EGEB: ExxonMobil, Chevron suffer stunning shareholder backlash

In today’s Electrek Green Energy Brief (EGEB):

  • ExxonMobil and Chevron suffer shareholder rebellions over a lack of strategy for emissions reduction.
  • Here’s the latest US Electric Power Monthly report, and what renewables are projected to do.
  • UnderstandSolar is a free service that links you to top-rated solar installers in your region for personalized solar estimates. Tesla now offers price matching, so it’s important to shop for the best quotes. Click here to learn more and get your quotes. — *ad.

ExxonMobil’s and Chevron’s rather bad day

US oil giants ExxonMobil and Chevron yesterday suffered shareholder backlash from activists and institutional investors over their failure to set viable emissions reduction strategies. The New York Times writes that “analysts could not recall another time that Exxon management had lost a vote against company-picked directors.”

Hedge fund activists Engine No. 1 successfully replaced two Exxon board members with its own candidates, and a vote on a third, Alexander Karsner, a senior strategist at X, is “not yet determined.”

Engine No. 1 “holds a stake worth just $54 million in a company with $248 billion in market capitalization. Exxon’s shares rose 0.7% to $58.64 after the votes were tallied Wednesday,” reports the Financial Times.

BlackRock, the world’s biggest asset manager and Exxon’s second largest shareholder with a 6.7% stake, backed Engine No. 1’s campaign. So did Legal & General Investment Management, which owns investment shares worth nearly $1 billion and is a top 20 Exxon shareholder.

Chris James, founder of Engine No. 1, said in an interview [via the NYT]:

This isn’t really about ideology, it’s about economics.

And economics is what has driven the adoption of some of the alternative fuel sources versus fossil fuels. We want there to be an acceptance of change.

So what can two or three board members achieve out of a total of 12? Their presence strengthens the position of investment firms pushing for climate change. Environmental Defense Fund president Fred Krupp writes:

It is about major asset managers and other influential investors stepping up, making their voices heard and walking the walk, connecting the dots between their climate rhetoric and their actions.

Over at Chevron, a majority of shareholders voted 61% in favor of a proposal from Dutch campaign group Follow This to force the oil giant to cut its scope 3 emissions – the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain.

Mark van Baal, cofounder of Follow This, said:

Institutional investors understand that no investment is safe in a global economy wracked by devastating climate change.

US electric power report

According to new data in the US Energy Information Administration’s “Electric Power Monthly” report, net generation of solar and wind power in the US increased by 24.3% (31,357 MWh) and 10.5% (96,658 MWh), respectively, in total electric power year-to-date, for January to March 2021 and 2020.

Overall, renewable sources excluding hydroelectric were up 10.8% (136,262 MWh). That includes wind, solar, wood, other biomass, and geothermal. Hydroelectric conventional was down by 7.5% (69,646 MWh) and hydroelectric pumped storage was up 11.1% (-1,085 MWh).

On the fossil fuel front, coal was up 34.8% (231,675 MWh) and natural gas was down 10.8% (342,372 MWh). This was due to higher prices for natural gas as a result of growth in liquefied natural gas exports and rising domestic natural gas consumption.

Further, in March, S&P Global Platts reported:

The EIA said the ‘recent extreme cold weather in much of the country contributed to an increase in coal use for power generation,” but added that the “supply for rising coal-fired generation will be partly met by draws from on-site stockpiles at power plants.’

Going forward, renewables are projected to make up 21.2% of US power generation in 2021 and 22.6% in 2022, up from 19.7% in 2020. Coal is expected to make up 22.6% of power generation in 2021 and 22.8% in 2022, up from 19.9% generated in 2020. Power generation from natural gas is estimated at 35.8% in 2021 and 34.9% in 2022, compared with 39.2% in 2020.

Globally, coal is expected to flatten by 2025 and renewables will surpass the fossil fuel, according to the International Energy Agency.

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