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An investor with a small stake in Exxon Mobil won two seats on the oil giant’s board of directors, thus achieving 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.
According to a report, the little-known company won two seats on the company’s board of directors when it began to pressure ExxonMobil in December to propose a better plan to deal with global warming. 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 first engine with only 0.02% of shares and no history of activism in the oil and gas field can even win a partial victory with giants such as Exxon Mobil, the largest crude oil producer in the Western world. This shows that the current environmental issues The emphasis is in the conference room 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 areas of the commodity industry, shareholders this year have expressed disappointment at the reluctance of executives to accept strict environmental targets. 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 issue involves ExxonMobil’s energy transition strategy, which many shareholders believe is far behind its European counterparts.
ExxonMobil’s environmental record and unwillingness to accept the transition to clean energy fast enough were key criticisms of the agency campaign six months ago. San Francisco-based Engine No. 1 severely criticized ExxonMobil’s long-term financial performance, 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 ExxonMobil will transform (if any) remains to be seen, but the message from shareholders is clear: the status quo cannot continue.
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