Countries may be moving toward green energy, but Big Oil is hardly all in.
On Friday, two impact-oriented funds dropped a climate proposal intended to go to a ExxonMobil (XOM) shareholder vote after the Houston-based oil giant filed a lawsuit to remove the measure from its proxy ballot.
In the complaint, the oil producer said the activist investors Arjuna Capital and Follow This were driven by an “extreme agenda” with the goal of “diminishing the company’s existing business.”
“Given Exxon’s preference to fight a battle in court rather than allow shareholders the freedom of a vote at its annual meeting, we decided to withdraw the climate proposal,” Mark van Baal, founder of Follow This, said in a statement on Friday.
As ESG initiatives and investing styles fall out of favor, energy giants are doubling down on their core business of oil. Last year, ExxonMobil announced a near $60 billion deal to acquire Pioneer Natural Resources (PXD) that will make it the largest player in US shale.
More than a week later, Chevron (CVX) said it would buy oil explorer and producer Hess (HES) in an all-stock agreement valued at $53 billion.
Big Oil companies have posted blockbuster quarters following the start of the Russia-Ukraine war in 2022 as crude prices surged.
Even as West Texas Intermediate (WTI) fell more than 10% in 2023, US energy giants saw their second-largest annual profit in a decade. The industry is under pressure from shareholders to keep momentum going.
Last week, an activist hedge fund sent a letter to BP (BP) demanding that the British oil and gas producer scale back its “irrational” green energy strategy, which has, “quite understandably, depressed the value of BP’s share price.”
A BP spokesman said in a statement the company continues “to receive support for our strategy” from other shareholders.
Oil and gas proponents say a shift to green energy won’t happen from one day to the next.
“We cannot replace overnight an energy system that took 150 years to build,” said ExxonMobil CEO Darren Woods at the Asia-Pacific Economic Cooperation conference in San Francisco in November.
“The problem is not oil and gas. It’s emissions,” he added. “The solutions to climate change have been too focused on reducing supply. That’s a recipe for human hardship and a poorer world.”
Last year the International Energy Agency, which advocates for green technologies, noted the oil and gas industry invested around $20 billion in clean energy in 2022, some 2.5% of its total capital spending.
