(Reuters) – The U.S. Securities and Exchange Commission has ruled Exxon Mobil must include a climate change resolution on its annual shareholder proxy, a defeat for the world’s largest publicly traded oil producer, which had argued it already provides adequate carbon disclosures.

In a Tuesday letter to Exxon seen by Reuters, the SEC said the oil producer cannot keep a proposal spearheaded by New York state’s comptroller from a full shareholder vote at the company’s annual meeting in May.

If approved, the proposal would force Exxon to outline specific risks that climate change or legislation designed to curb it could pose to its ability to operate profitably.

Exxon had argued that the proposal was vague and that it already publishes carbon-related information for shareholders, including a 2014 report on its website entitled, “Energy and Carbon – Managing the Risks.”

The SEC found those reports do not go far enough.

“It does not appear that Exxon Mobil’s public disclosures compare favorably with the guidelines of the proposal,” Justin Kisner, an attorney-adviser with the SEC, wrote to the oil producer.

Exxon Mobil declined to comment on the SEC’s ruling.

“We’ll be communicating the board’s recommendations on shareholder resolutions through the proxy document next month,” Exxon spokesman Alan Jeffers said.

It is not uncommon for companies to give shareholders their opinion on proxy votes. It is unclear whether the proposal, though, has much chance of success. Exxon shareholders have never approved a climate change-related proposal, and last year they rejected by 79% a request that a climate expert be appointed to the company’s board.

Nevertheless, New York state Comptroller Thomas DiNapoli, who oversees the state’s $178.3 billion pension fund, called the SEC’s decision a “major victory” for shareholders.

“Investors need to know if Exxon Mobil is taking necessary steps to prepare for a lower carbon future, particularly now in the wake of the Paris agreement,” DiNapoli said in a statement, referring to an agreement last fall by 195 countries to rein in rising emissions that have been blamed for global warming.

Environmentalists cheered the SEC’s decision.

“The SEC has rejected Exxon’s attempt to silence investors’ concerns about the very real financial risks associated with climate change,” said Shanna Cleveland of Ceres, a nonprofit group that tracks environmental records of public companies.

DiNapoli was joined in the SEC filing by the Church of England, the Vermont State Employees’ Retirement System, the University of California Retirement Plan and the Brainerd Foundation.


The ruling from the SEC comes as Exxon fights other carbon-related battles, including an inquiry by New York Attorney General Eric Schneiderman into whether the company misled the public and shareholders about the risks of climate change.

Exxon has hired a star attorney, Theodore V. Wells, Jr. as it fights the investigation from Schneiderman, who subpoenaed the company for a trove of records, emails and other documentation.

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Schneiderman has aggressively fought companies on climate issues for years. Last fall he settled an eight-year investigation with coal producer Peabody Energy to amend its climate change disclosures so that they would be more robust.

Also on Wednesday, the Rockefeller Family Fund said it will divest from fossil fuels as quickly as possible and “eliminate holdings” of Exxon.

Shares of Exxon xom barely moved after the SEC’s ruling, falling 0.2% in after-hours trading to $83.63.