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Exclusive: BlackRock backs dissident’s nominees in rebuke to Exxon – sources By Reuters

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© Reuters. FILE PHOTO: A emblem of the Exxon Mobil Corp is seen on the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018. REUTERS/Sergio Moraes/File Photo

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By Svea Herbst-Bayliss

(Reuters) – BlackRock Inc (NYSE:), Exxon Mobil Corp (NYSE:)’s second largest shareholder, has voted for 3 of 4 director candidates nominated by hedge fund Engine No. 1, opposite to the oil firm’s recommendation, individuals aware of the matter mentioned on Tuesday.

BlackRock, the world’s largest asset supervisor, has a 6.7% stake in Exxon, in accordance to the corporate’s proxy. Its vote alerts buyers have grown rather more critical about combating local weather change, including stress to Exxon and different oil corporations.

Exxon declined remark till after voting outcomes are disclosed on Wednesday. It has spent tens of thousands and thousands of {dollars} to oppose their election. The high U.S. oil producer, has been calling shareholders together with Vanguard and State Street (NYSE:) to assist its slate of 12 administrators, different individuals mentioned.

Engine No. 1 has a stake value solely about $50 million in Exxon, an organization with a market capitalization of about $250 billion, however its traction with BlackRock underscores the significance buyers are giving to environmental, social and company governance (ESG) components. The hedge fund has criticized Exxon, saying its returns lag the trade and it’s not shifting quick sufficient to cut back its carbon footprint.

Exxon holds its annual shareholder assembly on Wednesday and buyers have the choice of adjusting their votes till then.

The International Energy Agency (IEA) has mentioned buyers ought to cease funding new fossil gasoline initiatives if they need to reduce greenhouse gasoline emissions by 2050.

BlackRock didn’t reply to a request for remark.

The sources requested anonymity as a result of BlackRock doesn’t publicly disclose the way it casts its vote forward of time.

The ultimate vote might activate Exxon’s three largest buyers — Vanguard, State Street and BlackRock. Vanguard owns about 8.2% of the Exxon’s inventory whereas State Street owns 5.7%. Vanguard won’t disclose its resolution earlier than the assembly, a spokesman mentioned on Tuesday.

BlackRock has been extra prepared than Vanguard and State Street to again dissident buyers, analysts have mentioned. Its resolution might show important to securing a number of seats for Engine No.1’s nominees.

Engine No.1 proposed 4 administrators — Gregory Goff, Kaisa Hietala, Alexander Karsner and Anders Runevad — with experience in power, know-how and regulatory coverage. BlackRock supported all however Runevad, the individuals mentioned. Exxon has mentioned the 4 shouldn’t have the experience wanted for its board.

BlackRock additionally voted for Exxon Chief Executive Darren Woods and lead director Kenneth Frazier, the individuals mentioned. A yr in the past, it voted in opposition to Frazier and for splitting the chairman and CEO roles.

The California-based hedge fund gained the backing of three massive pension funds and different buyers dissatisfied with Exxon’s efforts to chart a clear power technique. Exxon’s previous dismissal of governance and local weather issues additionally price its assist, buyers have mentioned.

Three proxy advisory companies that information how buyers vote backed the hedge fund’s slate. Institutional Shareholder Services advisable three of Engine No.1’s candidates whereas Glass Lewis backed two of the hedge fund’s candidates.

Exxon pledged on Monday to add two new board members with power and local weather experience inside 12 months. Exxon’s share worth has climbed 45% for the reason that begin of the yr. The inventory was off 2% at $58.30 at noon on Tuesday.

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