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Activist investor Engine No. 1 wins a third seat on ExxonMobil board

02 June 2021 Amena Saiyid

Activist investor Engine No. 1 was successful in adding one more nominee to the board of oil major ExxonMobil.

The company on 2 June confirmed the election of Alexander Karsner, senior strategist at X (formerly known as Google X), a week after shareholders voted following ExxonMobil's annual general meeting.

Karsner joins Kaisa Hietala, a former executive vice president of renewable products at Neste, a Finnish refiner and marketer, and Gregory Goff, former chief executive of Andeavor, a US refiner now part of Marathon Petroleum, in serving on the board with nine re-elected members including ExxonMobil CEO Darren Woods, according to preliminary results announced by the company.

The election of three Engine No. 1 candidates to ExxonMobil's board of directors is seen as a sharp rebuke to the company's management and policies for creating value in a world transitioning away from fossil fuels.

The announcement came the same day as new analysis of US Environmental Protection Agency GHG emissions data showed ExxonMobil is not only the US largest producer of fossil fuels, it remains the largest emitter of CO2 and the second-largest emitter of methane.

Commissioned by nonprofit Clean Air Task Force and Ceres, a sustainable investor network, with support from Bank of America, M.J. Bradley & Associates performed analysis of GHG data submitted by 295 oil and natural gas producers in 2019.

Welcoming the new directors to the board, Woods said ExxonMobil looks forward to building on the progress "we've made to grow long-term shareholder value, and succeed in a lower-carbon future."

The election of Hietala and Goff was announced shortly after shareholders cast their vote on 26 May, but ExxonMobil said it would announce the results of the votes on the remaining candidates at a later date because the count was too close to call.

In December, Engine No. 1 nominated Karsner, Hietala, Goff, and Anders Runevad, former chief executive of Vestas Wind Systems, a turbine manufacturer, to the ExxonMobil board.

"We are grateful for shareholders' careful consideration of our nominees and are excited that these three individuals will be working with the full board to help better position ExxonMobil for the long-term benefit of all shareholders," Engine No. 1 said in a 2 June statement.

Engine No. 1, which holds a $54 million stake in the company with a $248 billion market capitalization, wants ExxonMobil to slash its capital spending and focus on the energy transition, saying its current strategy is no longer credible.

Some 20% of the company's stock is held by asset managers BlackRock, Vanguard, State Street, and Fidelity. BlackRock, Vanguard, and State Street joined the Net Zero Asset Managers Initiative, an international effort to limit investments to projects and companies aiming for net-zero carbon footprints.

Posted 02 June 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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