Engine No. 1 Shows Activist Hedge Funds Can Be Allies In Climate Activism Fight AOC Sustainability

By Mark DesJardine, Assistant Professor of Strategy and Sustainability, Penn State; and Tima Bansal, Canada Research Chair in Business Sustainability, Western University. First published on The Conversation.

One of the most expensive Wall Street shareholder battles on record could signal a big shift in how hedge funds and other investors view sustainability.

Exxon Mobil Corp. has been fending off a so-called proxy fight from a hedge fund known as Engine No. 1, which blames the energy giant’s poor performance in recent years on its failure to transition to a “decarbonizing world.” In a May 26, 2021 vote, Exxon shareholders approved at least two of the four board members Engine No. 1 nominated, dealing a major blow to the oil company. The vote is ongoing, and more of the hedge fund’s nominees may also soon be appointed.

While its focus has been on shareholder value, Engine No. 1 says it was also doing this to save the planet from the ravages of climate change. It has been pushing for a commitment from Exxon to carbon neutrality by 2050.

As business sustainability scholars, we can’t recall another time that an energy company’s shareholder – particularly a hedge fund – has been so effective and forceful in showing how a company’s failure to take on climate change has eroded shareholder value. That’s why we believe this vote marks a turning point for investors, who are well placed to nudge companies toward more sustainable business practices.

Update June 2, 2021: Exxon Board to Get a Third Activist Pushing Cleaner Energy

Until reading just now the recent LA Times story about the Hollywood Foreign Press Association — sponsor of the Golden Globes — AOC thought that the organization was prestigious. Reading now about the lackluster credentials of members, I can’t imagine that Hollywood publicists have let this group get so out of hand in its protectionist tactics and massive organizational ego.

Just one example from The Times: “While working as Hollywood correspondent for the leading French newspaper Le Monde in the 1990s, Claudine Mulard was rejected from the organization three times, with no reason given.”

Reeling under a class action lawsuit brought by highly credentialed journalists refused membership in the HFPA, Monday brought a massive headache to the organization.

The Hollywood Reporter writes that when publicists — the gatekeepers of "talent" — are upset with you, you are truly facing an existential crisis, activated by the reality that the organization has not one single Black member.

Now publicists are taking matters into teheir own hands. with representatives of more than 100 firms — “virtually every major one on both sides of the Atlantic “— signing on to an unprecedented missive hammered out in recent days. The opening paragraph reads:

As publicists we collectively represent the vast majority of artists in the entertainment industry. We call on the Hollywood Foreign Press Association to swiftly manifest profound and lasting change to eradicate the longstanding exclusionary ethos and pervasive practice of discriminatory behavior, unprofessionalism, ethical impropriety and alleged financial corruption endemic to the HFPA, funded by Dick Clark Productions, MRC, NBCUniversal and Comcast.

After pointing out the lack of diversity in the organization, the missive from 100+ agencies — listed individually — continues:

To reflect how urgent and necessary we feel this work is, we cannot advocate for our clients to participate in HFPA events or interviews as we await your explicit plans and timeline for transformational change.

While we stand ready to support your good faith efforts, please know that anything less than transparent, meaningful change that respects and honors the diversity and dignity of our clients, their colleagues and our global audience will result in immediate and irreparable damage to the relationship between our agencies, our clients and the Hollywood Foreign Press Association and those who sanction the institutional inquity and insular culture that currently define it.

The eyes of the industry and those who support it are watching.

We share the story from the perspectives of other media:

Golden Globes: NBCUniversal Says It's Using Its "Influence" to Pressure HFPA to Reform Hollywood Reporter

Walk It Like You Talk It: Hollywood Publicists Threaten to Pull Clients From All HFPA Press Until Plans to Diversify Are Shown The Root

HFPA Board Responds After Publicists Press Group Over Lack Of Black Members & Threaten To Urge Clients To Not Show For Golden Globes Deadline