A hedge fund that criticized ExxonMobil climate strategy had got enough shareholder support to oust at least two directors from the oil giant’s board, a major loss for the once-mighty company. America’s largest oil company faced a credible challenge from an activist investor, Engine No. 1. Upset with Exxon’s financial performance. The foot-dragging on climate, the hedge fund strived to overthrow four directors at the company’s annual shareholder meeting.
Engine No. 1 won two board seats in the shareholder vote. Two additional board seats were still too close to call Wednesday afternoon. The vote is a major milestone in the climate battle because it’s the first proxy campaign at a major US company in which the case for change was built around the shift away from fossil fuels.
The ouster of at least two ExxonMobil directors sent a message to other fossil fuel companies at a time when the International Energy Agency has warned the world it needs to immediately stop drilling for oil and gas to prevent a climate catastrophe. Engine No. 1 has criticized Texas-based multinational company’s unwillingness to adjust to renewable energy and steps to maximize oil production.
Anne Simpson, managing investment director at the California Public Employees Retirement System said that the investors are no longer standing on the sidelines. This is a day of reckoning.CalPERS is among the prominent investors and pension funds that backed the activist campaign.
ExxonMobil board will review two shareholder proposals that received majority shareholder approval, according to the company. The proposals include Item No. 9, which calls for a lobbying report, and Item No. 10, which requests a report on climate lobbying.Darren Woods, chairman and CEO of ExxonMobil said that the company has been engaging with shareholders and received positive feedback and support, particularly for our announcements relating to low-carbon solutions and progress in efforts to reduce costs and improve earnings. We heard from shareholders today about their desire to further these efforts, and we are well-positioned to respond.