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How a hedge fund is forcing change at ExxonMobil

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It's, to put it mildly, a rarity for any VC—let alone one at an unknown hedge fund—to step in and upend the board of one of the world's biggest companies. But in May, that's exactly what happened at Exxon Mobil, when Chris James and Engine No. 1, the investment firm he founded, stepped in.

"Changes like this at a giant Fortune 500 company just... don't... happen," says Fortune's Ellen McGirt, co-host of Fortune's Leadership Next podcast.

That all changed when James and his team began defining their firm's mission.

"When we started developing our total value framework, which looks at what is the the net value of a company to society at large," James says, "we saw that Exxon [is only] second behind Philip Morris [in having the] largest negative impact on society. We had used a formula we had developed, and continue to enhance, to look at how companies impact all their stakeholders. And of course, Exxon['s largest impact] is on the environment."

James joins McGirt and co-host Alan Murray on this week's episode of Leadership Next, a podcast about the changing rules of business leadership. Also on the show is Fortune's Katherine Dunn, who has written extensively about the investment firm's impact on Exxon Mobil.

This story was originally featured on Fortune.com