Political Investors Make ExxonMobil Bend. Is Big Tech Next?
Environmentalist activist investors seem to have won victories against the previously intractable ExxonMobil XOM . Is that a sign that political activist investing will be the next big thing in Washington, D.C.? Will the progressive movement, as defined by Congresswoman Alexandria Ocasio-Cortez and her Squad, promote shareholder activism to force Amazon AMZN into submission on organized labor? Will human rights groups buy shares in Nike NKE to compel it to stop its close ties to China which enslaves Uighur Muslims? Or will conservatives buy shares in Twitter and Facebook to take a stand against social media restrictions on news and conservative arguments?
For years, ExxonMobil has been the outlier on strategy among the international oil companies (IOCs). When others cut their budgets for oil and gas exploration, Exxon tried to keep its budget in place. When other companies spoke about breaking away from oil and gas production and moving toward “green” technologies, Exxon tried to work at both. But the pressure is getting to Exxon in the form of activist and other outspoken investors who have convinced the oil giant to take steps toward more environmentalism.
ExxonMobil said this week, “that it would cut the ‘intensity’ of emissions from its oil-and-gas production by 15% to 20% by 2025.” This would be done through a variety of changes, including a policy of ending flaring of excess gas at the point of extraction. The change is directly tied to pressure from Engine No. 1, an environmentalist investment firm, as well as other major investors such as BlackRock BLK .
This seems to be a proven strategy. Currently ExxonMobil has a market cap of about $186 billion. Twitter’s is about $34.3 billion, so accessing influence in Twitter should be easier than in ExxonMobil. If conservatives want to have a say in the way Twitter operates, it is not impossible to envision pressure from an alliance between an activist conservative fund or two coupled with like-minded individual shareholders who are either politically conservative or advocates for free speech on the internet. Facebook’s market cap is significantly higher at about $786 billion, and its founder, Mark Zuckerberg, is said to exert significant control over the company. Therefore, it would be more difficult for conservatives to influence its leadership. However, Twitter is small enough to be a compelling target if conservatives and free speech advocates ever wanted to band together to try to force a corporate change.
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The same could be done by labor advocates or human rights advocates. If political activism is now in the boardroom, it opens the companies to opposite activism at the annual meetings. If ExxonMobil can be compelled to change, so can Twitter or Amazon or Nike or anyone else.