What is activist investing or shareholder activism?

Nov 18, 2021
Put simply, activist investing and shareholder activism is the act of investing your money into publicly traded companies held on the stock market and then using your shares to influence their corporate governance.

Why do we need Activist Investing?

We’ve all seen the news: the private sector, left unchecked, has demonstrated its potential to damage the environment, contribute to rising inequality, and ignore social responsibility in favour of greed.

For instance, despite making numerous promises to use more recycled plastic in their production line Coca-Cola has repeatedly fallen short of its targets, continuing its reign as one of the world’s top polluters. Apple, another titan of waste, skirts corporate social responsibility by shrouding its device repair policies in layers of convoluted rules, ultimately leading to more consumer waste. Amazon, on the other hand, has an ongoing reputation for ignoring workers’ rights.*

We know that globally we are not meeting crucial global climate change-related targets. We also know that a healthy, well-paid, socially mobile workforce makes for a happier, safer, and more productive society. Furthermore, the environment and financial stability are connected, and most of the above issues are primarily controlled by the private sector.

What power do we have as individuals?

So what does this mean? First, it means that traditional activism can only go so far. For companies to commit to real and lasting change, the pressure needs to come from within. But the good news is that we live in a world where we as individuals have the power to influence the private sector—in addition to monitoring their consumer preferences, publicly held companies are obligated to listen to the concerns of their shareholders.

Meaning if you have money, you can buy shares in publicly held companies. And if you can buy enough shares, you can earn a seat at a company’s annual general meeting (AGM) and exercise your voting rights on company matters. Just recently, an activist investment advisor called Engine No.1 challenged ExxonMobil, unseating three of its board members for failing to sufficiently adjust its strategies in response to the climate crisis, demonstrating the collective power of shareholders.

Changing our attitudes towards investing

When combined, the words ‘wall’ and ‘street’ tend to evoke certain wolf-like connotations, and maybe that’s because investing has long been an individualistic or even a competitive pursuit used primarily to make money back for investors. But suppose we change our mindset when it comes to investing? In that case, we may increase the effectiveness of the third sector, including major charities and activist organisations, by using this existing system to force change.

Investing could be about more than just you - it could be about investing in our society and making a better future. Rather than making your money just work for you, you could make your money work for everyone - a more conscious way of investing or investing with a conscience. The good news is you don’t have to be rich to have an impact. All it takes is a lot of people with just a little bit of money.

Innovations such as Tulipshare’s platform are specifically designed for activist investment, making it easier for individuals to invest, collectivize and put pressure on corporations. You provide the desire for change by investing behind one of our campaigns, and we’ll provide the Trojan horse that seeks to sneak past corporate blockades.

Because, ultimately, companies are better off investing in the future, not just their short-term profits.

*Read more about Tulipshare’s ongoing campaigns to promote change within these companies here.

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