Activist hedge fund investor of ExxonMobil warns stakeholders against dangers of company’s current strategic goals
New York, April 26 2021: According to the Financial Times, Engine No1, an investor activist hedge fund in ExxonMobil has prepared a report for distribution amongst the oil giant’s stakeholders that highlights what it calls the company’s lack of planning for climate change and the contingencies associated with it.
According to the investor, ExxonMobil’s current strategy and business plan, which is focused on spending $20 to $25 Billion per year on exploring and pumping oil to fuel growth, is an existential business threat and shows that the company has no future alternate strategy in the case of an energy transition.
This report is especially important in the backdrop of the current global climate of cutting back emissions and reducing global carbon footprint. This week was marked by the virtual global climate conference called by US President Joe Biden to discuss, re-evaluate and reaffirm climate change targets by various countries.
The meeting saw world leaders come together virtually this week for a 40-leader climate summit, the result of which is President Biden vowing to double US targets to slash greenhouse gas emissions responsible for climate change by 2030 and Japan and Canada also raising commitments. The EU and Britain had already locked in ambitious and forceful targets earlier in the week.
ExxonMobil has attracted criticism in the past year for both its underwhelming financial performance and also its refusal to accept climate change and greenhouse gas emissions as a real threat to the energy business. The company lacks any solid approach to renewable energy development and no plan for an energy transition according to the report by Engine No.1.
ExxonMobil meanwhile has said its business would focus on carbon capture and storage technology as a means to counter the emissions that cause greenhouse gases, global warming and climate change. The hedge fund has critically pointed out the potential stakeholder value that is being sacrificed by ExxonMobil from its refusal to explore other potential value sources.The company refuses to accept the very real threat from the decline in fossil fuel demand in the future.
The investor hedge fund Engine No. 1 is building a case for the oil company to consider alternative energy investments more seriously. According to the report, ExxonMobil’s total emissions, those it generates and those from the products it sells, will increase by 2025. Its first quarter results are due to be published on Friday.
The pandemic ravaged the industry in 2020 and the US oil giant, lost $22 billion in 2020 amid collapsing oil prices.
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