Analysis-Exxon Mobil's megadeal to test climate-aware shareholders
) would expand the top U.S. oil producer's footprint in the country's biggest oilfield, raising questions for shareholders over its transition to low-carbon energy.
Despite pressure on global corporations to move away from fossil fuels in favor of cleaner energy like wind and solar, Exxon has not bet big on renewables like many peers. So far, shareholders profited as the share price more than doubled since early 2021 when activist investors publicly pushed for changes.
Big Oil is responsible for the bulk of human-induced greenhouse gas emissions and pressure for action is building. U.S. energy firms have been among the biggest winners so far, with Exxon's price gaining around 75% since the start of last year against a 10% drop in theThe deal comes two years after newcomer investment firm Engine No. 1 in 2021 put three new executives onto Exxon's board, partly amid criticism over its moves on climate.
Privately, investors worried if Exxon bowed out of production, someone else would pick up the slack and nothing would be gained for shareholders or energy transfer. While Engine No. 1's campaign at Exxon is remembered for its climate component, bankers and lawyers also said that the firm won its Exxon board seats largely because it made economic arguments.
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