Activist investment firm pushes Exxon to do more on greenhouse gas emissions

FILE PHOTO: FILE PHOTO: View of the Exxon Mobil refinery in Baytown, Texas
FILE PHOTO: A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. REUTERS/Jessica Rinaldi/File Photo

February 22, 2021

BOSTON (Reuters) – Investment firm Engine No. 1 on Monday reiterated its call for Exxon Mobil Corp, one of corporate America’s most iconic brands, to slash its greenhouse gas emissions to zero by 2050, according to a letter sent to the company.

“This is not just a climate issue but a fundamental investor issue – no different than capital allocation or management compensation,” the firm said in the letter.

Engine No. 1 said Exxon needs board members with deep energy expertise and insights into evolving trends to put itself on a path to net zero emissions that is sustainable and profitable. The firm has already nominated four directors to the board.

Exxon has gone from “dismissing emissions reduction goals as a ‘beauty competition’ to claiming repeatedly this month that its emissions reductions plans are ‘consistent’ with the Paris Agreement,” the investment firm said.

While Exxon, valued at $221 billion, has made changes, they do not go far enough, said the firm, which is supported by pension fund California State Teachers’ Retirement System (CalSTRS).

Exxon did not immediately respond to a request for comment.

In recent weeks, Exxon has announced several changes, including the appointment of a new board member, setting a new goal to cut emissions and committing $3 billion over the next five years to carbon capture.

“The Company aims for industry-leading greenhouse gas performance across its businesses by 2030, and recently announced new emission reduction plans for 2025, which are projected to be consistent with the goals of the Paris Agreement,” it said in its 2021 Energy & Carbon Summary.

Engine No. 1 wants Exxon to do more.

“ExxonMobil only sets emission reduction plans for 2025, whereas policies aligned with the Paris Agreement target net zero emissions by 2050,” the letter said.

Exxon’s share price has climbed 27% since the start of January.

(Reporting by Svea Herbst-Bayliss; Editing by Sonya Hepinstall)