Two days before ExxonMobil’s annual general meeting (AGM), the energy giant has made a last-minute commitment to add two new directors over the next year, as a group of major investors, led by sustainability-focused activist investment firm Engine No. 1, pushes for a broader board change to enable the company to better manage the emerging global energy transition.
In December 2020, Exxon announced a series of emissions reduction initiatives, it has yet to set a long-term net zero goal, and the company has met criticism for blocking a shareholder resolution asking it to report if and how it intends to bring its operations in line with the Paris Agreement’s goal of maintaining global temperature rise well below 2 degrees Celsius.
Engine No. 1 has proposed 4 new directors for the company, with significant experience across the energy sector, as well as in policy and strategy. The proposed slate includes Greg Goff, former CEO of refining and marketing company Andeavor, Kaisa Hietala, Former EVP of Renewable Products at Neste, Andy Karsner, Senior Strategist at X (formerly Google X) and former U.S. Assistant Secretary of Energy, and, Anders Runevad, former CEO of wind turbine company Vestas Wind Systems.
The activist investor’s initiative has received support from several major investors, including CalPERS, CalSTRS and the New York State Common Retirement Fund. A report today from Reuters indicates that investment giant BlackRock will vote for three of the nominees as well, adding significant momentum to the move.
In a new proxy statement filing, Exxon stated:
“Over the next twelve months, we will work with the Board to secure two new directors, one with energy industry experience and one with climate experience.”
Unimpressed with the last-minute tactic, Engine No. 1 filed its own proxy statement, indicating that Exxon’s board has refused to meet with any of the investor’s proposed nominees, and calling for the addition of “directors with experience in successful and profitable energy industry transformations who can help turn aspirations of addressing the risks of climate change into a long-term business plan, not talking points.”
In its filing, Engine No. 1 said:
“This vote is too important to be influenced by this type of cynical, last minute maneuvering, and business as usual is not going to better position ExxonMobil for long-term value creation.”