ExxonMobil has spent the last six months locked in a battle for its future, ever since a small investment firm launched a long-shot bid to reshape the company’s board of directors and steer the oil giant on a more climate-friendly path.

On Wednesday, Exxon lost, at least in part, when a majority of shareholders approved a pair of new corporate directors backed by the firm, which said they could help the company transform itself. The vote for a third new candidate was too close to call as of the end of the company’s annual meeting, which was held virtually.

The votes marked a substantial blow to Exxon and a rebuke of what critics see as an inadequate response to calls for the company to remake itself for a transition away from fossil fuels.

Many oil companies, especially Exxon’s European rivals, have announced plans to reach net-zero emissions and increase their investments in renewable energy. But Exxon has insisted that its future continues to lie primarily in oil and gas, with an expanded portfolio of low-carbon technologies to support it.

Andrew Logan, senior director of oil and gas at Ceres, a sustainable investment nonprofit, said he expects the votes to have a “significant impact” on Exxon’s long term strategy. 

“While the new directors don’t constitute a majority, their election clearly signals tremendous shareholder concern about Exxon’s current approach to the energy transition,” he said. “It’s hard to imagine that the board as a whole will not choose to revisit the company’s strategy, and soon. Nothing focuses a director’s mind like the possibility that they might lose their job. Today that risk became very real.”

Logan speculated that the news might lead Chief Executive Darren Woods to resign in the coming months.

“I don’t really see how Woods holds on after a repudiation like the one we saw today,” he said, adding that Woods might “pursue some sort of phased early retirement that lets him save face.”

Pavel Molchanov, an analyst with Raymond James, said that the addition of the new board members would have little impact on the company’s near-term plans, but he added that it was a “precedent-setting event” nonetheless, and could encourage other, similar efforts against major oil companies.

A majority of Exxon shareholders also approved two proposals that called on the company to produce reports about its lobbying activities. But most shareholders rejected a third proposal that asked for a report on how a sharp decline in oil and gas demand, which reaching net-zero global emissions by 2050 would require, would affect corporate finances. Exxon’s board had recommended against approving any of those measures. The company also fought off a proposal to create an independent chairperson of the board, which would have stripped Woods of that position.

But it was the initiative to add new directors that garnered the most attention from the company.

For most of last year, as European oil companies including BP and Royal Dutch Shell pledged to reach net-zero corporate greenhouse gas emissions by mid-century and announced plans to pivot their businesses slowly towards renewable energy and low-carbon fuels, Exxon resisted making similar moves. The company did not announce any corporate-wide emissions reduction goals, and before the pandemic reshaped global energy demand, Exxon had plans to expand oil and gas production by 2025.

Then, in December, Engine No. 1, a new firm with a relatively small stake in Exxon, launched its campaign to approve four new board members as part of an effort to address what it said was Exxon’s failure to adapt to a changing world. The firm cited Exxon’s poor financial performance as evidence that investors were paying for the company’s intransigence on climate change.

Later that month, Exxon announced its first corporate-wide emissions-cut pledge, saying it would reduce “emissions intensity”—or emissions per unit of energy—by 15 percent to 20 percent by 2025 for its oil and gas production operations only. This year, it followed with news that it would scale back its capital spending, all but abandoning plans for expanding oil production, and launch a new low-carbon business that would seek to profit from technologies that capture and store carbon dioxide emissions and produce clean-burning hydrogen and biofuels. More broadly, Woods has devoted an unprecedented amount of attention this year to climate change in speeches to investors, employees and the public.

The two new board members are Gregory Goff, who has a background in the oil and gas industry, and Kaisa Hietala, who led renewable products at Neste, a petroleum refining and marketing company. Exxon is still tallying votes to see whether Alexander Karsner, a senior strategist at X—formerly Google X—won enough votes to join the board. The fourth candidate nominated by Engine No. 1 was Anders Runevad, the former chief executive of Vestas, the wind turbine manufacturer. He did not secure enough votes to join Exxon’s board.

The investment community has grown increasingly active in calling for changes in the corporate world in response to climate change, so the question hanging over Exxon since December was whether those investors, especially major firms, including BlackRock and Vanguard which hold large stakes in the company, would actually vote to change the company’s board makeup against its wishes.

While BlackRock did not immediately disclose how it voted, Reuters reported on Tuesday that the firm would support three of the four candidates nominated by Engine No. 1. BlackRock did not immediately return a request for comment.

Woods defended the company’s moves on climate change at Wednesday’s meeting before the final vote was announced. He said Exxon’s investments in carbon capture and storage, biofuels and other technologies were positioning it to contribute to a future with fewer emissions. In response to a question from one shareholder about investing in renewable energy, he said the company had evaluated technologies like solar and wind generation, but, “We haven’t found an aspect of those technologies where we can contribute and add unique value,” or generate enough profit.

The debate about the future of the oil and gas industry was further stoked by a report last week by the International Energy Agency saying that, in order for the world to limit warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit), the energy industry would have to essentially end oil and gas exploration, and focus investment only on squeezing remaining resources out of existing fields.

All the major oil companies have faced climate-related shareholder resolutions this month. On Wednesday, a majority of Chevron’s shareholders supported a proposal calling on the company to reduce the emissions that come from burning the company’s products, which amount to a much larger figure than its direct emissions. Shareholders of ConocoPhillips supported a similar proposal at that company’s annual meeting two weeks ago. The following day, a majority of BP’s shareholders voted against a proposal that sought more ambitious emissions reductions goals than the company had announced. 

Investors represent only one source of pressure on the industry, of course. Before Exxon’s annual meeting began on Wednesday, a Dutch court issued a landmark ruling ordering Shell to reduce its corporate emissions by 45 percent by 2030, a more aggressive timeline than the company has committed to. 

“Exxon and other Big Oils that have not yet joined the energy transition trend ought to do so sooner rather than later,” said Molchanov, calling this trend inevitable. “The sooner companies join in, the less disruption they will ultimately face. Those who delay will find it to be a more painful process.”