Board spat at Exxon intensifies spotlight on climate change

The fight represents a moment of reckoning for major publicly traded companies to address a global crisis

ExxonMobil is facing a major challenge from a group of investors in one of the biggest fights a corporate boardroom has endured over its stance on climate change, an issue of rising urgency for many shareholders.

The investor group is pushing to replace four of the oil giant’s board members with executives they say are better suited to both strengthen the company’s finances and lead it through the transition to cleaner energy. The fight represents a moment of reckoning for major publicly traded companies to address a global crisis.

Engine No. 1, the name of the hedge fund that has mounted the challenge, owns just a sliver of Exxon’s shares. But the dissident slate of board members it has put forward commands the backing of some of the country’s most powerful institutional investors, including the largest public pension funds.

Regardless of the outcome of the shareholder vote, to be announced after the annual shareholder meeting Wednesday, the challenge reflects momentum among consumers, investors and government leaders around the globe to pivot away from fossil fuels and invest in a future where energy needs are increasingly met using renewable sources. To that end, President Joe Biden has set the ambitious goal of slashing America’s greenhouse gas emissions in half by the end of the decade.

“We’re at a tipping point,” said Aeisha Mastagni, portfolio manager at the California State Teachers’ Retirement System, known as CalSTRS, one of the nation’s largest pension funds and among the major institutional investors that backed the alternative group of directors. “You’re seeing investors from all around the world that are wanting to see better disclosure around climate change risk, you’re seeing shareholder proposals that are passing with increased shareholder support, and now we have this monumental vote at ExxonMobil.”


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