’s shareholders voted for a resolution that called for better risk reporting, recall IEEFA financial analyst Kathy Hipple and Director of Finance Tom Sanzillo. “The company responded by issuing a defective and irresponsible climate risk report that essentially dodged the issue,” the write. “And then ExxonMobil’s chairman and CEO, Darren Woods, reaffirmed the company’s plans to double down on oil and gas exploration and production rather than adopting a strategy more suitably innovative to the times—even after having missed revenue, profit, and production targets during an upcycle for prices in 2017 and in the first quarter of 2018.”

Against that backdrop, shareholders still voted this May 30 to re-elect the company’s board of directors, thereby “abdicating their duty to hold the company to account,” Hipple and Sanzillo write. The endorsement “showed a dangerous acquiescence to management, amounting to a rubber-stamping of the company’s insistence on denying climate-related business risks.”

IEEFA largely blames DiNapoli, the sole trustee for the more than US$200-billion New York State Common Retirement Fund, for failing to organize shareholder opposition in the lead-up to this year’s AGM. “DiNapoli led the majority coalition of ExxonMobil shareholders last year that called for the company to come clean on how climate risk might impact its business,” Hipple and Sanzillo note. This year, “as the leader of that coalition, [he] had an obligation to speak the truth and declare the company’s resulting report unacceptable, to explain why, and to urge a no-confidence vote in ExxonMobil’s board.”

Instead, they say, he sent the company a list of questions that should already have been answered in the climate risk report, squandering valuable time that could have been used building a shareholder coalition to challenge the board. That action, or lack thereof, also influences other major pension funds and institutional investors that often follow New York’s lead.

“Shareholder activism has proved to be an effective tactic when focused on changing an ancillary piece of a company’s business,” Sanzillo wrote earlier this year, in a separate opinion piece for the Financial Times [subs req’d]. “But it is the wrong tool to deploy on an industry that must fundamentally change.”

Which means that “any engagement with the fossil fuel industry, short of a demand for managed decline and a halt to new fossil fuel investment, has become financially unsound.”