<article><p class="lead">The ‘anti-woke' wave that is sweeping through some US statehouses has landed at Chevron, where a tiny start-up fund is calling on the oil major to disregard climate goals and produce oil and gas at will.</p><p>Although Strive Asset Management's 0.02pc stake in Chevron is hardly enough to move the needle, the Ohio-based firm has garnered attention given that its backers include billionaire investors Peter Thiel and Bill Ackman. In an open letter this month, co-founder Vivek Ramaswamy railed against the environmental, social and governance (ESG) pressures he says are not in shareholders' best interests. He said Chevron, the second-biggest US oil producer, is under pressure from large institutional shareholders to adopt "value-destroying limitations on its business".</p><p>Ramaswamy — author of Woke, Inc.: Inside Corporate America's Social Justice Scam — says Chevron should prioritise long-term returns over climate targets when making decisions around oil and gas investments. In response to the Strive letter, a Chevron spokesperson said the company's objective to "safely deliver higher returns and lower carbon is aligned with our shareholders' interests".</p><p>The activist push comes after Chevron bowed to pressure last year and set up a low-carbon unit, laying out plans to invest $10bn in technologies including renewable fuels, hydrogen and carbon capture through 2028, and for modest emissions targets. A shareholder resolution from Dutch environmental group Follow This in 2021 urging the company to tackle customers' Scope 3 emissions was backed by a majority of investors. "It would be very interesting if Strive would file an anti-ESG shareholder resolution, because this would create clarity of the position of Chevron and its shareholders," Follow This says. </p><p>The fund may have its work cut out trying to build support for its campaign. Chevron has embraced investor demands for improved returns by boosting share buybacks and keeping spending largely in check, in line with industry peers, even as oil prices have surged. Its low-carbon strategy has also won investor support.</p><h3>Riskier investment?</h3><p class="lead">Chevron's chief executive, Mike Wirth, this month explained that investors always respond the same way when asked whether they would view the firm differently if it changed tack to accelerate growth and spending. "Almost universally the reaction is: that doesn't make you a better investment, that may make you a riskier investment," he told the Barclays CEO Energy-Power Conference.</p><p>Although the energy crisis, exacerbated by the war in Ukraine and sanctions on Russian supplies, has exposed the shortcomings of years of underinvestment in the energy industry, there are few signs that the tide is about to turn. Based on recent discussions with investors, bank RBC says that feedback on potential increases in capital expenditure was mixed, but notes that there is more acceptance for boosting spending on oil and gas relative to low-carbon projects.</p><p>The ESG investment pushback has been on full view in Texas and Florida. Texas included BlackRock, the world's largest asset manager, in a list of financial firms found to "boycott" fossil fuel companies in the state, a move that could force some government funds to divest. BlackRock took issue, saying it has invested billions in US energy companies. It is also the third-largest investor in ExxonMobil.</p><p>And Florida governor Ron DeSantis, seen as a potential 2024 Republican presidential candidate, has moved to ban "social, political or ideological" factors from being considered when making investment decisions for the state's pension fund. Despite the crackdown, pension funds in both states have thrown their weight behind ESG resolutions in the past, according to a recent study by consultancy Morningstar. Its findings show strong support for ESG across party lines.</p><p class="bylines">By Stephen Cunningham</p></article>
