For years campaigners have been looting oil and gas stations, closing down cleaners and disrupting operations. Now the electronics sector is facing a new kind of dynamic: from the owners.
Over the past year, retailers have been eyeing oil supermajors ExxonMobil and Royal Dutch Shell, the giant of things Glencore and Scottish Energy Group SSE images. Investors in corporations and retailers are also pushing for change, voting more often than ever to address climate change perceptions.
Investors vary according to their goals, but they all base their campaign on what they claim is a failure of administrators to properly prepare for changes in electronics.
A third point, the US hedge fund calling for Shell’s demise, said in October that the Anglo-Dutch supermajor had “multiple competing parties” that led to “unconventional, contradictory methods that try to appease the most demanding but unsatisfactory”.
Elliott Management has targeted the SSE, saying the company has assets that will benefit from the future of low carbon but “continues to be frustrated”.
The arrival of energy-boosting entrepreneurs in this time of global turmoil is “not surprising”, according to Nick Stansbury, chief of climate solutions at Legal and General Investment Management, the UK’s largest asset manager.
“Demonstrators often fail to work for long periods of time when they realize that the storm is beginning to shake and when they see the door open to continue with other investors,” he said. “This is a business that has misappropriated funds and brought in missing long-term shares.”
The most successful annual campaign was held against Exxon by a small group of US hedge Fund Engine No. 1.
When it sent its letter to the Exxon board in December 2020 Engine it owned only 0.02 percent of the company. Six months later it found three seats responsible for preparing the Exxon in the future without fuel.
“We do not see ourselves as freedom fighters but as owners,” founder Christopher James told the Financial Times. “The freedom fighters often look for changes so that they can get their money back in the short term. The active owner is interested in what the owners want.”
But while such a language may be more unifying than the Wall Street shootings, James strongly opposes many oil and gas plans.
“These companies are aware of energy changes, they are talking about it, they have a plan, but it is not a way to make a profit,” he said.
The oil and gas industry are opposed to this. European supermajors, for example, have all announced plans to change power this year, including a major overhaul, which they say will make them a major powerhouse for many years to come. But many investors are still skeptical, and market estimates continue to lag behind in some industries.
“It will be extremely difficult for these businesses to be so business-minded and so quick to take action on the political and administrative changes and I have never seen major corporations do this effectively,” said one businessman who oversees the project.
Electricity executives who are planning to invest heavily in wind turbines, solar panels and import electric vehicles while continuing to use oil and gas should be strong enough to compete with companies in the “white drama” in both areas, Investor said. “It’s very difficult.”
In the aftermath of the current crisis of power change, the major power corporations are once again facing a financial crisis that has lost its affiliation with the conglomerate.
General Electric in November announced it would split into three companies, a day after Japan’s well-known industrial group Toshiba, under pressure from retailers, said it was also trying to split.
“These are all 100-year-old companies that think it is important for shareholders to run other businesses and volunteer groups that are open and free to go the right way,” said researcher Oswald Clint. Bernstein.
In contrast to Third Point, Clint supports Shell’s idea that it could do well in digital transformation as an integrated company, but said management had not yet done enough to articulate the merits of investor consolidation.
“Money makers find it difficult to imitate [the integrated business] I’m going to the easy thing, ”he said.
A group of environmental partners Follow This also contradicts Third Point’s idea to split Shell into a pre-existing oil company and a new oil and gas business, which founder Mark van Baal called a “temporary stimulus” that will not help combat climate change. .
Established in the Netherlands in 2015 as a platform to help retailers to seal oil and gas companies out of burning oil, Follow This takes a different approach from the multi-billion dollar business people in London and New York.
It issued a decision by shareholders last year at Shell, BP, Equinor, Chevron and Phillips 66 to compel each company to set emissions reduction targets in line with the 2015 climate agreement in Paris. One of its most successful projects, at Shell, received support from 30 percent of shareholders in May. This year it expanded the campaign to four other companies including Exxon and ConocoPhilips.
“Transfers do not work, votes work,” said van Baal, criticizing investors who said they had voted with the trustees and hoped they would change through negotiations.
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Such actions do not just follow This. In 2021 there were 16 climate-related ideas for 350 FTSE companies, up from five in 2020, according to a recent Thomson Reuters survey.
Whether strong corporate growth will benefit shareholders remains to be seen. Campaigns at Shell, SSE and Glencore – where London-based Bluebell Capital partners are pushing for a retailer to quit its hot coal business – are in their infancy. At Exxon, Engine drivers are in place but time will tell if they can transform America’s largest oil company from the inside.
“Depending on the views of the long-term owners, the freedom fighters may or may not be a good story,” said Natasha Landell-Mills, chief executive officer at Sarasin & Partners, chief financial officer in the UK. “It’s all about their motivation.”
Stansbury also urged caution, while acknowledging that the best performers have the ability to select “simple things” that can be done to improve the work.
“If the opponent shows up, you have to make sure, as a long-term investor, that they are asking for things that can make a long-term profit and make the whole ESG. [environmental, social and governance] the company’s output is growing, “he said.
With the exception of oil and gas officials and other powerful groups remain low compared to other sectors, the freedom fighters do not leave.
“These are not the ways that will fall apart,” Clint said, adding that Shell’s competitive BP was another “economy” that did not perform well. “BP can have a similar approach, there is no question.”
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