Sunday, December 12, 2021

Activist group targets Exxon with shareholder climate resolution


Signage is seen at an Exxon gas station in Brooklyn, New York City

Sun, December 12, 2021
By Ron Bousso and Sabrina Valle

LONDON (Reuters) - Climate activist group Follow This targeted Exxon Mobil Corp with a shareholder resolution urging it to deepen its carbon emissions reduction targets, ramping up pressure on the oil and gas company over its energy transition strategy.

The shareholder resolution ahead of the 2022 annual general meeting urges Exxon to publish medium and long-term targets to reduce the greenhouse gas (GHG) emissions from its operations and the burning of fuels sold to customers, known as Scope 3 emissions, in order to meet the U.N.-backed targets to limit global warming to below 2 degrees Celsius.

Exxon has successfully blocked attempts to file similar resolutions with the Securities and Exchange Commission during the presidency of Donald Trump. Exxon has not responded to an inquiry on whether it would seek to block the latest Follow This resolution.

Dutch organisation Follow This first targeted Royal Dutch Shell in 2016 and later expanded actions to other top oil and gas companies, gaining growing shareholder support. It is the first time it is targeting U.S. companies Exxon and Marathon Petroleum Corp.

Companies have introduced in recent years climate strategies that vary widely in scope and ambition.

It has also filed new resolutions with Chevron, ConocoPhillips, Occidental Petroleum, and Phillips 66, as well as Shell and BP PLC for the 2022 meetings.

"In previous years, Big Oil's executives have shown that they only move after their shareholders vote for climate resolutions," Follow This founder Mark van Baal said in an investor briefing.

A coalition of Exxon investors said in a report released on Thursday that it wants the oil company to replace its chief executive officer and move more aggressively to slash GHG emissions.

Six months after hedge fund Engine No. 1 successfully placed three new directors on Exxon's board to improve its climate approach, the report also said its newly appointed board members and management team have not done enough to transition to clean energy or overhaul spending.

Exxon earlier this month released its new investment strategy into 2027, increasing spending over the next six years on GHG emission-reduction projects to a total of $15 billion.

Chevron's board "reviews proposals from shareholders in detail and will make recommendations to stockholders about how to vote on each request" in its proxy statement, planned for April 7, spokesperson Sean Comey said.

Marathon, BP and Shell confirmed receiving the resolution. Phillips 66 and Conoco declined to comment.

(Reporting by Ron Bousso and Sabrina Valle; Editing by Marguerita Choy)

Activist Investors Call On Exxon To Replace Its CEO


It seems like "activist" environmentalists investors in Exxon simply aren't ever going to be happy.

A group of these investors is now urging Exxon to replace its CEO and move even quicker to slash greenhouse gasses, despite the fact that Exxon is already years ahead of schedule in doing so on several goals.

But the Coalition for a Responsible Exxon (CURE) says the company has been "too slow" to reshape itself, according to Reuters.

CURE, which has 145 members, said: "CURE awards the new board an overall grade of D- for failing to make any tangible progress on the targets set by us, other shareholders and independent observers at the time of the annual meeting."

The group took exception to the company's corporate goals released earlier this month because the plan "fails to set segment-specific reduction targets for Exxon's midstream and downstream businesses," the report says.

Exxon responded: "The plans support the corporate strategy of continued structural cost savings, investment in low-cost-of-supply and lower-emission products, and further portfolio high-grading, positioning the company to double earnings and cash flow by 2027 versus 2019."

Despite this, CURE is still calling for Exxon's CEO to be replaced.

Recall, just days ago, we wrote about Exxon being ahead of schedule in several of their emission targets.

In Exxon's full corporate plan to 2027, which can be found on its website here, the company said it "plans to increase spending to $15 billion on greenhouse gas emission-reduction projects over the next six years while maintaining disciplined capital investments."


Bloomberg also noted that Exxon confirmed "it was on track to meet its 2025 greenhouse gas emission-reduction plans by year-end 2021, four years ahead of schedule."

Related: The Oil Price Crash Has Taught U.S. Shale A Valuable Lesson

Turning to financials, the oil supermajor said it plans on maintaining capital investments between $20 to $25 billion, per year, through 2027.


The company also said it has repaid $11 billion in debt, to date, in 2021. Exxon says it'll be "comfortably" in its range of targeted debt-to-capital ratio by year end.


These plans, of course, follow our reporting in October that the company was considering abandoning some of its oil and gas projects to appease environmental advocates.

The company's board, we noted in October, which includes three directors nominated by activist investors, had "expressed concerns about certain projects, including a $30 billion liquefied natural gas development in Mozambique and another multibillion-dollar gas project in Vietnam."

The change in strategic direction comes as Exxon's board is facing growing pressure from investors to restrain its fossil fuel investments and limit its carbon footprint. The board is also considering the carbon footprint of the new projects, and how they would affect the company's ability to meet environmental promises it has made.

Back in September we reported that as part of appeasement of the ESG lobby, the oil giant planned on implementing disclosures of shale emissions. The company announced it would start measuring its methane emissions from production of natural gas at a facility it owns in New Mexico. Exxon joins other shale gas producers, like EQT, who already provide similar data.

But for the company's activist investors, it doesn't seem like it'll ever be enough...

By Zerohedge.com

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