Hopes Raised and Dashed in a Boardroom: a Lesson in Sustainable Investing
In 2021, three climate-conscious individuals were elected to the Board of Directors of ExxonMobil. Just one such person in the belly of the beast, so to speak, would’ve been case for celebration. Three, heads turned. To cap it off, the three were backed by a tiny socially responsible investment fund that no one had heard of. It was a classic story of an underdog overcoming the odds. We all cheer for the underdog.
As an investor who cares deeply about the future, I saw this victory as a small and important lever for curbing greenhouse gas emissions. The three could cast 3 of 13 Board votes. No, not enough to alter the company’s direction, but enough to give voice to wider circles of stakeholders from a powerful platform. Yes, they represented the little engine that could.
Last month, ExxonMobil announced a $60 billion acquisition of Pioneer Natural Resources, a move that further entrenches the company's fortunes in fossil fuels. The Board’s vote? 13 of 13 in favor. The three Board additions from 2021 who were supposed to represent a different voice appeared to have been voiceless.
I don’t know
For now, we can only speculate about the thinking of the three Board members from 2021. Perhaps they saw ExxonMobil’s plans to accelerate Pioneer’s net zero goals from 2050 to 2035 as an important step in decarbonization. Perhaps they simply prioritized shareholder value. Their vote carried moral weight. I can only wish that they acted as good ancestors to future generations.
We press on
What seemed like an important victory for sustainable investors in 2021 now looks more like a lesson that we can’t take on big corporations. That is the wrong lesson. The promise of being able to influence one of the highest governing bodies of one of the world’s biggest energy companies has not happened. Yet. It can and probably will. And it’s only one instrument in the toolbox to overcome climate change, itself a product of human hubris.