Colossal fossil ExxonMobil faced a stark, year-end warning last week that it will follow onetime business icons Blockbuster Video and Eastman Kodak into corporate oblivion if it fails to embrace the transition off fossil fuels.

While rebellious shareholders led by start-up hedge fund Engine No. 1 succeeded in electing three of 12 directors on the Exxon board last spring, the company hasn’t “embraced them holistically and recognized that this is shareholders talking to them and wanting a change,” warned Christopher Ailman, chief investment officer for the California State Teachers’ Retirement System (CalSTRS), the second-biggest public pension fund in the United States.

But “if these companies want to survive and not be Eastman Kodak or Blockbuster Video, darn it, they better get their act together and become energy companies, not just oil and gas firms,” Ailman told Blomberg TV December 31.

Ailman’s searing statement came less than two weeks after the UK’s National Employment Savings Trust (NEST) and Zurich-based UBS Group announced they were dumping their shares in five companies that had “not done enough” on climate, including Exxon and its Canadian subsidiary, Imperial Oil. Earlier in the month, Engine No. 1 founder Chris James said Exxon is stuck with a “failing governance structure propagated by a management without a strategy for the energy transition,” Reuters wrote in early December.

“This is a company that has lost its social licence,” James said at the time. “It needs to look at the energy transition as an opportunity to be part of the solution instead of the problem.”

On the heels of that interview, the Coalition United for a Responsible Exxon (CURE), a group of investors with a combined US$2.4 trillion in assets, gave the company a D- rating, called for CEO Darren Woods to be replaced, and “laid out a blueprint for a new CEO,” the Institute for Energy Economics and Financial Analysis reported. IEEFA chronicled a “downward cycle” the company has faced for years, pointing to the growing contrast between the demands of activist shareholders, the failure of many of its biggest oil and gas investments, and the “warning signs made clear according to their own metrics, the company’s stock price and bottom line.”

With Woods signalling that Exxon management has no intention of changing course, wrote IEEFA Director of Financial Analysis Tom Sanzillo, “the question at the top of the 2022 agenda at ExxonMobil is how long Darren Woods should remain CEO,” since he “represents all that is wrong with the company.”

Exxon spokesperson Casey Norton told a different story in an email to Bloomberg last week.

“The board is working constructively for the benefit of all shareholders and focused on shareholder returns through the energy transition, with an emphasis on capital discipline and reducing greenhouse gas emissions,” he told the news agency in an email.

“As part of the corporate plan announced earlier this year, the board endorsed increased investments in lower emissions projects, including those initially focused on carbon capture and storage, biofuels, and hydrogen,” he added. “We actively engage with shareholders and provide updates on our business plans, which consider their feedback and input.”

When he and other fossil executives were summoned to appear before a U.S. Congressional subcommittee last fall, Woods claimed his company “has long acknowledged the reality and risks of climate change, and it has devoted significant resources to addressing those risks.” But less than two weeks later, a senior company lobbyist said the climate emergency might not be as dire as the science shows, the Washington Post reported.

“Is it catastrophic inevitable risk? Not in my mind. But there is risk,” said Exxon VP and registered lobbyist Erik Oswald, in a November 9 panel presentation shared with the Post by watchdog group Documented.

“The way we think about this is not as the Crusaders who are the climate fix,” he added. “We’re looking at markets.”

At the time, Norton told the Post that “the statements you provided lack appropriate context and are not representative of the company’s positions on important issues, including climate change and carbon capture.”