ESG-focused activist investor Engine No. 1 announced today the launch of a new platform enabling investors in the Engine No. 1 Transform 500 ETF (ticker: VOTE) to see the fund’s votes on every proposal for each portfolio company.
Engine No. 1 rose to ESG investment fame in its successful battle to win seats on Exxon’s board, aiming to push the oil and gas giant to act on the emerging global energy transition to clean and renewable sources of energy. The campaign gained backing from numerous high-profile investors including CalPERS, CalSTRS and the New York State Common Retirement Fund, and BlackRock.
In September 2021, Engine No. 1 unveiled its Total Value Framework, detailing its data-driven approach linking companies’ ESG impacts to their valuation. The framework drives the firm’s investment decisions, enabling the firm to focus on how the value delivered to stakeholders affects the value a company delivers to its shareholders, while identifying environmental and social actions companies to increase shareholder value.
Engine No. 1 launched the VOTE ETF in June 2021, which invests in the 500 largest US public stocks, with a strategy to use voting to hold companies accountable while focusing on ESG issues that create value, and actively working with companies to strengthen the investments they make in stakeholders to drive company performance. With the new voting transparency platform, Engine No. 1 stated that it can now allow investors to see how the ETF’s votes have been cast to strengthen those investments.
Jennifer Grancio, Chief Executive Officer of Engine No. 1, said:
“Let’s not forget that investors, through active ownership, have the power to drive long-term value. We seek to give investors a voice in the boardroom to support companies in creating value over the long-term on behalf of all stakeholders.”
According to Engine No. 1, the new platform creates a clear differentiation from traditional funds in terms of the transparency and accountability offered to investors, with most mutual funds and ETFs voting against a majority of ESG proposals, and disclosing their votes only long after they are made. VOTE supported more than 90% of ESG proposals submitted by shareholders.
For the 2022 proxy season, the firm announced that its voting policy would again target increased transparency, accountability, and long-term investments in companies’ stakeholders, with a particular focus on climate change and workforce investments.
Michael O’Leary, Managing Director at Engine No. 1, said:
“Each year, there are thousands of votes on who will lead our largest public companies. There are thousands of votes on what those companies will report and what they will spend. Investors deserve to know – in real time – how their votes are being cast by the mutual funds and ETFs they own. We built VOTE to harness the power of these investors and are excited about all we’ll be able to accomplish together in 2022, which we believe will be another watershed year for shareholder voting.”