Liz blogged last summer about how some short-term activists were making a pivot to ESG and wondered whether this trend would intensify. There have been whispers that investors want to see more climate expertise on boards, but not much has come of that so far. Earlier this week, though, the WSJ reported that Engine No. 1 LLC, a new activist investor with a focus on sustainability, has taken aim at ExxonMobil:
Engine No. 1 LLC, an investment firm launched by Chris James last week, is preparing to send a letter to Exxon ’s board urging the Irving, Texas-based company to focus more on investments in clean energy while cutting costs elsewhere to preserve its dividend. The letter, a copy of which was viewed by The Wall Street Journal, identifies four people the firm plans to nominate to Exxon’s 10-person board.
The article also identifies CalSTRS as one shareholder that supports Engine No. 1’s cause. CalSTRS issued a press release confirming that it intends to support Engine No. 1’s alternate slate of board members, which includes a link to Engine No. 1’s proxy fight website.
We’ll see where this goes — the WSJ article notes that it’s possible the campaign will fall flat. A CNBC article discussing the matter says that for a long time, Exxon would’ve been an unthinkable target for activists given its size. In an effort to get large investors on board with the campaign, CalSTRS reached out to Larry Fink, BlackRock’s CEO, although the article notes the pension fund hasn’t received a reply. But Exxon’s shareholders have been at the forefront of climate-related shareholder proposals before. In 2017, shareholders approved a climate change proposal at Exxon, and back then, climate proposals weren’t seeing much success.
-Lynn Jokela, TheCorporateCounsel.net December 9, 2020
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