When upstart activist hedge fund Engine No. 1 secured three seats on the board of Exxon-Mobil, in June, it was a high-profile repudiation of the way the country’s largest oil company has long conducted business: with a laser focus on returns and a blind eye to its impact on the world at large. The fund vowed to push ExxonMobil to develop a plan to address climate change and reduce its carbon footprint. Exxon’s responsibility as a business would no longer be only to its shareholders, the boardroom showdown signaled, but also to the public and the planet.
To pull off this coup, however, Engine No. 1 first needed to woo other, bigger shareholders. Launched in December 2020 with a goal of getting companies to prioritize longterm value, the fund found a perfect first target in Exxon. The oil company had ignored the kinds of renewable investments that would set it up for future success, and its stock had been plummeting. Though En-gine