Melting

27 January 2021 By Robert Cyran Follow @rob_cyran

The $194 bln oil giant has largely ignored investors worried about the environment and that oil’s best days are over. Now it may add independent directors, make greener investments, and cut capex. Credit squeaky activists plus a rumbling threat from institutions like BlackRock.

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Exxon Mobil is considering adding one or more independent board directors, taking measures to reduce its climate footprint, and reducing capital expenditure according to a Wall Street Journal article on Jan. 27. The oil company is in talks with D.E. Shaw, a hedge fund which is advocating for changes, according to the Journal.

Engine No. 1, an activist fund, said earlier in the day that it had nominated four directors to Exxon’s board.

Separately, BlackRock Chief Executive Larry Fink said in his annual letter to CEOs on Jan. 26 that the $8.7 trillion asset manager would ask companies to disclose how their business models will be compatible with a net zero emissions economy. In a separate letter to clients, also on Jan. 26, BlackRock said it would implement a “heightened-scrutiny model” in its actively managed investment portfolios as a way to tackle securities of companies that pose significant climate risk, potentially flagging some holdings for divestment if they present a risk to clients' returns.

At Exxon's May 2020 annual meeting, BlackRock voted against two Exxon directors and for the creation of an independent board chair, according the asset manager's stewardship records, in both cases opposing the Exxon board's recommendation.

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Engine No. 1, an activist fund, said earlier in the day that it had nominated four directors to Exxon’s board.

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