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Engine No. 1, the new activist investor firm seeking long-term policy changes at Exxon, said on Wednesday it had formally nominated four independent director candidates to the supermajor’s board, continuing shareholder pressure on the biggest U.S. oil and gas firm to start thinking of its business in the energy transition.
“Investors increasingly want to see companies focused on the long-term and ExxonMobil is no exception. We believe that ExxonMobil’s Board needs new members who have proven success positioning energy companies for today as well as tomorrow, and who are sufficiently independent from the current Board to ensure a clean break from a strategy and mindset that have led to years of value destruction and poorly positioned the Company for the future,” Engine No. 1 said.
The investor firm sent a letter to Exxon last month demanding that the supermajor reinvent itself for “much-needed change.”
The activist investor—which has the backing of California State Teachers’ Retirement System (CalSTRS), the second-largest U.S. pension fund and owner of over $300 million in value of Exxon stock - seeks greater long-term discipline in capital allocation, as well as a sustainable plan for value creation in the changing world.
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Days after the investor firm demanded changes and announced it would be nominating candidates for independent directors, Exxon said it plans to reduce the intensity of the greenhouse gas emissions from its operated upstream assets by 15 to 20 percent by 2025, in support of the Paris Agreement.
Earlier this month, the supermajor also released an Energy and Carbon Summary that, for the first time in the company’s history, makes public the amount of carbon dioxide emissions produced across its value chain—so-called Scope 3 emissions.
“While recently ExxonMobil has taken incremental steps in the face of financial and shareholder pressure, we believe a reactive short-term approach is no substitute for a proactive long-term strategy that addresses the threats and opportunities facing the Company in a changing world,” Engine No. 1 said today.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.