NJ Investment Council Won’t Pull Its Nike Shares over Kaepernick Ad

Acting chair says the shoemaker’s shares have been strong, and the fund ‘decided to not take a position’ on controversial campaign due to the organization’s ESG policy.

Despite pushback from police and firefighter advocates, the $78.18 billion New Jersey State Investment Council will not pull its Nike shares following a controversial advertising campaign.

The campaign, which features former NFL quarterback Colin Kaepernick and other athletes such as LeBron James and Serena Williams, has drawn the ire of many, including Marty Barrett, a member of the Investment Council’s board of trustees who represents the state’s police and firefighter fund. Barrett suggested the state body divest its 312,000 Nike shares (valued at $$22.8 million at Thursday’s close), as he believes the campaign disrespects the military and first responders who died on September 11.

Kaepernick drew ire by kneeling during the nation anthem in protest of police brutality when he played for the San Francisco 49ers. Part of Nike’s campaign is a black and white photograph of Kaepernick’s face with the words “Believe in something. Even if it means sacrificing everything” superimposed over it.

Although the council voted to review its Nike holdings last month, its environmental, social, and governance (ESG) committee ultimately decided it would keep the shoemaker in its portfolio at Thursday’s meeting.

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Adam Liebtag, the State Investment Council’s acting chairman, told NJ.com that the stock has done well for the fund, and that the organization’s ESG policy “states clearly that we should not be making investment decisions to change social behavior or to take a political position.”

“So, in adherence with our policy, we decided to not take a position one way or the other on the social or political question behind the Nike campaign,” said Liebtag.

Nike’s new “Just Do It” ad has resulted in a division of its fanbase. Many people have abandoned the brand, and others have demanded public pension funds that manage the retirements of police and firefighters, such as the State of Wisconsin Investment Board ($117 billion), the Colorado Public Employees Retirement Association ($48.2 billion), and the Oregon ($70.7 billion) and Ohio ($91.2 billion) public employee retirement systems, send the sportswear company a message by divesting.

Recent political statements made by pension funds have resulted in pulling gun stocks, private prison contractors, and fossil fuel investments, but Nike’s ad campaign has yet to generate a similar reaction from these institutions.

Barrett was disappointed with his organization’s decision but understood that “it’s there to make money for the public employees and only our members would have suffered more.” He told reporters that he hopes Nike discovers that it “may not have made a proper decision” by running the campaign.

Tags: Colin Kaepernick, ESG, New Jersey State Investment Council, Nike, Pension

New York Attorney General Barbara Underwood has filed a lawsuit against Exxon Mobil Corp., alleging the oil company systematically misled investors regarding the risk that climate change regulations posed to its business.

The complaint accuses Exxon of perpetrating a “longstanding fraudulent scheme” to deceive investors and the investment community by providing “false and misleading assurances that it is effectively managing the economic risks posed to its business” by climate change, said the lawsuit.

“Instead of managing those risks in the manner it represented to investors,” said the lawsuit, “Exxon employed internal practices that were inconsistent with its representations, were undisclosed to investors, and exposed the company to greater risk from climate change regulation than investors were led to believe.”

Underwood alleges that for years, Exxon assured investors that it was accounting for the likelihood of increasingly strict regulation of greenhouse gas emissions by rigorously and consistently applying an escalating cost of those emissions to its business planning, investment decisions, company valuations, and the amount and value of company reserves and resources.

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However, according to the lawsuit, Exxon did not abide by these representations, and instead did much less than it claimed, which misled investors as to the company’s real financial exposure to the effects of climate change.

“Investors put their money and their trust in Exxon –which assured them of the long-term value of their shares, as the company claimed to be factoring the risk of increasing climate change regulation into its business decisions,” Underwood said in a release.

“Instead, Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them.”

The complaint also alleges that Exxon’s fraud was “sanctioned at the highest levels of the company.” In one example, it said former Exxon CEO and former US Secretary of State Rex Tillerson knew for years that the company’s representations concerning proxy costs were misleading.

Tillerson allegedly knew that the company was using lower, undisclosed proxy cost figures in its internal guidance, rather than the higher, publicly disclosed proxy costs it used in its public representations, investment decisions, and business planning.

Trevor Neilson, co-founder and CEO of investment firm i(x) investments, welcomed the lawsuit.

“Exxon Mobil engaged in a decades-long scheme to obfuscate clear scientific findings about their impact, fueling climate change denial which has no basis in scientific fact,” said Neilson in a release. “This lawsuit shows they followed the playbook of the tobacco industry, deceiving investors and other stakeholders.”

And the Union of Concerned Scientists, which has issued reports on oil companies’ practice of disinformation for years, said the lawsuit was a significant step toward holding fossil fuel companies accountable for distorting climate science and misleading investors and the public about climate change.

“Exxon Mobil has a long track record of acknowledging facts about climate change privately and spreading disinformation publicly, and continues to do so today,” Peter Frumhoff, the Union of Concerned Scientists’ director of science and policy, said in a release. “Cities and counties across the country are filing lawsuits to seek compensation from Exxon Mobil for the costs of climate damages and adaptation. Now we’ll learn whether and how the company defrauded shareholders.”

Tags: Attorney General Barbara Underwood, Climate Change, ExxonMobil, New York, Rex Tillerson