Chevron (CVX) reportedly met with Engine No. 1, but the activist investor group that defeated Exxon Mobil’s (XOM) management in a shareholder battle earlier this year is taking a different approach. CVX stock rose.
The U.S. oil major outlined its carbon reduction plans to Engine No. 1, which doesn’t plan to launch a campaign against it, sources told the Wall Street Journal.
Instead, Chevron will announce its carbon-reduction program in the coming weeks, including appointing a new director with an environmental background to the board, according to the Journal.
Big oil is facing a reckoning over climate change from both investors and governments.
Engine No. 1 took center stage at Exxon’s investor meeting in May and earned three seats on the board. The group pushed for the U.S. oil major to take a more proactive approach to climate change, which it believes will have major ramifications for Exxon stock.
In an attempt to appease Engine No. 1 ahead of the vote, Exxon announced that it would add two new directors over the next year, including one with climate experience.
But that wasn’t enough for Engine No. 1, which pushed back on the move say that the “board that continues to only be open to new directors that it approves, rather than trusting the shareholder vote.”
CVX Stock, Oil Stocks Face Climate Pressures
At Chevron’s meeting, shareholders went against management to back a proposal to reduce emissions from the Dow Jones oil giant’s customers.
European oil majors have been under immense pressure from governments as well as their shareholders to reduce emissions.
The majority of Shell investors voted in favor of the company’s Energy Transition Strategy to reach net-zero emissions by 2050.
Meanwhile, consumers are shifting away from gasoline-powered cars in favor of electric vehicles. And utilities are generating more electricity now from solar and wind power and less from natural gas.
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