• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 8 days America should go after China but it should be done in a wise way.
  • 2 days Even Shell Agrees with Climate Change!
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 4 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Activist Investors Drop ESG Campaigns on Lack of Profits

  • Consultancy Alvarez & Marsal: activist investors were less likely to engage in ESG campaigns this year after they proved to be markedly less lucrative than campaigns that focused on effecting operational or strategic change.
  • The research focused on 550 activist shareholder campaigns that took place between 2016 and 2021 at companies in the U.S. and Europe.
  • Activist investors have been an important tool for bringing the climate change agenda closer to the management of companies in the energy industry.

Activist investors’ love for sustainability-related shareholder campaigns appears to be growing cold in the absence of any practical outcomes, a consultancy has said.

Per Alvarez & Marsal, as quoted by Bloomberg, activist investors were less likely to engage in ESG campaigns this year after they proved to be markedly less lucrative than campaigns that focused on effecting operational or strategic change.

“As investors focus more firmly on returns in 2024 in a challenging market, we expect to see a decline in ESG-related campaigns and a renewed focus on metrics such as margin growth, cash generation and return on capital,” Alvarez & Marsal managing director Andre Medeiros said.

The consultancy looked at 550 activist shareholder campaigns that took place between 2016 and 2021 at companies in the U.S. and Europe.

According to an analysis of the campaign outcome data, the consultancy found that investor campaigns that focused on change in the operational or strategic departments, outperformed the market by an average 9.4% over the past six years.

At the same time, campaigns focused on sustainability-related aspects of a company’s activities outperformed the market at a much more modest rate of 0.2% over the six-year period.

Activist investors have been an important tool for bringing the climate change agenda closer to the management of companies in the energy industry and for forcing public energy companies to make commitments for emission reduction and investments in low-carbon energy.

However, these investments have failed to produce the returns that most investors would like, which recently led to a couple of U-turns at supermajors BP and Shell—both previously fully committed to directing more money to things like wind, solar, and EVs, while reducing their core business of producing and marketing oil and gas. The reason cited for the change in strategy was consistent underperformance of these investments as opposed to cash spent on core business.

By Irina Slav for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News