Exxon board member Jeff Ubben increases stake as the oil giant invests in carbon capture
Activist investor and newly appointed Exxon board member Jeff Ubben is building his stake in the company on a belief that the oil giant will be an integral part of the energy transition.
“That’s me,” he said on CNBC’s “Squawk on the Street” Thursday when asked if he plans to buy more Exxon stock. “I’m building this new business … I really believe the return momentum for Exxon is spectacular from here. They are part of the solution, not part of the problem,” he said.
A proponent of ESG investing, Ubben joined Exxon’s board of directors in March, amid pressure from shareholders to reorganize the directors as the share price plummeted.
ESG refers to a form of sustainable investing that focuses on three factors: environmental, social and corporate governance.
Ubben is no stranger to investing in oil and gas companies. While at ValueAct, the company he founded in 2000, he invested in BP and said traditional energy companies can be in ESG portfolios.
In the past few months, Exxon has doubled its commitment to environmental goals as oil companies in the US and overseas seek greener ways of doing their business.
On Monday, the company proposed a $ 100 billion carbon capture project in Houston that would require industry and government support. In February, Exxon announced plans to invest $ 3 billion in carbon capture and other emission-reducing technologies.
Ubben noted that while net zero electricity generation can be achieved through renewable energy, Exxon’s size and size means it is able to tackle areas that are harder to decarbonize, including transportation and industrial activity.
“When you think about Exxon’s role, you have to do the hard things, and you can’t get to zero without doing the hard things,” he said. “Using existing infrastructure and capturing the carbon is probably the cheapest and fastest way to get zero,” he added.
Exxon’s emission reduction targets have come under fire from those who say it’s too little too late. Engine No. 1, an activist group targeting Exxon since December, said the company hadn’t gone far enough to outline its role in a carbonless world.
“We believe that responding to the threat of a shareholder vote is not synonymous with a coherent and value-adding long-term strategy and that those gains could be short-lived without real change,” the group said in March after Exxon Investor Day.
Nevertheless, according to Ubben, the company is working on “groundbreaking technologies” that are supported by 20,000 scientists. He added that Exxon is a leader in the $ 2 trillion carbon capture business.
“This is the technology that will get us there the fastest, and without it Net-Zero will not work,” he said.
Exxon’s shares were slightly lower on Thursday but are up 35% this year.
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– CNBC’s Kerry Caufield contributed to the coverage.