Influential proxy advisor Institutional Shareholder Services (ISS) on May 14 threw its weight behind a small hedge fund's three dissident directors for Exxon Mobil Corp.’s board in a decision that could affect the outcome of a bitter corporate battle.

Activist fund Engine No.1 has taken aim at Exxon Mobil’s board and decision making in the first major shareholder contest to make climate change the leading issue for choosing directors. The fund has criticized Exxon Mobil for a lagging approach to lower-carbon energy and poor returns on past fossil fuel investments.

The ISS recommendation in favor of three of the four directors put forward by Engine No.1 is the second from a proxy adviser. Pensions & Investment Research Consultants (PIRC) published its view on May 12, backing all four Engine No.1 candidates.

ISS recommended that shareholders vote for former oil industry executives Gregory Goff and Kaisa Hietala and for former U.S. government energy official Alexander Karsner. The three “address the need for independent industry expertise … (and) “elevate the board’s ability to assess the energy transition,” ISS said.

Exxon Mobil CEO Darren Woods said he disagreed with the recommendations in remarks to CNBC.

The ISS and PIRC recommendations carry weight among institutional investors and often guide how they vote at corporate meetings. Exxon’s shareholders will vote on May 26.

Exxon Mobil’s stock price climbed 1.8% in early trading on May 14 and has risen over 40% since the start of 2021. Engine No.1 can credibly claim a portion of the credit for that, ISS said in its report.

“ISS’ recommendation is further validation of our belief that addressing the fundamental issues at Exxon Mobil requires a board that includes individuals with relevant energy industry experience and skills,” Engine No. 1 said in a statement.

Exxon Mobil and Engine No.1 are spending at least $65 million in the fight for Exxon Mobil’s future direction. The $250 million California-based hedge fund has called for spending and pay cuts, a board shake-up and shift to cleaner fuels that it describes as “existential” for the oil giant.

Its views are supported by New York and California pension funds and British investor Legal & General Investment Management, all of which hold Exxon Mobil shares.

Exxon Mobil has fought to reelect its board arguing they have developed a strong plan to address future lower carbon demands, including a proposal for a massive carbon capture and sequestration project.

ISS’s report said it is “unclear how committed” Exxon Mobil is to its energy transition strategy. Its proposal “appears to be based in significant part on future government support.”

Exxon Mobil, valued at $264 billion, has fended off past challenges seeking big change to its policies and leadership. As pressure from shareholders mounted this year, Exxon Mobil made a number of changes, including adding activist investor Jeffrey Ubben, former Comcast Corp. executive Michael Angelakis and former Petronas CEO Tan Sri Wan Zulkiflee Wan Ariffin to the board.

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