Exxon shareholders elect 2 or 3 green-energy advocates to board, in day of landmark defeats for Big Oil
Exxon Mobil shareholders voted Wednesday to elect at least two board members put forward by activist investors seeking to push the oil giant toward renewable energy and lower greenhouse gas emissions. Exxon spent $35 million fighting to defeat the slate of four board candidates from the small hedge fund Engine No. 1, which owns only 0.02 percent of Exxon stock, and Exxon CEO Darren Woods personally campaigned for Exxon's own candidates.
Some of Exxon's biggest investors sided with Engine No. 1, including large institutional investors like the California Public Employees' Retirement System (CalPERS) and BlackRock, the world's largest asset manager and Exxon's second-largest shareholder. Engine No. 1 argued that Exxon was not doing enough to prepare for a shift to clean energy, endangering profits. Both sides lobbied shareholders until the last minute, and Exxon extended voting for an hour, calling investors to urge them to change their votes, according to Engine No. 1.
Anne Simpson, a CalPERS managing director, called Exxon's voting extension "highly unusual" but said the eventual results marked a "day of reckoning" for Exxon and its investors that will also "reverberate around boardrooms internationally." Exxon called the election of two, probably three, Engine No. 1 candidates preliminary and said it will take "some period of time" to certify the votes.
A few hours before the Exxon upset, a court in the Netherlands issued a landmark ruling finding Royal Dutch Shell partially responsible for climate change and ordering it to cut its carbon emissions by 45 percent before 2031. Chevron shareholders also voted Wednesday to instruct the company to slash its greenhouse gas emissions.
"The events of today show definitively that many leaders in the oil-and-gas industry have a tin ear and do not understand that society's views and the legal and political environment in which they operate are changing radically," Amy Myers Jaffe, a professor at Tufts University's Fletcher School, told The Wall Street Journal. "Game-changer is an overused metaphor, but surely this is one," said Environmental Defense Fund president Fred Krupp. "The policy environment for companies has already changed and will change more."