This is a turning point for the oil and gas industry and for leading investors in the race to transition to a net zero energy system.
Leading companies around the world recognize that climate change presents a massive systemic risk, and solving it is a multi-billion dollar opportunity. Others, such as ExxonMobil, have rejected calls to align their business strategies with a decarbonizing economy. For them, a financial calculation may finally come.
On May 26, ExxonMobil faces an investor vote to replace four board members with forward-thinking leaders who can help catalyze and accelerate a much-needed transition towards a clean energy future. .
Three Major Proxy Advisory Firms (Glass Lewis, ISS, and Pension and Investment Research Advisory) has already come out in support of some or all of the nominees on the board. legal and generalThe UK’s largest asset manager has also pledged to vote on nominees to improve Exxon’s transition readiness and financial viability.
CalPERS, CalSTRS and the New York State Common Retirement Fund — the nation’s three largest public pensioners responsible for providing retirement security to millions — have also decided to vote their shares in favor of new board candidates.
Investors should walk the talk
ExxonMobil’s four largest shareholders Asset managers BlackRock Vanguard, State Street and Fidelity – own about 20% of the company’s stock, giving them powerful gains in the upcoming vote.
With the exception of Fidelity, these firms have also signed a pledge through Net Zero Asset Managers Initiative, “Supporting the target of net zero greenhouse gas emissions by 2050 or before, in line with global efforts to limit warming to 1.5°C” and “Supporting investments aligned with net zero emissions by or before 2050″. ”
How they vote will be proof of whether these shareholders are willing to act now to address these problems Serious emerging risks to the US financial system and move the firm towards cost-competitive and increasingly innovative clean energy technologies.
Climate crisis is a business imperative
There is increasing pressure on companies and investors to deal with the climate crisis. Real winners will emerge based on their ability to maintain the social license to operate and remain competitive in a rapidly changing and highly competitive clean energy market.
There is increasing investor confidence for companies that follow business-as-usual investment strategies with consistently poor returns.
For example, from 2010 to 2020, Exxon gave diminishing returns investors compared to its peers BP, Shell, Chevron and Total. America The Shell Industry Also Lost $300 Billion In that time, including unprofitable investments by ExxonMobil, which led to multi-billion dollar devaluation of assets.
The simple fact is that new products and technologies entering the market are of no use to oil and gas. From solar and wind in the power sector to electric vehicles in transportation and high-efficiency heat pumps in buildings, oil and gas are now competing with cleaner – and increasingly cheaper – alternatives.
a clear case for action
The International Energy Agency, which helps shape energy policy for 30 member states, clarified in a report on May 18 that the development of new oil and gas fields – the kind of investment ExxonMobil has continued – will help climate- There is no place in the still world.
report good Says that in order to reduce emissions at the scale and speed that science demands, investors and energy companies need to start practicing what they preach on climate change. After all, commercial opportunities abound in the growing clean energy sector, not in the fading future of conventional oil and gas.
It’s a shocking wake-up call for anyone in the oil and gas industry who thought they might be making their way through the energy transition. So, too Ford’s electron-powered F-150 Lightning pickup, unveiled last week, the first version of America’s most popular vehicle that needs no ExxonMobil products.
Coming so close to these developments, the ExxonMobil shareholder vote stands as a potential inflection point.
It’s a chance for ExxonMobil’s four largest shareholders to make their voices – and votes – on the climate and do the right thing for building long-term value.
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