Fund Engine No.1 has succeeded in getting two of its members elected to ExxonMobil's board of directors. A historic victory for critical shareholding.
The activist fund Engine No.1, which in recent months has often criticised ExxonMobil's management on the issue of climate change, has succeeded in getting two of its four candidates elected to the oil company's board of directors.
After a six-month battle and a campaign that cost millions of dollars, investors Gregory Goff, former chief executive of American oil company Andeavor, and Kaisa Hietala, an executive who led the transition of Finnish energy company Neste towards biofuels, will now be able to assert their positions within ExxonMobil.
The fund's other two candidates were Alexander Karsner, a former official at the US Department of Energy and now senior strategist at 'X' (Alphabet's innovation lab, the parent company of Google), and Anders Runevad, former chief executive of Danish wind turbine manufacturer Vestas wind systems.
The tool deployed by Engine No.1 is known as critical shareholding: a non-profit organisation or pressure group acquires a small package of shares in large companies in order to gain the right to attend meetings and submit key questions on matters of social and environmental responsibility. It is an instrument of internal pressure, aimed at exposing activities that clash with ethical and sustainable conduct.
During ExxonMobil's most recent board meeting, at which a vote was held to renew its leadership, the session was suspended for over an hour. A move that appeared to many to be desperate, but which could not prevent the inevitable: the small and young investment fund Engine No.1 secured the support of three major investment fund managers – BlackRock, Vanguard and State Street – which together hold over 20 per cent of ExxonMobil's shares.
"Investors are waking up", said Anne Simpson, director of a pension fund that is also a shareholder in the company, following the vote. Indeed, the ExxonMobil case is not an isolated one: in the same week, investors in Chevron, another major player in the oil & gas sector, also called on the company to commit to reducing its climate-altering emissions, and a Dutch court ordered Shell to cut its emissions by 45 per cent by 2030.
