ANALYSIS: Q2 Energy Activists Launch Multi-Objective Campaigns

Energy sector investor activism counts in Q2 exceeded Q1 counts, making up for the year’s slow start.

Activists not only launched more campaigns in the last quarter, but they also launched more campaign, objectives using multi-objective campaigns to target the operations of key companies—a notable shift from Q1, when they target global conflicts. The unfolding energy crisis might be one explanation for the surge in this quarter’s objective counts.

More Campaign Objectives in Q2

Last quarter, the energy sector saw the most investor activism campaign objectives (21) of any of the preceding five quarters, spread across only eight campaigns.

These campaigns are seeking broad-scale changes from the targeted companies. For example, the campaign Elliott Investment Management launched against Suncor is pushing for board enhancement, management review, overhaul of the company’s operational structure, enhanced capital returns, and strategic review based on Suncor’s “missed production goals, high costs, and safety failures,” according to a letter Elliot Investment sent to Suncor’s Board.

Likewise, Wolf Capital Management wants Shell Midstream sold, and opposes a merger, citing the company’s alleged inability to provide for investors under current social and governance policies. Activists also launched campaigns with multiple objectives against Shell, SK, and Superior Drilling Products in Q2.

Investors Seek Reflective Share Prices

The sweeping array of objectives included in energy sector campaigns are likely tied to the recent energy crisis. While the investor could be attempting to address supply disruptions, it’s likely that investors view energy share prices as disproportionate to company value and the surge in consumer rates.

As the energy crisis continues, we should expect investors to launch multi-objective campaigns when they perceive share prices to be not aligned with the market.

But this energy sector investor activism will likely meet challenges from consumers. For example, last fall Public Citizen argued that the structure of Elliott Investment Management’s stake in Evergy would raise electricity prices for consumers. We may see examples of tension between similar investor and consumer goals as the energy crisis escalates.

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