ExxonMobil, the corporate American titan, is facing a turning point this week as disgruntled shareholders say what critics call an inadequate response to seismic shocks caused by climate change.
Wednesday is the most watched Proxy fight years will end with a vote that will decide who sits on ExxonMobil’s board. The company is trying to avoid the challenge of hedge fund engine No. 1, and after a number of recent confirmations, activists believe that the victory is completely understandable.
“It will affect,” said Anne Simpson, head of management and stability at the Calbers Board of Trustees. “The wind of change is blowing through companies that are reluctant, afraid or do not know how to take action. [on climate]»
The battle has been going on since December, when No. 1 engine nominated four new directors to Exxon’s board, calling for a “targeted relocation of the company to succeed in the hydrocarbon world.”
Exxon, once known as a far cry from shareholders, has been hearing and responding to the activist threat since its inception. appoints new directors բացահայտ Discover new emission programs.
Darren Woods, chief executive, told the Financial Times he was ready to lead the board’s elected shareholders.
“We will work with everyone who comes out of the annual meeting,” he said.
Voting will determine a controversial proxy season In which Shell, Conoco, BP and other fossil fuel producers have faced criticism from investors for their climate strategy. At its annual meeting, Chevron Board meets its shareholder decisions on emissions, which begin immediately after Exxon Wednesday.
Calpers, Calstrs, the New York State Retirement Fund, the three largest pension funds in the United States, will all support Engine No. 1 offers, as will Legal & General Investment Management and the Church of England Commissioners.
In contrast, Norway’s huge sovereign wealth fund, which has been talked about a lot by companies climate risk, said he would cast his vote for Woods but would support the rest of the board.
Voting will depend on BlackRock, Vanguard և State Street. The three major funds together hold more than 20 percent of Exxon’s shares,, the superpower’s huge retail investor base, which accounts for almost half of its outstanding shares.
The big three funds have not said which way they will vote, but they all stress the growing importance of climate change in their investment decisions.
BlackRock CEO Larry Fink warned Earlier this year, CEOs announced that companies that were not planning to move to cleaner fuels would “see their business’s appraisals suffer.”
The protesters were able to get involved in what they see as the Battle of David և Goliath, which will reveal the true climatic colors of Wall Street.
Fred Krupp, chairman of the Environmental Protection Fund, called on shareholders to “seize the moment” by supporting the campaign, arguing that “massive shifts in clean technology, government regulations and consumer preferences.” “, demanded a stronger strategic response.”
But even Wall Street equity analysts have called the activists’ campaign possible, citing four fund board candidates with experience in the energy industry, the No. 1 engine family tree.
“This is not just your average $ 200 million hedge fund,” said Sam Margolin, CEO of Wolfe Research, referring to his support from large pension funds. “The reputation of the people [it] The nominees are very strong. ”
The two biggest advisers to the US proxy earlier this month Institutional shareholder services Lew Glass Lewis approved three եցին two candidates for the No. 1 Engine Board, respectively.
Exxon, the world’s most valuable company just a decade ago, has been has started The Dow Jones Industrial Average posted four consecutive quarters last year, when it also lost its gilded AAA credit rating. losses,
The company has shown rare resilience this year under investor pressure, cutting capital spending plans, paying off certain debts, and curbing more aggressive oil production growth plans.
Has the expected dividend yield almost has halved since jumping more than 11 percent last year when the market cut prices for one of Wall Street’s most popular payments.
Exxon shares, which have risen about 40 percent this year, outperformed competitors, although some analysts attribute this to the involvement of activists.
In response to climate pressure, the company this year began reporting on its “circle 3 emissions” from products it sold, announcing a new low-carbon business line. emissions upstream targets, և recently swam a $ 100 billion in carbon capture and maintenance (CCS) Concept in Texas.
The Supreme Council also appointed three new members of the board, including activist investor Jeffrey Ubben.
Woods told FT that the council is focused on developing a strategy for a “lower carbon future and related challenges” while “providing the goods needed by society”.
But Exxon will not lag behind European leaders in preventing zero emissions, which Ubben recently described as “irresponsible”,
For some financial analysts, Exxon’s move was too small, too late.
Cowen CEO Jason Gabelman insists that Exxon still has a long way to go to “prove their business in the future”, with its carbon plans remaining too modest.
In his proxy proposal, Glass Lewis argued that CCS, the key technology for Exxon applications, did not have the scale of economic viability to serve as “the center of an energy transition strategy.”
At the same time, the company’s belief that an increasingly prosperous global population will always have more Exxon oil was challenged this week by the International Energy Agency, a forecast that often quotes the highest.
The agency said new oil and gas projects would not be needed if the world cut emissions enough to prevent global warming.
“Long-term risk continues to grow, threatening the company’s existing business model,” said Glass Lewis.