Corp. shareholders elected two new board members on Wednesday, in a dramatic move spearheaded by activist investors that could force the oil
giant to better address climate change
and eventually transition away from fossil fuels
The move is a stunning blow to Exxon's leadership, which had until Wednesday largely chosen its own directors for the company's 12-member board. The new board members were pushed by Engine No. 1, a small, activist hedge fund that garnered the support of some of Exxon's biggest investors in calling for U.S. energy
companies to shift their business
models as climate change intensifies.
Shareholders elected Gregory Goff and Kaisa Hietala to the company's board, both of whom have experience in the energy industry. Votes
had not yet determined one other Engine No. 1 board candidate pushed by the activist firm, and according to preliminary results, eight of Exxon's choices won seats.
On Wednesday evening, the votes were still being counted.
According to the New York
Times, Engine No. 1 owns less than 1% of Exxon stock but began its push for new board members in December, the latest initiative by activists to force oil companies to address climate change caused by the use of fossil fuels.
Environmentalists and investors, on the other hand, have long argued that this is not the case.
“This isn’t really about ideology; it’s about economics,” Engine No. 1 founder Chris James told the Times on Wednesday.
The result is a setback for Exxon Mobil CEO
Darren Woods, who had previously described the board's composition as "among the strongest in the corporate world."
“We welcome all of our new directors and look forward to constructively and collectively working with them on behalf of all shareholders,” Woods said in a statement released shortly after the vote on Wednesday.
An utterly crushing day for Big Oil: 1) Chevron investors demand emission cuts; 2) a Dutch court orders Shell to cut emissions
in half; and 3) Exxon shareholders
defy the company and elect directors demanding climate action. Thanks to all who fight--push hard enough and the dominoes fall — Bill McKibben (@billmckibben) May 26, 2021
The decision, according to Bill McKibben, founder of 350.org, is part of a string of “good news
” for environmentalists.
“I think they’re signs that a decade of battering by activists is finally taking a real toll,” McKibben told MSNBC
’s Rachel Maddow on Wednesday. “Exxon is still powerful, but it’s now on the ropes in all kinds of ways, and they’re that much less powerful as of tomorrow.”
The vote took place amid a multimillion-dollar battle between Exxon Mobil and Engine No. 1 to determine the composition of the oil behemoth's leadership council. Exxon Mobil said it spent $35 million to counter Engine No. 1's $30 million campaign.
This week, Exxon was one of three major oil companies that suffered setbacks.
Royal Dutch Shell
was ordered by a Dutch court to reduce its carbon dioxide emissions by 45% below 2019 levels by the end of the decade, while Chevron Corp. shareholders voted later Wednesday to compel the company to develop a plan to reduce emissions caused by its products.