Climate change activists will sit on the board of oil industry giant ExxonMobil in a historic first, after a hedge fund’s successful campaign to push the energy firm toward renewables.
What are the details?
The New York Times reported that Exxon shareholders voted Wednesday to elect “at least two board candidates nominated by activist investors who pledged to steer the company toward cleaner energy and away from oil and gas.”
A hedge fund dubbed Engine No. 1 put forward a slate of independent board candidates, and was successful in its campaign to switch out board members. CNBC reported that Engine No. 1 “has a 0.02% stake in Exxon,” and “has been targeting the company since December over the oil giant’s need to shift away from fossil fuel dependency.”
The Hill reported that “the activist hedge fund, which has a minor stake in Exxon at just $50 million, was formed last year with the goal of shifting Exxon’s approach to climate change.” Exxon has a market value of roughly $250 billion.
But Engine No. 1 was able to gain the support of Exxon’s top shareholders in its climate change initiative, winning “the backing of the three biggest U.S. pension funds, the two biggest advisory services, and at least one of the three biggest fund managers,” The Washington Post reported.
The outlet noted that those three fund managers are BlackRock, Vanguard, and State Street, who altogether “hold more than 20 percent of ExxonMobile’s shares.”
Exxon announced in a press release that preliminary vote estimates indicate that shareholders elected Engine No. 1 nominees Gregory Goff and Kaisa Hietala to the board. According to Axios, “Hietala is a a former renewables executive with the refining company Neste and Goff is the former CEO of the refiner Andeavor.”
“We welcome all of our new directors and look forward to working with them constructively and collectively on behalf of all shareholders,” Exxon chairman and CEO Darren Woods said in a statement.
“We’ve been actively 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,” he continued. “We heard from shareholders today about their desire to further these efforts, and we are well positioned to respond.”