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ANALYSIS: 2020 Q4 Data Show Activists Focused on Climate Change

Jan. 28, 2021, 9:10 AM

Amid the pandemic and economic downturn, the fourth quarter of 2020 saw new climate-focused activism campaigns, according to data from the Bloomberg Terminal. Two activists focusing their campaigns on climate change in Q4 joined the top 10 list of activist organizations by market capitalization: Engine No. 1 LLC and TCI Fund Management Ltd.

Engine No. 1 LLC, a new investment firm founded by hedge fund veterans Christopher James and Charles Penner, says it focuses on investing in workers, communities, and the environment. On Dec. 7, the firm submitted a letter to Exxon Mobil Corp.'s board expressing its concern over the company’s sustained underperformance and failure to address climate change concerns.

The firm proposed a plan to “reenergize” Exxon Mobil, asking the company to cut capital spending and increase investments in clean energy and infrastructure. Supported by the California State Teachers’ Retirement System (CalSTRS), the firm also planned to nominate four independent energy experts to Exxon Mobil’s board. DE Shaw & Co LP, an activist hedge fund, also submitted a private letter to Exxon Mobil that expressed similar concerns. Exxon Mobil released its new five-year greenhouse gases (GHG) reduction plan on Dec. 14.

‘Say on Climate’ Campaign

As part of a new “Say on Climate” campaign, TCI Fund Management Ltd filed separate shareholder proposals at various companies, including Alphabet Inc., S&P Global Inc., Moody’s Corp., and Canadian National Railway Co. TCI, which assesses ESG factors, especially climate change risk, as part of its investment process, asked target companies to disclose their annual GHG emissions, adopt low-carbon transition plans, and allow shareholders to vote on the plan at an annual general meeting.

The “Say on Climate” campaign was started by the Children’s Investment Fund Foundation, owned by Sir Christopher Hohn of TCI. The CIFF says it expects that the campaign will file shareholder resolutions at several companies globally in 2021 and 2022.

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