Activists Crashed Exxon’s Board, but Forcing Change Will Be Hard

These big investors place a lot of faith in companies and the profit motive to make changes that can cost trillions of dollars. This year, Mr. Fink wrote that he had “great optimism about the future of capitalism and the future health of the economy — not in spite of the energy transition, but because of it.”

But investors have not always rewarded companies that have announced ambitious plans to reduce emissions and move toward cleaner energy.

Over the last five years, Exxon’s shares have fallen by about a third — a period over which the SP 500 stock index was up about 100 percent. Its stock has done worse than the shares of other large oil companies. Yet, the shares of BP and Shell, two European companies that are investing a lot in cleaner sources of energy, are also lower — BP is down more than 17 percent over five years and Shell is down more than 26 percent.

And despite their efforts, energy companies as a whole have not reduced emissions by nearly enough to stop temperatures rising above levels that scientists believe are dangerous for the planet, and many experts are calling for more far-reaching changes. The International Energy Agency said last week that countries needed to stop approving new oil and gas fields immediately for the world to reach net zero carbon emissions by 2050.

Roberta Giordano, finance program campaigner for the Sunrise Project, an environmental group, said BlackRock, Vanguard and other asset managers needed to go much further, starting with the removal of Mr. Woods as Exxon’s chief executive.

“Once again this shareholder season, BlackRock has failed to fully use its massive voting power on climate,” she said.

But more optimistic analysts argue that Exxon could help the world reduce emissions and make money doing it. For example, the company’s experience with offshore oil drilling could be used to build offshore wind farms, said Geoffrey Heal, a professor at Columbia Business School. And Exxon could spend more on technology that removes carbon from the atmosphere and help make it affordable.

“If I was one of the directors,” Mr. Heal said, “I’d be pushing for that.”

Article source: https://www.nytimes.com/2021/05/27/business/economy/exxon-board-climate-change.html