I would love to see a chain reaction forming a collective of people with 'fuck you money' and just going around Oil&Gas and bully boards into basic human decency.
The end justifies the means is a paraphrase of Niccolò Machiavelli.
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.
> 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
It seems much more logical to start driving electric, IMHO.
> “the system” doesn’t want you to know that’s how to change it
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.
I think of it as a military industrial complex with global financial elite through very effective public / private partnerships that seems to move towards constant war while espousing the need for peace, claim to support sustainability while owning and promoting the interests of the most deeply exploitive efforts and companies, espouse the reduction of income inequality even while they work against the economic interests of the majority to enrich themselves, and generally do so fairly consistently at every turn.
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.
I am not sure that anyone has enough 'fuck you money' to go around to EVERY oil & gas and do this. Also, 'the system' will not allow for this to happen.
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?
Are oil and gas 'bad'? Are other corporations 'good'?
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'?
It is unrealistic to think they would not be bailed out. Oil and gas have an intrinsic geopolitical value. What we need is to see a legitimate roadmap towards sunsetting both from companies and govs.
They wouldn't necessarily have to burn their entire stake since those companies have huge infrastructures that can be repurposed or leveraged in order to make strategic investments in alternative ventures, so ultimately there may even be a net win for the stakeholders
Some of the comments here are missing some key information. A shareholder with $2000 in shares held for three years is entitled to propose a shareholder resolution. You don’t need huge amounts of money to do this. I’m sure that many people on HN can submit proposals if they wish.
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."
> The new shareholder resolution calls on the oil company to reduce its Scope 3 emissions or those that result from the use of its products
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.
I think everyone understands the necessity of oil & gas - but what's becoming clear is that some oil & gas companies are acting like tobacco companies have in the past - they're intentionally trying to discredit climate change research, minimise public awareness of their impacts, and other "bad" activities which are good for business, but bad for society.
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.
> The new shareholder resolution calls on the oil company to reduce its Scope 3 emissions or those that result from the use of its products.
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.
The first two are not what the resolution is asking for, which is to reduce emissions from customers using their product.
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?
It's very clear that regardless of what resolution was put forward that the intent of the shareholder bloc supporting it is to reduce global carbon emissions from fossil fuel companies.
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.
> the intent of the shareholder bloc supporting it is to reduce global carbon emissions from fossil fuel companies.
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.
You are acting like the demand side is all that matters. Using your analogy, Walmart can reduce their customers’ rice consumption by 50% by the simple act of only allowing 250,000 tons to appear on shelves.
Irrelevant question. I was using your imperfect analogy to demonstrate that Exxon can reduce customer oil consumption by reducing the amount of oil Exxon supplies.
While I do appreciate your deep insight, I am missing a bit of nuance in your response. Perhaps you can help me understand why Exxon reducing its supply of oil would not reduce its customer’s consumption of its oil.
Let’s pretend you have a job. You drive 20 miles each way to go to work. When you need gas, you buy it at the Exxon station every 3 or 4 days. Suppose the Exxon station closes. What are you going to do? Quit your job, default on your mortgage and become homeless? No, you’re going to buy gas somewhere else. So, did Exxon reducing its production of gas reduce your gas consumption? Did it move your house closer to your job? Did it make your car more fuel efficient? No, it did nothing except maybe slightly inconvenience you.
Open an economics textbook and look up the phrase inelastic demand.
And yet you can’t articulate a single logical reason why reducing Exxon’s oil production will reduce demand for oil. Not even a hypothetical scenario of how it might work. Interesting.
1) Oil and gas extraction itself is very energy intensive and quite dirty. That could be improved.
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.
None of those except maybe indirectly the lobbying meet what the resolution is asking for, which is that Exxon control how customers use their products.
Yes, that's a sample of one. YOU can/will do that. A government buying $50m worth of oil & gas for its needs (i.e. Army vehicles) won't be doing that. So unless you are willing to buy $50m then it doesn't matter how much oil & gas you burn in your background ($100 perhaps before the neighbors call the police and the FD on you?)
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?
> 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
You're probably paying for trash collection, not the recycling itself, and you're paying for the disposal of the non-recyclable trash.
Right, I picked a deliberately silly example. I just don't understand what these activists think Exxon is going to do. Do they think Exxon can dictate to the military how the military is allowed to use the fuel they buy? Because...uh...they can't. The military will buy fuel and do whatever it wants with it and Exxon can't do a thing about it.
It's not physically impossible. CCS and all that. They could even do it at the source, turn the oil into hydrogen and carbon and bury the latter. Whether it's economical is a different story.
Then someone else produces and sells it. Exxon doesn’t control market demand. If companies could control demand for their products then they would make infinite money by just controlling the demand to be as high as possible.
Good luck getting a vote at Aramco or PDVSA or anything in Russia. They'll be laughed out of the room if they're lucky and probably murdered if they get too annoying.
Maybe. Then maybe they'll try some other tactic in those cases.
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.
What powers do you think they do or should have over how customers use their product? If Exxon is asked to immediately reduce your personal carbon emissions by say, 30%, what control do you think Exxon should have over your personal fossil fuel use to do that?
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).
Can I buy shareholder voting rights separately from the actual money value of the shares?
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.
The dual structure of shares was mentioned, but, let's say there's not "non voting shares".
"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.
Don't mutual funds separate voting rights from beneficial ownership? So maybe one way to gather voting rights for other people's shares would be to run a mutual fund.
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.
Ideally the company has a dual-class structure where one class of share has more voting rights than the other - and you find someone who will sell them to you. This will significantly reduce your capital risk. A dual-class structure is how some founders (like Zucc) retain majority control of the company despite a minority beneficial ownership stake.
You could probably also talk people into nominating you as their proxy at the shareholder vote.
You could theoretically, with shareholder approval, take a company private, split the share classes, and then IPO again and resell the shares to the same people.
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.
Easier to campaign for other shareholders to vote for your proposal in advance. It can be like a political campaign, it's just rare for people to try it, but nothing stops you from convincing other shareholders of voting for your resolutions well in advance of the meeting.
But in this case the activism is explicitly about hurting the company financially. 1) it is unlikely that you convince other shareholders to vote against their interest 2) the board and management have a fiduciary to their shareholders, including the ones who do not vote (which is often the majority of shareholders, how often did you show up at the general assembly of a stock you own in your portfolio, or a stock held in an ETF which typically do not vote). I suspect this is what the Exxon lawsuit will argue.
The trouble is, companies exist to make money. Even if you have control of a company and don't care about profits, everyone else does. That's the whole point of shareholders overruling CEOs. I don't see a difference between that and majority shareholders who want to set money on fire. If you deliberately pursue actions with little benefit that lose lots of money, any other shareholder should be able to fight it as a breach of duty.
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.
