By Sebastian Schmid
ExxonMobil is a globally well-known international oil and gas company that is publicly traded. They say they are dedicated to producing the energy and chemical products required for economic development, keeping in mind environmental well-being. The unprecedented triumph of an activist investor (who holds a small stock portion in Exxon Mobil Corp.) in its proxy battle with the oil behemoth is the first sign. It is the first sign showing the increasing relevance of the climate crisis to investors.
According to a preliminary tally, Engine No. 1, the two companies’ lesser in this fight has reportedly earned a higher stake. Engine No. 1 has now earned two seats on the corporation’s board of directors at annual shareholders’ meeting.
The company had shot to prominence in December when it began pressuring Exxon to develop a more robust strategy to combat global warming. Engine No. 1, with only a 0.02% share and zero histories of oil and gas activism, was able to win.
Even a partial victory against Exxon, the Western world’s largest petroleum producer, demonstrates how environmental issues have become a severe concern in boardrooms.
The result is a humiliation for Exxon, unusual in the whole world of Big Oil, and a hint that organizational investors are increasingly willing to put pressure on corporations to address climate change. The vote is particularly notable for the ferocity with which Exxon fought back against the activist, who chastised the business for its poor financial performance.
Just 48 hours before the meeting, the firm announced that it would appoint two new directors, one of whom would have “climate experience.” Gregory Goff, the former CEO of refiner Andeavor, and environmental scientist Kaisa Hietala were the victorious Engine No. 1 nominee.
Exxon called all four dissident nominees “unqualified” earlier this month. In addition, eight Exxon contenders were elected, with two board seats still up for grabs. At one point during the process, Exxon called a pause to provide extra time for vote counting.
Engine No. 1 claimed the business was attempting a “last-ditch effort to avoid much-needed board change.”
In other parts of the resources sector, shareholders have already expressed dissatisfaction with management’s unwillingness to accept strict environmental goals this year. Exxon’s environmental policies, as well as its refusal to embrace greener energy transitions soon enough, were a significant point of contention in the six-month proxy fight.
The way Exxon pivots, if ever, has to be revealed, but the warning from shareholders is clear: the status quo isn’t going to be approved of any longer.