Gambling on Green

Chapter 1History of Environmental and Corporate Entanglement

In spring 2021, a small hedge fund called Engine No. 1 successfully infiltrated and changed the board of the oil behemoth Exxon. In a series of maneuvers that will surely go down in the history of game-changing investments, an activist investor used stealth and strategy to take over the board. Chris James, Engine No. 1's founder, began his initiative in December 2020 with a focus on reducing and eliminating greenhouse gases from the company's operations, which would in turn help boost long-term profits, especially considering the brutal year that oil companies were experiencing at the time.¹ That strategy ultimately led to seating three candidates on the board who agreed with James about shifting Exxon's fossil fuels focus: a refining executive, a renewable products expert, and a former US Assistant Secretary of Energy.² This was a major coup, considering Exxon was heavily invested in oil and natural gas at the time, with relatively little investment in renewables.³ Since then, there has been a gradual increase in major investments in renewable technologies, but there is still much work to be done.⁴

It's not often that an investor is so determined to shift the very business model of a company with such an unyielding culture as Exxon. As you'd expect, nothing about Exxon's May 26, 2021, shareholder vote on board members was normal. For starters, Exxon's leaders reportedly called for a recess only 40 minutes into the ...