1 00:00:05,880 --> 00:00:08,440 Speaker 1: Welcome Trillions. I'm Joel Webber and I am America. I'll 2 00:00:08,520 --> 00:00:16,120 Speaker 1: run us Eric. There is this thing that happened in 3 00:00:16,280 --> 00:00:20,920 Speaker 1: late May that if you're a business journalist, UM you 4 00:00:20,960 --> 00:00:25,680 Speaker 1: immediately sat up and this was the results of UM 5 00:00:25,680 --> 00:00:30,560 Speaker 1: an Exxon board meeting, and out of nowhere, something called 6 00:00:30,680 --> 00:00:34,880 Speaker 1: Engine number one showed up and basically all of Corporate 7 00:00:34,920 --> 00:00:39,159 Speaker 1: America took notice and ended up getting three board seats 8 00:00:39,720 --> 00:00:42,760 Speaker 1: on x On Mobile. And it speaks to a lot 9 00:00:42,800 --> 00:00:45,960 Speaker 1: of things, and we're we're thrilled about this, but a 10 00:00:46,000 --> 00:00:48,440 Speaker 1: couple of the folks at Engine number one are going 11 00:00:48,479 --> 00:00:50,920 Speaker 1: to join us today on trillions. What stood out to 12 00:00:51,000 --> 00:00:54,120 Speaker 1: you about that moment, because it was not just about 13 00:00:54,520 --> 00:00:58,080 Speaker 1: what an activist can accomplish with board seats. A couple 14 00:00:58,080 --> 00:01:00,520 Speaker 1: of things. First, it's a small company who got bigger 15 00:01:00,560 --> 00:01:04,560 Speaker 1: players to act. And I've always really looked at Vanguard 16 00:01:04,560 --> 00:01:06,399 Speaker 1: and black Rock and some of the institution owners of 17 00:01:06,600 --> 00:01:08,400 Speaker 1: having quite a bit of power. This is one of 18 00:01:08,440 --> 00:01:11,600 Speaker 1: the issues we hear from from uh, you know, people 19 00:01:12,360 --> 00:01:15,120 Speaker 1: about how big passive is getting and their voting power. 20 00:01:15,760 --> 00:01:17,280 Speaker 1: At the same time, you've got E S, G, E 21 00:01:17,319 --> 00:01:20,399 Speaker 1: T F S coming out, which essentially score stocks and 22 00:01:20,400 --> 00:01:23,400 Speaker 1: then exclude maybe some of the energy stocks. I've always 23 00:01:23,400 --> 00:01:25,720 Speaker 1: struggled with those. Why wouldn't you want to own the 24 00:01:25,760 --> 00:01:28,320 Speaker 1: people you want to help? So I looked at this 25 00:01:28,400 --> 00:01:30,039 Speaker 1: and I was like, this makes a lot of sense 26 00:01:30,080 --> 00:01:32,800 Speaker 1: to me that, you know, voting and owning the shares 27 00:01:32,880 --> 00:01:35,480 Speaker 1: is how you can really impact things as opposed to 28 00:01:35,520 --> 00:01:39,080 Speaker 1: just not owning Exxon. Let's work with them, And so 29 00:01:39,319 --> 00:01:41,280 Speaker 1: I was immediately took notice. Then they filed for an 30 00:01:41,280 --> 00:01:43,480 Speaker 1: e t F and I was like, wow, this is 31 00:01:43,520 --> 00:01:46,880 Speaker 1: this is interesting and it's it's a really simple et F. 32 00:01:46,920 --> 00:01:52,160 Speaker 1: It's the five biggest stocks. And what I also found, uh, 33 00:01:52,200 --> 00:01:55,240 Speaker 1: really intriguing was the expense ratios point oh five percent, 34 00:01:55,360 --> 00:01:58,360 Speaker 1: So it's got a Vanguardian price tag and the tickers 35 00:01:58,400 --> 00:02:01,160 Speaker 1: good vote, so it's got a lot of things going 36 00:02:01,200 --> 00:02:03,080 Speaker 1: for it, and I think it could redefine E s 37 00:02:03,120 --> 00:02:05,280 Speaker 1: G investing. You know, if your goal is to have 38 00:02:05,280 --> 00:02:08,320 Speaker 1: an impact, it just seems like this, this activist type 39 00:02:08,320 --> 00:02:10,880 Speaker 1: ETF would be the way to do it versus a 40 00:02:11,120 --> 00:02:13,519 Speaker 1: just not owning a couple of energy stocks. So the 41 00:02:13,600 --> 00:02:17,359 Speaker 1: name of that et F engine number one transformed FIVETF 42 00:02:17,360 --> 00:02:21,120 Speaker 1: with the ticker vote joining us today from Engine number one, 43 00:02:21,240 --> 00:02:26,200 Speaker 1: Charlie Penner and Yasmin die Bilger also joining us um 44 00:02:26,240 --> 00:02:31,240 Speaker 1: from Bloomberg Intelligence ESG analysts robbed Boff and at Bloomberg News. 45 00:02:31,240 --> 00:02:34,840 Speaker 1: On s G reporter Sagel Kashan So one big happy 46 00:02:34,880 --> 00:02:38,399 Speaker 1: family joining us for this very very important interview, which 47 00:02:38,400 --> 00:02:41,760 Speaker 1: I think of is almost the ultimate David and Goliath story, 48 00:02:44,240 --> 00:02:52,600 Speaker 1: this time on Trilliance Engine number one. Charlie, Jasmine, Rob Sagel, 49 00:02:52,639 --> 00:02:57,880 Speaker 1: Welcome to trillions. Thank you so so Charlie. It's almost 50 00:02:57,960 --> 00:03:02,200 Speaker 1: like you were flying in delp mode um and all 51 00:03:02,280 --> 00:03:05,320 Speaker 1: of a sudden you shook corporate America in a really 52 00:03:05,360 --> 00:03:08,600 Speaker 1: big way. You had a point zero two percent steak 53 00:03:09,200 --> 00:03:12,799 Speaker 1: in x on mobile, no history of activism in oil 54 00:03:12,880 --> 00:03:15,200 Speaker 1: or natural gas, and all of a sudden you had 55 00:03:15,200 --> 00:03:18,400 Speaker 1: scored three board seats, which was a quarter of of 56 00:03:18,400 --> 00:03:21,399 Speaker 1: of what was available. And you know, not long ago, 57 00:03:21,400 --> 00:03:24,640 Speaker 1: Exxon was the world's most valuable company. So just tell me, 58 00:03:25,040 --> 00:03:27,160 Speaker 1: how did you come out out of nowhere here? How 59 00:03:27,160 --> 00:03:32,799 Speaker 1: did you manage to pull that off? Um? Yeah, I mean, um, 60 00:03:32,960 --> 00:03:37,080 Speaker 1: the out of nowhere part. Um. I might give a little, uh, 61 00:03:37,360 --> 00:03:39,800 Speaker 1: you know, backstory on so I spent fifteen years doing 62 00:03:40,320 --> 00:03:45,040 Speaker 1: traditional share older activism strategy at a very successful activists 63 00:03:45,040 --> 00:03:48,000 Speaker 1: from called John and Partners that does traditional activism so 64 00:03:48,080 --> 00:03:53,160 Speaker 1: focused on things like capitalcation, capital structure, UH and things 65 00:03:53,200 --> 00:03:57,000 Speaker 1: like that. And we had actually done a fair number 66 00:03:57,000 --> 00:04:00,360 Speaker 1: of campaigns in the energy space, companies like use An 67 00:04:00,400 --> 00:04:05,920 Speaker 1: Exploration and e QT and and Karen McGee, and you know, 68 00:04:06,320 --> 00:04:09,360 Speaker 1: in a lot of respects, this campaign was similar because 69 00:04:10,080 --> 00:04:12,800 Speaker 1: before you got to the long term picture that we 70 00:04:12,920 --> 00:04:15,080 Speaker 1: viewed at Engine number one as being a failure to 71 00:04:15,120 --> 00:04:18,720 Speaker 1: appropriately prepare for the long term changes face in the industry, 72 00:04:19,000 --> 00:04:22,000 Speaker 1: there was just a basic bad capital allocation story which 73 00:04:22,080 --> 00:04:25,520 Speaker 1: quite frankly was worse in terms of value destruction than 74 00:04:25,520 --> 00:04:29,120 Speaker 1: the other companies I mentioned um So, in one respect, 75 00:04:29,160 --> 00:04:32,080 Speaker 1: the very kind of basic near term components of the 76 00:04:32,120 --> 00:04:34,320 Speaker 1: campaign that looked at the last ten years of value 77 00:04:34,360 --> 00:04:38,240 Speaker 1: destruction and exile mobile even before COVID struck, was in 78 00:04:38,320 --> 00:04:40,279 Speaker 1: some ways very familiar. I think the thing that that 79 00:04:40,440 --> 00:04:43,440 Speaker 1: perhaps came out of no or was the additional element 80 00:04:43,600 --> 00:04:46,120 Speaker 1: of the longer term focus on where can this company 81 00:04:46,160 --> 00:04:49,520 Speaker 1: be ten twenty thirty years down the road? And I 82 00:04:49,600 --> 00:04:52,559 Speaker 1: exaggerate obviously you did not come out of nowhere, because 83 00:04:52,600 --> 00:04:55,320 Speaker 1: you actually had a very successful track record. And actually 84 00:04:55,560 --> 00:04:58,640 Speaker 1: just take a moment and you you have tussled with 85 00:04:58,839 --> 00:05:01,960 Speaker 1: big companies before or in that prior life, one being 86 00:05:02,000 --> 00:05:04,800 Speaker 1: Apple for instance, Can you talk about that? Yeah? Sure, 87 00:05:04,880 --> 00:05:06,160 Speaker 1: And just to be clear, you know, most of the 88 00:05:06,160 --> 00:05:09,240 Speaker 1: time I spent at john OH was executing and helping 89 00:05:09,240 --> 00:05:11,880 Speaker 1: textcut on other people's ideas that were in that kind 90 00:05:11,880 --> 00:05:15,360 Speaker 1: of traditional activist mold. What I spent the last few 91 00:05:15,440 --> 00:05:19,760 Speaker 1: years at JOHNAH doing was campaigns that that uh I 92 00:05:19,800 --> 00:05:24,560 Speaker 1: had originated that were um without longer term focus. That 93 00:05:24,800 --> 00:05:28,320 Speaker 1: the thinking being that, uh, you know, companies that think 94 00:05:28,320 --> 00:05:30,839 Speaker 1: more long term will perform better over the long term. 95 00:05:30,920 --> 00:05:33,200 Speaker 1: And if you're thinking long term, you're focused on things, 96 00:05:33,600 --> 00:05:36,200 Speaker 1: in the case of Apple, like your relationship with your users. 97 00:05:36,440 --> 00:05:42,200 Speaker 1: And you know, at that time in eighteen UM it 98 00:05:42,320 --> 00:05:45,640 Speaker 1: was really the kind of beginning stages of the tech lash, 99 00:05:45,720 --> 00:05:49,440 Speaker 1: and even though Apple hadn't really kind of come under 100 00:05:49,480 --> 00:05:51,240 Speaker 1: that type of scrutiny yet, it didn't take a lot 101 00:05:51,240 --> 00:05:54,200 Speaker 1: of looking around the corner when you looked at really 102 00:05:54,279 --> 00:05:57,520 Speaker 1: the spike and negative mental health outcomes for the heaviest 103 00:05:57,560 --> 00:06:00,240 Speaker 1: young users of the phone in terms of things like 104 00:06:00,600 --> 00:06:05,240 Speaker 1: UM depression and loneliness and suicide risk factors and sleep deprivation, 105 00:06:05,839 --> 00:06:08,360 Speaker 1: and the basic thinking was in in you know, this 106 00:06:08,440 --> 00:06:11,080 Speaker 1: is something I'm still trying to do today. Is basically 107 00:06:11,120 --> 00:06:14,800 Speaker 1: if you look at positive impacts and long term value 108 00:06:14,839 --> 00:06:17,279 Speaker 1: creation potential as being two sides of the same coin. 109 00:06:17,880 --> 00:06:20,760 Speaker 1: The basic argument at Apple was that if your goal 110 00:06:21,320 --> 00:06:23,960 Speaker 1: has apples to move from being valued like a hardware 111 00:06:24,000 --> 00:06:27,440 Speaker 1: company h to being valued like a subscription based recurring 112 00:06:27,480 --> 00:06:30,160 Speaker 1: revenues company, and you want to do everything possible to 113 00:06:30,240 --> 00:06:33,960 Speaker 1: keep people feeling safe and secure within the ecosystem, um, 114 00:06:34,000 --> 00:06:36,359 Speaker 1: you'd want to do things to partner with families to 115 00:06:36,520 --> 00:06:39,320 Speaker 1: give them really more dynamic control over the phones, which 116 00:06:39,720 --> 00:06:41,200 Speaker 1: you have to combine for a lot of other things 117 00:06:41,279 --> 00:06:45,440 Speaker 1: like good parenting and discussions and things. Um. And fortunately 118 00:06:45,440 --> 00:06:49,280 Speaker 1: for us, Apple very quickly said this makes sense. And 119 00:06:49,640 --> 00:06:51,760 Speaker 1: you know, they called Tim Cooke was on the phone 120 00:06:51,760 --> 00:06:54,080 Speaker 1: the next day with with their biggest shareholders saying what 121 00:06:54,080 --> 00:06:56,240 Speaker 1: do you think of us? And they said, yeah, why 122 00:06:56,279 --> 00:06:58,919 Speaker 1: wouldn't you do this? It makes sense? And um, the 123 00:06:58,960 --> 00:07:01,040 Speaker 1: controls were really well received. They need to do more 124 00:07:01,080 --> 00:07:04,719 Speaker 1: to market them. Quite frankly, Google actually, which copied a 125 00:07:04,720 --> 00:07:06,760 Speaker 1: lot of what Apple did, has done a better time 126 00:07:06,839 --> 00:07:09,239 Speaker 1: marketing it, but it was a good first step and 127 00:07:09,240 --> 00:07:12,920 Speaker 1: and I think kind of hopefully, you know, validated the 128 00:07:12,920 --> 00:07:15,920 Speaker 1: case a little bit that focusing on these things isn't 129 00:07:15,960 --> 00:07:18,360 Speaker 1: just about you know, positive impact, it's just kind of 130 00:07:18,400 --> 00:07:20,960 Speaker 1: good business sense to it the long term. Well. And 131 00:07:21,320 --> 00:07:24,680 Speaker 1: McDonald's was another one that that you had at that 132 00:07:24,720 --> 00:07:27,400 Speaker 1: moment in time too, And I guess that's gonna be 133 00:07:27,400 --> 00:07:30,880 Speaker 1: an interesting segue here, because when you engage with companies 134 00:07:30,920 --> 00:07:35,000 Speaker 1: like this, sometimes it's public and sometimes it's not talked 135 00:07:35,000 --> 00:07:38,640 Speaker 1: about the way that you dealt with McDonald's at that Yeah, 136 00:07:38,680 --> 00:07:41,960 Speaker 1: and that was actually one that previously had not named 137 00:07:41,960 --> 00:07:44,720 Speaker 1: the company, but the New York Times, I guess spoke 138 00:07:44,760 --> 00:07:46,840 Speaker 1: to some other people and figured it out. That was 139 00:07:46,880 --> 00:07:50,520 Speaker 1: actually the year after the Apple campaign, and the basic 140 00:07:50,600 --> 00:07:52,720 Speaker 1: idea again there was to try to kind of marry 141 00:07:52,760 --> 00:07:58,280 Speaker 1: the long term value creation argument with the positive impact argument. 142 00:07:58,720 --> 00:08:01,440 Speaker 1: In that case, you know, um, at least prior to 143 00:08:02,960 --> 00:08:06,040 Speaker 1: the pandemic, McDonald's was a company that loses about two 144 00:08:06,080 --> 00:08:09,200 Speaker 1: percent of its customers every year, and to make up 145 00:08:09,240 --> 00:08:11,920 Speaker 1: for that, you know, they've been doing things like selling 146 00:08:12,160 --> 00:08:14,960 Speaker 1: you know, cheesy bacon on the fries and don't sticks 147 00:08:14,960 --> 00:08:17,080 Speaker 1: with breakfasts and stuff like that, which you know find 148 00:08:17,160 --> 00:08:19,280 Speaker 1: but isn't necessarily i think by their own emission in 149 00:08:19,320 --> 00:08:22,400 Speaker 1: great long term value creation strategy. So you know, one 150 00:08:22,440 --> 00:08:24,920 Speaker 1: of the reasons that they've been losing customers, and again 151 00:08:25,160 --> 00:08:29,080 Speaker 1: this is all pre pandemic is people looking for either 152 00:08:29,120 --> 00:08:33,319 Speaker 1: healthier or flexitarian choices where they're not looking to eliminate meat, 153 00:08:33,320 --> 00:08:35,439 Speaker 1: but want to be able to reduce the intake of 154 00:08:35,520 --> 00:08:38,679 Speaker 1: meat in a growing number of cases for environmental reasons. 155 00:08:38,679 --> 00:08:41,360 Speaker 1: So the basic idea was they can both have a 156 00:08:42,400 --> 00:08:46,439 Speaker 1: you know, positive impact on reducing their deforestation in methane 157 00:08:46,440 --> 00:08:50,960 Speaker 1: emissions and also appeal to customers who maybe have given 158 00:08:51,000 --> 00:08:54,760 Speaker 1: up on McDonald's, particularly families with younger kids who may 159 00:08:54,760 --> 00:08:57,640 Speaker 1: not feel great about you know, kind of taking in there. Again, 160 00:08:57,720 --> 00:08:59,720 Speaker 1: that's one where there's there's more work to be done. 161 00:08:59,760 --> 00:09:03,240 Speaker 1: But they did introduce partnership with Beyond met in Canada, 162 00:09:03,360 --> 00:09:05,679 Speaker 1: which you know, it was marketing in a certain way 163 00:09:05,720 --> 00:09:07,559 Speaker 1: that maybe could be approved upon going forward. And the 164 00:09:07,640 --> 00:09:11,760 Speaker 1: now they have this mick plant uh concept that that 165 00:09:11,840 --> 00:09:14,000 Speaker 1: you know what, we'll see what develops with that. But yeah, 166 00:09:14,000 --> 00:09:16,760 Speaker 1: that was the one that followed Apple, which which brings 167 00:09:16,840 --> 00:09:19,760 Speaker 1: us sort of two Engine number one. So how did 168 00:09:19,800 --> 00:09:22,880 Speaker 1: that come into being, because it's actually almost born at 169 00:09:22,880 --> 00:09:25,680 Speaker 1: the beginning of the pandemic, right, Yeah, So I had 170 00:09:25,720 --> 00:09:29,400 Speaker 1: met the founder of Engine number one, Chris James, after 171 00:09:29,520 --> 00:09:32,640 Speaker 1: the Apple campaign, and he at that time was formulating 172 00:09:32,679 --> 00:09:35,960 Speaker 1: his thinking about what would eventually become Engine number one, 173 00:09:36,520 --> 00:09:40,480 Speaker 1: and very much, very much focused on, uh, the idea 174 00:09:40,720 --> 00:09:43,600 Speaker 1: that you know, companies over time have to internalize their 175 00:09:43,600 --> 00:09:47,800 Speaker 1: externalities in terms of their evaluation, and that the investments 176 00:09:47,800 --> 00:09:52,400 Speaker 1: that they make in their people, in their customers, in 177 00:09:52,480 --> 00:09:56,480 Speaker 1: the society around them, and in their communities, uh, in 178 00:09:56,760 --> 00:09:59,600 Speaker 1: the environment. Ultimately, if you take a long term time 179 00:09:59,640 --> 00:10:03,320 Speaker 1: prize and approach, you can't reflect and value. So you know, 180 00:10:03,400 --> 00:10:06,880 Speaker 1: he had a lot of ideas, one of which ultimately 181 00:10:07,280 --> 00:10:10,080 Speaker 1: the CTF. But what I was trying to do it 182 00:10:10,240 --> 00:10:13,960 Speaker 1: at Jonah fit very well into his kind of grander vision. 183 00:10:14,080 --> 00:10:19,120 Speaker 1: So we kept talking and yeah, I joined Engine number one, 184 00:10:19,960 --> 00:10:22,240 Speaker 1: you know, late last year, which feels like a longer 185 00:10:22,280 --> 00:10:25,520 Speaker 1: time ago than it was. But yeah, um yes, but 186 00:10:25,679 --> 00:10:28,320 Speaker 1: let me bring you into this. Um. Uh, you and 187 00:10:28,360 --> 00:10:30,800 Speaker 1: I met when you were at JP Morgan. You were 188 00:10:30,960 --> 00:10:33,200 Speaker 1: an et F person. You're one of the first guests 189 00:10:33,240 --> 00:10:37,400 Speaker 1: on this on this podcast actually so, and then now 190 00:10:37,440 --> 00:10:41,040 Speaker 1: you're here, and I guess, can you bridge everything Charlie saying, 191 00:10:41,080 --> 00:10:42,520 Speaker 1: because this is a new world for a lot of 192 00:10:42,600 --> 00:10:45,240 Speaker 1: ETF investors, they're not even used to hearing stuff like this, 193 00:10:46,000 --> 00:10:49,240 Speaker 1: and you're gonna basically take some of this activism that 194 00:10:49,320 --> 00:10:52,040 Speaker 1: Charlie just went over several examples of and democratize it 195 00:10:52,559 --> 00:10:54,040 Speaker 1: in the E t F. Can you talk about the 196 00:10:54,080 --> 00:10:57,600 Speaker 1: process to do that? Yeah? Sure, And maybe just taking 197 00:10:57,600 --> 00:11:00,360 Speaker 1: a step back since he referenced my time at JP 198 00:11:00,440 --> 00:11:02,120 Speaker 1: Morgan and one of the things I learned that I 199 00:11:02,160 --> 00:11:05,760 Speaker 1: was one of the early employees in JP Morgan's ETS business. 200 00:11:05,840 --> 00:11:08,679 Speaker 1: I joined when that firm had one E t F 201 00:11:08,720 --> 00:11:11,719 Speaker 1: and five million dollars. And when you look at the 202 00:11:11,760 --> 00:11:15,720 Speaker 1: market dynamics of ETS, one of the things you see is, Wow, 203 00:11:15,800 --> 00:11:19,199 Speaker 1: the space is crowded and it's concentrated. And so you 204 00:11:19,320 --> 00:11:21,320 Speaker 1: sort of asked them actual questions, how does a new 205 00:11:21,480 --> 00:11:23,880 Speaker 1: entrant come into the space and and really think it's 206 00:11:23,880 --> 00:11:26,520 Speaker 1: going to crack the code and grow? Um, you know, 207 00:11:26,600 --> 00:11:29,240 Speaker 1: JP Morgan was obviously very successful at doing that. I 208 00:11:29,320 --> 00:11:32,160 Speaker 1: left when they had about sixty billion dollars, but in 209 00:11:32,200 --> 00:11:34,960 Speaker 1: my thinking of coming here, it's sort of what you 210 00:11:35,000 --> 00:11:37,000 Speaker 1: were hitting on, Eric, when I was thinking about what 211 00:11:37,160 --> 00:11:40,880 Speaker 1: is the value proposition of an engine number one type 212 00:11:40,920 --> 00:11:45,200 Speaker 1: provider in the ETS space? And from my perspective, it 213 00:11:45,280 --> 00:11:48,760 Speaker 1: was a couple of things. The first is this idea 214 00:11:48,880 --> 00:11:53,080 Speaker 1: of being purpose built, so engine number one focuses only 215 00:11:53,120 --> 00:11:56,719 Speaker 1: on impact. And I think that that sort of focused 216 00:11:56,800 --> 00:12:00,560 Speaker 1: mission statement, focused products that that we could drive off 217 00:12:00,600 --> 00:12:03,440 Speaker 1: of it UM was something that was actually quite unique 218 00:12:03,440 --> 00:12:07,280 Speaker 1: in the market for this particular spaces sustainability. And I 219 00:12:07,320 --> 00:12:09,840 Speaker 1: think secondly, you know a lot of the things that 220 00:12:10,000 --> 00:12:12,720 Speaker 1: people talk about the sustainable investing world. You look at 221 00:12:12,720 --> 00:12:15,320 Speaker 1: it and you think, wow, it's growing quite a lot, 222 00:12:15,360 --> 00:12:17,600 Speaker 1: but it's still a drop in the bucket of all 223 00:12:18,000 --> 00:12:21,040 Speaker 1: the E T F bascets out there. So my hypothesis 224 00:12:21,080 --> 00:12:24,440 Speaker 1: was something was holding that space back a little bit UM. 225 00:12:24,440 --> 00:12:26,920 Speaker 1: And I think it really was a combination of or 226 00:12:27,080 --> 00:12:30,840 Speaker 1: is a combination of one investors really feeling this quandary 227 00:12:30,880 --> 00:12:33,960 Speaker 1: between can I invest in alignment with my values and 228 00:12:34,000 --> 00:12:37,320 Speaker 1: the financial tradeoff that you have to make UM and 229 00:12:37,440 --> 00:12:41,080 Speaker 1: to this all feel like being tangible, there being a 230 00:12:41,160 --> 00:12:44,120 Speaker 1: real so what to what they're doing UM and so 231 00:12:44,200 --> 00:12:46,040 Speaker 1: I think that's where the engine number one E t 232 00:12:46,200 --> 00:12:49,000 Speaker 1: F business really fits well into the broader framework is 233 00:12:49,360 --> 00:12:53,240 Speaker 1: Charlie was talking about it. It's the ability to harness 234 00:12:53,320 --> 00:12:56,960 Speaker 1: the power of all investors, be it the largest investors 235 00:12:56,960 --> 00:12:58,520 Speaker 1: in the country, all the way down to the self 236 00:12:58,520 --> 00:13:02,400 Speaker 1: directed investor, give them a voice and a vote um 237 00:13:02,559 --> 00:13:05,839 Speaker 1: pun intended, and really a seat at the table on 238 00:13:05,880 --> 00:13:09,000 Speaker 1: some of these really important topics. And I think that 239 00:13:09,320 --> 00:13:18,120 Speaker 1: value proposition is really unique. And so let's just really 240 00:13:18,320 --> 00:13:20,720 Speaker 1: just for one second stop here and just contrast this 241 00:13:20,800 --> 00:13:23,400 Speaker 1: with E s G t F s UM. E s 242 00:13:23,400 --> 00:13:25,280 Speaker 1: G t F s are going out scoring a bunch 243 00:13:25,280 --> 00:13:28,920 Speaker 1: of stocks and they all all have their different methodologies. 244 00:13:29,000 --> 00:13:31,480 Speaker 1: Typically they won't own an exon or they'll own it 245 00:13:31,520 --> 00:13:35,600 Speaker 1: in a sale a smaller uh you know, waiting. Can 246 00:13:35,640 --> 00:13:37,840 Speaker 1: you talk a little bit about trying to position this. 247 00:13:38,080 --> 00:13:40,120 Speaker 1: I'm trying to pretend you're in a meeting with an 248 00:13:40,120 --> 00:13:44,080 Speaker 1: advisor or an investor. How are you explaining this versus say, 249 00:13:44,120 --> 00:13:49,040 Speaker 1: the onslaught of now on s gtfs out there. Yeah, 250 00:13:49,120 --> 00:13:51,520 Speaker 1: I think this is the really important point. There's not 251 00:13:51,520 --> 00:13:54,200 Speaker 1: a lot of product development in the space, but to 252 00:13:54,280 --> 00:13:56,760 Speaker 1: your point, they all sort of look and feel the same. 253 00:13:56,840 --> 00:14:00,960 Speaker 1: It's either excluding or rewaiting based on some some E 254 00:14:01,160 --> 00:14:04,600 Speaker 1: s G data point. They're basically E s G by 255 00:14:04,640 --> 00:14:07,880 Speaker 1: what they own, but not what they do. And I 256 00:14:07,920 --> 00:14:10,520 Speaker 1: think there's this real question you sort of have to 257 00:14:10,559 --> 00:14:14,000 Speaker 1: ask yourself about what's the theory of change behind putting 258 00:14:14,160 --> 00:14:16,720 Speaker 1: your money in one of those products? What changes if 259 00:14:16,720 --> 00:14:20,080 Speaker 1: I were to move my entire savings account from the 260 00:14:20,200 --> 00:14:23,960 Speaker 1: SMP five to something that slightly relighted stocks based on scores. 261 00:14:24,280 --> 00:14:25,880 Speaker 1: And I think that's maybe one of the things that 262 00:14:25,920 --> 00:14:29,280 Speaker 1: holds back the end investor. I'm not sure that that 263 00:14:29,360 --> 00:14:31,200 Speaker 1: type of strategy is very real to them, So that 264 00:14:31,320 --> 00:14:33,800 Speaker 1: the premise of vote was actually quite simple on the 265 00:14:33,840 --> 00:14:37,280 Speaker 1: investment side, as you said, it really was if you 266 00:14:37,360 --> 00:14:39,960 Speaker 1: have market cap, and you like market cap and like 267 00:14:40,040 --> 00:14:41,960 Speaker 1: the price of market cap, you can keep all of 268 00:14:42,000 --> 00:14:44,720 Speaker 1: those things. UM. But where we're really going to drive 269 00:14:44,840 --> 00:14:47,720 Speaker 1: value is the work we do as active owners, which 270 00:14:47,800 --> 00:14:51,520 Speaker 1: from our perspective, really spans a very broad spectrum of things. 271 00:14:51,600 --> 00:14:55,360 Speaker 1: It's the votes we cast, it's the collaborative engagements that 272 00:14:55,400 --> 00:14:58,440 Speaker 1: we run in a small subset. It's also the work 273 00:14:58,440 --> 00:15:01,960 Speaker 1: that Charlie's doing. UM On the more activism side, and 274 00:15:02,040 --> 00:15:05,840 Speaker 1: that's really where what we're doing is different. And my 275 00:15:05,960 --> 00:15:09,400 Speaker 1: personal opinion is that we're solving those challenges I mentioned. One, 276 00:15:09,920 --> 00:15:13,280 Speaker 1: we're not introducing a financial trade off. Again, most people, 277 00:15:13,400 --> 00:15:16,840 Speaker 1: virtually every investor has market cap in their portfolio, and 278 00:15:16,880 --> 00:15:18,520 Speaker 1: so we're saying, if you like that, you can keep 279 00:15:18,520 --> 00:15:20,960 Speaker 1: it the same. But two, we're allowing this to come 280 00:15:21,000 --> 00:15:25,720 Speaker 1: to life with real tangible examples of how we're voting 281 00:15:25,720 --> 00:15:30,760 Speaker 1: shares and hoping to change companies. Charlie, when Chris described 282 00:15:30,800 --> 00:15:33,480 Speaker 1: the strategy for you early on and was like, hey, 283 00:15:33,520 --> 00:15:36,440 Speaker 1: I've got this idea to marry activism within within E 284 00:15:36,520 --> 00:15:40,680 Speaker 1: t F, what was your what was your first reaction 285 00:15:40,720 --> 00:15:45,400 Speaker 1: to that? I mean it was described a little more 286 00:15:45,960 --> 00:15:48,920 Speaker 1: broadly and and it's probably worth mentioning, you know, kind 287 00:15:48,920 --> 00:15:53,960 Speaker 1: of that, Um, you know, engine number one is multifacet 288 00:15:54,000 --> 00:15:57,160 Speaker 1: I mean there's the E t F, there's a more traditional, 289 00:15:57,880 --> 00:16:03,040 Speaker 1: uh you know, more concentrated portfolio. There'll be additional I 290 00:16:03,080 --> 00:16:06,280 Speaker 1: believe E t F or some private investment stuff. So 291 00:16:06,320 --> 00:16:10,400 Speaker 1: it was really presented as and what was really interesting 292 00:16:10,440 --> 00:16:13,000 Speaker 1: about it was the idea that all these different businesses 293 00:16:13,400 --> 00:16:18,760 Speaker 1: would kind of be synergistic with each other. So you 294 00:16:18,760 --> 00:16:23,320 Speaker 1: know the the Jasmin said. The idea I think really 295 00:16:23,320 --> 00:16:27,480 Speaker 1: behind engine number one is systemic change. So one way 296 00:16:27,480 --> 00:16:29,800 Speaker 1: you can bring about systemic changes through these kind of 297 00:16:29,840 --> 00:16:32,800 Speaker 1: targeted activist campaigns. Right, you spend a year of your 298 00:16:32,840 --> 00:16:35,000 Speaker 1: life and probably take off another ten on the back end, 299 00:16:35,440 --> 00:16:38,520 Speaker 1: you know, running a campaign like the Exxon campaign. But 300 00:16:38,600 --> 00:16:42,320 Speaker 1: another thing you can do is, hopefully over time, as 301 00:16:42,360 --> 00:16:46,520 Speaker 1: the t F hopefully grows, is you kind of change 302 00:16:46,560 --> 00:16:49,320 Speaker 1: the voting landscape is. As you know you were mentioning 303 00:16:49,360 --> 00:16:53,360 Speaker 1: before the the unintended consequence of these e s CHI 304 00:16:53,480 --> 00:16:55,480 Speaker 1: funds that are just focusing on the good actors is 305 00:16:55,560 --> 00:16:58,840 Speaker 1: less accountability for folks who are companies. Maybe you should 306 00:16:58,840 --> 00:17:01,960 Speaker 1: be doing things differently. And if you can grow this 307 00:17:02,000 --> 00:17:05,320 Speaker 1: thing and also have an influence on on the overall 308 00:17:05,400 --> 00:17:10,200 Speaker 1: kind of voting proclivities of other funds as well, um, 309 00:17:10,240 --> 00:17:12,560 Speaker 1: you can bring create greater accountability not just to a 310 00:17:12,600 --> 00:17:14,240 Speaker 1: handful of companies a year we're going to be the 311 00:17:14,240 --> 00:17:18,199 Speaker 1: subject of activist campaigns, but actually to the entire market. 312 00:17:18,240 --> 00:17:21,800 Speaker 1: And it doesn't have to be a massive, you know, 313 00:17:21,880 --> 00:17:24,960 Speaker 1: soul sucking exercise like X, and it can be the 314 00:17:25,040 --> 00:17:28,600 Speaker 1: smaller kind of shareholder engagements and votes that that really, 315 00:17:29,080 --> 00:17:32,560 Speaker 1: you know, change the kind of everyday discourse that people 316 00:17:32,600 --> 00:17:37,160 Speaker 1: are having about environmental and social and long term drivers 317 00:17:37,160 --> 00:17:42,119 Speaker 1: have valued at the biggest companies still hit um to 318 00:17:42,160 --> 00:17:45,000 Speaker 1: each other. You mentioned systemic change. A lot of the 319 00:17:45,200 --> 00:17:49,359 Speaker 1: s G issues UM timate change or racism here in 320 00:17:49,400 --> 00:17:53,280 Speaker 1: the US, these are huge systemic issues. A number of 321 00:17:53,280 --> 00:17:56,680 Speaker 1: people have said, you have said, like divestment campaigns, ets, 322 00:17:56,880 --> 00:17:59,720 Speaker 1: no carbon funds, all of these sort of like products 323 00:18:00,080 --> 00:18:03,159 Speaker 1: are not really enough to address these issues on the 324 00:18:03,200 --> 00:18:06,120 Speaker 1: time frame that we need, especially with climate change. Um 325 00:18:06,200 --> 00:18:08,160 Speaker 1: So how do you sort of like react to that, 326 00:18:08,280 --> 00:18:09,879 Speaker 1: you know, when it comes to like e t s 327 00:18:10,400 --> 00:18:12,960 Speaker 1: addressing something like climate change in the next ten years. 328 00:18:13,119 --> 00:18:15,800 Speaker 1: And yeah, I I we would agree with those people. 329 00:18:15,840 --> 00:18:18,240 Speaker 1: It's kind of the founding principle, which is, if you 330 00:18:18,720 --> 00:18:24,080 Speaker 1: are looking to bring about change within a time frame 331 00:18:24,160 --> 00:18:28,040 Speaker 1: that is soon enough to be consequential, divestment in most 332 00:18:28,080 --> 00:18:31,400 Speaker 1: cases is not going to do that. You know, companies 333 00:18:31,440 --> 00:18:37,160 Speaker 1: like Examobile are not hurting for capital. So look, it's 334 00:18:37,160 --> 00:18:39,399 Speaker 1: not to knock anybody's investment choices. You know, everyone can 335 00:18:39,440 --> 00:18:41,600 Speaker 1: make their own decisions, but our our opinion is that 336 00:18:42,080 --> 00:18:45,040 Speaker 1: you can't just ignore the companies that are most in 337 00:18:45,080 --> 00:18:49,000 Speaker 1: need of change. Uh, And it doesn't to us feel 338 00:18:49,000 --> 00:18:50,679 Speaker 1: great just not to be invested in then we'd rather 339 00:18:50,720 --> 00:18:54,399 Speaker 1: be invested in them, be able to give investors in 340 00:18:54,440 --> 00:18:57,399 Speaker 1: need to have broad market exposure at a very low price, 341 00:18:57,760 --> 00:19:00,320 Speaker 1: and be able to you know, again through the vote, 342 00:19:00,560 --> 00:19:03,200 Speaker 1: through collaborative engagement, and in the subset of cases, through 343 00:19:03,240 --> 00:19:06,520 Speaker 1: an activist approach imposed. We hope greater accountability on the 344 00:19:06,560 --> 00:19:09,040 Speaker 1: market to deal with with those issues, which again we 345 00:19:09,080 --> 00:19:11,240 Speaker 1: think are are as long as you have a long 346 00:19:11,359 --> 00:19:13,640 Speaker 1: term time rise in which we think most investors do, 347 00:19:14,600 --> 00:19:19,120 Speaker 1: really fundamental of long term value drivers for these companies. 348 00:19:19,119 --> 00:19:22,960 Speaker 1: You are answering these these questions the right way. Maybe 349 00:19:23,000 --> 00:19:24,640 Speaker 1: just one thing, I just to add on to what 350 00:19:24,760 --> 00:19:26,639 Speaker 1: Charlie was saying there on the voting side, just to 351 00:19:26,800 --> 00:19:30,200 Speaker 1: underscore the point a little bit. I think most investors 352 00:19:30,760 --> 00:19:34,000 Speaker 1: don't know how their shares are being voted. And I 353 00:19:34,040 --> 00:19:36,080 Speaker 1: think that that's actually one of the sleeping giants in 354 00:19:36,119 --> 00:19:38,359 Speaker 1: this room. If you think about it. You know, the 355 00:19:38,480 --> 00:19:41,639 Speaker 1: average scent P five hundred fund um has has if 356 00:19:41,680 --> 00:19:44,479 Speaker 1: you look historically at voting track records, has voted against 357 00:19:44,560 --> 00:19:49,960 Speaker 1: let's call it, se of environmental and social shareholder proposals 358 00:19:50,000 --> 00:19:52,720 Speaker 1: over the last five to ten years. And I think 359 00:19:52,760 --> 00:19:55,440 Speaker 1: a investors don't know that, and be they also don't 360 00:19:55,440 --> 00:19:58,800 Speaker 1: necessarily know they have a choice in that, and that 361 00:19:58,880 --> 00:20:01,639 Speaker 1: maybe be he sort of speaks to the power of 362 00:20:01,760 --> 00:20:05,280 Speaker 1: harnising all investors here. There's trillions of dollars behind that, right, 363 00:20:05,320 --> 00:20:08,399 Speaker 1: if we could actually just provide a layer of transparency 364 00:20:08,440 --> 00:20:12,320 Speaker 1: to that and provide an alternative that in of itself 365 00:20:12,480 --> 00:20:16,640 Speaker 1: may actually have some pretty profound impact and change. And so, 366 00:20:17,119 --> 00:20:18,840 Speaker 1: you know, I guess the e t F is named 367 00:20:18,880 --> 00:20:21,240 Speaker 1: that way for a reason. I do think that the 368 00:20:21,320 --> 00:20:24,400 Speaker 1: voting part actually has the potential to be really interesting 369 00:20:24,440 --> 00:20:29,280 Speaker 1: and transformational. You know, Vanguard and black Rock are passive 370 00:20:29,320 --> 00:20:32,200 Speaker 1: owners and or Index one and they own they're the 371 00:20:32,240 --> 00:20:34,919 Speaker 1: top two owners of most companies out there. Um, they 372 00:20:34,960 --> 00:20:38,080 Speaker 1: own about eight percent nine percent of every company pretty much. 373 00:20:38,560 --> 00:20:40,840 Speaker 1: And you talked about this voting record. Now we in 374 00:20:40,840 --> 00:20:43,160 Speaker 1: the industry week, they're starting to get more transparent. They'll 375 00:20:43,200 --> 00:20:45,200 Speaker 1: they'll tell you how they voted a lot of times 376 00:20:45,200 --> 00:20:47,200 Speaker 1: with management. And I don't know. If I'm not in there, 377 00:20:47,200 --> 00:20:49,960 Speaker 1: I don't I can't grade them myself. I'm not really 378 00:20:50,000 --> 00:20:52,560 Speaker 1: that involved. But I guess could you talk a little 379 00:20:52,600 --> 00:20:55,119 Speaker 1: bit about this idea. I use the metaphor of a 380 00:20:55,160 --> 00:20:58,040 Speaker 1: tug boat that engine number one, even though engines are 381 00:20:58,080 --> 00:21:00,720 Speaker 1: train Um. I like the name by the way. I 382 00:21:00,840 --> 00:21:03,679 Speaker 1: use the metaphor of a tug boat, where you know, 383 00:21:03,800 --> 00:21:06,879 Speaker 1: maybe you guys are able to tug these bigger owners 384 00:21:07,320 --> 00:21:09,400 Speaker 1: into a direction. They might not go on their own. 385 00:21:09,880 --> 00:21:13,240 Speaker 1: They might not propose this or be the catalyst for 386 00:21:13,280 --> 00:21:15,160 Speaker 1: some of these, but they'd be willing to go along 387 00:21:15,200 --> 00:21:18,760 Speaker 1: with that. So can you talk about that relationship and 388 00:21:18,760 --> 00:21:21,520 Speaker 1: and moving them towards your side on these issues. I 389 00:21:21,520 --> 00:21:24,520 Speaker 1: guess what Eric's trying to say was, was tugboat number 390 00:21:24,520 --> 00:21:27,280 Speaker 1: one ever in the name conversation? No, but it probably 391 00:21:27,320 --> 00:21:31,359 Speaker 1: should have been. You know, it's probably not too late. Um. 392 00:21:31,400 --> 00:21:34,040 Speaker 1: You know, I think that the way I think about 393 00:21:34,160 --> 00:21:37,040 Speaker 1: at least is you have to be meeting a market need. 394 00:21:37,600 --> 00:21:42,000 Speaker 1: So if you think about you know, the early two thousands, 395 00:21:42,520 --> 00:21:46,200 Speaker 1: you know, the kind of modern wave of shareholder activism, 396 00:21:46,240 --> 00:21:48,320 Speaker 1: you know, it was meeting a market need, which was 397 00:21:48,400 --> 00:21:52,360 Speaker 1: that challenging companies were the CEO was an empire builder, 398 00:21:52,800 --> 00:21:55,600 Speaker 1: or the board paid management as if they were top 399 00:21:55,640 --> 00:21:59,560 Speaker 1: performers when they're actually you know, bottom UH quartile performers. 400 00:22:00,040 --> 00:22:04,480 Speaker 1: And it wasn't institutional investors didn't care about those issues. 401 00:22:04,520 --> 00:22:07,320 Speaker 1: But if you're voting you know, ten thousand proxies a 402 00:22:07,440 --> 00:22:10,800 Speaker 1: year and you're engaging with hundreds or thousands of companies 403 00:22:10,840 --> 00:22:14,200 Speaker 1: every year, and you have, you know, a full time job, 404 00:22:14,680 --> 00:22:17,040 Speaker 1: you're not going to take off six months or a 405 00:22:17,080 --> 00:22:19,000 Speaker 1: year to do kind of a deep dive into those 406 00:22:19,040 --> 00:22:24,159 Speaker 1: companies UM and and make these types of proposals. So 407 00:22:24,200 --> 00:22:27,239 Speaker 1: in the same way that you know, the traditional UH 408 00:22:27,280 --> 00:22:30,080 Speaker 1: and still very successful activist funds like like JOHNA and 409 00:22:30,640 --> 00:22:36,040 Speaker 1: others UM Meta market need you know, I think funds 410 00:22:36,040 --> 00:22:39,080 Speaker 1: like black Rock and Vandguard and others are absolutely sincere 411 00:22:40,040 --> 00:22:42,280 Speaker 1: when they when they talk about the need for companies 412 00:22:42,320 --> 00:22:44,600 Speaker 1: to have a plan for for the energy transition and 413 00:22:44,960 --> 00:22:47,360 Speaker 1: to deal with other important issues. But it is not 414 00:22:48,040 --> 00:22:53,719 Speaker 1: their business model. They don't have the time and whatever 415 00:22:54,440 --> 00:22:59,240 Speaker 1: other kind of um, you know, personality traits or or 416 00:22:59,720 --> 00:23:01,399 Speaker 1: deep facts that you need to take kind of an 417 00:23:01,440 --> 00:23:05,359 Speaker 1: activist approach. And so if we can offer hopefully compelling 418 00:23:05,960 --> 00:23:08,560 Speaker 1: arguments and good candidates that you know, we've spent the 419 00:23:08,600 --> 00:23:10,439 Speaker 1: better part of a year of trying to find I 420 00:23:10,440 --> 00:23:13,439 Speaker 1: don't used as really pushing them in any particular direction. 421 00:23:13,480 --> 00:23:15,320 Speaker 1: I think there's there's sincere when they say they care 422 00:23:15,320 --> 00:23:18,000 Speaker 1: about these issues, but we're meeting a market need, which 423 00:23:18,080 --> 00:23:23,720 Speaker 1: is employing a dedication of time in a particular set 424 00:23:23,720 --> 00:23:26,560 Speaker 1: of resources and skills that hopefully can be helpful in 425 00:23:26,640 --> 00:23:28,639 Speaker 1: giving them a choice. You know, most of the time 426 00:23:29,280 --> 00:23:32,919 Speaker 1: they don't have a real choice, uh, in situations and 427 00:23:32,920 --> 00:23:36,159 Speaker 1: with companies like Exxon when it actually comes time to 428 00:23:36,280 --> 00:23:40,080 Speaker 1: casting your vote, and if we can offer them something, 429 00:23:40,080 --> 00:23:42,199 Speaker 1: if we do a good job, it helps kind of 430 00:23:42,240 --> 00:23:44,240 Speaker 1: move the ball forward in a way that's consistent with 431 00:23:44,280 --> 00:23:47,000 Speaker 1: their goals, as opposed to pushing them in in in 432 00:23:47,080 --> 00:23:51,080 Speaker 1: some new direction. Hi, Rob here, I just wanted to 433 00:23:51,160 --> 00:23:54,080 Speaker 1: chime in with a follow up question. I mean, obviously 434 00:23:54,359 --> 00:23:57,120 Speaker 1: Black Rock and Vanguard have been mentioning for years they're 435 00:23:57,760 --> 00:24:00,240 Speaker 1: interested in climate change, you know, Liar fank Of has 436 00:24:00,280 --> 00:24:03,320 Speaker 1: written that letter, um. But more recently, in the last 437 00:24:03,359 --> 00:24:05,840 Speaker 1: year or so, social issues have become more and more important, 438 00:24:05,840 --> 00:24:09,679 Speaker 1: and you obviously mentioned the Apple campaign earlier. I'm just 439 00:24:09,680 --> 00:24:12,560 Speaker 1: wondering that are there any opportunities on the social side, 440 00:24:12,560 --> 00:24:17,600 Speaker 1: particularly around diversity, inclusion or equality. Absolutely, Yeah, I think 441 00:24:17,600 --> 00:24:21,120 Speaker 1: that you know, UM and the social can be more 442 00:24:21,160 --> 00:24:27,040 Speaker 1: difficult to quantify, but you know, whether it's UM diversity inclusion, 443 00:24:27,119 --> 00:24:33,480 Speaker 1: whether it's human capital management, whether it's responsible technological development UM, 444 00:24:33,520 --> 00:24:37,600 Speaker 1: these are playing a massive role in things like income inequality, 445 00:24:37,600 --> 00:24:42,000 Speaker 1: which is a massive drag on economic growth, on weakening 446 00:24:42,000 --> 00:24:44,760 Speaker 1: of democratic small d institutions around the world, which is 447 00:24:44,800 --> 00:24:47,040 Speaker 1: a threat to the very system of capitalism that we 448 00:24:47,040 --> 00:24:51,600 Speaker 1: we all operate within. UH. And so yeah, absolutely, I 449 00:24:51,600 --> 00:24:55,360 Speaker 1: think I think the the S and sh H can 450 00:24:55,400 --> 00:24:58,040 Speaker 1: be just as impactful. You know, you're probably stirring with 451 00:24:58,080 --> 00:25:01,440 Speaker 1: a longer spoon, quite frankly, because you're not really getting 452 00:25:01,480 --> 00:25:03,400 Speaker 1: so much into issues of like they said, cap allocation 453 00:25:03,440 --> 00:25:05,280 Speaker 1: and things that were more kind of meat and potatoes 454 00:25:05,280 --> 00:25:07,840 Speaker 1: in the x ON campaign. But I think they absolutely 455 00:25:07,840 --> 00:25:10,119 Speaker 1: can drive a great deal of long term value and 456 00:25:10,200 --> 00:25:12,000 Speaker 1: also destroy long a lot long term value if you 457 00:25:12,000 --> 00:25:15,679 Speaker 1: don't answer those types of questions correctly. YEA touching on 458 00:25:16,000 --> 00:25:19,040 Speaker 1: what Joel and both UH and what world could our 459 00:25:19,040 --> 00:25:21,960 Speaker 1: glass about x ON? That campaign was largely based on 460 00:25:21,960 --> 00:25:25,760 Speaker 1: the financialism company, how you push for change on E 461 00:25:26,000 --> 00:25:29,480 Speaker 1: S G issues when the company isn't doing so well 462 00:25:29,520 --> 00:25:34,480 Speaker 1: on S issues? But financially are performing well, yeah, you 463 00:25:34,520 --> 00:25:36,560 Speaker 1: still have to root in the financials. I mean, look, 464 00:25:36,600 --> 00:25:40,560 Speaker 1: we are not adding a whole lot of value if 465 00:25:40,640 --> 00:25:44,520 Speaker 1: we can't by some means quantify you know what we're 466 00:25:44,560 --> 00:25:48,679 Speaker 1: talking about. But you know it can be certainly a 467 00:25:48,720 --> 00:25:51,080 Speaker 1: lot more difficult. I mean even you know, any campaign 468 00:25:51,080 --> 00:25:52,520 Speaker 1: that we're going to be doing is not going to 469 00:25:52,680 --> 00:25:55,920 Speaker 1: have the you know, ability to break it down as 470 00:25:55,960 --> 00:25:58,879 Speaker 1: cleanly as you know. For example, in a trial actus campaign, 471 00:25:58,880 --> 00:26:00,639 Speaker 1: if you're pushing for a share of back, you can 472 00:26:00,640 --> 00:26:02,679 Speaker 1: say what the new denominator is going to be. Or 473 00:26:02,920 --> 00:26:05,480 Speaker 1: you are asking a company to spin off and under 474 00:26:05,480 --> 00:26:07,800 Speaker 1: performing division and you can say, here's what Spinko is 475 00:26:07,800 --> 00:26:09,760 Speaker 1: going to trade down here or remain coal trade and 476 00:26:09,800 --> 00:26:11,680 Speaker 1: you can kind of needly quantify listening. So even on 477 00:26:11,720 --> 00:26:14,439 Speaker 1: the environmental side, um, you know, we could say what 478 00:26:14,560 --> 00:26:18,359 Speaker 1: we thought the impact of better capitalllocation, more discipline and 479 00:26:18,400 --> 00:26:21,639 Speaker 1: consistent capitalllocation policies would be. But in terms of you know, 480 00:26:21,720 --> 00:26:24,760 Speaker 1: the longer term, you know, giving the marketing reason to 481 00:26:24,840 --> 00:26:29,800 Speaker 1: think that even in a decarbonizing world of lower oil 482 00:26:29,840 --> 00:26:32,159 Speaker 1: and gas demanded, EXA Mobile still have a reason for 483 00:26:32,200 --> 00:26:35,480 Speaker 1: being in in twenty or thirty years. That's pretty difficult 484 00:26:35,480 --> 00:26:38,239 Speaker 1: to quantify um. You know, on the social front, I mean, 485 00:26:38,320 --> 00:26:41,600 Speaker 1: take you know, the Apple campaign, it's difficult to say 486 00:26:42,440 --> 00:26:46,440 Speaker 1: exactly what the precise impact of you know, better more 487 00:26:46,560 --> 00:26:49,000 Speaker 1: dynamic controls for parents would be. But that's also kind 488 00:26:49,040 --> 00:26:52,760 Speaker 1: of the nature of uh, that business. I mean, what 489 00:26:52,800 --> 00:26:55,040 Speaker 1: they're doing on the privacy front, what they're doing on 490 00:26:55,160 --> 00:26:59,480 Speaker 1: augmented reality, what they're doing on an emojis and group 491 00:26:59,560 --> 00:27:01,560 Speaker 1: face and you know, they don't break those things out 492 00:27:01,640 --> 00:27:05,560 Speaker 1: into separate kind of menu items that people pay more for. 493 00:27:05,800 --> 00:27:08,000 Speaker 1: So in some ways that's kind of the nature of 494 00:27:08,000 --> 00:27:09,879 Speaker 1: that business. But at the end of the day, you 495 00:27:09,880 --> 00:27:11,719 Speaker 1: still have to be able to break it down into 496 00:27:12,359 --> 00:27:16,679 Speaker 1: either revenue growth you know, hopefully in the case of 497 00:27:16,680 --> 00:27:20,560 Speaker 1: fast food companies that that offer more plant based protein 498 00:27:20,600 --> 00:27:24,560 Speaker 1: substitutes as time go on to to meet growing customer demands. 499 00:27:25,040 --> 00:27:28,000 Speaker 1: You have to be able to translate it into profitability. 500 00:27:28,119 --> 00:27:30,040 Speaker 1: Certainly with human capital management, there are a lot of 501 00:27:30,080 --> 00:27:32,560 Speaker 1: companies that have shown that by investing more in people, 502 00:27:32,600 --> 00:27:35,680 Speaker 1: you actually increase basic metrics like sales per square foot 503 00:27:35,680 --> 00:27:38,320 Speaker 1: and need but dot per square foot. So you know, look, 504 00:27:38,720 --> 00:27:41,080 Speaker 1: we we have to be able to make for for 505 00:27:41,119 --> 00:27:44,639 Speaker 1: at least for the activist campaigns, arguments that will appeal 506 00:27:44,760 --> 00:27:49,200 Speaker 1: not just to E s G focused investors and and stakeholders, 507 00:27:49,240 --> 00:27:53,160 Speaker 1: but to uh uh, you know, basic long term investors, 508 00:27:53,160 --> 00:27:55,880 Speaker 1: and that will require at some point talking about how 509 00:27:55,880 --> 00:27:59,439 Speaker 1: it impacts revenues or profitability or the multiple or some 510 00:27:59,480 --> 00:28:01,800 Speaker 1: other metric that people look at, you know, when they're 511 00:28:01,840 --> 00:28:05,000 Speaker 1: valuing these companies. One thing to maybe add on that, 512 00:28:05,000 --> 00:28:07,159 Speaker 1: because we've now that we've been in market for a 513 00:28:07,200 --> 00:28:09,639 Speaker 1: couple of weeks now on an index, on one of 514 00:28:09,680 --> 00:28:12,920 Speaker 1: the questions we get a lot is but wait, what 515 00:28:12,920 --> 00:28:15,440 Speaker 1: what is the value proposition here from an economic side 516 00:28:15,480 --> 00:28:19,760 Speaker 1: if your basic premise is to track an index and therefore, 517 00:28:19,920 --> 00:28:22,600 Speaker 1: you know why you even need an economic argument behind 518 00:28:22,680 --> 00:28:25,040 Speaker 1: what you're doing if you're not going to take by 519 00:28:25,080 --> 00:28:28,200 Speaker 1: definition and outsized position UM. And you know, it's something 520 00:28:28,280 --> 00:28:30,240 Speaker 1: it's something that I've actually thought quite a lot about 521 00:28:30,840 --> 00:28:32,879 Speaker 1: UM as I think about this new product where we're 522 00:28:32,920 --> 00:28:36,040 Speaker 1: actually specifically trying to be market categoriented. I mean at 523 00:28:36,040 --> 00:28:39,440 Speaker 1: a high level, of course, the entire firm has places 524 00:28:39,440 --> 00:28:41,800 Speaker 1: in its portfolio where it leads into concentration. When we 525 00:28:41,840 --> 00:28:44,080 Speaker 1: have a strong economic view, so you know, I think 526 00:28:44,360 --> 00:28:48,000 Speaker 1: point one is an engine. Number one ties the impact 527 00:28:48,040 --> 00:28:51,080 Speaker 1: we're doing to economic value. But to you know, we're 528 00:28:51,120 --> 00:28:53,200 Speaker 1: only ever going to be as successful as the investors 529 00:28:53,200 --> 00:28:55,360 Speaker 1: we can bring along with us. And as Charlie was mentioning, 530 00:28:55,480 --> 00:28:58,560 Speaker 1: you know the the e t F. You know, even 531 00:28:58,560 --> 00:29:01,640 Speaker 1: if we're wildly successful and ten billion dollars a hundred 532 00:29:01,640 --> 00:29:04,960 Speaker 1: billion dollars, you can extrapolate how big that product could grow, 533 00:29:05,720 --> 00:29:08,240 Speaker 1: you still need to actually build a coalition of people 534 00:29:08,280 --> 00:29:11,600 Speaker 1: around you and make reasonable shareholder arguments for what you're doing. 535 00:29:11,720 --> 00:29:15,000 Speaker 1: So um, I do feel like even the index side 536 00:29:15,000 --> 00:29:18,120 Speaker 1: of the argument actually still has a very it's stronger 537 00:29:18,160 --> 00:29:27,120 Speaker 1: when you tie it to an economic value proposition. One 538 00:29:27,120 --> 00:29:30,360 Speaker 1: of the things that we have noticed this and I'm 539 00:29:30,400 --> 00:29:33,080 Speaker 1: not sure if you have a prepared to answer for this, 540 00:29:33,120 --> 00:29:36,720 Speaker 1: but people love the SMP five hundred. There's just something 541 00:29:36,760 --> 00:29:40,240 Speaker 1: about that brand name. And we have the Bloomberg five hundred, 542 00:29:40,280 --> 00:29:42,600 Speaker 1: and I think that's actually better they were SMP is 543 00:29:42,640 --> 00:29:45,560 Speaker 1: way too late to take In Tesla, it's basically actively 544 00:29:45,560 --> 00:29:48,920 Speaker 1: managed fun in a way. Here's a more beta, a 545 00:29:49,000 --> 00:29:52,360 Speaker 1: real beta index you guys track in the morning Star one. Yeah, 546 00:29:52,360 --> 00:29:54,520 Speaker 1: there's people are really hooked on this index, How do 547 00:29:54,600 --> 00:29:57,400 Speaker 1: you try to dislodge somebody who has like an IVV 548 00:29:57,600 --> 00:30:01,360 Speaker 1: or a voo tracking the SMP five hundred with this. Yeah, 549 00:30:01,440 --> 00:30:03,960 Speaker 1: I think that's a really good question, because, I mean, 550 00:30:04,000 --> 00:30:06,680 Speaker 1: the intentional design behind this product as we're trying to 551 00:30:06,760 --> 00:30:09,560 Speaker 1: simplify the investment decision as much as possible. So if 552 00:30:09,600 --> 00:30:11,680 Speaker 1: you have something you like as much as we can, 553 00:30:11,720 --> 00:30:13,920 Speaker 1: you should try to keep it. You know, at a 554 00:30:14,160 --> 00:30:16,959 Speaker 1: high level, the morning Star index that we're tracking is 555 00:30:16,960 --> 00:30:20,560 Speaker 1: is exposure to the largest five companies waited by market 556 00:30:20,560 --> 00:30:23,040 Speaker 1: cap in the US. So it sounds very similar and 557 00:30:23,080 --> 00:30:25,960 Speaker 1: it is very similar from a long term tracking error perspective. 558 00:30:26,040 --> 00:30:28,640 Speaker 1: So I do think we've met the objective of actually 559 00:30:28,680 --> 00:30:32,240 Speaker 1: having a very similar exposure. But I'll also say morning 560 00:30:32,240 --> 00:30:35,800 Speaker 1: Star as a partner, um it's a fabulous partner for us. 561 00:30:35,840 --> 00:30:38,360 Speaker 1: I think what they're doing in the index space is 562 00:30:38,400 --> 00:30:42,120 Speaker 1: actually quite disruptive in some sense, maybe similar to how 563 00:30:42,120 --> 00:30:45,560 Speaker 1: we're thinking about ourselves and the world we operate in. UM. 564 00:30:45,600 --> 00:30:47,880 Speaker 1: So I also have the added benefit of, you know, 565 00:30:47,880 --> 00:30:51,320 Speaker 1: a like minded partner with us. But in effect, you know, 566 00:30:51,360 --> 00:30:52,800 Speaker 1: now that I've been in market a couple of weeks 567 00:30:52,800 --> 00:30:55,600 Speaker 1: talking to investors. I do think that while they're all 568 00:30:55,640 --> 00:30:59,160 Speaker 1: these small nuanced differences between standard US equity large cap 569 00:30:59,200 --> 00:31:04,120 Speaker 1: index is, they're they're essentially very similar, and most investors, 570 00:31:04,320 --> 00:31:08,120 Speaker 1: UM don't really see much of the difference. Hey throw 571 00:31:08,200 --> 00:31:11,840 Speaker 1: up here again, UM, just on on the UH the 572 00:31:11,880 --> 00:31:15,040 Speaker 1: management fee five basis points. Obviously that helps attract a 573 00:31:15,120 --> 00:31:18,360 Speaker 1: u M. That obviously puts more muscle behind your campaigns. 574 00:31:18,400 --> 00:31:22,120 Speaker 1: But then is it sustainable to to run these activist 575 00:31:22,120 --> 00:31:25,040 Speaker 1: campaigns with that? You know, I heard the Exon campaign. 576 00:31:25,040 --> 00:31:26,600 Speaker 1: I think it was twelve and a half million dollars. 577 00:31:27,000 --> 00:31:29,640 Speaker 1: Is it sustainable to keep running campaigns like that with 578 00:31:29,800 --> 00:31:33,280 Speaker 1: just five basis points? Yeah? And and again this is UM, 579 00:31:33,440 --> 00:31:36,280 Speaker 1: you know, it's it's a it's UM important to keep 580 00:31:36,320 --> 00:31:38,960 Speaker 1: in mind as I mentioned, you know earlier that you know, 581 00:31:39,040 --> 00:31:42,320 Speaker 1: engine number one now has an ETF, but it has 582 00:31:42,400 --> 00:31:48,120 Speaker 1: other strategies as well, including as I mentioned, more concentrated portfolio. 583 00:31:48,360 --> 00:31:55,080 Speaker 1: So UM, we are bringing more UH to the financial 584 00:31:55,120 --> 00:31:59,240 Speaker 1: picture than just the five picks five BIPs that DTF 585 00:31:59,360 --> 00:32:01,640 Speaker 1: is is bring. UM. But yeah, I don't think it'll 586 00:32:01,680 --> 00:32:03,480 Speaker 1: make a lot of sense to have a solely an 587 00:32:03,480 --> 00:32:05,400 Speaker 1: e t F that that's charging five bits and be 588 00:32:05,520 --> 00:32:08,880 Speaker 1: running multiple, you know, twelve nine dollar campaigns every year, 589 00:32:08,920 --> 00:32:11,680 Speaker 1: but that's not what we're doing. Maybe just to add 590 00:32:11,680 --> 00:32:13,920 Speaker 1: to that, I mean, I think there is a very 591 00:32:14,000 --> 00:32:16,560 Speaker 1: intentional choice with having our first e t F and 592 00:32:16,640 --> 00:32:19,480 Speaker 1: we plan on having more ets be the one that 593 00:32:19,520 --> 00:32:22,680 Speaker 1: we chose to launch, which is that it's what, like 594 00:32:22,720 --> 00:32:25,440 Speaker 1: I said, what most people have in their portfolios. So 595 00:32:25,600 --> 00:32:29,000 Speaker 1: you know, this type of product that speaks to a 596 00:32:29,120 --> 00:32:32,680 Speaker 1: wide range of investor both from institutional and self directed, 597 00:32:33,200 --> 00:32:35,640 Speaker 1: and it's sort of a standard part of everyone's portfolio. 598 00:32:35,760 --> 00:32:39,400 Speaker 1: Gives us access and breath in an investor base, which 599 00:32:39,400 --> 00:32:42,040 Speaker 1: I think is really valuable to the firm. UM. So 600 00:32:42,040 --> 00:32:45,280 Speaker 1: it's Charlie mentioned this is one of multiple strategies we run, 601 00:32:45,320 --> 00:32:48,000 Speaker 1: but I also think it's got a really interesting strategic 602 00:32:48,040 --> 00:32:50,080 Speaker 1: angle for for the broader firm. You know, I just 603 00:32:50,120 --> 00:32:52,840 Speaker 1: want to ask one quick question, yes, which is we 604 00:32:52,920 --> 00:32:55,560 Speaker 1: just did an episode about tickers and how how people 605 00:32:55,720 --> 00:33:00,280 Speaker 1: claim good tickers? How did you get vote? It blows 606 00:33:00,360 --> 00:33:02,480 Speaker 1: my mind and it makes me so happy, and I 607 00:33:02,520 --> 00:33:05,400 Speaker 1: saw that you had done that, UM that section or 608 00:33:05,520 --> 00:33:08,360 Speaker 1: session I sakers are so important. People who aren't E 609 00:33:08,400 --> 00:33:11,520 Speaker 1: t F people don't necessarily gravitate too much work. But 610 00:33:11,520 --> 00:33:13,560 Speaker 1: as someone who's built so many ets in my life, 611 00:33:13,880 --> 00:33:15,840 Speaker 1: it is so important to get the right ticker. And 612 00:33:16,480 --> 00:33:19,080 Speaker 1: when we got vote, it was just it was just 613 00:33:19,160 --> 00:33:22,520 Speaker 1: one of those amazing moments because it says what it's 614 00:33:22,640 --> 00:33:25,320 Speaker 1: I mean, it's really basically the way we think about 615 00:33:25,360 --> 00:33:28,280 Speaker 1: the product is like your voice, take your seat at 616 00:33:28,320 --> 00:33:31,120 Speaker 1: the table, and like we're pushing on an open door 617 00:33:31,160 --> 00:33:34,880 Speaker 1: and we use the word vote. So um, really we're 618 00:33:34,920 --> 00:33:37,880 Speaker 1: really lucky to have grab grab that one. You know. 619 00:33:37,960 --> 00:33:41,000 Speaker 1: Interesting talking about vote and voting rights, you do have uh, 620 00:33:41,120 --> 00:33:44,480 Speaker 1: some companies in in the S and P or among 621 00:33:44,520 --> 00:33:47,680 Speaker 1: the five largest, particularly tech companies, which we talked about earlier, 622 00:33:47,920 --> 00:33:50,720 Speaker 1: where you don't have that one share, one vote. How 623 00:33:50,760 --> 00:33:54,040 Speaker 1: do you work with those companies where maybe the power 624 00:33:54,080 --> 00:33:56,680 Speaker 1: of voting isn't all there is it is for some 625 00:33:56,760 --> 00:34:01,959 Speaker 1: other companies. Yeah, Um, well, it's certainly more of a challenge. Um, 626 00:34:02,240 --> 00:34:05,000 Speaker 1: I think you know it. It though it's still goes 627 00:34:05,040 --> 00:34:08,800 Speaker 1: back to um having to make compelling economic arguments. So 628 00:34:08,920 --> 00:34:11,480 Speaker 1: I mean, if you look at Apple, you know it 629 00:34:11,560 --> 00:34:13,200 Speaker 1: might have well have been a you know, a dual 630 00:34:13,280 --> 00:34:15,480 Speaker 1: share class company right at the time. I think the 631 00:34:15,480 --> 00:34:18,520 Speaker 1: market cap was nine billion dollars. And even with with 632 00:34:18,600 --> 00:34:22,480 Speaker 1: California State Teachers Retirement System joining us, we have like 633 00:34:22,520 --> 00:34:26,319 Speaker 1: a billion dollar position. So can you you know, take 634 00:34:26,360 --> 00:34:29,280 Speaker 1: them to a vote at the annual meeting and and 635 00:34:29,440 --> 00:34:32,720 Speaker 1: toss people off the board. No, but you can still 636 00:34:32,760 --> 00:34:36,120 Speaker 1: make uh, you know, compelling long term arguments. And it's 637 00:34:36,200 --> 00:34:39,240 Speaker 1: it's ironic. Actually, some of the tech companies I won't 638 00:34:39,320 --> 00:34:45,759 Speaker 1: name names who justify high low vote structure by saying, well, 639 00:34:45,800 --> 00:34:48,480 Speaker 1: we want to look out for our long term uh 640 00:34:48,680 --> 00:34:52,000 Speaker 1: you know, value creation interests. You might argue or taking 641 00:34:52,000 --> 00:34:57,319 Speaker 1: an overly short term approach to their business model. Um, 642 00:34:57,360 --> 00:34:59,760 Speaker 1: but if you can, you know, make a compelling argument 643 00:35:00,480 --> 00:35:02,400 Speaker 1: that they can you know, be more valuable over the 644 00:35:02,440 --> 00:35:04,480 Speaker 1: long term by answering some of these questions differently and 645 00:35:04,680 --> 00:35:08,480 Speaker 1: and and get shareholders to concur you know, you can 646 00:35:08,480 --> 00:35:11,520 Speaker 1: still get things done. But you're right, You're you're missing 647 00:35:11,560 --> 00:35:14,360 Speaker 1: in those cases the ultimate hammer, which is putting different 648 00:35:14,360 --> 00:35:16,200 Speaker 1: people on the board if if they don't come along. 649 00:35:16,520 --> 00:35:17,880 Speaker 1: But I feel I still think in a lot of 650 00:35:17,920 --> 00:35:20,520 Speaker 1: situations it can be worth trying, and I think will 651 00:35:20,560 --> 00:35:24,720 Speaker 1: be worth trying as time goes on. Here um sechel 652 00:35:24,760 --> 00:35:27,799 Speaker 1: here again, um one for you, Charlie, people in the 653 00:35:27,960 --> 00:35:30,680 Speaker 1: space who've been doing this for like many decades or 654 00:35:30,719 --> 00:35:34,759 Speaker 1: talking again about structural change and talking policy and things 655 00:35:34,800 --> 00:35:36,960 Speaker 1: like that. Are you planning to do any sort of 656 00:35:37,040 --> 00:35:39,279 Speaker 1: like lobbying or anything like that if you want to 657 00:35:39,280 --> 00:35:45,840 Speaker 1: sort of push full systemic change. UM? Well, UM, you 658 00:35:45,880 --> 00:35:52,120 Speaker 1: know I think that, UM, it's you know, never say never. Um. 659 00:35:52,160 --> 00:35:57,120 Speaker 1: And certainly things that impact UH investor rights and and 660 00:35:57,600 --> 00:36:00,640 Speaker 1: you know, board accountability, you know, so on there within 661 00:36:01,600 --> 00:36:04,680 Speaker 1: a purview and that's something that you know, even uh, 662 00:36:04,760 --> 00:36:07,360 Speaker 1: you know before coming to Engine number one was something 663 00:36:07,400 --> 00:36:13,600 Speaker 1: that that yeah, I've worked on from time to time, 664 00:36:13,640 --> 00:36:16,520 Speaker 1: but I would say that, you know, we do recognize 665 00:36:16,520 --> 00:36:22,319 Speaker 1: that a lot of these issues, UH are issues that 666 00:36:22,320 --> 00:36:28,000 Speaker 1: that will play out in a complex global system, and 667 00:36:28,160 --> 00:36:31,640 Speaker 1: in many cases the regulatory environment will have a heavy 668 00:36:31,760 --> 00:36:33,840 Speaker 1: impact on those It's one of the reasons why, for example, 669 00:36:33,840 --> 00:36:36,040 Speaker 1: on the XO mobile board, we thought it was important 670 00:36:36,040 --> 00:36:38,920 Speaker 1: to have somebody like Andy Karsner, who, in addition to 671 00:36:39,000 --> 00:36:42,960 Speaker 1: being a galaxy brain type when it comes to the 672 00:36:43,040 --> 00:36:46,200 Speaker 1: energy transition, you also spend time as Assistant Secretary of 673 00:36:46,280 --> 00:36:51,640 Speaker 1: Energy UH and has UH stayed in that kind of milieu, 674 00:36:51,760 --> 00:36:55,080 Speaker 1: including with the current administration. So we understand that that 675 00:36:55,080 --> 00:36:57,360 Speaker 1: that in a lot of these cases, the regulatory and 676 00:36:57,400 --> 00:37:01,279 Speaker 1: the technological as well as the investor community focuses will 677 00:37:01,320 --> 00:37:04,080 Speaker 1: all kind of intersect. Would that ever lead to getting 678 00:37:04,120 --> 00:37:09,840 Speaker 1: involved in in kind of non investor related policy lobbying efforts. 679 00:37:10,880 --> 00:37:13,279 Speaker 1: It's not something I think currently being contemplated, but I 680 00:37:13,280 --> 00:37:15,319 Speaker 1: guess never said ever if if it made sense. But 681 00:37:15,400 --> 00:37:18,720 Speaker 1: you know, we recognize that our lane is really making 682 00:37:18,840 --> 00:37:24,440 Speaker 1: arguments that will appeal to investors. Uh. And and you know, 683 00:37:24,440 --> 00:37:26,480 Speaker 1: I think in most cases that is that's a separate 684 00:37:26,520 --> 00:37:29,320 Speaker 1: lane from what's going on with with policy makers. So 685 00:37:29,400 --> 00:37:31,680 Speaker 1: let's talk about that lane and just going forward. Charlie, 686 00:37:31,680 --> 00:37:34,120 Speaker 1: how do you decide what you're going to engage in 687 00:37:34,480 --> 00:37:36,960 Speaker 1: and what you're not going to engage in? And how 688 00:37:36,960 --> 00:37:39,439 Speaker 1: are you looking through that lens? How is engine number 689 00:37:39,480 --> 00:37:44,000 Speaker 1: one looking at the future? Uh? Well, you know, first 690 00:37:44,000 --> 00:37:45,239 Speaker 1: thing is you've got to make sure that you have 691 00:37:45,320 --> 00:37:47,120 Speaker 1: a path to victory. I mean, I know, I know 692 00:37:47,120 --> 00:37:48,960 Speaker 1: a lot of people looked at the excellent campaign and 693 00:37:48,960 --> 00:37:52,400 Speaker 1: thought that, um, you know, we were taking a flyer, 694 00:37:52,520 --> 00:37:55,040 Speaker 1: but we really weren't. Um if if I didn't think 695 00:37:55,080 --> 00:37:59,719 Speaker 1: and if if um you know if if everyone looking 696 00:37:59,760 --> 00:38:02,080 Speaker 1: at it didn't see a clear path to victory, and 697 00:38:02,120 --> 00:38:06,680 Speaker 1: that means you know, counting potential votes. Um, it's not 698 00:38:06,719 --> 00:38:09,759 Speaker 1: a great use of a year of your life, you know, 699 00:38:09,800 --> 00:38:12,600 Speaker 1: if there's no way to win. Um. So you know 700 00:38:13,760 --> 00:38:16,120 Speaker 1: the gating item as always can you be successful? And 701 00:38:16,120 --> 00:38:19,560 Speaker 1: then after that, uh, you look at you know, the 702 00:38:19,880 --> 00:38:23,320 Speaker 1: value creation opportunity, you look at the impact opportunity, and 703 00:38:23,360 --> 00:38:25,760 Speaker 1: again there should for a good campaign will be joined 704 00:38:25,760 --> 00:38:28,440 Speaker 1: at the hip and then you wait against other opportunities 705 00:38:28,480 --> 00:38:30,720 Speaker 1: that you're looking at. Me. You don't have a infinite 706 00:38:30,800 --> 00:38:33,560 Speaker 1: number of campaigns that you can pursue every year. Uh, 707 00:38:33,600 --> 00:38:35,160 Speaker 1: and so you try to, you know, make the ones 708 00:38:35,160 --> 00:38:38,400 Speaker 1: that are most compelling from a value creation and uh, 709 00:38:38,440 --> 00:38:42,279 Speaker 1: you know kind of narrative perspective, tape precedence. So if 710 00:38:42,320 --> 00:38:45,279 Speaker 1: you think about this in years of your life, how 711 00:38:45,320 --> 00:38:52,440 Speaker 1: long of a lift do you have ahead of you? God, 712 00:38:54,400 --> 00:38:57,400 Speaker 1: it's such a grim question and kind of claim my 713 00:38:57,440 --> 00:38:59,320 Speaker 1: mortality and we're not gonna be how long we'll be 714 00:38:59,360 --> 00:39:03,960 Speaker 1: sitting at this ask? Uh, we invited you on a podcast, 715 00:39:04,040 --> 00:39:06,160 Speaker 1: but you can also lay down on like like a 716 00:39:06,200 --> 00:39:10,399 Speaker 1: couch if you need to. Um, I honestly just kind 717 00:39:10,440 --> 00:39:13,759 Speaker 1: of I think just think from campaign to campaign, and 718 00:39:13,760 --> 00:39:16,799 Speaker 1: there's lots of other ideas that that we're working on 719 00:39:16,920 --> 00:39:19,120 Speaker 1: now that I think, um, and they're not all x 720 00:39:19,320 --> 00:39:21,760 Speaker 1: ON type ideas in the sense that they will require 721 00:39:22,120 --> 00:39:24,320 Speaker 1: taking things to a vote. I mean, most most activist 722 00:39:24,400 --> 00:39:29,520 Speaker 1: situations you don't get resolved constructively and usually privately. Uh 723 00:39:29,680 --> 00:39:31,520 Speaker 1: So hopefully they'll be a fair number of those, more 724 00:39:31,600 --> 00:39:34,479 Speaker 1: certainly more of those than than campaigns like XSON. But 725 00:39:34,520 --> 00:39:36,359 Speaker 1: you know, as long as as we can keep coming 726 00:39:36,440 --> 00:39:38,200 Speaker 1: up with with good ideas that we think will be 727 00:39:38,200 --> 00:39:41,080 Speaker 1: compelling to people, you know, no plan to stop doing it, 728 00:39:42,600 --> 00:39:45,920 Speaker 1: um Cecil Harry again. UM So I'm not gonna ask 729 00:39:45,920 --> 00:39:47,520 Speaker 1: you what your next campaign is, but I know you're 730 00:39:47,560 --> 00:39:49,400 Speaker 1: not going to answer it, But can you give us 731 00:39:49,440 --> 00:39:51,919 Speaker 1: an idea of what theme that you're playing cycle would 732 00:39:51,920 --> 00:39:56,719 Speaker 1: be at the environment, racial discrimination, worker pay, incoming equality, 733 00:39:57,400 --> 00:40:00,400 Speaker 1: what's your next name? I mean, really all of above, 734 00:40:01,560 --> 00:40:04,239 Speaker 1: I can tell you that, Um, there's more to do, 735 00:40:04,400 --> 00:40:10,680 Speaker 1: certainly on the um IOC front. Uh there is more 736 00:40:10,719 --> 00:40:15,920 Speaker 1: to do, not just on the supply side of them, 737 00:40:17,560 --> 00:40:21,920 Speaker 1: the climate change and energy transition uh issue, but on 738 00:40:21,960 --> 00:40:23,920 Speaker 1: the demand side. I'd say, a lot more to do. 739 00:40:24,480 --> 00:40:28,439 Speaker 1: I think that on the human capital management front, there's 740 00:40:28,480 --> 00:40:31,240 Speaker 1: a lot to do in kind of marrying the idea 741 00:40:31,320 --> 00:40:37,319 Speaker 1: of good operational decisions enabling greater investment in people. I 742 00:40:37,320 --> 00:40:40,799 Speaker 1: think on the responsible technological front, uh, there's a ton 743 00:40:40,840 --> 00:40:43,480 Speaker 1: of work to be done. So working on a bunch 744 00:40:43,520 --> 00:40:46,560 Speaker 1: of different stuff, and it's just a question of, uh, 745 00:40:46,719 --> 00:40:48,440 Speaker 1: you know, when the work gets done, when the timing 746 00:40:48,520 --> 00:40:50,960 Speaker 1: is right, and you know, when we're sure that that 747 00:40:51,120 --> 00:40:53,360 Speaker 1: you know we're we're more likely to be successful than not. 748 00:40:53,640 --> 00:40:57,280 Speaker 1: So Um, Yeah, I think there's a lot of interesting 749 00:40:57,280 --> 00:41:00,560 Speaker 1: stuff coming down the pike hopefully. Sure, But what's going 750 00:41:00,600 --> 00:41:02,799 Speaker 1: to be the focus though, I mean there's lots of 751 00:41:03,320 --> 00:41:11,120 Speaker 1: issues there. Uh, the focus will be um, systemic change 752 00:41:11,600 --> 00:41:15,240 Speaker 1: will beyond things that aren't tweaks to a business model 753 00:41:15,960 --> 00:41:18,839 Speaker 1: and are not the type of thing where you say, 754 00:41:18,840 --> 00:41:20,360 Speaker 1: for example, like you know, a lot of funds you 755 00:41:20,400 --> 00:41:23,960 Speaker 1: know focused on percentages. Can you can increase this percentage? 756 00:41:23,960 --> 00:41:27,000 Speaker 1: You can decrease that percentage. What we'd like to do 757 00:41:27,120 --> 00:41:31,680 Speaker 1: is is U propose things that offer a better and 758 00:41:31,719 --> 00:41:35,160 Speaker 1: more long term and more sustainable in every sense of 759 00:41:35,160 --> 00:41:37,799 Speaker 1: the word business model. So I can tell you there's 760 00:41:37,800 --> 00:41:40,279 Speaker 1: a couple of things that that con see the light 761 00:41:40,320 --> 00:41:45,120 Speaker 1: of day, uh this year, that that fall into that category, 762 00:41:45,600 --> 00:41:51,000 Speaker 1: and they're not in the energy space. Is that more well? 763 00:41:51,000 --> 00:41:54,719 Speaker 1: Systemic change is quite a nebulous sort of concept. So 764 00:41:55,480 --> 00:41:56,920 Speaker 1: why don't you guide us a little bit more to 765 00:41:57,040 --> 00:41:58,920 Speaker 1: sort of the theme that you're you're looking at the 766 00:41:59,400 --> 00:42:06,440 Speaker 1: Siegel I'm doing. I'm doing. My joke is called uh, 767 00:42:07,600 --> 00:42:09,520 Speaker 1: I look, I don't want to ruin the surprise. I 768 00:42:09,560 --> 00:42:11,960 Speaker 1: think that you like it. We'll talk when the time comes. 769 00:42:11,960 --> 00:42:15,400 Speaker 1: Stage prompts. Can this thing go global? I mean obviously 770 00:42:15,440 --> 00:42:20,640 Speaker 1: you have UM, you know different UM shareholder rights structures globally, 771 00:42:20,760 --> 00:42:24,160 Speaker 1: So can can you build an international index and edition 772 00:42:24,160 --> 00:42:28,239 Speaker 1: at US index with the similar concept? I hope we 773 00:42:28,320 --> 00:42:33,000 Speaker 1: see more versions of our strategy beyond just the S 774 00:42:33,040 --> 00:42:36,080 Speaker 1: and P five hundred or morning Star five hundred type 775 00:42:36,120 --> 00:42:39,960 Speaker 1: of exposure. I mean, ultimately, the value proposition we're trying 776 00:42:39,960 --> 00:42:42,759 Speaker 1: to think about with this products, that is, let's find 777 00:42:42,800 --> 00:42:47,200 Speaker 1: pockets of core market cap assets where they're large, they're meaningful, 778 00:42:47,280 --> 00:42:51,120 Speaker 1: and investors use them in building portfolios. UM. Clearly the 779 00:42:51,239 --> 00:42:53,719 Speaker 1: US is you know, different cuts of the US is 780 00:42:53,719 --> 00:42:57,759 Speaker 1: a more kind of simple extension story, so small cap 781 00:42:57,880 --> 00:43:01,400 Speaker 1: made cap value growth. But um, but but I do 782 00:43:01,520 --> 00:43:03,480 Speaker 1: think you know, the concept of what we've done here, 783 00:43:03,480 --> 00:43:05,480 Speaker 1: what we've cracked the code is not just niche to 784 00:43:05,480 --> 00:43:07,880 Speaker 1: what we've done. There's many other places we can go 785 00:43:07,960 --> 00:43:11,480 Speaker 1: with it. Um And I personally, for me, I want 786 00:43:11,480 --> 00:43:14,200 Speaker 1: to see where investors bring us on that. UM. I 787 00:43:14,239 --> 00:43:17,160 Speaker 1: think it's going to be most interesting to see how 788 00:43:17,239 --> 00:43:19,880 Speaker 1: this product is received and where people actually want to 789 00:43:19,920 --> 00:43:23,240 Speaker 1: pull us from the concept of other indexes but similar 790 00:43:23,280 --> 00:43:27,160 Speaker 1: active ownership strategy. There's no only no reason it couldn't. 791 00:43:27,200 --> 00:43:30,640 Speaker 1: I mean, most of the non US markets, they actually have, 792 00:43:30,760 --> 00:43:33,480 Speaker 1: at least in terms of the actual rights that shareholders have, 793 00:43:33,560 --> 00:43:36,000 Speaker 1: fairly robust rights. It's really more a question of the 794 00:43:36,080 --> 00:43:39,760 Speaker 1: local uh you know, market and kind of shareholder attitudes 795 00:43:39,840 --> 00:43:43,080 Speaker 1: quite frankly, which you know, I think are bigger determinants 796 00:43:43,120 --> 00:43:49,080 Speaker 1: of whether or not makes sense center particular country. But um, yeah, 797 00:43:49,080 --> 00:43:51,919 Speaker 1: there's in most most situations, there's there's no reason why 798 00:43:51,920 --> 00:43:53,840 Speaker 1: you can't as long as you have a good handle 799 00:43:53,840 --> 00:43:59,080 Speaker 1: on the kind of attitudes of the shareholder base. Yeah, 800 00:43:59,120 --> 00:44:01,080 Speaker 1: I mean it's a question we ask at the end 801 00:44:01,120 --> 00:44:04,920 Speaker 1: of every trillions, what is your favorite et F ticker 802 00:44:05,480 --> 00:44:12,840 Speaker 1: that is not your own. Oh my gosh. Um, I 803 00:44:12,880 --> 00:44:17,320 Speaker 1: actually did like I do like she and just maybe 804 00:44:17,360 --> 00:44:21,080 Speaker 1: just keeping it in the space of sustainability, um, keeping 805 00:44:21,120 --> 00:44:25,239 Speaker 1: it very simple to what those products we're trying to achieve. Yeah, 806 00:44:25,680 --> 00:44:30,360 Speaker 1: and Charlie, how about you. I don't know if I 807 00:44:30,400 --> 00:44:35,680 Speaker 1: ever gave more than thirty sects a year ago. I 808 00:44:35,800 --> 00:44:42,480 Speaker 1: just google them. I'll go with yo. No idea what 809 00:44:42,520 --> 00:44:44,359 Speaker 1: it is, but it rolls off the time. All right, 810 00:44:44,400 --> 00:44:49,359 Speaker 1: there you go, Charlie, Jasmine, Sagril rob thank you all 811 00:44:49,400 --> 00:44:52,080 Speaker 1: so much for joining us on Trillia. Thanks, thank you, 812 00:44:58,120 --> 00:45:01,239 Speaker 1: Thanks for listening to Trillions til next time. You can 813 00:45:01,280 --> 00:45:05,400 Speaker 1: find us on the Bloomberg terminal, Bloomberg dot com, Apple Podcast, Spotify, 814 00:45:05,800 --> 00:45:07,960 Speaker 1: and wherever else you like to listen. We'd love to 815 00:45:08,000 --> 00:45:11,080 Speaker 1: hear from you. We're on Twitter, I'm at Joel Webber Show, 816 00:45:11,200 --> 00:45:14,040 Speaker 1: He's at Eric fall Tunas. You can find more about 817 00:45:14,080 --> 00:45:18,560 Speaker 1: Engine number one at engine one dot com. This episode 818 00:45:18,560 --> 00:45:22,000 Speaker 1: of Trillions was produced by Magnus Hendrickson. Francesca Leevie is 819 00:45:22,040 --> 00:45:31,520 Speaker 1: the head of Bloomberg Podcast. Bye