Liam Denning, Columnist

Exxon Slayer's New ETF Courts Passive Aggressive Money

Engine No. 1’s new ESG fund will look like an index tracker and behave like an activist investor, acting as a prod for the likes of Vanguard and BlackRock.

June 22, 2021 at 5:40 PM UTC

By Liam Denning

Liam Denning is a Bloomberg Opinion columnist covering energy. A former banker, he edited the Wall Street Journal’s Heard on the Street column and wrote the Financial Times’s Lex column.

Engine No. 1 injected some new thinking on energy transition into Exxon. Now it’s trying its hand at ETFs.
Photographer: Barry Lewis/In Pictures via Getty Images

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Having grown up in the U.K., I longed for the moment when passive money would morph into passive aggressive money. And now it is here: the Engine No. 1 Transform 500 ETF:

Engine No. 1 LLC is the tiny fund manager that scored a major upset by getting three dissident directors into oil’s holy of holies, the Exxon Mobil Corp. boardroom. This was something of a judo move, leveraging Exxon’s own traditional strength — financial discipline — against it, while also putting passive fund giants like BlackRock Inc. on the spot to back up their calls for environmental, social and governance reforms. The ETF is a logical next step, and kind of genius.