An investor with a very minority stake in Exxon Mobil won two seats on the oil giant’s board of directors, a historic climate victory.
The first activist investor with a small stake in Exxon Mobil Corp. has won a historic victory in the battle for proxy rights with the oil giants, marking the growing importance of climate change for investors.
Engine One, a little-known company, attracted much attention when it began to propose a better plan for global warming to Exxon Mobil in December. The company won the company at its annual shareholder meeting on Wednesday. Two seats on the board of directors. Preliminary statistics.
The result embarrassed Exxon, which is unprecedented in the world of rare oil. It also shows that institutional investors are increasingly willing to force US companies to deal with climate change. The No. 1 engine, which only owns 0.02% of the shares and has no history of oil and gas activities, can even partly defeat Titan giants like ExxonMobil, the largest crude oil producer in the Western world. This shows how much people are paying attention to environmental issues. In the board of directors of the country’s largest company.
As Exxon Mobil struggled with activists, the vote was also shocking, and the company also criticized the company for its poor financial performance. ExxonMobil declined to meet with the nominee, and CEO Darren Woods told shareholders earlier this month that voting on them would “damage our progress and endanger your dividends.” At the meeting 48 hours before the convening, the company even made a promise to add two new directors, one of whom has “climate experience.”
In other corners of the commodity sector, shareholders this year have been frustrated by the reluctance of executives to implement strict environmental goals. DuPont de Nemours Inc. faced 81% opposition to plastic pollution disclosure, while ConocoPhillips failed to adopt stricter emission targets.
ExxonMobil’s voting results showed clear dissatisfaction with Woods’ strategy. Although the stock rebounded this year, it still rose by more than 40% due to soaring oil prices.
With the recovery of cash flow, Woods should be able to continue to improve ExxonMobil’s financial performance, ensure that the S&P 500 Index receives the third largest dividend and leaves a record loss in 2020, the first loss in forty years. But the bigger problem is related to ExxonMobil’s energy transition strategy. Many shareholders believe that ExxonMobil’s strategy is far behind its European counterparts.
ExxonMobil’s environmental record and unwillingness to accept the transition to clean energy quickly enough were the main criticisms of the six-month agency activity. The San Francisco-based First Engine severely criticized ExxonMobil’s long-term financial performance when evaluating it, calling it “a decade of value destruction.”
ExxonMobil did not turn to low-carbon fuels and sales power like some other competitors, but placed a large bet on carbon capture and storage, a technology that reportedly requires strong government support to achieve.
Engine One said that ExxonMobil’s large-scale CCS hub in Houston “has no substance” and only produced an “advertising blitz”. The fund also stated that ExxonMobil’s climate targets “distorted its long-term emissions trajectory,” and claims that it was consistent with the Paris Agreement “failed the basic test of logic.”
How Exxon pivots remains to be seen, but the message from shareholders is clear: The status quo cannot be sustained.