Campaigners have crushed Exxon board, but forcing change will be difficult
“If you want to be a public company in a carbon intensive industry, you are going to have to convince investors that you still have a viable business in a low carbon future,” said Mark Viviano, managing partner at Kimmeridge, a company of energy. -targeted private equity firm.
Exxon management says it realizes it needs to prepare for a more low-carbon future and has supported the goals of the Paris climate agreement. But the company gave up solar power decades ago, and today its efforts to rebuild for an energy transition are based on brilliant ideas that may not work.
It is a world leader in the industry’s carbon capture and storage underground, and in recent weeks it has proposed a massive $ 100 billion carbon capture and storage project along the Houston Ship Channel. who could be a model for the world. But for the plan to be economically viable, the federal government would have to impose a carbon tax or some other kind of carbon price, a tough sell in Washington these days.
Exxon has also worked for years to make advanced biofuels from algae, a project other companies have abandoned. And it continues to invest heavily in oil and gas exploration at a time when demand for these products may peak.
Shareholders voted to retain Darren Woods as CEO and chairman, a move a Morgan Stanley research report saw as endorsement of its strategy to spend less on capital projects, cut costs and continue. to pay a generous dividend.
“I’m not sure Exxon is going to change the way they’re going to handle the energy transition,” said Mark Boling, former executive vice president of Southwestern Energy, a Texas oil and gas company. “I think they’ve made a decision on how they’re going to go and a few new board members won’t make any difference.”
The makers of the No.1 engine don’t say much about their plans.
“We have redefined what is possible,” said Chris James, founder of the No.1 engine, in an interview after the vote. “Our overall goal is really greater transparency, which brings accountability, transparency on the impacts of what the business does as well as accountability on how to manage those impacts.”