Two of the world’s biggest oil companies got called out for their roles in the climate crisis – and, this time, the call was coming from inside the building. Activist shareholders at Exxon Mobil and Chevron used the corporations’ annual meetings as a platform to demand action.
Activist investor hedge fund Engine No. 1 shook up proceedings at the annual meeting of Exxon Mobil on Wednesday morning – and ended up capturing two seats on the Big Oil giant’s board of directors.
Engine No. 1 was formed just six months ago with the intention of pressing corporations to make change to address the climate crisis. At first, few took notice of the tiny-by-Wall-Street-standards fund. But, with a $50 million investment in Exxon Mobil and support from California and New York state employee and teacher pension fund managers frustrated with Exxon Mobil’s slagging performance and slow movement towards greener energy, Engine No. 1 founders Chris James and Charlie Penner were able to pull off an insurgent campaign unusual for a company as large and established as Exxon Mobil.
According to industry experts, the activist campaign was able to tap into an existing well of frustration about Exxon Mobil’s green energy future that was far deeper than the company’s executives had acknowledged.
“Investors have regularly highlighted concerns about preparedness for an energy transition, yet the board did not take action decisive enough to prompt recognition from the market until after launch of the dissident’s campaign,” a representative for shareholder advisory firm ISS told Reuters.
According to reports, Exxon Mobil has spent just $10.4 billion on investments in lower-carbon energy technologies over the last 20 years combined. That represents a tiny fraction of the company’s overall spending. In 2020, it spent $20 billion.
Just hours later at Chevron’s annual meeting, the scene was less dramatic, but still significant. Shareholders voted to back a proposal that would obligate the company to make steps toward reducing emissions. Though the proposal did not include specific target dates or levels of reduction, its strong support among the company’s investors has been seen by industry analysts as a signal of growing pressure on Chevron to address environmental concerns.
“Today, fossil fuel companies got a big wake up call,” former Vice President Al Gore wrote in a Facebook post regarding the shareholder action. “Keep up the pressure. It’s working.”
The pair of shareholder messages came just days after another Big Oil corporation, Royal Dutch Shell, received a climate change message of its own. In what is being described as a “landmark ruling,” a Dutch court ordered that by 2030, the company must cut its carbon dioxide emissions down to 45 percent below the levels emitted in 2019. That is more than twice the amount of reduction the company has previously said it is working towards.