Wave of Shareholder Action

On May 26th (this Wednesday), Exxon’s AGM will bring to a head the last year of activity from proactive, environmentally-minded shareholders.

There’s a challenge to the authority of CEO Darren Woods with an insurgent slate of four outside directors backed by the activist hedge fund; Engine No. 1. These proposed four new board members now have the backing of several major institutional investors. A simple majority vote can determine board membership.

In addition, there are two more shareholder proposals put forward by the group Climate Action 100+; these resolutions ask Exxon to properly access its financial standing with regarding to Paris Climate Accords. In a way, this matters far more than the machination of less carbon intensive companies (the oft subject of many ESG investors) since the bulk of decarbonation must come from carbon-intensive companies like Exxon.

The principle action is Engine’ No. 1’s attempt to add four more positions to the Exxon board – all with a focus on carbon transition. This resolution is already supported by:

  • CalPERs and CalSTRS,
  • the Church of England,
  • the New York Common Retirement Fund, and
  • Legal & General Investment Management.

The battle is getting increasingly acrimonious and it’s unclear how the result will play out. Ultimately, the vote still hangs in the balance and will turn on how Blackrock, Vanguard and State Street decide to vote on Wednesday.

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