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Investor pushes Exxon toward net zero by 2050

(Bloomberg) – Exxon Mobil Corp. has already improved its climate plans, just three months after an activist investor’s campaign to force change within the company. Now the group, Engine No. 1, is pushing the oil giant to set a new goal: zero net greenhouse gas emissions by 2050. Engine No. 1 published a letter on Monday reiterating its call for Exxon to renew its board. board of directors with the inclusion of four new members who have the necessary experience to lead the company towards climate neutrality. This is a goal already adopted by large European oil producers such as BP Plc, Royal Dutch Shell Plc and Total SA. Exxon and the American Chevron Corp. have resisted. “This is not just a climate problem, but a fundamental problem for investors, it is not different from capital allocation or management compensation, given the immense risk to the model. Exxon Mobil’s current business in a rapidly changing world, ”wrote San Francisco-based Engine No. 1 in a letter sent to the company. The group is backed by the California State Teachers’ Retirement System, the second largest pension fund in the United States and owner of more than $ 400 million in Exxon stock. Exxon did not immediately respond to a request for comment. This is the latest salvo in Engine No. 1’s campaign against Exxon, which began in December. Unlike previous shareholder climate efforts that focused on getting the company to disclose environmental data or be more ambitious about reducing emissions, Engine No. 1 now insists that change will only happen if the board includes leaders with experience in the energy transition. Exxon currently produces virtually no renewable energy and, as Bloomberg Green reported last year, the company had made long-range plans to expand fossil fuel production and thereby increase greenhouse gas production. Chairman and CEO Darren Woods, none of the board members had any experience even in the oil industry. On February 2, Exxon added Wan Zulkiflee, former head of Malaysia Petroliam Nasional Bhd. Since the initial Engine No. 1 letter, Exxon has set a new target to reduce emissions, revealing for the first time the magnitude of customer emissions. burning fossil fuels and pledged to invest $ 3 billion in carbon capture and other technologies. In a sign that the activist momentum could yield additional results, Exxon is considering Jeff Ubben, a climate-minded investor, as a new board member this month. Engine No. 1 owns less than $ 50 million in Exxon stock, at December 31. With the support of Calstrs, the activist initiative represents approximately 0.2% of Exxon’s public participation. But the oil giant has recently been receptive to investor demands. Exxon shareholders with trillions of dollars in total assets, including BlackRock Inc., Legal & General Group Plc, and UBS AG, have joined the general call for corporations to provide stronger climate disclosures. Exxon’s actions have coincided with the election of US President Joe Biden, who promised to tighten regulations for oil companies and pledged to steer the country toward net zero emissions by 2050. This means that nine of the world’s 10 largest economies have agreed to a target for achieve climate neutrality. The changes at Exxon stem from a series of investigative reports from Bloomberg Green last year that exposed previously undisclosed emissions from Exxon and the development stalling of a major carbon capture project. Engine No. 1 believes that Exxon’s responses so far are insufficient. While the planet could benefit from Exxon revising its climate strategy, Engine No. 1 continues the activist-investor tradition of framing its demands around protecting shareholder value. “We believe that enhancing the long-term future of the company requires a clean break with the past,” the letter says. Original Note: Exxon Pushed by Activist Holder to Set Goal of Net-Zero by 2050For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source. © 2021 Bloomberg LP

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