As Exxon Mobil Corp. shareholders continue their bid to force the oil giant to deal more aggressively with climate change, several large U.S. institutional investors are backing a slate of alternative directors.

The company announced Wednesday that three candidates nominated by a dissident group of shareholders, called Engine No. 1, had been elected to its board of directors. Preliminary tallies last week had two of the challengers winning seats. Nine of the 12-member board supported by Exxon were re-elected.

The dissident slate of Exxon directors was proposed by Engine No. 1, which asserted that the company’s current board was ill-equipped to handle the transformations that are reshaping the energy sector. The vote reflected a broader push among consumers, investors and government leaders to pivot away from fossil fuels and invest in a future in which energy needs are increasingly met with renewable sources.

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The initial results were announced a week ago, after an unusual shareholder meeting where Exxon had paused the proceedings to allow more time for people to vote. The company had previously said that because of the complexities of the voting process, inspectors might not be able to certify final voting results for “some period of time.” More than 2.8 billion shares were voted, representing about 67 per cent of the shares entitled to be voted, according to a federal filing.

The outcome represents a setback for Exxon’s leadership and coincides with growing pressure on publicly traded companies to more urgently revamp their businesses to address what critics see as an intensifying global crisis. Last month, a Dutch court ordered Royal Dutch Shell to cut its carbon emissions by a net 45 per cent by 2030 compared with 2019 levels in a landmark case brought by climate activism groups. The court ruled that the energy giant had a duty to reduce emissions and that its current reduction plans were insufficient.

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While the votes were being tallied, Exxon paused the shareholder meeting last week to allow people more time to vote. Anne Simpson, a managing director at the California Public Employees’ Retirement System, and one of the institutional investors that backed the alternative slate of directors, calls that move “highly unusual.” Nevertheless, it was a “day of reckoning” for Exxon and for investors, she says.

On the hot-button issue of climate change, “investors are moving from talk to action, and it’s also going to reverberate around board rooms internationally,” says Simpson. In addition to CalPERS, which is the largest pension fund in the U.S., other major institutional investors that joined the challenge to Exxon’s leadership included the New York State Common Retirement Fund and the California State Teachers’ Retirement System. “It’s a historic vote that represents a tipping point for companies that are unprepared for the global energy transition,” says Aeisha Mastagni, a portfolio manager at CalSTRS.

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The investors that backed the alternative group of board members had complained that, compared with some other oil giants, Exxon has failed to commit itself sufficiently to cleaner energy, from wind, solar or other sources. Companies sometimes work with dissident shareholders to accept suggested changes to boards. Exxon, though, had resisted the challenge. It argued that it was already committed to addressing the climate crisis, with plans to add new board members, including one with expertise in climate change. It has also highlighted its plan, still in the early stages, to use the Houston Ship Channel to capture and store carbon dioxide offshore.

The company also said it was satisfied with its existing directors. “Our current board of directors is among the strongest in the corporate world,” said Darren Woods, chairman and chief executive officer of Exxon, adding that the board provided exceptional guidance during a particularly tough period for the industry.