Colossal fossil ExxonMobil is up against “existential business risk” due to its “refusal to accept that fossil fuel demand may decline,” according to an investor presentation by San Francisco-based hedge fund Engine No. 1 that was first reported by the Financial Times.
Though it already faces “value destruction”, the 80-page presentation said, Exxon is “pinning its future on fossil fuels as governments move to slash emissions” and “still has no credible plan to protect value in an energy transition,” Bloomberg Green reports, citing the Times story.
While the company “touts its efforts in areas like carbon capture and biofuels,” the Times said, citing the presentation, its activities so far have “delivered more advertising than results.”
Last week, the New York State pension fund and the California State Teachers’ Retirement System (CalSTRS) said they would support Engine No. 1’s four nominees for the Exxon board, with New York State Comptroller Thomas DiNapoli declaring the board “needs an overhaul” to better manage the climate risks it faces, Reuters reports. The United States’ biggest fossil and the activist hedge fund “are battling over board seats following Exxon’s historic net annual loss of US$22.4 billion for 2020,” the news agency writes. “The fund has criticized the producer for ‘significant underperformance’ and a lagging approach to cleaner fuels.”
Engine No. 1’s nominees are former fossil CEO Gregory Goff, former Vestas Wind Systems CEO Anders Runevad, Kaisa Hietala, former head of renewable fuels at Finnish refiner Neste, and Alexander Karsner, a former U.S. Assistant Secretary of Energy for efficiency and renewable energy, Reuters states.
“We are excited to have a new slate of candidates to support,” DiNapoli said. “We are supporting Engine No 1′s slate of candidates because they bring transformative industry experience to the table and hold out hope that it is not too late to turn the tide at Exxon and improve its performance.”
Bloomberg says an Exxon spokesperson responded to Engine 1’s critique in an April 12 letter to shareholders, saying the fund’s “vague and undefined plan” would endanger the colossal fossil’s future and its shareholders’ dividends.