The pugilistic 80-year-old founder of Florida hedge fund Elliott Management has been described as a “financial terrorist” for his practice of buying sizeable stakes in public companies and then pressuring them to alter their strategies, sell assets or fire top leaders. He’s also been called a “vulture capitalist” because he’s made an art of scooping up defaulted debt from struggling countries and then demanding payment in full.

In the media, however, Singer is more genteel. On a recent podcast he described himself as an activist shareholder who simply works “to control or influence outcomes.”

As the United States is learning, however, control-seeking billionaires rarely serve the public interest. The Manhattan Institute – a hard-right lobbying group that attacks regulation, the green energy transition, public education, social services and DEI – held an awards dinner for Singer in May, noting that all its recent success in these areas “would not be possible without Paul Singer.” (Recent headline on the institute’s website: “ESG Is Coming for Your Candy Bars.”)

As a libertarian, Singer has long supported the Koch family’s notorious promotion of tax cuts and fossil fuels. He donates generously to Republican causes, including US$63 million in the 2024 election, and $5 million to Trump’s campaign specifically.

Besides “control,” note Singer’s use of the word “influence.” In 2008, he flew with Supreme Court Justice Samuel Alito to a US$1,000-a-day fishing lodge in Alaska, according to reporting by ProPublica. In the following years, Alito ruled on about 10 cases that Elliott Management brought to the Supreme Court as part of its high-stakes collection campaigns. Alito never disclosed Singer’s gift, nor did he recuse himself – even in a dispute with Argentina that netted Elliott US$2.4 billion.

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Singer has used his strong-arm tactics to halt the energy transition at fossil fuel companies. When Elliott muscled in on Canadian oil-sands giant Suncor in 2022, he demanded five board seats and a management review. Suncor promptly sold off $730 million in wind and solar assets that had been the company’s big bet on the future. The pressure also led Suncor to hire a new CEO, veteran Exxon executive Rich Kruger, who believes Suncor’s future lies in bitumen – the world’s dirtiest oil.

Rick Spence is a business writer, speaker and consultant in Toronto specializing in entrepreneurship, innovation and growth. He is also a senior editor at Corporate Knights.

The post Meet the ‘vulture capitalist’ working to prop up fossil fuels appeared first on Corporate Knights.

The three groups are the Shareholder Association for Research and Education (SHARE), Investors for Paris Compliance (I4PC) and the Trottier Family Foundation. They are part of an increasingly vocal portion of shareholders who believe that the Trump administration in the United States is worsening an already calamitous state of global warming, a situation that will – sooner or later – dictate a massive transition in how energy systems around the world are financed.

Canadian banks are poised to play a big role in this transition. With their deep ties to the oil and gas industry, the country’s banks are among the world’s largest fossil fuel funders through loans, investments and financial dealmaking. In a report last year, Royal Bank of Canada (RBC) was ranked the seventh-largest bank on fossil fuel financing between 2016 and 2023, while Scotiabank ranked 11th.

“Banks have tremendous power to either maintain the status quo or actively and intentionally steward our country towards the new economy,” says Éric St-Pierre, executive director of the Trottier Family Foundation. “The power is in their hands, and they could really embrace funding the new economy that is moving toward renewables and the cleantech sector.”

“Internationally, we see an energy transition that is happening regardless of politics,” says Amanda Carr, associate director of SHARE. “It’s an economic transition that is in play and very exciting. We want to understand how the banks that we invest in are seizing those opportunities.”

As banks backslide, shareholders band together

The campaigns come only weeks after two major global banks – Wells Fargo and HSBC – rolled back their net-zero emission targets. In February, Wells Fargo became the first major bank to abandon its goal to bring financed emissions to net-zero by 2050. HSBC, which had previously committed to a very ambitious goal of reaching net-zero in all its business by 2030, announced it would push back its net-zero target to 2050.

The rollbacks follow a move over the last few months by all major U.S. and Canadian banks to leave the Net-Zero Banking Alliance, the global net-zero banking coalition.

The banking sector should be identifying those new opportunities that bring us toward the transition to a cleaner economy. The Canadian banks could really set the bar here.

– Éric St-Pierre, Executive Director, Trottier Family Foundation

In February, the Trottier Family Foundation published an open letter to the banks signed by 34 pension funds, endowments, family offices and foundations representing more than $53 billion in assets. The signatories call on the banks to uphold their 2050 net-zero commitments, adopt short-term science-based targets and ensure transparent annual reporting on climate targets.

“We’re quite concerned that a lot of the Canadian banks have left the Net-Zero Banking Alliance,” St-Pierre says in an interview. He hopes the letter “sends a signal that the 34 of us are bank clients and we have significant assets, so we would ask to be taken seriously by the banks.”

In response to a request for comment on the letter, a spokesperson for the Canadian Bankers Association (CBA) issued a statement that the sector “understands the important role it can play in facilitating an orderly transition to a lower-carbon economy, supporting collaborative approaches between the public and private sectors.” Notably, the issue of climate commitments or 2030 targets is absent from the CBA statement. “Canadian banks remain committed to strategically supporting clients in their transition efforts. They will continue to implement and report on their own climate strategies and plans, integrating internal capabilities to adhere to relevant international standards.”

A crucial metric for bank accountability

In a separate campaign, SHARE, PFA Pension – the largest pension fund in Denmark – and other investors have filed shareholder proposals with four of Canada’s biggest banks: Scotiabank, Bank of Montreal, CIBC and Toronto-Dominion, urging them to adopt a key metric recognized as a crucial indicator of net-zero progress in the financial industry.

Called the energy finance (or energy supply) ratio, the metric compares the volume of low-carbon and fossil fuel financing. Developed by the new energy finance division at Bloomberg (BloombergNEF), the ratio illustrates an institution’s level of low-carbon energy financing compared with its fossil fuel financing. Bloomberg has established that the ratio can include some financing of oil and gas but needs to be at least 4:1 low-carbon to fossil fuel worldwide by 2030 to limit global warming to 1.5°C.

“What’s interesting to note is that the [target] ratio is four to one, not four to zero,” SHARE’s Carr says. “We’re not seeing something that is extreme from the BloombergNEF team.”

In a recent report, Bloomberg estimates that the energy finance ratio in the global banking sector stood at 0.89:1 in 2023, less than a quarter of what it needs to be to maintain 1.5°C of global warming.

Shareholder advocates gain ground

Shareholder pressure has generated some success. RBC is one of three banks (the others are Citi and JP Morgan) that are expected to start reporting their energy financing ratios in 2025 as a result of investor proposals last year. As well, this year’s proposal from SHARE has prompted Scotiabank to start reporting the ratio in 2026.

Carr says that the ratio helps investors understand how well individual banks are performing on energy finance and provides a good management tool on the climate transition. “What the ratio allows us to do is to compare banks, regardless of size, and it also allows a bank to determine its own destiny.”

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Shareholder advocacy group I4PC is using investor resolutions to push TD Bank to embed net-zero governance at the bank’s board of directors and Bank of Montreal (BMO) to disclose its support for industry associations lobbying against pro-climate policy.

As a result of I4PC pressure, TD has agreed to review board governance policies and director selection criteria to ensure that the board is accountable and competent on key risks and priorities, including net-zero issues. I4PC has also filed a resolution with BMO calling on the bank to disclose its support for associations such as the Canadian Association of Petroleum Producers, which is lobbying against policies such as a cap on carbon emissions.

A shift toward renewables at National Bank

The banking sector has pushed back in recent years on the idea that it can lead the energy and climate transition, arguing that it also needs to continue financing fossil fuel energy. Julian Wentzel, chief sustainability officer at HSBC, recently said it’s time to end the “negative bias” toward fossil fuels.

But St-Pierre points to National Bank as an example of a relatively small institution that is showing leadership on at least one important climate measure, the commitment to renewable energy financing. In its most recent climate report, National Bank says it has tripled its renewable-energy lending to $15 billion from $5 billion in 2019 and is aiming to bring this to $20 billion by 2030.

National’s renewable-energy commitment is larger than that of RBC ($15 billion by 2030), a bank that is more than four times bigger (although RBC is expected to publish its annual climate report shortly that may update this commitment).

St-Pierre says there could be a push by banks to expand fossil fuel financing as a result of Donald Trump’s tariffs, which have raised interest in a new national energy pipeline. But that would ignore other energy opportunities such as expansion of the national electricity grids and government clean energy procurement, he says. “The banking sector should be identifying those new opportunities that bring us toward the transition to a cleaner economy. The Canadian banks could really set the bar here.”

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

The post As banks backslide on climate, Canadian shareholder groups demand reforms appeared first on Corporate Knights.

This year, fast food chains Jack in the Box and Wingstop agreed to publish their first set of measurable climate targets, following a campaign by the shareholder advocacy group The Accountability Board.

The two-year-old non-profit owns shares in roughly 100 publicly traded companies. Its purpose: “to hold companies accountable on issues relating to the environment, social matters and corporate governance,” says co-founder Matt Prescott.

A growing movement of non-profit shareholders are filing proposals and seeking action to increase corporate accountability. “They’re using the financial-system infrastructure to enable them to get access to companies that they might not get access to otherwise,” explains Kevin Chuah, an assistant professor at Northeastern University who researches stakeholder activism.

The Accountability Board focuses on food and agriculture companies like Tyson Foods and Hormel Foods because they have an outsized impact on the environment and animal welfare, Prescott says.

While many multinational corporations have made public climate commitments, they have often failed to back them up with actionable plans for accomplishing those goals. That was the case with Jack in the Box, according to Prescott. “They’ve got disclosures about risks posed by climate change and other environmental issues, but the company didn’t actually have measurable goals for reducing its emissions,” he says. Thanks to the newly passed proposal, now they will.

Jack in the Box now reports Scope 1 and 2 emissions – that is, emissions the company directly emits or that are generated from the electricity or other utilities the chain uses. In the food sector, however, as much as 90% of greenhouse gases come from Scope 3 sources, with most of those coming from meat and dairy products. Scope 3 refers to emissions that come from a company’s supply chain, which in this case includes the beef burgers that are a massive driver of food-related emissions.

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The Accountability Board structures its proposals strategically to make them more likely to succeed, such as by keeping them general, Prescott explains. For example, the group may ask for measurable targets without prescribing what those targets should be. Otherwise, major shareholders – who tend to shy away from proposals that are overly prescriptive – might withhold their support, Prescott says.

The evolution of shareholder activism

Shareholder activism traces its roots to the 1980s. At the time, shareholder activists usually sold their shares once their goals were achieved, earning them the nickname of “corporate raiders.” Since then, activist investors have managed to reform their reputation and corporate executives now take a greater interest in shareholder perspectives.

The Accountability Board doesn’t usually sell its shares, instead choosing to maintain and also grow its portfolio, Prescott says. Most of the shares the organization owns were bought with an initial $11-million grant from the non-profit foundation Open Philanthropy.

For Chuah, shareholder activists are one piece of the bigger picture of change. Agitator non-profits and religious groups are often the ones “who get issues onto the table and effectively bring them to the attention of the mainstream,” he says. Next, “the institutional investors get on board.” Real progress, according to Chuah, requires both: those working within and outside of institutions.

Grace Hussain covers farming and agricultural policy. She holds her MS in Animals and Public Policy from Tufts University.

This article was originally published by Sentient. It has been edited to conform with Corporate Knights style.

The post Activist investors convince fast food chains to adopt climate targets appeared first on Corporate Knights.

Let’s name the elephant in the room: Bay Street and Calgary are on a collision course on net-zero. Large Canadian banks, insurance companies and pensions have declared they will reach net-zero in financed emissions in their portfolios by 2050. Fearing loss of investment, Canada’s major oil and gas companies declared that they too are committed to net-zero. But, any rudimentary analysis shows that simply isn’t true.

The reaction of major Canadian oil and gas companies to new federal anti-greenwashing rules has been telling. They not only complained loudly, but took the unprecedented step of removing many of their corporate climate disclosures from their websites, unlike any other industry in the country subject to the same rules. They say that it’s the uncertainty of the standards that’s causing them to react this way, but it’s basic math that exposes their doublespeak.

The companies’ shorter-term climate targets have never added up to their reaching net-zero by 2050. They game the numbers, like Suncor failing to provide a baseline for its 2030 target so we don’t know what level it’s reducing from, or like Enbridge expressing its targets in “intensity” terms – emissions per unit of production – as opposed to absolute terms, so that they can continue to expand fossil fuel operations, thereby making the climate crisis worse.

The industry has proposed carbon capture and storage as the solution, but only if taxpayers foot the bill while it continues to make billions. Scaling the technology poses massive challenges and has underperformed nearly everywhere else in the world. And the kicker is that even if it works perfectly, it will address only a fraction of the emissions and not touch the much larger “downstream” emissions that show up in the net-zero accounting of financial institutions.

Over the past few years we’ve filed shareholder proposals at companies like Enbridge, Suncor and Cenovus to expose the risks that their failure to transition pose to investors in those companies, which includes most large Bay Street actors like RBC Global Asset Management and TD Asset Management, which act on behalf of millions of Canadians.

Nearly all of these major investors say that they are “engaging” with high-carbon investees in their portfolios in order to advance net-zero, setting this up as a binary choice against divestment. Some of them voted for our proposals, the bare minimum to live up to their commitments. Some didn’t, calling into question their seriousness.

But, with a few exceptions like BCI, we’ve yet to see any large Canadian investors take meaningful steps to themselves press oil and gas companies on net-zero. Some support Climate Engagement Canada, whose assessments show the industry to be off course, but there is little evidence they are acting on that information in ways that will remedy the situation.

Our U.K. colleagues have an expression for this style of weak engagement: they call it “tea and biscuits,” equivalent to having a nice quiet chat with the target company with no results. It’s contrasted with adopting an escalation strategy, where investors use their clout by going public with concerns, filing their own shareholder proposals, holding directors accountable and ultimately divesting if a company fails to transition. In this way, engagement and divestment are not binary choices but complementary steps along a continuum, designed to be effective.

Legal and General Investment Management (LGIM) is a good example of this more robust approach. With about CDN $2 trillion in assets under management, LGIM publishes its climate expectations for investees, follows up with letters and meetings, exercises its voting rights by both filing shareholder proposals and voting against directors, and ultimately puts recalcitrant companies in its divestment list.

This is the kind of approach we need from major Canadian investors like the asset management arms of our big banks, insurance companies (like Manulife and Sun Life) and the “Maple Eight” pensions. The more of them that do this, the more that heavy emitters in Canada will need to change course.

We decided that our oil and gas work was providing these investors with an excuse to not do their own. As long as “somebody else” was stepping up, they could stay on the sidelines. The result is that our oil and gas companies continue to go in the opposite direction to net-zero.

So we quit. Kind of. We’ll stop filing proposals with oil and gas companies but will continue to track whether investors are living up to their climate commitments, including their promises to transform their high-carbon investees. A secure economy, and a decent return on investment, depends on it.

Matt Price is executive director of Investors for Paris Compliance, a shareholder advocacy organization holding Canadian companies accountable to their net-zero commitments.

The post Why this investor advocate quit filing oil and gas shareholder proposals appeared first on Corporate Knights.

In November, the independent federal government agency whose stated mission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation” announced that it would be toughening the rules surrounding shareholder resolutions – a critical legal tool available to activist shareholders looking to propose corporate changes.  The following is a letter signed by a number of pension and sustainable finance experts challenging the silence from large institutional investors surrounding the rule change.

As the SEC changes “the rules of the game” for material risks like ESG, big institutional investors must act before it is too late

Investors rely on the proxy process in the United States as the main mechanism to bring both strategic and material environmental, social and governance (ESG) risks and opportunities to the attention of corporate boards. But the SEC (Securities and Exchange Commission) is now proposing to degrade this key tool such that it will seriously undermine corporate accountability. U.S. institutional investors’ silence on this issue will hurt them and, more importantly, their clients in the long run. They must speak up now before their fiduciary duty is further degraded.

The SEC wants to curtail the proxy process by increasing ownership requirements and thresholds of support to allow resolutions to be submitted to general meetings in subsequent years. These measures sound technical and dull, but their impact could be significant.

The rules would, in effect, exclude many proposals on topics ranging from executive stock sales to political spending and from board diversity to climate change. Data shared with Standard & Poor’s by the Sustainable Investments Institute suggests that one-third of proposals voted on from 2010 to 2019 would have been excluded from resubmission by the new rules.

The proposed rules would make it significantly harder for shareholders to resubmit proposals, but many observe that resubmitting proposals is essential to building support for and understanding of the issues, as was the case for an issue once considered fringe, like climate change, which has now become “a defining factor in companies’ long-term prospects,” as BlackRock CEO Larry Fink said last week.

Disappointingly, the SEC’s actions also contradict the Business Roundtable, which in August 2019 broadened its definition of corporate purpose to give more attention to the interests of stakeholders beyond shareholders. They stand in contrast to the rising number of CEOs speaking out about the need to address the loss in public confidence in capitalism and the actions of companies like Microsoft, which recently detailed its concrete plans to become carbon negative.

The SEC comment period ends February 3. Preventable Surprises reviewed comments submitted to date in the current comment period and in the policy development process. The vast majority of U.S. fund managers appear to be either actively or passively supporting this specific change, whether through silence or by letting business associations speak for them.

Wellington Management Company and MFS Investment Management are commendable exceptions, having signed on to a letter coordinated by the United Nations’ Principles for Responsible Investment (PRI) that states:

“The proposed rules stand in direct contradiction of the SEC’s stated purpose, to protect investors. Ultimately, they would put more power into the hands of CEOs and corporate boards, weaken shareholder protection, especially for smaller investors, and diminish basic transparency and corporate accountability. They are in effect a form of corporate voter suppression to disenfranchise investors who seek to actively engage with companies on ESG matters, climate risks, sustainability and long-term value creation.”

They are joined on this letter by an impressive group of (non-American) asset owners and managers.

In private discussions, managers often come up with a variety of reasons for not publicly challenging the SEC proposal. Some protest that they have already made their views clear by taking part in the SEC roundtable or through direct conversations with SEC officials. Others claim that they don’t comment publicly on policy matters, relying on trade groups to speak for them. Still others say they do not sign on to group letters and would rather submit their own letters. But the vast majority have neither written their own letter nor signed on to others.

The unspoken reality could be that senior executives of these mega-managers might be happy if ESG resolutions went away, as their voting record consistently suggests (many of the largest U.S. index funds have, for instance, consistently opposed shareholder proposals related to climate change).

Regardless, letting trade associations speak for them does not do them or anyone else any favours. However, if ESG resolutions are restricted, it will negatively affect investors’ ability to fulfill their fiduciary duties by investing in and positively influencing the companies they own.

It’s worth remembering that shareholder resolutions and the proxy voting process are the only existing communication channel between a board and its company’s broad shareholder base that is not controlled by management. In a fast-changing world, companies will be worse off if their boards are insulated by barriers to regular and unbiased feedback from the shareholder base, especially on evolving sustainability issues that will influence future capital flows.

Thinking ahead, fund managers should realize that their silence will hurt their bottom line:

• 1) Asset owners – their clients – will continue to demand to see positive ESG changes in the companies they invest in and will expect these big managers to submit resolutions on their behalf or will do so themselves (and the managers may still have to bear the costs). Otherwise, they might resort to other, more radical means: voting against corporate directors more often or finding new managers.
• 2) Asset owners will see the U.S. as too weak on corporate governance because of corporate influence over regulators while viewing large U.S. fund managers as being too conflicted to protect the interests of asset owners.
• 3) Silence around these proposed SEC changes positions U.S. fund managers as behind the curve, further hurting their ability to attract talent.

A proactive stance in favour of transparency and stakeholder engagement will instead help their bottom line. Capital is liquid and prefers to invest in countries where investors can influence the companies they invest in. By depriving themselves of this ability, U.S. institutional investors are doing a disservice to their long-term business model, no matter the relative depth of U.S. capital markets.

With less than a week left to submit responses, we urge institutional managers, including BlackRock, State Street, JPMorgan, T. Rowe Price, Nuveen and Morgan Stanley – all of which have made strong commitments to climate or ESG ­­­– to be transparent about their positions on this matter.

They could join the International Corporate Governance Network in noting:

“The number of shareholder proposals in the U.S. has remained consistent over years while the level of support for shareholder proposals has increased, demonstrating growing recognition of the importance of the matters raised by such proposals among a broader spectrum of investors. We are not aware of any “abuses” of the existing rules by shareholders.”

Or they could join Theresa Whitmarsh of the Washington State Investment Board in observing:

“Systems for proxy voting and shareholder proposals are not broken. Granted, the plumbing system could benefit from careful updates, but the SEC’s proposed overhaul is overkill and does not address the system’s plumbing.”

Or they could join the Wellington Management Company and MFS Investment Management in signing the PRI-coordinated letter.

Or they could write their own.

To quote SEC commissioner Robert Jackson, “Whatever problems plague corporate America today, too much accountability is not one of them.”

We simply wish that institutional managers make their views equally explicit.

Signed,

Keith P. Ambachtsheer, Director Emeritus, International Centre for Pension Management, Rotman School of Management, University of Toronto

Bill Baue, Senior Director, r3.0 (Redesign for Resilience & Regeneration)

Lauren Compere, Managing Director, Boston Common Asset Management

Toby Heaps, CEO, Corporate Knights

Margaret Heffernan

Keith L. Johnson, Chair, Reinhart Institutional Investor Services

Jon Lukomnik

Nell Minow, Vice Chair, ValueEdge Advisors

Tom O. Murtha, Lecturer, Columbia University

Mike Musuraca, Chair, Preventable Surprises

Brynn O’Brien, Executive Director, Australasian Centre for Corporate Responsibility

Jérôme Tagger, CEO, Preventable Surprises

Raj Thamotheram, Founder and Senior Advisor, Preventable Surprises

Gabriel Thoumi, CFA, FRM

Michele Wucker, CEO, Gray Rhino & Company

The post As SEC curtails shareholder activism, big institutional investors must act appeared first on Corporate Knights.