ExxonMobil faces an “existential business risk” by pinning its future on fossil fuels as governments move to slash emissions, an activist hedge fund will tell investors in the final push to overhaul the oil major’s board.
“ExxonMobil still has no credible plan to protect value in an energy transition,” said an 80-page investor presentation seen by the Financial Times, in which Engine No 1 excoriated the company’s “value destruction” and “refusal to accept that fossil fuel demand may decline”.
The energy company “touts its efforts in areas like carbon capture and biofuels”, the document said, but those efforts have “delivered more advertising than results”.
Exxon has captured less than 1 percent of its own emissions once the pollution from its sold products was included, Engine No 1 said.
Engine No 1 was started last year by hedge fund manager Chris James, best known as a tech investor, and Charlie Penner, who previously agitated against Apple while at Jana Partners and is behind the Exxon campaign.
The effort to overhaul Exxon’s board is among the most-watched US shareholder proxy battles in years and highlights a broader test for corporations and Wall Street as climate change risks rise up investors’ agendas.
In December, Exxon announced a target its greenhouse gas “intensity”, a measure of pollution per barrel produced, Energy Profit. SourcePower. Politics.alongside plans to curb methane emissions and flaring. The plans were “consistent” with the Paris climate pact
“Arguing that reducing emissions intensity. . . while ExxonMobil continues to pursue production growth and thus increases overall emissions, puts it on a ‘Paris consistent’ path, fails the basic test of logic,” the document said.