Activist fund gets a third director on Exxon board

Exxon Mobil Corporation’s (NYSE:XOM) boardroom upheaval continued on Wednesday as environmental activist fund Engine No.1 saw its third nominee appointed to the board.

Ex-Google executive Alexander Karsner is the third director to join Exxon’s 12-member board at Engine No.1’s behest. It two prior nominees Gregory Goff, a former refiner, and environmental scientist Kaisa Hietala were voted in last week.

Engine No.1 holds only a small number of Exxon shares but proved influential with Exxon’s pension fund shareholders, including BlackRock which holds 6.6% of the oiler’s stock.

Engine No.1 wants Exxon, America’s largest oil company, to move away from fossil fuels. In May, as it put forward candidates for the board, it said the company would need directors with experience in successful and profitable energy industry transformations.

“We look forward to working with all of our directors to build on the progress we’ve made to grow long-term shareholder value and succeed in a lower-carbon future,” said Exxon Chief Executive Darren Woods in a statement.

Engine No.1’s manoeuvres came as other ‘supermajor’ oilers Chevron and Shell also encountered scrutiny over their energy transition policies.

Last week, Chevron shareholders voted in favour of a proposal for the company to target reduction in the emissions created by its customers (rather than just those resulting from its own operations). Some 61% of shareholder votes came in favour of the proposal despite the executive management recommending shareholders vote against.

On the same day, Royal Dutch Shell Plc (LON:RDSB) lost a landmark case brought forward by seven activist groups, including Greenpeace and Friends of the Earth Netherlands, to challenge its climate strategy.

The Dutch Court of The Hague ordered the FTSE 100 group to reduce CO2 emissions by 45% by the end of 2030 compared to 2019 levels. The 45% reduction also includes ‘scope 3′ emissions, meaning those from burning Shell’s gas and oil.

Before being taken to court by the activists, the company had previously pledged to cut the emissions of the products it sells by 20% over the same time period, as well as setting a net-zero goal by 2050.

The case was filed in 2019 on behalf of more than 17,000 Dutch citizens on the basis that the oiler is threatening human rights by investing in fossil fuels.

As campaigners move from picket lines and social media into boardrooms evidently the landscape is shifting, what precisely it will mean operationally for these ‘supermajor’ hydrocarbon companies remains to be seen.

Story by ProactiveInvestors