(Reuters) - Engine No. 1, which won an against-the-odds board challenge against Exxon Mobil Corp earlier this year, is publishing a framework for investing on Monday that pushes for a value to be assigned to how corporate activities affect climate and society.The “total value framework” provides significant new insight into how the San Francisco-based firm, which has about $430 million in assets under management, picks companies to invest in. The framework was outlined exclusively to Reuters ahead of its publication. Investors have closely followed Engine No. 1’s activity after three of its candidates won board seats at Exxon in a shareholder vote in May by criticizing the energy giant’s track record and targets on reducing its carbon footprint. [nL3N2NK44M] It was a stunning victory that Engine No. 1 achieved while holding just a 0.02% stake in Exxon, and investors have been looking for clues on the next moves by the firm, which was launched in December last year. In the white paper to be published on Monday, co-authored with Wharton School management professor Witold Henisz, an adviser to the firm, Engine No. 1 said traditional environmental, social and corporate governance (ESG) scores were too detached from the financial value assigned to companies. That makes it harder for investors to focus their capital to bring about changes like cutting emissions, Henisz said in an interview.Instead, Engine No. 1 attaches a value to a company’s impact on climate change, water consumption, workforce diversity or human rights. In the absence of company data that allows this, it uses models that draw on sources such as the United Nations and the International Labor Organization. “What we are adding to the party is making this an economic argument,” Engine No.1 CEO Jennifer Grancio said in an interview. As an example of how its model works in practice, Grancio noted how Exxon included only about 10% of its total carbon emissions in its reduction targets, mainly by excluding the emissions created when customers burned its fuel. When companies fully report on such emissions and take steps to reduce them, “that’s potentially a huge place to pick up value,” Grancio said. Engine No.1, founded by hedge fund veteran Chris James, has opted to invest in companies that make fossil fuels in order to push them to minimize their environment impact. Some funds eschew fossil fuel stocks altogether. Harvard University said last week that its endowment would completely divest from fossil fuels. Engine No. 1 takes a very different approach, for example by investing in energy company shares in its new Transform 500 exchange-traded fund, which has been set up to strategically use its proxy votes. Grancio declined to comment on what Engine No. 1’s next target could be, but said it was aiming to be a constructive partner to companies it invested in, not an activist hedge fund launching proxy contests. “Exxon was a lot of work and we are just barely past that,” she said.