Seeking Alpha
Oil giants grope for next steps after day of devastating defeats
- Today brought a trifecta of trouble for Big Oil: Exxon Mobil (NYSE:XOM) lost at least two board seats to an activist hedge fund, Chevron (NYSE:CVX) shareholders voted to further cut emissions, and Royal Dutch Shell’s (RDS.A, RDS.B) emissions targets were deemed insufficient by a Dutch court.
- Engine No. 1’s successful campaign to win seats on Exxon’s board likely will force it to more directly confront growing shareholder concerns about climate change.
- Exxon was vulnerable because it has failed to provide good returns from fossil fuels for years and gets no credit from investors focused on sustainability because it has not invested in renewable energy, says Peter Bryant, a managing partner at business consultant Clareo.
- At Chevron, shareholders voted 61% to cut emissions from the end-use of its fuels and barely lost a non-binding vote calling for a report on the business impact of achieving net zero emissions by 2050.
- The shareholder votes signal a new sense of urgency, says Mark Van Baal, who leads a climate advocacy group that placed resolutions calling for emissions cuts at Chevron and elsewhere.
- Meanwhile, Shell says it will appeal the Dutch court ruling, which has a “negligible chance to survive appeals,” Rystad Energy’s Per Magnus Nysveen says.
- But lawyers and consultants say the ruling could set a precedent in other Western jurisdictions, particularly in Europe, opening oil companies and firms in other energy intensive industries to new legal jeopardy over their carbon emissions.
- According to Van Baal, today’s message was clear: “We want you to act by decreasing emissions now, not in the distant future.”
