JP Morgan attempts to block fossil fuel proposal from London activist investor
Activist investor Tulipshare has filed a proposal with JP Morgan to halt its fossil fuel investments – which the Wall Street giant is looking to keep out of its next annual meeting.
The London-based startup submitted the proposal in December on behalf of a millennial investor, however, JP Morgan has written to the US Securities Exchange Commission (SEC) in hopes of excluding it from its AGM.
In the letter, JP Morgan said fossil fuel investment falls under “ordinary business operations” and is a matter that has previously been submitted to the company.
However, the SEC updated its guidance in November to not allow for exclusions of proposals that address climate change, “so long as the proposals afford discretion to management as to how to achieve such goals”.
JP Morgan, said to be largest fossil fuel financier in the world, also argued that its activity with fossil fuels probes “too deeply into matters of a complex nature upon which shareholders, as a group, are not in a position to make an informed judgement”.
Though, under the new rules, SEC staff must consider the how well-read investors are on the matter and the availability of data, to determine whether a climate change proposal is ‘too complex’ for shareholders.
Tulipshare raised $10m in venture capital funding in December, as it seeks to scale the platform which helps smaller investors lobby large corporations.
The platform, founded in July, allows retail investors to pool their corporate voting power together in a bid to tackle issues such as climate change.
“This is a prime example of how corporations neglect to consider the sophistication of investors, availability of data, and public discussion and analysis on the topic when assessing whether a matter is “too complex” for shareholders,” chief executive and founder Antoine Argouges said.
“There are well-established international frameworks relating to carbon emission reduction target-setting, as laid out in the Paris Agreement, and countless publicly available scientific studies relating to climate change. Our team looks forward to responding to JPMorgan’s letter to the SEC and engaging with the company on this issue bringing a voice to retail investors globally seeking to raise timely, societal issues.”
City PM has contacted JP Morgan for comment.