Redefining Industry Principles: Industry Leaders Prioritize Innovation and Shareholder Value Amidst Activist Challenges
In order to support innovation and expand shareholder-value, industry leaders are pushing back against DEI initiatives and embracing investment in prosperous hydrocarbon technologies. These major shifts bode well for both Frontieras and the economy as a whole.
April 5th, 2024
Written by Matthew McKean, CEO and co-founder of Frontieras North America (LinkedIn)
Over the last several years we have seen activist campaigns expand as they have attempted to align corporate views with their own. According to the latest S&P Global Market Intelligence data, there were 1,162 activism campaigns in 2023, up from 1,100 a year earlier and 370 campaigns in 2014.The campaigns, which include shareholder proposals, proxy fights and organized requests for board representation, focus on executive pay to racial justice to climate change.
These activities have placed industries on tilt, facing mounting pressure from activists and government regulators to report more about their environmental, social, and governance (ESG) practices. However, as we close out Q1 ’24, we are witnessing a significant shift with companies asserting control over their operations and pushing back against these demands to create continuity in their operations and expand shareholder value.
Several high-profile corporations like Apple, Tyson Foods, and Applied Materials successfully defeated proposals aimed at increasing transparency on issues ranging from artificial intelligence (AI) to diversity policies. ExxonMobil took a bold step in January by suing activist investors seeking a shareholder vote on the oil major's climate policies. While the shareholders dropped the proposal, ExxonMobil is continuing its legal fight, asking the court to block investors from presenting future climate proposals. In a written statement to Market Intelligence, an ExxonMobil spokesperson reiterated that activists with "minimal or even no shares should not be permitted to resubmit proposals that do not grow long-term shareholder value." Other notable activities that illustrate that the market is fighting back include:
1. The Securities and Exchange Commission (SEC) has diluted climate-risk disclosure rules in response to industry complaints, signaling a retreat from stringent regulatory demands.
2. Big asset managers and financial institutions are withdrawing support from initiatives like Climate Action 100+, indicating a recalibration of priorities.
3. Shareholders are increasingly rejecting proposals for greater disclosure, suggesting a (potential) fatigue to activism. Notable victories for companies include shareholders voting against third-party audits at Tyson Foods and rejecting proposals on pay gap reporting at Applied Materials.
The energy market has become the poster child for these activist campaigns. Pandering to the “green activists,” the government has created untenable market conditions that have stymied innovation, reduced profit and ultimately hurt the consumer and our nation’s industry independence. Over the past 12 months, we have seen a monumental shift within the capital world away from costly and unsustainable "green energy" technologies that heavily rely on government subsidies to tried-and-tested hydrocarbon energy sources. In my opinion, we are witnessing the ESG movement retracting.
Major investors are doubling down on their conviction by investing in hydrocarbon energy technologies, recognizing their significance in supplying global energy needs. Traditional energy companies, including those dealing with oil, coal, diesel, and natural gas, are re-emerging as crucial players in the global economy. Among these companies stands Frontieras North America, an energy technology company poised to revolutionize the sector with its next-generation fuel processing technology, FASForm.
Frontieras' patented FASForm fuel technology offers a solution that is both profitable and self-sustaining, with no reliance on government subsidies. Unlike many renewable energy projects, FASForm boasts validated commercial viability and substantial profit margins that are immune to the fluctuating cost of capital. The technology produces large volumes of market-ready liquid hydrocarbons from abundant sources like coal and waste plastics. Additionally, it yields high volumes of hydrogen, natural gas, and a designer carbon product suitable for various industrial applications, including steel manufacturing. The key to FASForm's success lies in its closed-loop continuous feed process, which boasts extremely low emissions, making it an environmentally friendly alternative to conventional crude refining.
FASForm’s ability to unlock intrinsic value trapped in coal, lignite, oil sands, and waste plastics presents long-term opportunities for investors. Frontieras North America firmly believes in innovation that thrives in the free market, without government subsidies propping them up. Their philosophy centers on the notion that the best means of improving the environment is through the innovation of next-generation technologies that are highly profitable.
Frontieras North America's revolutionary FASForm technology represents a beacon of hope in this evolving landscape, offering a profitable and self-sustaining solution to energy needs. By prioritizing innovation and profitability, Frontieras is not only navigating the complexities of activism and regulation but also paving the way for a more sustainable and prosperous future, free from the constraints of government subsidies and activist pressures.
To learn more about Frontieras North America’s FASForm facility and zero-waste energy technology, please watch the following video for a virtual walkthrough of our first upcoming facility in Mason County, West Virginia.
These perspectives on the global energy market are my own. If you are interested in learning more about Frontieras, its FASForm technology or the Frontieras management team, please visit www.frontieras.com