Exxon Slammed by Tiresome Activist Investors
Providing further proof - as if any were needed - that ESG investor groups can never be satisfied, ExxonMobil finds itself under renewed attack from activists for not doing enough even though it is on target to meet the 2025 goals it was previously pressured by the same activists to adopt.
A group calling itself the Coalition for a Responsible Exxon, or “CURE” (no idea where the “U” is derived) is angry that Exxon, while doing what it needs to do to meet its overall goals, including $15 billion in planned investments in green energy initiatives, failed this year to to set “segment-specific reduction targets for Exxon’s midstream and downstream businesses.” For that ostensible “failure,” CURE awards the company’s new board of directors - which includes activist members sponsored by fellow ESG activist group Engine No. 1 - a grade of D-minus for the year, and calls for the firing of CEO Darren Woods despite the company’s stellar financial performance in 2021.
The most predictable thing in the energy world today is the knowledge that, when Exxon management acquiesces to this demand and meets it next year or the year after, the activists at CURE will move the goalposts one more time, award the Board a D-minus or perhaps generously raise it to a D, and reiterate their demand for the firing of the CEO. Because that is, after all, what these ESG investor groups do. Given that they are consistently rewarded by corporate management teams for deploying such tactics, they have no reason to change a behavior that works.
CURE’s announcement came days after Exxon itself announced that its Esso Petroleum Company subsidiary had entered into a memo of understanding (MOU) with SGN and Macquarie’s Green Investment Group (GIG) to “to explore the use of hydrogen and carbon capture to help reduce emissions in the Southampton industrial cluster.” A release by the three prospective partners estimates that the potential annual demand for hydrogen from the cluster could be as much as 37 TWh by 2050, enough to meet the heating demand of 800,000 homes in Southern England. The Southampton cluster is home to Exxon’s Fawley Complex, the largest refining/petrochemical complex in the UK.
Joe Blommaert, president of ExxonMobil Low Carbon Solutions said: “Hydrogen has the potential to help provide customers with access to affordable, reliable energy while minimizing emissions. We are pleased to be part of this collaboration that includes a technical study to assess the potential for the Fawley facility to play a key role in both hydrogen production and carbon capture and storage solutions. With well-designed policy and regulations, hydrogen can help reduce the emissions of the Southampton industrial area that provides vital products for modern life.”