Fool Me Once, Shame On You. Fool Me — You Can’t Get Fooled Again …

In the good old days, some of you may recall there were these things called activist investors.  They focused on forcing companies to divest unprofitable divisions, change out a management team or pursue business combinations to achieve economies of scale.  Essentially they pushed companies to undertake corporate actions which they believed would increase the value of the shares which they (the activist investor) had recently acquired.

Then along came Engine No 1.  They appeared to offer new flavour of activist investing, one that understood the critical challenge of climate change and how it would impact both our world and the outlook for energy companies.  The new spin was that Engine No 1 identified that climate change was going to damage the company’s long-term financial outlook (and possibly its long-term viability), and that board changes were necessary to push the company to commence a significant business transformation.  And to everyone’s surprise, they successfully rallied a number of other Exxon shareholders to the cause and actually won.  They placed three new board members and started the ball rolling.

Fast forward a couple of years and Engine No 1 are activists no more.  More importantly, the Exxon board appears to be acting as the Exxon board of old.  As this article describes, not only is Exxon once again fighting climate-related shareholder proxies, it is going on the offensive to prevent them from coming to a vote at all.

I will leave it to you to ponder the series of events which brought energy companies (and not just Exxon) back to their good old days.  What I might humbly suggest is that we adhere to the wisdom of former US President George Bush, and don’t get fooled again.

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