United States: Exxon loses board seats to activist hedge fund in landmark climate vote

A tiny hedge fund dealt a major blow to Exxon Mobil Corp on Wednesday, unseating at least two board members in a bid to force the company’s leadership to reckon with the risk of failing to adjust its business strategy to match global efforts to combat climate change.

The success of hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell – a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.

Eight of Exxon’s nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1’s nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.

The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.

“Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts,” Woods said in a statement. “We’re well-positioned to do that.”

Under Woods, Exxon incurred a $22 billion loss last year as the COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output – in contrast to global rivals that have scaled back fossil fuel investments.

“It’s a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it’s a rebuff of the whole attitude of the Exxon board,” said Ric Marshall, executive director of ESG Research at MSCI.

The original full article can be found at reuters.com

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