The Securities and Exchange Commission (SEC) released a report on Oct. 7 about their investigation into whether large asset managers complied with federal disclosure requirements during a 2021 campaign to elect new directors to ExxonMobil’s board. The agency said it would not pursue enforcement action but outlined circumstances in which coordinated shareholder activities could trigger additional disclosure requirements.
The investigation examined the activities of Climate Action 100+, an investor initiative focused on corporate climate policies, and its members during a 2021 campaign in which hedge fund Engine No. 1 sought to replace four ExxonMobil directors to influence the company's strategy on fossil fuels and the energy transition. The SEC investigated whether Climate Action 100+ members' participation in the initiative and support for the campaign amounted to coordinated shareholder activity that would require them to disclose their combined holdings and potentially affect their eligibility to use simplified ownership reporting forms.
The report discussed BlackRock and State Street, which belonged to Climate Action 100+ during the campaign, and Vanguard, which did not. The SEC made no findings of securities law violations and decided not to pursue enforcement action.
