What happened
Shares of ExxonMobil (XOM -2.78%) rose just over 5.5% in early trading today. That's a notable move for this massive company, and it doesn't appear to have anything to do with oil prices. In some ways, what was announced today could be much bigger than that.
So what
For better or worse, Exxon is one of the world's most recognizable oil and natural gas companies. That has long put it in the crosshairs of clean-energy proponents. Making matters worse, the company has steadfastly stuck to its long-term focus on carbon fuels, even as some competitors have recently begun talking up a shift to clean energy. While Exxon does have some clean-energy initiatives, such as using algae as a replacement for oil, its efforts so far simply haven't been enough to appease the increasingly loud calls for change.
Image source: Getty Images.
That's spurred a large number of outsiders to call on the company for more action. The list includes environmental groups and politicians, but now it is also starting to fill up with investors. Some of these investors are willing to buy shares and push hard for change, including efforts to get new faces on the board. Earlier in the year Exxon added one new director, but that wasn't enough to appease its dissident investors. It has now added two more, including Jeff Ubben, a noted proponent of environmental, social, and governance (ESG) investing. Wall Street clearly liked the pick.
Now what
Exxon is set to hold its investor day on Wednesday, so there's likely to be more news out of the oil company on clean energy in the coming days. But the addition of new board members, notably one with Ubben's ESG focus, appears to have investors believing that the company is starting to take calls for change more seriously.
Although today's gain is nice to see, most long-term investors should probably wait for the clean-energy details likely to be revealed on March 3 before making a bet on the direction Exxon is taking on the ESG front.
