ESG-Driven Activist Campaigns to Rise, JPMorgan Dealmaker Says

The number of activist campaigns pushing large companies to speed up ESG improvements will increase next year, according to JPMorgan Chase & Co.’s German M&A head Patrik Czornik.

Even small activist shareholders can exert pressure on major corporations because environmental, social and governance themes can easily make headlines and win support from long-only funds, Czornik told reporters at a roundtable discussion Tuesday.

Enkraft Capital GmbH in September called on European utility giant RWE AG to accelerate a transition to clean power, saying it could double its share price by exiting its lignite coal plants more quickly. The activist’s campaign won support from large German fund Deka Investment GmbH.

Though Enkraft is a small investor focused on renewable energy, Engine No. 1’s recent campaign against Exxon Mobil Corp. showed how even little-known hedge funds can be successful exerting influence on energy giants.

The size of an activist’s stake doesn’t matter, according to Martin Ulbrich, a mergers and acquisitions lawyer at Hengeler Mueller. Companies constantly need to ask themselves how they can become less vulnerable to ESG-driven activist campaigns, he said at the same event Tuesday.

“No corporate in any sector can feel safe,” Ulbrich said.

To contact the reporter on this story:
Eyk Henning in Frankfurt at ehenning1@bloomberg.net

To contact the editors responsible for this story:
Brian Bremner at bbremner@bloomberg.net

Ben Scent, Kevin Miller

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