Investors representing tens of billions in assets gave incoming General Electric Co. CEO Lawrence Culp a piece of their mind.
The show of force was signed by more than a dozen investors from Capricorn Capital, Encourage Capital, RS Group, McKnight Foundation, Rockefeller Brothers Fund, Children’s Investment Fund Foundation, Affirmative Investment Management, Renewable Resources Group, EverWatch Financial, Kepos Capital, Ecofin and Generate Capital.
“For GE to become a leader again, the company must further scale back investment in and deployment of fossil fuel technologies and focus on clean technologies,” the letter said.
Culp replaced ousted CEO John Flannery last week as GE’s board grew frustrated with the slow pace of change. GE has lost a half-trillion dollars in market value since 2000, in part due to GE’s ailing power business, which has made ill-timed bets on fossil fuels.
GE Power invested heavily in manufacturing and selling turbines to gas and coal-fired power plants, for example, just as utilities began ramping up construction of solar and wind farms. Last week the firm wrote down $23 billion in goodwill associated with its power business.
- Divest-invest. “For GE to become a leader again, the company must further scale back investment in and deployment of fossil fuel technologies and focus on clean technologies,” states the Open Letter to GE CEO Lawrence Culp. “Will GE continue fighting to protect decelerating fossil fuel businesses or lead the world into a more profitable and sustainable future?”
- The impact alpha. The investors say GE should focus on its successful wind turbine business, which had revenues of $9 billion last year, and draw on its deep technical expertise in energy storage and batteries to position the company “at the center of the electric vehicle transition.” GE has not yet jumped significantly into the solar market; the letter-writers say “new solar technologies offer a chance for GE to leapfrog into a $150 billion market.
Editor’s note: We’ve updated this post to indicate that the McKnight Foundation is a signatory of the open letter, not the Knight Foundation as originally indicated.
