Analyst Note| Allen Good, CFA |
On July 6 we had the benefit of speaking briefly with representatives from Engine No. 1 at a Morningstar town hall where they were discussing their latest ETF initiative. On the top of our mind was whether they envisioned Exxon replicating its European peers and pivoting toward renewable power generation as part of a long-term strategy to adapt to a low-carbon world. In short, they don’t, according to Charlie Penner, who was one of the firm’s leaders on its campaign to place four new directors on the Exxon board. Although he stressed that the three newly elected board members were selected for their ability to guide Exxon through the transition, not as firm proxies, his view was that pushing into renewables, particularly through acquisition, would not be value accretive.