ExxonMobil is the largest direct descendant of John D. Rockefeller’s Standard Oil…and it is being forced to go green.
ExxonMobil just lost a huge boardroom battle.
At a shareholder meeting last week, 2 green-friendly directors — who will push for a lower carbon future — were voted onto the energy giant’s board of directors.
According to The Economist, it is “extremely rare” for a company of Exxon’s size to have even a single dissenting voice on the board (translation: things are going to change).
With climate change concerns…
… more pressing than ever, Big Oil is facing pressure from all angles (governments, consumers) to clean up their energy production.
The most aggressive moves have come from green-friendly Europe:
- BP has plans to reduce the carbon intensity of its products by 50% in the next 3 decades
- Shell will be carbon neutral by mid-century
While ExxonMobil has carbon-reduction plans in place, critics want more. To wit: The company’s current spending plan calls for $3B on green projects in the next 5 years (vs. ~$100B for its other projects).
A defeat has been years in the making
A small activist hedge fund named Engine No. 1 started agitating for change in December.
It was backed by 2 massive California pension funds (CalPERS, CalSTRS). While they own <1% of ExxonMobil, the funds’ combined $700B of assets make them very influential, per The Economist.
To be carbon neutral by 2050…
… the world must stop all new oil and gas projects, according to a report from the International Energy Agency (IEA) released in mid-May.
While there is much work to do, ExxonMobil’s stunning board defeat is one step toward reaching that goal.