Hedge funds aren’t exactly known for being champions of climate change, but Engine No. 1’s historic battle against Exxon may be a harbinger of a major shift.

The small activist hedge fund – founded in December with the goal of using its investments to benefit society – chose to wage its first battle against one of the largest oil companies in the world. It argued Exxon wasn’t doing enough to transition away from fossil fuels, bad both for the environment and the oil company’s bottom line. On Wednesday it won its fight by persuading other shareholders to support at least two of its nominees to Exxon’s board.

The results mark a turning point as more investors and even hedge funds begin to view companies that snub sustainability as bad for business, write Penn State’s Mark DesJardine and Western University’s Tima Bansal.

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Bryan Keogh

Senior Editor, Economy + Business

Engine No. 1 wants Exxon to focus less on fossil fuels. AP Photo/Matthew Brown

Engine No. 1’s big win over Exxon shows activist hedge funds joining fight against climate change

Mark DesJardine, Penn State; Tima Bansal, Western University

Engine No. 1 convinced other shareholders to support at least two of its nominees to join the company's board as part of its push for a stronger sustainability strategy at Exxon.

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