ImpactAlpha, March 17 – Activist investor Artisan Partners may have thought it had exacted its revenge on the French food giant when it succeeded in ousting Danone CEO Emmanuel Faber this week. Artisan was one of the .06% of Danone shareholders that opposed Faber’s move last year to make Danone the first public company to adopt the French “entreprise à mission” legal framework last year.
A champion of sustainable business, Faber began reporting Danone’s “carbon-adjusted EPS,” and recruited Agents of Impact including Hiro Mizuno, Ngozi Okonjo-Iweala and Rockefeller Foundation’s Rajiv Shah to Danone’s “mission committee.” Artisan jumped on Danone’s lagging share price as sales slowed amid the pandemic, particularly in China.
Then, one of its own investors jumped all over Artisan.
CtW, an advisor to $250 billion in union-affiliated pension funds, blasted Artisan for itself combining the roles of chairman and CEO after it had criticized the arrangement at Danone, and called for the replacement of Artisan’s compensation committee for “awarding outsized discretionary cash bonuses.”
In contrast, CtW’s Dieter Waizenegger called Danone’s mission-driven conversion “a significant step towards more responsible and sustainable business strategy that should be supported by asset managers concerned with environmental, social and governance issues.”
CtW Investment Group works with unions affiliated with Change to Win, a federation representing nearly five million members. CtW “organizes workers’ capital into an effective voice for accountability and retirement security,” according to its web site.
Union pension funds have become increasingly active in supporting worker rights at both public and private companies in their portfolios. Note to Waizenegger: Why stick with Artisan?
Artisan took a page from the old shareholder primacy playbook, prioritizing profits and short-term returns. A new crop of activist investors is flipping the script.
Their bet: accelerating the low-carbon transition and improving ESG performance will boost companies’ long term value. Engine No. 1, for example, is seeking to shake-up ExxonMobil, while Inclusive Capital Partners’ Jeffrey Ubben joined Exxon’s board to push for change from within.