Engine No1 and Inyova: Tactics for successful board renewal in the name of climate change
A substantial part of the investor community is taking it on itself to steer the corporate sector towards drastically lowering greenhouse gas emissions through their ownership positions in public companies. Research shows that a large proportion of institutional investors think that climate change is posing a financial risk to their portfolios and is already beginning to materialize.
There has recently been an increased focus on climate change in a board context. Corporate boards have an important role to play as they set the overall policy and long-term goals for the company and have an oversight function of corporate officers and executives. Some investors purport that boards should be required to approve and be accountable for corporate net-zero plans, and that directors must be knowledgeable in climate change issues related to the business.
This case study highlights and contrasts two cases where shareholders have sought to nominate candidates for board membership in the name of climate change, with varying results. From this contrast, we can learn about pathways to success for such attempts. The first case is the better known, when activist fund Engine No1 proposed new directors to Exxon Mobil’s board. The second example is the less public case of Swiss asset manager Inyova’s attempt to add a director with climate-related credentials to the board of BMW.