Why the ExxonMobil share rallied today
Actions of ExxonMobil (NYSE: XOM) rose just over 5.5% early in today. It’s a notable move for this massive company, and it doesn’t seem to have anything to do with oil prices. In some ways, what was announced today could be much more important than that.
For better or for worse, Exxon is one of the best-known oil and gas companies in the world. This has long put him in the crosshairs of proponents of clean energy. To make matters worse, the company has stuck steadfastly on its long-term goal of carbon-based fuels, although some competitors have recently started talking about a transition to clean energy. While Exxon has clean energy initiatives, such as using algae as a substitute for petroleum, its efforts so far have simply not been enough to quell the growing calls for change. .
This prompted a large number of foreigners to call on the company for more action. The list includes environmental groups and politicians, but now it’s also starting to fill up with investors. Some of these investors are ready to buy stocks and push for change, including striving to get new faces on the board. Earlier this year, Exxon added a new director, but that was not enough to appease its dissident investors. He has now added two more, including Jeff Ubben, a recognized supporter of environmental, social and governance (ESG) investments. Wall Street clearly liked the choice.
Exxon is expected to hold its investor day on Wednesday, so there will likely be more clean energy news from the oil company in the coming days. But the addition of new board members, notably one with Ubben’s ESG focus, seems to be leading investors to believe the company is starting to take calls for change more seriously.
While today’s payoff is nice to see, most long-term investors should probably wait for the clean energy details likely to be revealed on March 3 before betting on where Exxon is heading on the market. ESG front.
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