Also: London falling, Apple encryption, and Peruvian crisis.
Good morning. Peter Vanham here, filling in for Alan.
What do an environmentally-minded activist investor and an anti-ESG activist investor have in common? More than you would think, if Bluebell and Strive are examples to go by.
Both firms made headlines this week. London-based Bluebell demanded several governance changes at BlackRock, including a replacement of CEO Larry Fink. It said the company’s inconsistent messaging over ESG hurt its reputation—and its investors. It wants a new CEO to ensure Blackrock’s environmental and social stewardship is about actions, not words.
Ohio-based Strive, meanwhile, declared victory in its anti-ESG activism at Disney and Exxon. At those companies, a new CEO and two new board members were appointed, respectively, and that allowed Strive to move on to new targets. At Chevron and Home Depot, it now demands they stop “prioritizing ESG over excellence” or threatens to drag them into a costly proxy battle.
At first sight, the two activist investors have very little in common other than their tactics. Bluebell seeks returns for its investors that are “environmentally and socially responsible,” its co-founder Giuseppe Bivona told me. Strive’s founder Vivek Ramaswamy, on the other hand, said that “if you want to pursue an environmental agenda with your own money, you’re free to do it. But Strive is not your home”.
Yet there is a commonality beyond the fact that they’re activist investors: both funds want to keep the companies they invest in out of politics.
“I don’t believe that the role of an investment manager is to dictate policy,” Bivona told me over the phone from London. “We all have an opinion, but the mission of BlackRock is not to be involved in influencing beliefs and suggesting, for instance, energy policy. Especially if you have alienated 23 states and 150 million of Americans as a result of your actions. That is bad for your business.”
“That’s very compelling,” responded Ramaswamy when I put Bivona’s assessment to him. “There may be some common ground. At Strive we prioritize excellence over politics. Companies have to be mission-driven: have a core purpose and stay true to it. But by trying to be everything to everyone, BlackRock has become nothing to anyone. [Bluebell] has a similar concern about inconsistency.”
Investors like Bluebell and Strive will still most likely meet each other at opposite sides of shareholder votes in the future. As an example: Bluebell in the past year asked Glencore to divest its coal business, while Strive is asking oil and gas companies to increase their exploration and drilling. That should lead to plenty of discussion at shareholder meetings down the road.
But if both investors—and others like them—keep the pressure on companies to stay out of politics, they may indeed become successful in ensuring that only they, and not CEOs, get the label “activist” in the future.
More news below.
Peter Vanham
@petervanham
Peter.vanham@fortune.com
P.S.: Last week’s essay on the ongoing ESG backlash erroneously reported Deloitte dissolved and renamed its ESG practice. Instead it grouped its various ESG practices, and named the newly formed group “Sustainability, Climate and Equity,” the company pointed out.
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London falling
Potential new EU financial-market rules spell trouble for the City of London. The European Commission has proposed forcing banks to maintain active clearing accounts in the bloc, and to monitor their exposure to clearing houses such as London Stock Exchange’s LCH, which currently handles the vast majority of euro-denominated derivatives trades. Commission officials say they’re not trying to weaken London’s position, but rather to shore up the EU’s financial stability. The new rules would come into force in 2025. Fortune
Apple encryption
Apple is moving to better protect its users’ data by allowing them to apply end-to-end encryption to their iCloud backups, photos, and notes. As this means Apple wouldn’t be able to decrypt such data itself, it will almost certainly mean a fresh clash with law enforcement at some point. It’s been a busy week for the company: CEO Tim Cook also said Tuesday that Apple will make chips in the U.S. CNBC
Peruvian crisis
Peruvian President Pedro Castillo yesterday tried to dissolve the country’s congress ahead of a vote on his impeachment over alleged corruption. He failed, and has now been replaced by Dina Boluarte, his erstwhile vice president. Castillo has also been arrested over what political opponents have called an attempt at a coup. Financial Times
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