It would be an understatement to say it was one of the more anticipated AGMs of recent times.
“Activist investors are taking America’s energy giant to task over carbon emissions. The result is not a foregone conclusion,” said The Economist, reporting on big oil stalwart Exxon-Mobil’s annual meeting and the challenge it faced from a coalition of those investors, led by Engine No.1, wanting to put four green-minded directors on the board to force the company into lower-carbon change.
“A fight for the soul – and the future – of Exxon-Mobil” said the Washington Post, as big media previewed the tussle over the priorities of one of big oil’s biggest players for days in the run-up to the virtual meeting.
In the end, the company lost two board seats to the aforementioned activist investors in a coup that was heralded as a victory in the fight against climate change.
What does this mean for the investor landscape being navigated by UK companies, or is Exxon-Mobil just one more ‘older’ stock that is having to bow to the weight of pressure, with the balance of power tipping towards investors who feel it is not changing fast enough?
Time will tell. But the company’s strategy, ESG focus and performance have been poured over in public in ways that few large companies will have experienced before, except in times of prolonged crisis.
Few other companies may experience that level of scrutiny around aspects of ESG-related change and strategy. But the lasting impression of this story is likely to be the level of data that was put up in lights to make the case for strategic change. Tangible metrics across the environmental ESG spectrum and beyond, covering investment commitments, shareholdings, competitor contrasts and of course share price trajectory.
It was a case made not just with statistics and percentages, but with dollar signs, and the sheer weight of it ultimately won out. The FT reported jointly on that story and Shell being ordered by a Dutch court to reduce emissions further, with the verdict pinning responsibility for emissions by Shell and its suppliers on the company.
They may be badged as activist investors now, but armed with sufficient breadth and depth of evidence, and with reputation shaped not just in decisions at a meeting but in the build-up and aftermath, today’s activists may be tomorrow’s mainstream.
For communicators and strategists, the need to understand and address the agendas of individual investors has been heightened.
The ESG News Review is written by Steve Earl, a Partner at BOLDT.
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