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In a recent interview, Exxon Mobil CEO Darren Woods discussed the company’s strategy for combating climate change and responded to concerns raised by activist investors. Despite better-than-expected first-quarter earnings and a stronger balance sheet, Exxon faces scrutiny over its approach to climate change and the challenge of activist investors seeking changes in its board of directors. The following are key points from the interview:

Carbon Capture and Sequestration Emphasis:
Exxon has prioritized carbon capture and sequestration as a solution to climate change, differentiating itself from competitors focusing on wind and solar power.
Analysts have questioned the profitability of Exxon’s carbon capture strategy and whether it will primarily serve to offset the company’s carbon footprint.

Need for a National Price on Carbon:
Woods advocates for a national, predictable, and transparent price on carbon as an effective way to incentivize cost-effective CO2 reductions in the economy.
He acknowledges the necessity for market incentives, government policies, and regulations to support investment in CO2 reduction.
Governments play a crucial role in creating an enabling environment for the emerging carbon credit market and driving investments in CO2 reduction.

Carbon Price and Business Model:
Woods highlights the importance of a growing market for CO2 reduction credits to support investment in low-carbon solutions.
Exxon is exploring opportunities in the early stages of the carbon credit market, where companies are willing to pay for carbon reduction steps to meet their commitments.
The company aims to be proactive in the emerging market, bringing its expertise to help society and governments allocate resources effectively.

Responding to Activist Investors:
Amid challenges from activist investors, Woods defends the company’s compensation programs, managed by an independent compensation committee with a long-term outlook.
He emphasizes the board’s role in restructuring the company and making bold investments, leading to future success and projected earnings growth.

While Exxon faces skepticism about its climate change initiatives and board composition, the company continues to emphasize its commitment to low-carbon solutions and carbon capture as essential components of its strategy for the future.