Boards must deal with ESG issues as ‘perfect storm’ of activism gets underway: MLT Aikins lawyer – Canadian Lawyer Magazine

Boards must deal with ESG issues as ‘perfect storm’ of activism gets underway: MLT Aikins lawyer Canadian Lawyer MagazineBoards must deal with ESG issues as ‘perfect storm’ of activism gets underway: MLT Aikins lawyer Canadian Lawyer MagazineBoards must deal with ESG issues as ‘perfect storm’ of activism gets underway: MLT Aikins lawyer Canadian Lawyer Magazine

Engine No 1. Engine No 1. A shareholder or group can, however, seek to control a public company by purchasing enough shares to gain a significant, but not controlling, share of the target company.
Engine No. 2 was able to purchase common shares in Exxon worth less than US $40million (approximately 0.02 percent of Exxon’s shares) on May 26, 2021. 1 conducted a proxy fight, which resulted in it winning three of its four nominations on the board.
Chell points out that Engine No. 1 had the support from large institutional investors, including BlackRock Vanguard and State Street who all voted against Exxon’s leadership in favor of the activist group.
Exxon’s climate change strategy was a source of significant shareholder dissatisfaction before these events. It refused to invest in alternative energy sources such as solar or wind, which were considered less profitable. After ExxonMobil’s $22 billion loss, activists became more vigilant. Exxon spent $35 million to defend against Engine No. 2’s proxy fight. 1.
Chell states that Exxon has made some progress in ESG issues. One example is its recent public support of a pledge by the U.S. to reduce methane emissions 30% below 2020 levels by 2030. “But, it will come down to whether Exxon makes a material improvement to its ESG performance before we can quantify any non-financial benefits derived from Engine Number. 1. ESG activism.”

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