ExxonMobil's business strategy hung in the balance on Wednesday as it scrambled to stave off a challenge from investors aiming to reshape its board and align the largest international oil major's growth plans with global moves to combat climate change.

The US oil giant 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 investments to boost its output — in contrast to global rivals that have scaled back fossil fuel investments.

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A dissident shareholder group led by tiny fund Engine No 1 is seeking to replace as many as a third of the 12-member board of directors at Wednesday's shareholder meeting, the first major boardroom contest at an oil major that makes climate change the central issue.

Shareholders, led by Engine No 1, have said the world is changing quickly as governments and companies move to reduce the emissions from fossil fuels that are warming the planet, and that ExxonMobil chief executive Darren Woods needs to make big changes to ensure the company's future value to investors.

Engine No 1, which has put up a slate of four nominees, has successfully rallied support from institutional investors and shareholder advisory firms upset with ExxonMobil for its weak financial performance in recent years.

It has just a $50 million stake in ExxonMobil, which carries a market value of nearly $250 billion.

'World around us is changing'

"The world around them is changing," said Aeisha Mastagni, a portfolio manager at California State Teachers' Retirement System, which backed the activists. The proxy fight has taken on "monumental" importance, Mastagni said.

BlackRock, ExxonMobil's second-largest shareholder, joined the dissidents, as it will support three of Engine No 1's nominees, Reuters reported on Tuesday.

ExxonMobil has fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile public relations campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction.

Activists have said it is too little, too late, and that ExxonMobil needs a less reactive strategy.

On Monday, ExxonMobil said it would add two new directors to its board, one with climate industry experience, in an attempt to win enough institutional support.

ExxonMobil added three new directors to its board earlier in the year as the pressure from Engine No 1 and hedge fund DE Shaw, which voiced similar complaints, mounted. DE Shaw kept its dealings with ExxonMobil largely out of the limelight.

"We have one of the strongest boards in corporate America," Woods said in an interview last week.

ExxonMobil's board understands the company's complexity and supports a path toward carbon reductions in the Paris accord, Woods said, referring to the international agreement aimed at combating climate change.

Difficult challenge

The viability of ExxonMobil's climate strategy and past resistance to shareholder concerns lay behind BlackRock's vote, people familiar with the decision said.

ExxonMobil can expect strong support from retirees and smaller investors that count on the company's rich dividend. Proxy fights are notoriously difficult for challengers, said a hedge fund executive not involved in ExxonMobil.

Preliminary vote results are expected by midday. Results will show if there is broad support among energy investors for a transition to cleaner fuels necessary to limit worldwide temperature increases. There will be no need for new oil and gas projects if investors want net-zero carbon emissions by 2050, the International Energy Agency said this month.

Wednesday's vote "is a good example of activist stewardship to help the company get the board it needs for the energy transition," said Robert Eccles, a professor at Saïd Business School at the University of Oxford.