Investors are decidedly not happy about Exxon’s lawsuit against two shareholders who proposed a climate resolution, highlighting growing tension between corporate interests, investors, and regulators.
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Shareholders are fracking mad
Investors are decidedly nothappy about Exxon’s lawsuit against two shareholders who proposed a climate resolution, highlighting growing tension between corporate interests, investors, and regulators. Despite the Biden administration's SEC making it more difficult for companies to thwart shareholder resolutions, Exxon Mobil’s legal action directly challenges this activism trend by seeking to sidestep SEC authority.
The SEC has reported a 36% surge in efforts by companies to block shareholder proposals in this proxy season compared to last year. Although the 2023 season saw an increased number of new activists launching campaigns and record shareholder proposals, there was a noticeable decline in support for these proposals, along with growing weariness among both companies and institutional investors towards such activism.
Exxon Mobil's situation is not isolated; Shell is similarly engaged in a dispute with its shareholders over climate policies. This challenge is spearheaded by the activist group Follow This and is backed by major institutional investors, including Amundi, Europe's largest asset manager. Another group is targeting the Dutch Bank ING.
Divestment for thee, not for me
Anti-ESG bellwethers are quick to pull state investments out of fossil fuel “boycotters” like BlackRock — but they handle their personal piggy banks differently. Florida’s Chief Financial Officer Jimmy Patronis, who recently got over 100 banks to sign an agreement not to “politically discriminate,” failed to divest more than $75,000 of personal funds from BlackRock. The hypocrisy extends to Oklahoma Treasurer Todd Russ, who lambasted a state pension fund for using an exemption to an anti-fossil fuel boycott law while quietly exercising the same exemption for investments managed by his own office.
This kind of political grandstanding is heavily funded by Big Oil donations, according to a report from Unlocking America’s Future revealing elected federal and state officials who publicly oppose the SEC’s climate disclosure rule received more than $152 million from the oil industry. Bankrolls like these lead to pointless exercises in Texas, for example, where Attorney General Ken Paxton — a recipient of more than $5 million in fossil fuel donations — recently banned Barclays from participating in the state’s municipal bond market because the bank hadn’t responded to questions about its ESG investments.
Palate Cleanser: New ad puts Vanguard on blast
The ad targets the mega-asset manager for pulling out of the Net Zero Asset Managers Initiative and taking “marching orders” from right-wing politicians. Watch below:
Biden pauses LNG expansion that would benefit speculators, not Europe
The Biden Administration is putting a temporary pause on pending decisions to expand liquefied methane export infrastructure. President Biden specifically pointed to the disproportionate health burden from new LNG export facilities on Gulf Coast communities of color. It’s a major win for climate policy, showing that promises at COP28 in Dubai had real substance.
Republicans and fossil fuel defenders were quick to claim the move would hurt US allies in Europe and global energy security. But a new report from BailoutWatch, Friends of the Earth, and Public Citizen found there’s already plenty of LNG available for Europe, and only 18% of the gas from the paused projects would have gone there, with the majority going to speculators and the rest to Asia.
Despite these moves by the Biden Administration, private equity investors are still betting on sustained LNG growth. Industry leaders lean on the narrative that LNG is a cleaner bridge fuel between coal and renewables, ignoring that methane leakage related to gas production and transportation causes more climate damage than coal.
Is Fed Chair Powell’s soft exit on the horizon?
Federal Reserve Chair Jerome Powell is often credited with softly landing the economy after inflation skyrocketed post-pandemic. But the interest rate hikes that hurt workers and families, ignorance of climate finance risk, and corruption within the Fed are leading some to cast doubt on his future as chair as the board prepares to meet this week.
The Fed’s internal watchdog recently cleared two former officials of wrongdoing after both regional presidents made numerous trades in sync with central bank operations that outlayed billions in stabilizing funds. While none of the lucrative trades allegedly violated federal law, investigators said there appeared to be a conflict of interest — and we trust them when they say that. Aside from his own ethical complications and doubts about the impact of Powell’s Volcker-esque interest rate hikes, it’s clear that decisions made under his watch massively impeded the cleanenergy transition. If President Biden allows Chair Powell his own soft exit by declining to renominate him for a third term, it would be a rare moment of bipartisan alignment between Biden and the presumptive Republican nominee.