Vive La Rvolution

Image source: Valmedia, Christopher Brewer - Shutterstock

What's going on?

The green revolution continued its uprising this week, as three major oil companies were forced to feel the winds of change.

What does this mean?

Its been a tough few days for oil companies. First up, a Dutch court stepped in and ordered Shell to start accelerating reductions in its carbon emission. Then Chevrons shareholders followed up with an uppercut of their own,votingin favor of a drastic cut inits emissions.

Still, maybe the most notable was ExxonMobil, which was put under pressure by its investors to start rolling out a greener agenda. Or more specifically, by one activist investor with just 0.02% of its shares. If you think that doesnt sound like much, youre not wrong: investors usually need a much bigger stake to throw their weight around. But despite having no history of activism in the oil and gas industry, this one managed to rally ExxonMobils second-biggest shareholder BlackRock to its cause, and the rest fell like dominoes.

Why should I care?

For markets: Investors just care too much (about money).

Make no mistake, investors sudden enthusiasm for energy companies transition to cleaner energy isnt out of the goodness of their hearts. Theres a financial incentive at play (tweet this): oil companies could attract a fresh wave of climate-minded investors if their eco-friendly efforts are successful in the longer term, and that could push their share prices up.

The bigger picture: Making a difference from the inside.

One way for investors to make sure their investments have a positive impact is to avoid those that might have a negative one, but its not the only option. Some of the biggest investors in the world use an engagement strategy, where they take a big enough stake in dubious companies poor employers or high polluters, say to gain a seat at the table. That way, they can use that newfound influence to push them toward positive change.

Originally posted as part of the Finimize daily email.

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