David vs Goliath - energy edition

Welcome back to The Strawman, the daily climate change newsletter that’s like your buddy telling you on a night out that you probably shouldn’t be texting your ex. We’ve got your back.

Today, we’re diving into the high-stakes world of activist investors, and their role in the energy transition. Not sure about you guys, but every time the Strawman hears the word “investors” he zones out - but this one’s worth zoning back in for.

What’s an activist investor?

Before we jump into specific examples, let's make sure we're all on the same page about what an activist investor is. These are the folks who buy up shares in a company and then use their stake to push for changes they believe will benefit the business and the world.

Not to mention - they’re usually hoping to make a whole lotta money along the way too.

It's like that one friend who's always telling you to go to the gym, but in the corporate world. Their heart’s in the right place.

But guess what? These activist investors are making waves in the energy sector.

Story time with Exxon

Now here’s where things get spicy - see, these activist investors sometimes don’t actually own much of the company they invest in. Usually they’ll have a few percent - but in 2021, a activist firm called Engine No.1 took this to a whole new level.

With just a 0.02% stake in Exxon, they took on the energy giant and won, securing three seats on Exxon’s board to push for a greener future.

The Energy sector is getting Totalled

Like the 4 minute mile, once one person does it, everyone tries to do it.

Now TotalEnergies, the French oil and gas giant, is feeling the heat from a Dutch group of activist investors called Follow This.

With the help of 17 other investors, Follow This filed a shareholder resolution pushing TotalEnergies to up its game in cutting emissions by 2030. This would mean not only scaling back on gas projects but also ramping up investments in renewables.

So, how does this all connect? Activist investors are increasingly using their power to push for change within major energy companies. They're fighting for a transition to cleaner energy sources, even within the behemoths of the oil and gas industry. And as we've seen with Exxon and Engine No. 1, these small but mighty investors can make a huge difference.

Sure, there's still a long road ahead, and the energy transition won't happen overnight. But with the help of activist investors, we're seeing real change in an industry that's been notoriously resistant to it.

Happy Friday, and see ya tomorrow,

The Strawman