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A historically bad day for Big Oil could turn into a “watershed moment” in the climate crisis, said Sam Meredith at CNBC. A stunning “confluence of events” last week saw a string of boardroom and courtroom defeats for three oil giants within hours of each other. The first came when a tiny activist hedge fund that has been pushing ExxonMobil to pivot away from fossil fuels managed to unseat at least two board members of the company. The long-shot victory for Engine No. 1, which holds just a 0.02 percent stake in Exxon, was not the only sign of the “waning patience of investors pushing for much faster action” on climate change. Shareholders of Chevron also voted overwhelmingly to “push the company to reduce its carbon footprint.” The same day, “a Dutch court ruled that Shell must reduce its carbon emissions by 45 percent by 2030.” This is “the first time in history a company has been legally obliged to align its policies with the Paris Agreement.”
The Exxon vote was a “bombshell,” said The Economist. It is “extremely rare for a company the size of ExxonMobil to elect even one dissident director, let alone two or three.” But Engine No. 1’s campaign succeeded, thanks to the backing of BlackRock, the asset management giant that holds 6.6 percent of Exxon’s shares, as well as four large pension funds representing workers in California and New York. Shell’s loss requires it to take ”measurable, concrete steps toward decarbonization,” said Gernot Wagner at Bloomberg. For Exxon, by contrast, “what comes next is more open-ended.” The difficulty here is figuring out what the next steps will be for a company whose core competency is “handling liquid fuel.” It’s up to the climate activists to translate their victory into policies and “find a new role for Exxon in a carbon-constrained world.”
This wasn’t the Waterloo for fossil fuels that the Left claims it is, said The Wall Street Journal in an editorial. “Engine No. 1 saw an opening with the pandemic and took it.” Its main backer, BlackRock, is “trying to get in the good graces of the anti–fossil fuel crowd who run Washington.” In effect, this “was a progressive political coup.” Worldwide, climate activists prefer “corporatist stitch-ups” to the ballot box, said Andrew Stuttaford at National Review. One survey found that 35 percent of U.K. residents would not spend even $1 a month to “mitigate climate change.” Meanwhile, the British government is weighing a ban on gas boilers that would cost 8 million homeowners around $28,000 each.
The tension between reducing emissions and lifting profits is impossible to ignore, said Peter Eavis and Clifford Krauss at The New York Times. Getting Exxon “to switch to cleaner energy will be a yearslong effort.” The question is how long the big investment firms will be willing to “keep the pressure on.” Investors haven’t always rewarded companies for their climate actions. Exxon’s shares have fallen by about a third in the past five years — but Exxon has still done considerably better than BP and Shell, two European companies that are investing a lot in cleaner sources of energy.
This article was first published in the latest issue of The Week magazine. If you want to read more like it, you can try six risk-free issues of the magazine here.