Last week a small activist hedge fund called Engine No.1 won two seats on the board of Exxon Mobil by persuading other investors that there was not much of a plan in the company to handle climate change.
Engine No.1, which shocked investors and analysts last week by taking the board positions at Exxon’s annual shareholder meeting, is now planning to launch its first exchange-traded fund.
According to a regulatory filing, the Transform 500 ETF’s goal is to encourage changes at the companies it holds through proxy voting.
Engine No.1 is looking to measure how companies are investing in their employees and the environment, using different metrics like workforce diversity, employee health and safety, carbon emissions, and land use, which already impact the stock price of Exxon Mobil.
The hedge fund owns only about 0.02% of Exxon’s shares. It was able to get support from the three largest U.S. investment firms; BlackRock Inc., Vanguard Group, and State Street Corp., as well as the nation’s three most significant pension funds to overhaul the oil giant’s board.
The win “marks the first successful proxy fight with a focus on environmental or social issues,”
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