Corporate boards paid close attention to the director battle that emerged at Exxon Mobil Corp. (XOM) earlier this year and the upstart ESG activist fund that surprisingly succeeded at shaking up the energy giant’s board.

More environmentally focused activist contests are likely to emerge at large integrated energy companies following the success Engine No. 1 at Exxon Mobil, said Brian Stafford, CEO of governance risk and compliance software provider Diligent Corp., on the Activist Investing Today podcast.

“Companies that underperform will in general be targeted by activists, and increasingly for many sectors, such as energy, there is a need among investors to focus on the long term, and the long term implies how sustainable are your products going to be to meet the ever changing needs of the market,” Stafford said. “I think you will see other [campaigns] like what we saw with Engine No. 1.”

Stafford said much of the environmental-focused movement that exists today emerged because of the index fund managers, BlackRock Inc. (BLK), State Street Corp. (STT) and Vanguard Group Inc., which own large corporate stakes.

“BlackRock and State Street say the way an energy company will persist is if it focuses on the future of energy and sustainability,” Stafford said. “You saw the passive investors push for ESG reforms, and that has been built on by the ESG activists. It is a huge area that will see additional growth.”

Stafford said that in the wake of Engine No. 1, energy company corporate boards are now questioning whether they have the right directors.

“If you are going to be a leader in the energy transition, do you have the skills to do that on the board?” he asked.

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