Just in time for Earth Day… Carl Icahn's latest beef differs from his usual shareholder-focused strategy of corporate raiding. Yesterday the billionaire investor wrote a passionate letter to McDonald’s investors accusing the fast-food giant of animal cruelty. Icahn has a small ($50K) stake in the Golden Arches, but it hasn’t kept him from waging a public proxy battle over the company’s pork-supply-chain practices.
- The issue: A decade ago, McDonald’s vowed to phase out suppliers that use controversial gestation crates (think: supertight metal stalls for pregnant pigs). Update: still hasn’t happened.
- Icahn’s answer: Add two of his hand-picked directors to McDonald’s board to ensure the pigs are treated better.
- Mickey D’s response: Icahn’s demands are “unfeasible” and would create a “financial burden” for its customers (read: more expensive bacon).
Sustainability hypocrisy… ESG (environmental, social, and governance) investing is one of the hottest trends on Wall Street. Last year, investors poured a record $120B into sustainable assets — 2X more than in 2020. While arguing animal welfare should be a pillar of ESG, Icahn’s also calling out corporate green promises as hollow marketing ploys. And he says the big asset managers (like: BlackRock) reap billions without holding companies accountable.
A small stake can make a big difference… Activist investors are using their influence to force corporations to make sustainable changes. It’s worked before: activist fund Engine No. 1 won three seats on Exxon's board last year with just a 0.02% stake after it convinced shareholders Exxon needed to get serious about climate change. McDonald's shareholders will get their chance to weigh in on Icahn’s cause at its annual meeting next month.