Climate activists have a lot of fallen clean tech companies to choose from this year

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Last year was a record year for corporate activism, especially in Europe and the Asia Pacific, according to an annual review by Lazard. (Read review: Annual Review of Shareholder Activism 2023 | Lazard). But not so much with climate activists.

After a series of years or rising proxy battles and climate activism on Wall Street, attacks on environmental, social and governance investing from red state lawmakers and a severe decline in clean tech stocks led to a marked downturn in climate activism, Lazard told The New York Times.

Given that many solar, wind, and other renewable energy stocks were hit so hard in 2023, especially by rising borrowing costs tied to higher interest rates, the prospect that activists might target some of these companies for sale or reorganization grows stronger as the stocks rebound. Other targets by climate activists, namely oil and gas stocks, could be less vulnerable in 2024, primarily because of the high-wattage political nature of the fossil fuel industry in a presidential election year, and their performance.

One of the most famous climate proxy contests, a battle for board seats on Exxon Mobil by San Francisco-based hedge fund Engine No. 1 in 2021, ended with the hedge fund winning seats. Exxon’s shares have more than doubled since then, but it has consistently doubled down on fossil fuels over renewable energy since then.

The value in many clean tech companies as the market recovers and interest rates start to fall could be a key discussion in sustainable investing circles this year. Corporate activism, an industry that is only growing as the Lazard report shows, will certainly be watching.