When a hedge fund tells a company to do something, it gets done.
A few weeks ago, I shared my position that Investors are the group ultimately controlling a company's ESG approach. We now have a live case study with Bluebell Capital Partners and BP.
The Financial Times describes Bluebell Capital as an "activist investor". Bluebell's threat to BP is substantial. When they say ditch your strategy, they mean it. Danone and Glencore can attest to this.
Why is Bluebell Capital making this request?
From their perspective, reducing oil and gas production by 25% reduces shareholder value and is "irrational".
BP's stock price trails behind its competitors, which would indicate Bluebell Capital's request is valid; however, the position that the strategy is irrational may be accurate or targeted at undermining a clean energy approach.
Interestingly, newly appointed Chief Executive Murray Auchincloss has stated that he is committed to the plan. The question will be how committed he is.
What does this have to do with economic sustainability?
Suppose investors are ultimately the architects of ESG and Sustainability in businesses. In that case, a company's strategy depends on the interests and activism of the investors, which is potentially detrimental and unsustainable.