The investor who roared at ExxonMobil
A LITTLE PLAYER TAKES A BIG OIL – Exxon Mobil Corp., once a global superpower that could bend governments to its will, is locked in a battle against an upstart investor who wants to shake up the oil giant’s board.
The No.1 engine was launched on December 1, and announced its first campaign – against Exxon Mobil – days later. Over the next five months, he mustered a critical mass of institutional support to do what decades of environmental and shareholder activism could never: put Exxon Mobil on defense.
On Wednesday, shareholders will vote on whether to install the four dissident No.1 engine candidates on Exxon Mobil’s 12-member board. The vote could be a watershed moment in stakeholder capitalism in a year when nearly three dozen climate and sustainability-related shareholder initiatives are on the table.
For decades, investor climate activism was strongly ideological. Shareholders and benevolent activists could bring science and data to the table, but as long as sales were up and profits were strong year on year, it was hard to argue that oil and gas companies were bad business. Financial results now dominate the debate as climate change shakes balance sheets and consumers start voting with their wallets.
Policymakers in Washington could be mired in old-school ideologies, but modern stakeholder capitalism is armed with questions about bottom lines and returns on investment, especially as governments strive to phase out the use of fossil fuels.
“This debate should not be ideological,” said the founder of the No.1 engine Chris James said in an interview. “When companies think about their impacts, whether on communities or on the environment, it brings a lot of common sense back to capitalism.”
These groups will be monitored while they vote: Vanguard, BlackRock and State Street, three of the world’s largest asset managers and the largest shareholders of Exxon Mobil. The companies have not indicated how they will vote, but have already raised complaints for not keeping their promises to focus on environmental, social and governance, or ESG parameters.
These doubts persist, judging by the rhetoric we have heard. Wisconsin State Treasurer Sarah Godlewski said she expected “sufficient explanation regarding the reasoning and rationale for the votes cast by BlackRock and Vanguard.”
Exxon has appointed six new directors since longtime CEO Rex Tillerson left the company in 2017 to join the Trump administration. On Monday, in the heat of the moment, he announced his intention to add two more within a year.
“The dissident candidates lack the experience, expertise and knowledge necessary to run a company of the size and importance of Exxon Mobil in the face of the opportunities and challenges of the energy transition,” a spokesperson for the company Casey norton mentionned. “Our board played an important role in overseeing our strategy. Our board of directors and management listen to and respond to shareholder feedback. “
Engine # 1 faces a tough fight. Almost half of Exxon Mobil’s shares are held by mom-pop investors, a group that tends to vote with management if they vote at all.
Exxon Mobil has said it will spend $ 35 million to counter the No.1 Engine campaign, which the investor group says cost it nearly $ 30 million to set up.
Lorraine has the whole story.
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DO YOU REMEMBER THESE DIVERSITY COMMITMENTS? – The murder of George Floyd a year ago prompted companies to commit to spending billions of dollars on racial justice initiatives and to review their own hiring practices. Now, investors want to know if they are keeping those promises.
Shareholders have tabled a record number of proposals asking banks, asset managers and other companies to assess their diversity and inclusion efforts. At Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, those demands drew between 26% and 40% of shareholder support – not enough to pass, but still some sort of victory, said Tejal Patel, director of corporate governance of the union company CtW Investment Group, which tabled the resolutions.
“New proposals tend to get single-digit support. So getting almost 40% at JPMorgan is pretty amazing, ”Patel said.
“This marks a shift in the way shareholders view racial justice issues,” she said. “These concerns permeate every aspect of the way banks do business, from loans to political donations. They have an impact on a company’s reputation. “
Then there were the clear wins. Almost 60% of American Express shareholders supported a annual report request on the alignment of workplace practices with the company’s commitment to diversity, equity and inclusion.
American Express released its latest ESG report, which includes data on race, gender, and ethnicity from its Federal Employment Information Report, or EEO-1. Investors say EEO-1 data is the best available because it can be compared between companies.
Company to have ESG and diversity updates this fall, Amex spokesperson Leah Gerstner mentionned.
At Union Pacific Corp., more than 75% of shareholders supported two proposals to obtain data on the diversity of its workforce. The company will release its EEO-1 report this summer and make past data available in the same format, spokesperson Kristen South mentionned.
On the bridge: Amazon, Chevron and PayPal face racial fairness votes. Amazon and Chevron hold their annual meetings Wednesday; PayPal meets Thursday.
Beyond the meetings: Amazon Employees for Climate Justice, a group of employees, met 640 technical and executive signatures on a petition calling on the company to increase its emissions targets and address the disproportionate environmental damage its warehouse operations have on the predominantly black, Latino, Indigenous and immigrant neighborhoods in which they are based. Amazon had blocked a formal shareholder proposal of the group.
And while shareholders vote, CEOs will testify in Congress. Country Directors General six largest banks will speak to the Senate Banking and House Financial Services Committees this week. The group consists of five white men, one white woman, and no colored people.
Lawmakers want to know what banks – and other big U.S. corporations – have done since Floyd’s death to fight diversity within their ranks and take a more active role in advocating for social justice.
CLIMATE RESILIENCE – President Joe Biden doubles federal spending $ 1 billion to help communities prepare for hurricanes, floods and other natural disasters.
About 40% of the additional funds earmarked for building resilient infrastructure and communities from FEMA, or BRIC, will target disadvantaged areas.
The damage: twenty-two natural disasters each caused at least $ 1 billion in damage last year, a stark reminder of the cost of climate change. Local governments typically don’t invest in mitigation, although every dollar invested in preparedness saves $ 6 in future recovery costs, according to the National Institute of Building Sciences.
National Oceanic and Atmospheric Administration forecasters expect an above-average Atlantic hurricane season, with 13 to 20 named storms, of which six to 10 could become hurricanes.
Ana did not wait for the hurricane season. The first named subtropical storm of the season developed near Bermuda Saturday.
– A hydrogen hub could emerge in the New Mexico desert. Libertad Power Project LLC is one of several ongoing hydrogen projects in the Four Corners. Its first power plant could be operational by 2024. The Albuquerque Journal has the story.
– Archaeologists say humanity’s oldest art is falling apart before their eyes, WIRED Reports.