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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Bhp Group Limited | BHP | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 15.00 | 0.65% | 2,340.00 | 16:35:27 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 2,310.00 | 2,310.00 | 2,346.00 | 2,340.00 | 2,325.00 |
| Industry Sector |
|---|
| MINING |
| Top Posts |
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Posted at 26/2/2024 10:58 by loganair Miners are set for a bumpy ride by Rhodri Morgan:The UK’s major miners face multiple challenges. The first of these is operational – Glencore and Anglo American, two of London’s largest commodity outfits, have bled profits in 2023. For the former, adjusted EBITDA fell by 50 per cent year-on-year to $17bn in 2023 while Anglo American saw a net profit fall of 94 per cent. Glencore is really struggling to reckon an attempted exit of its legacy coal business, one that delivered $17.9bn EBITDA in 2022 – more than the groups entire return in that metric for 2023. It is instead putting down a roadmap towards essential metals for the energy transition; nickel, cobalt and zinc. Anglo is also trying to dial in on battery metals but remains heavily tied to another poorly-performing asset class – Platinum Group Metals (PGM), used in the diesel and petrol car industry. Alongside a wheezing diamond market, PGMs cost Anglo around $5.5bn in revenue in 2023. The problem across the board for miners, not just Anglo and Glencore, is that this isn’t the good old days. Miners had rarely been as profitable in recent history as they were in the immediate aftermath of the pandemic, which effectively ignored individual market permutations and sent all commodities skywards. Now, mining sub-sectors are off the ride and are starting to reconfigure individual supply-demand dynamics and that is where the underlying issues are coming to the fore. The nickel market, for example, has dramatically over-estimated short-term demands resulting in a market flood and pain for those with exposure. Exacerbated by a supply monopoly from Indonesia, miners with exposure like Glencore are struggling to sell the metal at a lower market price, and further hampered by dramatic increases in operational costs versus what they were a decade ago. The firm has firmly felt the nickel bite, announcing the sell-off of its stake in the Koniambo mine in New Caledonia after a profitless decade. The head of French metal mining group Eramet said last week that Indonesia would effectively render “old traditional players structurally non-competitive̶ Nevertheless, the firm’s chief executive Gary Nagle is determined to spin off Glencore’s coal businesses to the U.S in favour of making UK-based operations more green metal focused – an uphill battle for the foreseeable future. China is continuing to weigh on miners too as its copper-hungry property business remains subdued despite state efforts to wake it up. Firms like Anglo are sitting on ageing assets and analysts know that major projects need to be found pretty quickly to avoid slipping further into the mooted steep production deficits. But Anglo faces a challenge not shared as acutely by its competitors like Glencore, Rio Tinto or Vale in that its portfolio is attempting to cater for two inversely expanding ends of the motoring market. The costly revenue shortfalls from its PGM group in 2023 are in large part attributable to stalling petrol and diesel vehicle demand. And with battery metal demand bottoming out too, the firm is stuck between a rock and a hard place. Glencore and Anglo are not Shell and BP. In market cap terms at $45bn and $23bn, they might look like they hold relatively comparable positions within the London-listed market. But miners are far more exposed to market volatility owing to the demand in sectors they feed. For now, both Glencore and Anglo can weather instability through manageable debt piles and the resources to try and pivot in whatever way possible to drive profitability. But investors should strap in for a bumpy ride. |
Posted at 30/12/2023 15:32 by zho Hmmm. It works for me using Google, but not other search engines. Anyway, here it is, omitting graphs:It's time to buy the 'Big Australian' This mining colossus is a smart, long-term option with its clear focus on a slimmed-down set of metals and fertiliser At the risk of anthropomorphising a digger of rocks, BHP (BHP) comes across as the most relaxed of the major miners. While it is the sector’s largest by market capitalisation, the ‘Big Australian’ has kept to its antipodean roots while Rio Tinto (RIO) looks to massively expand its iron ore output with the Simandou mine in Guinea and Glencore (GLEN) shifts beyond its current coal, copper, cobalt and trading remit with a company split in two years. BHP has used its healthy balance sheet to both buy smaller miners and build organically, but has kept to well-travelled paths. This year’s OZ Minerals buyout has added reserves near the Olympic Downs mine in South Australia, while its next mega-mine is the Jansen fertiliser project in Canada. Meanwhile, BHP plans to sell its stakes in two metallurgical coal mines in Queensland for $4bn (£3.14bn), following the spin-off of the remaining BHP Petroleum assets into Woodside Energy (AU:WDS). Much of this action may have passed by UK investors, after BHP folded its UK plc legal structure into its Australian limited company entity two years ago, prompting its exit from the FTSE 100. Shorn of its index membership, but with a reshaped portfolio, BHP’s recent share price weakness belies a more compelling company later this decade (providing price forecasts for its major commodities support ongoing investments, of course). Near-term hurt Even with a strong – though flattening – iron ore price, investors have shied away from BHP and Rio Tinto this year. This points to scepticism that a price of more than $120 a tonne can hold, given shakiness in the Chinese construction sector. For BHP, results for its June-end financial year did not give investors much to get excited about, given the fall in earnings and a decline in the final dividend to 80¢ a share, down from 175¢ in 2022. Analyst forecasts are for sales to remain flat this year, at around $28bn each half – well short of the $35bn peak in the first half of the 2022 calendar year. This has been driven by both lower prices and some operational slowdowns. The Escondida mine in Chile, the world’s biggest copper mine, has seen production bounce around month on month. In October, the most recent period for which output is available, production was at the rate of 1mn tonnes a year, down a sixth in a month. Full-year guidance is currently slated for between 1.08mn and 1.18mn tonnes. This comes after costs climbed 17 per cent last year, which chief executive Mike Henry has described as “a solid outcome in the context of what other producers are experiencing”. Iron ore has been stronger. Henry cited “$5 more per tonne in free cash flow than that reported by our largest competitor” as an indicator of BHP’s relative performance. Expansion is also planned for the key Pilbara iron ore complex, with output for this year guided at 282mn to 294mn tonnes, on route to medium-term capacity of 305mn and eventually 330mn tonnes. Growing plans In the meantime, there is plenty on Henry’s desk already. On top of running the copper and iron ore units and fighting rising costs, there is the Jansen build and the various OZ Minerals additions in South Australia. The company has hitched its wagon to four materials for the coming decade: iron ore, copper, nickel and potash. By contrast, Rio Tinto is moving into lithium, and is committed to finally building the sprawling Simandou project in Guinea. It’s partly this asset that brightens BHP’s relative appeal. Rio Tinto will spend billions on funding a new railway to get the ore to port and has already experienced much grief operating in Guinea. The project’s partners, mostly Chinese, are pushing hard to get moving in a bid to ramp up non-Australian iron ore supply. First output is now expected in 2025, and could eventually produce 200mn tonnes a year – equivalent to 10 per cent of the market. |
Posted at 18/9/2023 20:17 by ariane Labor’s work laws will cut dividends, BHP warnsPeter Ker and Tom Richardson The Review Sep 18, 2023 – 7.00pm BHP has warned investors dividends will suffer under the Albanese government’s “same job same pay” agenda, which the miner expects will strip more than $1.3 billion from its annual earnings based on a conservative reading of the bill, equivalent to 5000 jobs. The nation’s biggest company vowed to “continue to argue the case” against the policy while seeking to mobilise support from its army of direct and indirect shareholders on Monday, which it estimated at close to 17 million Australians. BHP’s chief financial officer David Lamont. Carla Gottgens But Workplace Minister Tony Burke signalled he was up for the fight with BHP and its income hungry investors, saying that most companies did not rely on the sort of “loopholesR BHP is vulnerable to the government’s proposed “Closing Loopholes” amendment to the Fair Work Act because it employs about 4500 maintenance and production workers through its “Operations Services” subsidiaries, which typically pay lower wages than the BHP subsidiaries that directly own the company’s mines. The bill seeks to ensure workers employed under structures like BHP’s Operations Services get the same pay as colleagues on different workplace agreements. It is expected to affect companies like Downer and Qantas. BHP warned in May that the policy would increase its costs by $1.3 billion a year, a claim that was dismissed by the government in the explanatory memorandum attached to the bill when it was tabled in parliament on September 4. But on Monday, BHP chief financial officer David Lamont said the $1.3 billion estimate was probably conservative given the bill was broader than originally expected. “The original estimate that we did have of $1.3 billion, we think now is actually light on,” said Mr Lamont during a shareholder webinar. BHP did not initially assume the laws would be extended to service providers like Downer and Thiess, which may also be captured according to paragraph 558 of the memorandum. “This will have a direct impact to our shareholders,” said Mr Lamont. “$1.3 billion will come directly off our earnings each year that will then flow directly to dividends, we estimate that to be about 30¢ on a dividend payout.” BHP declared fully franked dividends worth $US1.70 a share, or about $US8.7 billion ($13.5 billion), for the year to June 30, – the fourth-biggest annual payout in the miner’s history. Mr Lamont’s 30¢ estimate is a hypothetical figure based on the policy being in place in the 2023 financial year, and BHP absorbing a $1.3 billion hit to earnings. The past five years have marked a golden era for shareholder returns at BHP amid high commodity prices and an inflationary backdrop that has ensured resource producers are price makers, not price takers. Mr Lamont hinted that jobs could also be affected if BHP sought to mitigate the financial impact of the policy. “Another way to look at it; that $1.3 billion is equivalent to about 5000 jobs in BHP,” he said. BHP’s estimate that it has about 17 million shareholders includes those who are underlying investors through their superannuation accounts. Speaking on the same webinar, BHP’s Minerals Australia president Geraldine Slattery said the proposed laws would “cut short” a large number of Australian workers. “For shareholders it is something you should be very concerned about,” she said. Mr Burke said the reforms would only compel BHP to pay rates it had already agreed to pay some of its staff under workplace agreements. “It’s odd that a company would be alarmed at having to pay the rates of pay it has already agreed to,” he said. “Most businesses in Australia don’t use this loophole. There are very few workplaces where the hourly rate for a casual is lower than the rate for a permanent worker.” Plato Investment Management managing director Don Hamson said the imposition of higher costs on BHP would inevitably lead to lower profits, lower dividends and perhaps a lower valuation for BHP shares. “Ultimately if this is a permanent reduction in earnings this will equal a capital reduction as well in the value of shares, so shareholders will get a double whammy of less capital value and less income along the way,” he said. Mr Hamson said lower profits would also mean BHP would pay less tax. “Somebody might be better than someone else at the same job. I don’t pay all my staff the same as some are more productive than others, and have different skills or experience in similar roles,” he said. The nation’s biggest industry super fund, AustralianSuper, declined to comment. |
Posted at 29/8/2023 09:52 by anhar Those are appalling predictions for me as a divi investor, income being the only reason I invest in shares at all. But I've learned after decades of doing this that broker forecasts are completely unreliable so I'll continue to hold BHP forever, having already held it for an extremely long time during which the income has been spectacular, including the demergers of S32 and WDS. |
Posted at 28/8/2023 13:42 by loganair Where next for the BHP dividend?Following the release of the miner’s results, analysts at Goldman Sachs have been adjusting their forecasts and have now included their expectations for FY 2028. First up, in FY 2024, the broker is now expecting the BHP dividend to come in lower at 119 US cents (185.4 Australian cents) per share. Based on the current BHP share price of $43.02, this implies a dividend yield of 4.3%. Goldman then expects another cut to 106 US cents (165.1 Australian cents) per share in FY 2025. This will mean a yield of 3.8% for income investors. The trend is expected to continue in FY 2026, with the broker forecasting a 97 US cents (151.1 Australian cents) per share dividend from BHP. This equates to a 3.5% dividend yield. A final (modest) cut is then forecast in FY 2027 to 96 US cents (149.5 Australian cents) per share. This would mean a yield of 3.45% for investors. Finally, the broker believes it will be time to increase the BHP dividend in FY 2028. It has pencilled in a fully franked 101 US cents (157.3 Australian cents) per share dividend for that financial year. This represents a 3.65% dividend yield. In summary, that will be: FY 2024 – 119 US cents FY 2025 – 106 US cents FY 2026 – 97 US cents FY 2027 – 96 US cents FY 2028 – 101 US cents Positives: Exposure to a diverse portfolio of commodities. A focus on shareholder returns. Negatives: Economic outlook uncertainty. Western tensions with major customer China. |
Posted at 17/4/2023 14:14 by grupo guitarlumber MINING.COMTeck attracts bids from Vale, Anglo American and Freeport Cecilia Jamasmie | April 17, 2023 | 4:49 am Teck Resources (TSX: TECK.A, TECK.B)(NYSE: TECK) is said to have been approached by Vale (NYSE: VALE), Anglo American (LON: AAL) and Freeport-McMoRan (NYSE: FCX) on potential deals for the Canadian miner’s base metals business if shareholder approve a planned split. The three global miners are among at least six companies that have expressed interests in transactions with Teck post-split, local paper The Globe and Mail reported on Sunday, citing sources close to the matter. The Vancouver-based company, which is Canada’s largest diversified miner, proposed in February spinning off its steelmaking coal business to focus on base metals, particularly copper and zinc. Swiss commodity trader and mining company Glencore Plc (LON: GLEN) launched a hostile $23.1 billion takeover of Teck, which has been sweetened since then to entice Teck’s shareholders initially opposed to the idea of being exposed to a larger coal portfolio. The revised proposal gives Teck’s shareholders who do not want to own shares in the combined coal operation the option to receive cash plus 24% of the combined metals-focused business. On Sunday, former chairman Norman Keevil, whose family controls Teck through its ownership of the majority of the company’s ‘A’ class of shares, reiterated his arguments against the takeover. “As there has been much media commentary regarding my views on the future of Teck, I would like to provide a clear statement of my perspective,” he said. “My colleagues and I are proud of what we achieved through 30 years of building Teck, growing the company 500-fold from a $25 million market cap to $12.6 billion, with double-digit compounded growth in shareholder value, and continuing growth in recent years to $25 billion today,” he added. Keevil clarify he would support a transaction — be an operating partnership, merger, acquisition, or sale – with the “right partner”, on the “right terms” for Teck Metals after separation. Teck’s chairman emeritus added that Glencore’s proposal was “the wrong one, as well as at the wrong time” and the split should go ahead. With just over a week left on the clock for Teck’s shareholders to vote on the split, Glencore is trying its best to persuade the Canadian miner’s shareholders. Last week, chief executive Gary Nagle landed in Toronto to personally explain his company’s vision and intentions. By Friday evening, two influential shareholder advisory firms had recommended against Teck’s strategy, while its largest investor, China Investment Corp., said it favoured Glencore’s proposal. The shiny orange metal Experts had anticipated that the company’s decision to split the business in two would make Teck Metals a takeover target. The company owns four copper mines in South America and Canada, which produced 270,000 tonnes combined last year. Teck also expects to double copper output after the second phase of its Quebrada Blanca (QB) project in Chile ramps up to full capacity by the end of 2023. Glencore believes that operating Quebrada Blanca jointly with the nearby Collahuasi mine, in which the Swiss multinational holds a 44% stake, would add at least a $1 billion of value to its coffers. The idea, Glencore has explained, is that QB and Collahuasi share infrastructure rather than creating a single operation. The latter would require approval from Anglo American (LON: AAL), which has 44% of Collahuasi and Sumitomo, which holds a 30% indirect interest in the Chilean copper mine. Top miners, in turn, are hungry for copper assets as demand for the metal accelerates and a global shortfall looms. BHP, Rio Tinto and Glencore itself have disclosed that they are actively looking to grow their copper exposure. |
Posted at 08/2/2023 20:37 by loganair In the long run, BHP will benefit from macro growth drivers for commodities including copper and iron ore. Renewable energy investments require both steel and copper, e.g. for electrical grid upgrades, wind parks, and so on. It can be expected that the world will spend very heavily in these areas in the coming years and decades. The replacement of existing, aging infrastructure in the US, Europe, etc. will be a factor for demand as well, and growing infrastructure and housing spending in countries such as India where the middle class is growing fast should benefit commodity demand as well. At the same time, not too many mine projects are being pursued, due to regulation, costly and lengthy approval processes, and so on. Some believe that this combination will create another commodities supercycle. Overall, the outlook for producers such as BHP is far from bad.The near-term picture has improved a lot for BHP and its peers in recent weeks, as Beijing's decision to open up the economy has given a major boost to commodity markets. That being said, BHP's share price has risen quite a lot in recent weeks -- shares are currently trading 43% ahead of the 52-week low. Investors that buy BHP now are thus paying somewhat of a premium price, relative to how the company was valued in the second half of last year. To some degree, that's justified due to the cleaner near-term outlook, but on the other hand, further upside potential will be more limited for those that buy right here -- after all, shares can rise the most when they are bought at a low price, and not close to 52-week highs. Looking at BHP's valuation, we see that the stock is pretty fairly valued right now. |
Posted at 15/10/2022 13:41 by ariane Here’s the BHP dividend forecast for 2022 to 2024This mining giant has paid out some huge dividends recently. Here, Edward Sheldon looks at the BHP Group dividend forecast for the years ahead. Edward Sheldon, CFA❯ Published 15 October, 8:47 am BST Mining powerhouse BHP Group (LSE: BHP) has been a bit of a cash cow for investors in recent years. Last financial year, for example, it rewarded shareholders with total regular dividends of USD $3.25 per share, which translates to a yield of about 13% at the current share price. Is the company set to continue paying out monster dividends going forward? Let’s take a look at the BHP dividend forecast for the years ahead. BHP dividend forecasts First, there are a couple of things to explain. The first is that BHP’s financial year ends on 30 June. So, the year ending 30 June 2023 is ‘FY2023’ The second is that BHP reports its financials, and declares its dividends, in US dollars. So, all forecasts are in dollars. This is important to note because the GBP/USD exchange rate is quite volatile at the moment. In other words, the yield on offer today could be quite different to the yield when the dividends are actually paid if exchange rates fluctuate. As for the forecasts, right now City analysts expect BHP to pay out $2.09 per share for FY2023 and $1.86 per share for FY2024. These projected payouts are lower than the $3.25 paid last financial year. However, they still translate to very high yields. At today’s share price and exchange rate, the projected payout for FY2023 equates to a prospective yield of 8.3% while the estimated payout for FY2024 translates to a prospective yield of 7.4%. Assuming that these dividend forecasts are accurate (analysts’ estimates can be way off the mark at times), BHP looks set to continue being a cash cow for investors. Are BHP shares worth buying for income? Would I buy BHP shares for the big dividends on offer? The answer to that question is actually no. One reason I’d pass on BHP is that the stock is ‘cyclical̵ I don’t see the point of collecting a 8% yield if the share price can potentially fall around 70% like it did here. I’d need many years of dividends to make up for that kind of capital loss. I prefer dividend stocks that are a little more stable in nature. Another issue for me is the fact that BHP tends to cut its dividend when business conditions are challenging. This is not ideal from an income-investing perspective. I prefer to invest in companies that consistently increase their dividend payouts year after year. I can rely on these kinds of businesses to provide me with a certain level of income. So, while the yield here does look very attractive, I won’t be buying the shares for my portfolio any time soon. Ed Sheldon has no position in any of the shares mentioned. The Motley Fool UK |
Posted at 19/12/2021 05:40 by waldron Activist Investor Push To End Coal Mining Is BackfiringBy Editorial Dept - Nov 13, 2021, 10:00 AM CST Climate activists and impact investors have seen their plans to end coal mining turn into exactly the opposite The push to end coal mining has made several mines more valuable in the face of robust global coal demand Miners that were planning mine shutdowns have extended the production life of their assets Join Our Community The obvious case for allowing the free market to make decisions in industries like energy is that, when changes are forced instead of adopted naturally (usually via laws or government subsidies), they often work against the interests of efficiency. That's a lesson several companies found out first hand. In fact, Bloomberg writes there is now a "growing unease among climate activists and some investors that the policy many of them championed could lead to more coal being produced for longer". For example, Anglo American Plc, one of the world’s most powerful mining companies, has become "a case study in unintended consequences" after climate activists and investors urged it to stop digging up coal, Bloomberg reported this week. Now, it has transformed mines that were one set for closure into "the engine room for a growth-hungry coal business". Anglo American CEO Mark Cutifani had seen Rio Tinto sell off its coal mines and had a plan to shut down its seven South African mines. But the company wasn't taking action fast enough for activists and investors, so Anglo spun off another company called Thungela and tucked its coal operations into the SpinCo. Investors could then "decide for themselves" if they wanted to hold or sell shares of the SpinCo. The SpinCo Chief Executive Officer, July Ndlovu, then announced they were looking to grow their coal production, not shrink it. “I didn’t take up this role to close these mines, to close this business,” Ndlovu said. Its South African mines have the potential to add a decade or more of mining, producing more than 10 million tons of coal per year. BHP Group, a rival company, had trouble selling a colliery earlier this year so it applied to extend mining at the site for another two decades. It was thought of as a way to sweeten a deal to sell the mine, but may wind up turning into BHP simply mining at the site for longer than expected. Investors continue to bring up BHP's exit strategy from the mines as a point of contention. Related: Can U.S Shale Drillers Help Prevent An Energy Crunch? “The big push from investors is around ensuring that any divestment that occurs is to parties that are responsible,” BHP CEO Mike Henry said. Glencore Plc announced earlier this year it would increase its ownership of a large Colombian coal mine after seeking out the opinions of activists, the report says. The company has promised to end its coal operations by 2050, but has also prepared "contingency" plans in the event investors "force it". Nick Stansbury, head of climate solutions at Legal & General Group Plc, told Bloomberg: “Everyone in the industry is starting to be more sophisticated, more nuanced and more careful on the way they think these issues through.” Ashley Hamilton Claxton, the head of responsible investment at Royal London Asset Management, concluded by stating that fossil fuel companies should hold on to their coal assets and manage their decline: “Selling the problem to a third party has unintended consequences. We need to shift the debate in the investment industry about being more sophisticated around these things.” More Top Reads From Oilprice.com: |
Posted at 29/9/2021 16:58 by waldron Delivering Alpha 2021Climate change will be an alpha generator for the next four decades, says CalSTRS CIO Published Wed, Sep 29 202111:25 AM EDT Pippa Stevens @PippaStevens13 cnbc Key Points Climate change is a mega trend creating opportunities for investors. “If you take advantage of it, and get ahead of it, it’s going to be an alpha generator for the next 30 or 40 years,” CalSTRS CIO Christopher Ailman said at CNBC’s Delivering Alpha conference. Wendy Cromwell, vice chair at Wellington, said data is key for investors looking to invest around ESG. ESG investing, or when a company’s environmental, social and governance factors are evaluated, is booming, and a panel of sustainability-focus Climate change “is a mega-trend that if you take advantage of it, and get ahead of it, it’s going to be an alpha generator for the next 30 or 40 years,” CalSTRS Chief Investment Officer Christopher Ailman said Wednesday at CNBC’s “Delivering Alpha.” “If you don’t pay attention to it, it’s going to be a negative alpha and you’re going to be stuck with a low-beta return.” Wendy Cromwell, vice chair at Wellington which had $1.4 trillion in assets under management as of the end of the second quarter, echoed these comments, saying of climate change that “investors need to study it, and companies need to be prepared for it.” ESG investing is booming, with global assets in sustainable funds hitting $2.24 trillion at the end of June, according to data from Morningstar. Assets first topped the $1 trillion mark in the second quarter of 2020. But the ESG boom has given rise to its fair share of critics. By nature ESG is subjective, and without standardization across companies and industries it’s hard to evaluate if an ESG-branded product is actually delivering on its stated goals. “There’s no question there are some asset managers who are just using those words because it’s a marketing tool,” said Ailman, although he doesn’t believe ESG has reached bubble status. Regulators in Washington are currently looking into ESG investing with a number of proposals on the table. Cromwell said first and foremost it’s all about data. In terms of the “E” element, she said disclosures around scope one, two and three emissions should be required for all U.S.-listed companies. She added that it’s important for scientists and investors, who often speak different languages, to work together to assess the long-term physical risks for companies from climate change, such as from wild fire and flooding exposure. Carine Ihenacho, chief governance and compliance officer at Norges Bank Investment Management, said it’s vital to cut through the noise around company promises and the ESG investing boom more generally. “Find out what types of issues are material to companies...how does the company manage it, and how does the company then report the progress,” she said. Norges is the world’s largest sovereign wealth fund with more than $1.4 trillion in assets under management. The fund previously announced plans to phase out fossil fuel exposure, specifically around companies engaged in exploration and production. More funds are following suit — often succumbing to pressure — including Harvard University, which earlier this month said it will stop investing in the fossil fuel industry. But Ailman cautioned against viewing divestment as a be all and end all strategy. He considers divestment to be ESG 1.0, while engagement — a far more useful and important strategy — to be ESG 2.0. “Divesting doesn’t reduce the amount of carbon in the atmosphere. Engagement does. I can’t emphasize that enough,” he said. “Engagement and turning peoples’ attitudes, turning companies around, is what’s absolutely critical now because climate changes isn’t just the energy industry, it’s a lot of other industries, and the whole world has to change.” This attitude played out when CalSTRS joined upstart activist fund Engine No. 1 in the fight for representation on Exxon’s board. The fund garnered support from high-profile investors like CalSTRS, and ultimately placed three of its four nominees on Exxon’s board of directors following a close and contentious vote at the oil giant’s annual meeting. “We took on that board. We changed that board and we are really changing that company from the top down,” he said, noting that Exxon has the scientists, resources and capital to move the needle on issues like carbon capture. “That was huge,” he said of shaking up the board. “It was climbing Mount Everest when you just take up mountaineering for the first time.” |
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