ExxonMobil faces “winds of change” when it comes to reaching the climate fight committee

ExxonMobil, the titan of the American corporation, is experiencing a crucial moment this week, with quiet shareholders not to mention what critics call an inappropriate response to seismic changes caused by climate change.

On Wednesday, the most watched proxy battle it will end in a vote to decide who is in charge of ExxonMobil over the years. The company is trying to overcome a challenge to the 1st engine of the debut hedge fund, and after some final approval, entrepreneurs believe victory is at hand.

“This will resonate,” said Anne Simpson, head of Calpers ’board of directors and sustainability, a U.S. pension fund that supports activists. “The winds of change are blowing through companies that are unsure of how to reluctance, fear or take action [on climate]”.

The fight has been underway since December, when the No.1 engine appointed four new directors to Exxon’s management and called for “the deliberate relocation of the company to succeed in the decarbonising world”.

Exxon, once well known to shareholders, has been in a position to listen and respond to the activist threat since its inception. appointing new directors and announcing new emissions plans.

Darren Woods, chief executive, told the Financial Times that he was willing to direct the shareholders of the elected committee.

“We will work with what comes out of the annual meeting,” he said.

Voting will limit a conflicting proxy season where Shell, Conoco, BP and other fossil fuel producers have been criticized by investors for their climate strategies. Chevron’s management also has shareholder resolutions related to emissions at its annual meeting, immediately beginning at Exxon on Wednesday.

The Calpers, Calstrs and New York State Retirement Funds, the three largest pension funds in the U.S., will support the proposals for the 1st engine, as well as the Legal and General Investment Directorate and the Church Commission for England.

In contrast, Norway’s huge sovereign wealth fund, which has talked a lot about business climate risk, said he would reject the Woods vote, but would reject the rest of the board of directors.

Voting will be located between BlackRock, Vanguard and State Street – the three major funds together hold more than 20% of Exxon’s shares – and the supermarket’s huge retail investor base accounts for nearly half of its outstanding shares.

The three major funds have not said how they will vote, but they all stress that climate change is becoming increasingly important in their investment decisions.

Larry Fink is the head of BlackRock warn CEOs will see companies that are not prepared to switch to cleaner fuels at the beginning of the year “suffer from their businesses and valuations”.

The campaigns have been glued to a battle that portrays David and Goliath as a battlefield that will reveal the true colors of Wall Street.

Fred Krupp, chairman of the Environmental Defense Fund, urged shareholders to “fill the moment” with the campaign’s backing, arguing that there are “massive changes in clean technologies, government regulations and consumer preferences”. . . it called for a stronger strategic response ”.

But Wall Street equity analysts have also seen the entrepreneurial campaign as credible, citing four fund management candidates with experience in the energy industry and a 1st engine genealogy.

“This is not your average $ 200 million hedge fund,” said Sam Margolin, CEO of Wolfe Research, backed by large pension funds. “People’s popularity [it] the candidates are very strong “.

Earlier this month, the U.S.’s two largest proxy consultants, Institutional Services for Shareholders and Glass Lewis, respectively, accepted three and two of the No.1 engine management candidates.

Entrepreneurs “Existential” risk Exxon raises it focus on oil and gas, have also taken advantage of investor frustration with Exxon’s financial results in recent years.

Exxon, the most valuable company in the world, was just ten years ago from which last year’s Dow Jones Industrial Average, which also lost its gold AAA credit rating and suffered for four consecutive months. losses.

The company has shown rare flexibility this year as a result of pressure from investors to cut capital spending plans, pay off some debt and recover from the sector’s most aggressive oil production growth plans.

Implicit dividend yields fell by almost half from 11 percent last year when the market cut one of Wall Street’s most estimated payments.

Exxon’s share price, about 40 percent this year, has outperformed its opponents, although some analysts have blamed it on entrepreneurial engagement.

In response to climate pressure, the company’s products it sells this year have begun to shed “scope 3,” announcing a low-carbon, new line of business rising emissions targets, and recently floated a Capture and store $ 100 billion in carbon (CCS) concept in Texas.

The principal has also appointed three new board members, including activist investor Jeffrey Ubben.

Woods told FT that the commission was focused on developing a strategy to “address the low-carbon future and the challenges associated with it,” to “provide the products that society needs.”

But Exxon is not committed to developing zero emissions from Europe’s largest supermarkets, a goal recently achieved by Ubben they said he was “irresponsible”.

For some financial analysts, the moves made by Exxon have been few and far between.

Cowen director Jason Gabelman argued that Exxon needed to do much more to “prove the business of the future” and that carbon plans were modest.

Glass Lewis argued in his proxy recommendation that CCS, a technology critical of Exxon’s planet, did not have “scale and economic viability” to be “the backbone of the energy transition strategy”.

Meanwhile, the company believes that the growing prosperous population around the world would need more Exxon oil this week, the International Energy Agency has questioned, a frequently quoted advertiser for the supermarket.

The agency said new oil and gas projects would not be necessary if emissions were to be reduced enough to prevent global warming.

“The long-term risks continue to grow, threatening the company’s existing business model,” Glass Lewis said.