A tiny hedge fund dealt a major blow to Exxon Mobil Corp on Wednesday, unseating at least two board members in a bid to force the company’s leadership to reckon with the risk of failing to adjust its business strategy to match global efforts to combat climate change. The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions. read more Eight of Exxon"s nominees were elected to its 12-member board of directors, along with two of Engine No. 1"s nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board. The result will add to pressure on Exxon CEO Darren Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already diversifying away from fossil fuels and should not jeopardize its profits in doing so. Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments. "It"s a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it"s a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI. The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund"s stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million. NEW DIRECTION The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala. read more "We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon"s shareholder meeting.Exxon said that counting votes to determine whether it had lost more board seats to Engine No. 1 was continuing. Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon"s future value to investors. The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon"s second-largest shareholder, who agreed to vote for three members of Engine No. 1"s slate. read more Exxon shares ended up 1.2% in Wednesday trading, rising after the announcement. The stock has lagged its peers over the last five years. Woods had argued that Exxon"s board understood the company"s complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change. However, in another signal of investor dissatisfaction with the company"s approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts. "Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state"s pension fund backed Engine No. 1. DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis. Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy. "We are sending new board members, seasoned in managing change in the fossil fuel industry, to help put the company back on track," DiNapoli said.