ExxonMobil, Chevron investors vote for more action on climate change

Yahoo – AFP, John BIERS, May 26, 2021

Shareholders of ExxonMobil will decide whether to replace up to four board
members with supporters of renewable energy investment

Shareholders at ExxonMobil elected Wednesday at least two board members who pledged more aggressive action on climate change, while Chevron investors directed the oil giant to deepen emission cuts. 

The dual meetings involving the two biggest US oil giants showed clear evidence of how addressing climate change has moved from the environmental world into the investor mainstream. 

At ExxonMobil, two board nominees from activist group Engine No. 1 won enough votes to secure board seats. Shareholders also backed a proposal requiring a report on the oil giant's lobbying activities on climate change. 

At Chevron, a majority of investors backed an activist proposal calling on the company to reduce "scope 3" emissions associated with company operations. 

Earlier Wednesday, a Dutch court ordered oil giant Shell to slash its greenhouse gas emissions by a net of 45 percent by the end of 2030 following a challenge launched by environmental group Friends of the Earth. 

Engine No. 1's Gregory Goff and Kaisa Hietala secured enough votes to join ExxonMobil's board, along with Chief Executive Darren Woods and several other incumbent directors who were reelected, said ExxonMobil corporate secretary Stephen Littleton. 

Littleton said the vote was too close to call on whether the other two Engine No. 1 candidates would join the board instead of incumbent directors and that a final outcome may not be known "for some period of time." 

After the results were announced, Woods congratulated the Engine No. 1 candidates and pledged to work with them to meet shareholder expectations. The company had launched a lobbying offensive to re-elect its incumbent board, arguing it was taking meaningful action to address climate change. 

"We've heard from shareholders about their desire to catalyze further progress at ExxonMobil and we are well prepared to deliver," Woods said after the vote. 

'Change is coming' 

ExxonMobil had announced a series of steps on climate change since Engine No. 1 launched its campaign in late 2020, making Wednesday's election contest unpredictable. 

Engine No. 1's Charlie Penner expressed uncertainty about the vote during remarks at the outset of the meeting. 

"No matter what the outcome of this vote, change is coming," said Penner, who noted ExxonMobil's promises made since the insurgent campaign launched late last year that it "cannot easily walk away from." 

The oil company in January established a new "low carbon solutions" business to commercialize carbon capture technology; announced two new board members in March; and earlier this week pledged to appoint two more board members in the next 12 months, one with energy industry experience and one with climate experience. 

ExxonMobil has battled annual meeting fights on climate change for decades, usually prevailing on shareholder resolutions. 

But oil majors are under intensifying pressure to develop more aggressive policies on climate change and embrace renewable energy. 

European rivals such as BP, Royal Dutch Shell and Total have undertaken renewable investments and pledged to attain net-zero carbon emissions by 2050. 

The International Energy Agency earlier this month said all future fossil fuel projects should be scrapped if the world is to reach net-zero carbon emissions by 2050 and stand any chance of limiting warming to 1.5C. 

The report goes well beyond existing policies adopted by the United States and other governments. The Biden administration, for example, has endorsed renewable energy investment, but has not supported an immediate phase-out of new fossil fuel investment. 

Both ExxonMobil and Chevron have announced new environmental initiatives in recent months, while insisting on the need for continued investment in oil and gas development. 

Woods called the recent IEA analysis a "helpful" contribution, saying reducing emissions is a "complex problem and a challenging one" that will require new technology and government policies. 

Shares of ExxonMobil rose 0.7 percent to $58.65 in afternoon trading, while Chevron was flat to $103.85.

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