May 29, 2021 Editorial
Kaieteur News – The name Engine 1 may not mean much to Guyanese, but its leaders pulled off an astonishing coup right in the heart of Exxon’s brain centre. Engine 1 did something that is sure to rock Exxon’s top management to its heels, and be a powerful indication that major changes are going to have to be the way forward at Exxon, especially as those relate to the environment and climate change. But there is something else that ought to be of priceless value to the citizens of this country, all of which we now share today.
Engine 1, by any consideration, is not a big Exxon shareholder. It is best known as an activist hedge fund that owns a mere 0.02 percent (US$40 million approximate valuation) of the company’s outstanding shares, with an unrelenting focus on bringing about corporate change and responsibility. Caring for the environment and climate change are two areas that separate Engine 1 from its peers, and now it has succeeded in doing the once unthinkable. At Wednesday’s annual meeting of Exxon shareholders, a virtual one due to the pandemic, two out of the four directors nominated by Engine 1 gained seats on Exxon’s 10-man board of directors. There is the likelihood that it could still gain a third seat, which was too close to call.
This is shocking development, a major one, that could have far-reaching implications on how oil majors operate in today’s world. And when one adds another landmark development in a Dutch court (also by a group of concerned and tireless activists, spearheaded by Friends of the Earth), which ordered Royal Dutch Shell to cut emissions by 45 percent by 2030, a scant nine years away, this has much meaning for the world. That is, the world of corporate oil giants (how they deal with climate change), the world of resource-rich nations and their fossil-based treasures, and the world of relentless voices, as represented by those pushing oil companies towards the courts to move away from so much fossil fuels dependency.
This was a primary motivator in Engine 1’s activism, meaning, desiring seats on the company’s board to influence change in management’s visions and policies regarding the environment, climate change, current operational programmes, and longer-term strategic fossil fuel plans. This was what stirred and galvanised Guyanese attorney, Ms. Melinda Janki, to join hands with fellow Guyanese attorney, Ronald Birch-Smith, to haul ExxonMobil Guyana before the courts. The seismic developments at Exxon’s annual shareholders meeting, coupled with the ruling of the Dutch Court, could be a game changer for Guyana, and on a number of fronts.
For starters, Exxon’s CEO, Darren Woods, himself a top three shareholder, could be on the way out, since this Engine 1’s board victory could be interpreted as signal of fading confidence in his leadership, and the visions he prioritised. The possible departure of CEO Woods, should it occur, could bring about a ripple effect in the top tiers of Exxon’s management structure, and provide openings for Guyanese leaders and the Guyanese people. We have to be bold enough and wise enough to strike while the opportunity is present.
This country’s political leaders, without exception, have long lamented that Exxon has us over a barrel, and all tied up lock and stock. The iron is hot now, and should be used to strike. There is weakness in the now increasingly shaky ranks of once arrogant Exxon management. Like Engine 1, there are many material elements in Guyana’s relationship with Exxon that are cause for serious concerns and disappointment, if not anger. Like tiny Engine 1, our leaders should not be intimidated by the power and might of Exxon. The Engine 1 David has felled the oil Goliath, Exxon. As happens in life, when the alpha dog stumbles momentarily, displays a weak spot in his armour, then others find courage, and believe that they, too, can succeed, they also can chance their arm, go on the attack, and gain the upper hand.
Guyanese leaders must not be hesitant or squeamish. This is war, and they must be willing to stand the sight and scent of blood. The opening is there to go for the jugular and press the company for concessions, to redo its relationship with us. And, our fellow citizens must also sense and seize a god-sent opportunity to pressure Guyanese leaders to, in turn, pass on that tension and pressures to Exxon. Something is going to have to give soon. The time is now, and both Guyanese leaders and the Guyanese people must act, and do so with confidence and conviction.
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