Drew Faust, President of Harvard University, and other prominent leaders who have been pushed, pulled and prodded to cause the endowments they oversee to divest of fossil fuel companies directly engaged in extractive activities, reject this idea in favor of "shareholder engagement." Engagement, say, with Exxon-Mobil is possible only if one is a shareholder of that enterprise. Therefore, engagement is a distinct alternative to divestment, because one cannot do both at the same time with regard to the same company.There are some SEG issues (i.e. social, environmental and governance issues) where shareholder engagement has been tried and been successful. However, the closer one comes to trying to affect core business issues or issues involving the safety, security and compensation of officers and directors, the less successful engagement becomes. In fact it's a bust. Thus, for example, trying to convince Phillip Morris to give up making cigarettes or Johnny Walker to abandon its distilleries will most certainly be a fool's errand. Likewise, trying to convince GM or Microsoft to abandon stock options or to institute a nominating system that allows shareholders to nominate and elect directors from a slate larger than the number to be elected will prove to be an equally useless effort.It is for this reason that divestment became the tool of choice in addressing tobacco companies. And companies heavily engaged in profitable businesses in South Africa under apartheid.In regard to fossil fuel companies directly engaged in extractive activities, it is unrealistic to imagine them being swayed by shareholder arguments to get out of their core business of exploring for, extracting and selling carbon-emitting fuel. The problem goes beyond just the high likelihood of spinning wheels and accomplishing nothing in addressing the urgent need for global action. Indeed, engagement is likely to assist Big Oil and Big Coal in postponing the day when governments limit the burning of fossil fuels. The International Energy Agency reckons that, if governments act to compel adherence to the "carbon budget" necessary to have a chance of holding the planet to only a 3.6 F rise in temperature from pre-industrial levels, it will cause Big Oil and Big Coal to lose about $1 trillion a year. Engagement with institutional investors like Harvard gives the fossil fuel giants the protective cover they need to stretch out the transition process to renewables for as long as they can. It legitimizes talk over action. In truth, if the engagement crowd didn't exist, the fossil fuel giants would by now have invented them. (And, in light of the parallels to tobacco and lead, who knows the extent to which they did.)Nonetheless, if, despite these problems, one wants to try engagement, perhaps as a step taken in fairness to a targeted company before divesting, here are three demands that would, if accepted, turn the company from a global pariah into a responsible corporate citizen:1. Publicly accept the science of climate change, including recognition of the scientifically rooted predictions of damage to the planet and its people if we fail to halt carbon emissions.2. Cease Capex (capital expenditures) in search of more fossil fuel.3.Use the company's lobbying forces wherever active to lobby for (a) elimination of all fossil fuel subsidies, which globally today total some $600 billion a year, (b) imposition of carbon taxes or other means to internalize the costs to the planet of burning fossil fuels, and (c) legislation to reduce carbon emissions to a level, globally, that will not harm the planet. Click here to read full news..