Exxon throws a fit over shareholders exercising their rights
techcrunch.com
techcrunch.com
The idea that the “desired result” is so necessary and so important that any method, even a morally “bad one,” may be used to achieve it, seems very popular.
People lap up what they perceive to be justice against the machine, but it’s the system creating the problem in the first place.
That is to say the focus shouldn’t be on activist investors waging a war on change from the outside, but a popular defunding of companies that can’t responsibly deliver products from the demand side, and “the system” doesn’t want you to know that’s how to change it.
So we get fantasies of caped justice with appended hedge fund quality wealth and an appetite for morality and change, which of course is wishing for the very people who maintain the system to become the change: unlikely.
But then again it was the very same author who wrote:
> A man who is used to acting in one way never changes; he must come to ruin when the times, in changing, no longer are in harmony with his ways.
It seems much more logical to start driving electric, IMHO.
I think even your own quotation marks show that "the system" is a weak concept. You can't think of things as a "system" or "matrix" (if you're a right wing conspiracist) or "society" (if you're a left wing one) causing every ill.
How do you see the world? Is that vision of the current system particularly political, because I would consider it fairly objectivist based on my observations.
The dominant paradigm is a system no matter what political ideology you use to interpret it.
There is objectivism in “the system” as a nomenclature that shouldn’t be confused by one country’s domestic political paralysis.
The assumption of every ill is a rather presumptuous broadening of what is obviously a rhetorical analysis. And remember that rhetoric is always intended to persuade so no term I write can be written without touching on the prior feelings you have based on your own rhetorical training. But that doesn’t eliminate objective reality: we need to account for it in our conversations.
It isn’t healthy for a society to ignore the existence of governing bodies and their influences, whether you call them a matrix, a system, framework, a baked potato or any other term.
"The beatings will continue until morale improves"
Money talks, BS walks. That includes (as one example) the Saudis that live off the oil they produce. What makes you (or anyone) believe that they would allow for a Musk or a Bezos to ruin their business model?
I’d much rather see people invest to outcompete oil by investing in profitable clean energy.
Hoarding "fuck you money" indicates a lack of basic human decency.
If you see things in these terms, I think you are trying to address you political or environmental concerns, directly with corporations. This really end up feeding the government though - you simply get more government. Is that 'good'?
What is unique and newsworthy here is that typically companies go to the SEC to remove shareholder proposals that they think are frivolous. In this case, they sidestepped the SEC and took it straight to court, which is a very aggressive move.
The SEC declared in 2021 that the current administration would no longer allow the exclusion of proposals like this. "Staff will ... instead focus on the social policy significance of the issue that is the subject of the shareholder proposal."
And: "Going forward we would not concur in the exclusion of similar proposals that suggest [climate change] targets."
https://www.sec.gov/corpfin/staff-legal-bulletin-14l-shareho...
So there was no reason to ask the SEC, who have already stated their position. The next recourse is to ask the courts to review SEC policy.
Exxon is supposed to reduce emissions from their customers using their products? How? If I buy Exxon gas and take it home and light it on fire in the back yard is an Exxon employee supposed to come and stop me?
There’s definitely a lot of things we can do to fight climate change but passing nonsensical shareholder resolutions demanding impossible things isn’t one them.
The fuel is meant to be consumed. Majority of the fuel purchased will end up being consumed a very certain way.
Now, how do manage the cost of this handling? I recently listened to some EU minister saying that "super markets include the cost of recycling in the price of the milk carton". I didn't know that when I buy something from a super market I pre-pay for the recycling - which made me feel stupid since we pay extra in admin-costs in our building for this - anyway such is life).
So back to the oil & gas. Let's assume that 99.9% of oil & gas will be consumed in the standard process. We can make an average calculation on the technology it will be consumed in (i.e. 50yo old bus vs new bus - different polluting outputs). With a certain (?) degree of confidence we can estimate the pollution that will be created. Is it absolute? No. Is it better than nothing?
You're probably paying for trash collection, not the recycling itself, and you're paying for the disposal of the non-recyclable trash.
There are oil & gas companies which are at least trying to change - Equinor in Norway, Engie in France. The common thread is that they're both at least partly state owned.
Either way Exxon totally has a way to reduce the emissions of their customers: by reducing their customers. They may go to other producers but this is hardly the only thing activists are trying. It's not an impossible request and could be a useful component of a larger strategy.
2) Flaring is a pure loss of fossil carbon to the atmosphere and should be absolutely minimized. There's a local community near me with an ongoing complaint against Exxon for too much flaring: https://www.bbc.co.uk/news/topics/c6wk2ml6gwzt - on a dark night I can see it myself from 25 miles away.
3) Corporate lobbying can be pro-fossil or pro-renewable. Pro-fossil lobbying generally doesn't have a moral leg to stand on once climate change is taken into account, and they should stop doing it and stop making political donations to pro-climate-change politicians and PACs.
4) BP has a renewables division. Does Exxon?
Just a quick list of things that could be done. Like Philip Morris, they're going to have to acknowledge that their main product is inherently harmful and its use should be phased out.
Like I say, the closest analogy is Philip Morris: the product is inherently harmful.
or they could give discounts to their customers that show they have reduced their emissions through various initiatives , eg buying cleaner buses
There are multi pronged approaches to this, reducing C02 emissions.
* Exxon can invest more effort into effective carbon sequestration down wells, ala Gorgon (currently the largest such project on earth, albeit somewhat vaporware for now).
* pivot assets and engineering out of fossil fuels and into renewables, remaining an energy company but shifting out of whale oil.
* Developing better public transport in the parts of the world with greatest per capita FF usage to reduce that demand.
* etc.
Exxon Mobil Corp. has a market cap. of some 400 billion USD .. it's not as though they lack resources to pivot toward shareholder demands.
For the final one, why would you ask Exxon, a company that has 0 expertise in building public transportation systems, to suddenly pivot into an entirely new industry? Why would this be an effective strategy to get more public transportation built? Why not lobby the relevant city / state governments directly? Why not invest in any one of the companies that already build public transportation systems?
The first two directions (of many possibilities) go toward that end and would likely be supported by that shareholder block if put forward.
The last would put resources toward the reduction of per capita fossil fuel production, and use the resource of a fossil fuel extractor to do so.
> Why would this be an effective strategy to get more public transportation built?
Because, if carried forward, it achieves the desired end goal and uses the resources of a problematic company to do so.
For an activist block that wants change in energy creation it makes a great deal more sense to change bad behaviour than to leave that in play and invest elsewhere.
If you can imagine the mindset of activist investors you'll be able to answer these questions for yourself as you pose them - it's a useful technique to work on.
But that's why it makes no sense. The emissions caused by the customers are not emissions "from" fossil fuel companies. Exxon is not using the fossil fuels. If you want to reduce the emissions, talk to the customers. They're the ones who are doing the emitting.
It's like if Wal-Mart sold 500,000 tons of rice and you say that Wal-Mart ate all this rice. They didn't, the people who bought it did.
I suppose I could try to get into the activist mindset but it's painful to bang my head against a wall that hard and I'm worried about permanent damage.
Open an economics textbook and look up the phrase inelastic demand.
So you invest in oil companies so you can vote on their board?
But it’s still investing in oil companies and giving them more money. It’s probably legit, but it does feel like a scam.
Buying shares on the market from third parties does not give the company more money.
For example, GameStop raised over a billion dollars while Redditors were trying to get rich by memeing it to the moon.
I am also unsure about how to feel about it. I actually bought a bunch of VOTE after it launched [1], I am not sure if this was a good thing to do, but that was not money I was gonna give to charity otherwise (I would have invested it via other "ESG-oriented" systems that I don't entirely trust as being good for the world).
[1] https://www.cnbc.com/2021/06/22/underdog-activist-engine-no-...
Or do a massive leveraged buy of shares just before the vote, then sell afterwards.
Obviously if I do this and force a shareholder decision not good for company profits, the share price would be lower when I sell and I'd lose a lot of money.
You could probably also talk people into nominating you as their proxy at the shareholder vote.
In the interim while private, some bank would be the 100% owner, with some contract saying they must re-IPO within 24 hours and resell shares for 1 cent to the original list of shareholders.
And I don't see any reason you couldn't do all this on one day - you just need approval of 51% of the shareholders and the board.
Because filing for re-IPO is a very complicated affair in itself?
Though the rest of it is fairly correct - it is basically the PE playbook.
"Can I buy shareholder voting rights separately from the actual money value of the shares?": Buying shareholder voting rights is the actual money value of the shares.
The value also includes a future claim on the company's assets and cash flows.
Shares can also be borrowed (for a fee) for the purpose of short selling, but maybe they could also be borrowed for their voting rights.
Imagine if Exxon took their massive capital and started sabotaging green tech companies by infiltrating their boards and making bad decisions. There is no difference between that and what these investors are doing. Investing in any company to sabotage them should be against the law, especially if you have competing interests.