Engine No. 1 – the hedge fund which gained three seats on Exxon’s board earlier this year – is reportedly looking into opportunities for gaining a similar influence in other oil companies. As reported by CNBC‘s David Faber, the fund has been in contact with senior management at other corporations, most notably Chevron.
Chevron formally confirmed that a meeting was held with Engine No. 1 and released a statement saying: “We have contingency plans to respond to many different types of events, including an activist investor. We engage regularly with shareholders in constructive two-way dialogue and look forward to discussing the next chapter of our lower carbon story with them later this month.”
Although the talks may not lead to anything specific between Engine No. 1 and Chevron any time soon, but they are a signal of intent by the activist firm that it means to push on with its ESG agenda.
However there has been criticism of Engine No. 1’s approach to promoting a more climate-friendly plans for Exxon. In an article published on August 18, Henry N. Butler, executive director of the Law & Economics Center at George Mason University’s Antonin Scalia Law School and Bernard S. Sharfman, a research fellow at the Law & Economics Center, claim that Engine No. 1 is “All Talk, No Strategy for ExxonMobil” because there is nothing specific in Engine No. 1’s plan for shifting Exxons focus to clean-energy production.
Further confirming the lack of specifics was a statement from Exxon’s CEO Darren Woods, who said the company doesn’t plan any “huge shifts in strategy” after losing the board seats battle.
Rising energy prices have also provided a recent boost to its bottom line and possibly reduced the momentum behind the drive for a transition to greener initiatives.