The US Securities and Exchange Commission warned asset managers and activist investors about their reporting obligations following a shareholder campaign in 2021 to remove Exxon Mobil Corp. directors over their record on climate. The SEC’s guidance stems from an investigation into the contentious activist investor push that year that successfully changed the oil company’s board of directors.
The agency said it probed but chose not to pursue an enforcement action against members of a group called Climate Action 100+, adding it had “serious concerns” about the conduct of the group and other participants. Asset managers and investors who join groups need to make sure they’re complying with SEC rules on shareholder engagement, the regulator said in a report on Wednesday.
The SEC said shareholders have the right to express their views but anyone owning more than 5% of a public company must disclose their plans and other information if they seek to change or influence control. The SEC also probed whether the climate group pressured Black Rock Inc. and State Street Corp. to support group-backed matters. The investigation didn’t conclude that Black Rock or State Street agreed to vote proxies in certain manners.
Climate Action 100+, supported by the Boston-based nonprofit Ceres, said it has always operated within US securities law. “Engaging with companies on how they manage those risks and assessing director performance is a long-standing, lawful part of responsible investing,” said Michael Boudett, general counsel of Ceres. The SEC issued its warning ahead of the 2027 proxy season via a “report of investigation.”
Source: Bloomberg Markets · Summarized by HeadlinesBriefing