This could change in 2022, by making sure all shareholders can have their voices heard
We believe the rise of activist investing can bring much needed accountability and change at a company level in 2022, and those not willing to commit to much-needed ESG targets may lose their competitive edge.
The private sector, left unchecked, has demonstrated its potential to damage the environment, contribute to rising inequality, and favour shareholder greed over social responsibility.
For instance, despite making numerous promises to use more recycled plastic in their production line Coca-Cola has repeatedly fallen short of its targets, continuing its reign as one of the world’s top polluters. Apple, another titan of waste, skirts corporate social responsibility by shrouding its device repair policies in layers of convoluted rules, ultimately leading to more consumer waste.
Listed on the public market, companies like Coca-Cola and Apple are typically only held accountable to regulators and shareholders. And 2021 saw shareholders make real positive change.
Once a title reserved for the ‘wealthy few’ who could afford to commandeer companies and make big changes for shareholders, shareholder activism is starting to get more attention as a viable solution to counter corporate greed and irresponsibility. For instance, the number of activist campaigns in the US alone has increased by 200% over the last four quarters.
Last year, activist investor Engine No.1 challenged ExxonMobil, unseating three of its board members for failing to sufficiently respond to the climate crisis. They did so through the support of some of the world’s largest institutional investors, including BlackRock, Vanguard and State Street.
Engine No.1 demonstrates the impact of company engagement and the collective power of shareholders, by forcing change to come from within. Yet if publicly held companies are truly public, why is it only powerful institutional investors who are allowed seats at the decision-making table?
For too long, public markets have failed to recognise the interests and concerns of retail investors. Investment platforms weren’t built to ensure individual investors’ voices were heard – and they certainly don’t encourage individuals to leverage their shareholder voting rights. According to ProxyPulse, individual investor votes on corporate decisions represented only 28% of their total shares in 2021.
Today, more than half of investors believe the stock market is rigged against individual shareholders, an alarming statistic. At Tulipshare, we believe the time is ripe for individual shareholders to become more involved in shareholder activism and exert their influence on corporate behaviour. We have greater strength and more potential when we act collectively around a uniting cause.
We think that activist investment platforms geared to individual shareholders are the key to making this happen. Activist investing is the act of investing your money into publicly traded companies held on the stock market and then using your shares to influence their corporate governance, and it’s our focus at Tulipshare.
Publicly held companies are obligated to listen to the concerns of their shareholders, and sometimes the more shares you own, the louder your voice. Through Tulipshare, individuals across the UK can invest as little as £1 to advocate for social and environmental changes at publicly traded companies. Tulipshare then unifies individuals’ shareholder rights with other investors to make their voices heard and engages directly with the IR teams of companies – empowering users to vote with their money.
Since launching our activist investment platform in July 2021, thousands have shown interest in supporting our campaigns on Apple’s repair programs, JPMorgan’s fossil fuel activities, Amazon’s warehouse workers’ rights and Coca-Cola’s virgin plastic usage, and tens of thousands of dollars have been invested across these campaigns. Spearheaded by our recent $10.8 million dollar funding round, we hope to grow even more in 2022.
In the new year, we want as many people as possible to come forward with campaign ideas of their own and see the change they’ve always wanted to implement at a company level. Our platform allows other like-minded individuals to unify and invest in campaigns that seek to provide environmental and social change, while we provide the Trojan horse that seeks to get past corporate blockades.
We believe an activist investing platform for retail investors is the latest progression in making our money work for good.
It allows investing to be about more than just a potential personal gain – it is about investing in our society and creating a better future by seeking to participate in corporate governance as a shareholder. Ultimately, activist investing provides an opportunity to engage with companies and hold them accountable for their societal impact and not just their short-term profits.
Despite well-meaning efforts at COP26, we know that globally we are not meeting crucial global climate change-related targets. We also know that a healthy, well-paid, socially mobile workforce makes for a happier, safer, and more productive society. Activist investing can help put pressure on companies and hold them accountable for their actions, and hopefully lead to better corporate governance that benefits people and our planet.