Chevron has recently met with representatives of activist investor hedge fund Engine No. 1 to talk about plans for emissions reductions, as the U.S. supermajor is getting ready for a possible proxy battle similar to the one Exxon led —and lost—earlier this year, The Wall Street Journal reported on Friday.
Engine No. 1, which launched in December 2020, scored a huge victory for activist shareholders at Exxon’s annual general meeting in May 2021, winning three board seats despite the tiny stake that it holds in the oil supermajor. The Engine No. 1 win signaled an unprecedented shift of shareholder sentiment in the oil and gas industry. The vote, according to observers, signals the continued displeasure of a growing number of shareholders with how Exxon is handling the push for lower-carbon energy and calls to do more to mitigate the impact of its business on the environment.
Now Chevron is bracing for a potential fight with activist investors. The talks between company executives and Engine No. 1 representatives were described as “cordial”, and the activist hedge fund didn’t indicate it would launch an Exxon-like proxy battle at Chevron, the Journal’s sources familiar with the matter said.
Nevertheless, Chevron has a contingency plan to respond to an event in which an activist investor would try to sway major shareholders to win board seats.
“We have contingency plans to respond to many different types of events, including an activist investor,” Chevron spokesman Braden Reddall told the Journal.
Chevron also plans to announce in the coming weeks more ambitious targets to cut emissions, the Journal’s sources with knowledge of the plan say.
According to one of those sources, the U.S. oil and gas giant, however, will stop short of the ‘net-zero business’ pledge that has become very popular among European oil majors, including Shell, BP, Eni, Repsol, Equinor, and TotalEnergies.
By Tsvetana Paraskova for Oilprice.com
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