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Engine No. 1 Puts Pressure on Parkland Fuel, Opposes Incumbent Board Over ESG Concerns


DEF 14 Inc. April 20, 2023


Canadian fuel supplier Parkland Fuel Corporation is facing opposition from activist investor Engine No. 1, which has announced that it will oppose the incumbent board and nominate its own candidates for election at the company's upcoming annual meeting.


Engine No. 1, which owns a 0.6% stake in Parkland, has been critical of the company's environmental, social, and governance (ESG) practices and has urged the company to accelerate its transition to a lower-carbon future. In a letter to Parkland's board, Engine No. 1 stated that the company's "current strategy is not ambitious enough, lacks urgency, and does not adequately address the significant risks and opportunities associated with the transition to a lower-carbon economy."


The activist investor has also raised concerns about Parkland's executive compensation practices, noting that CEO Bob Espey's total compensation package in 2021 was more than 600 times that of the median employee. Engine No. 1 has called for greater alignment between executive compensation and ESG performance.


Parkland has responded to Engine No. 1's letter, stating that it is committed to ESG principles and is making progress in its efforts to reduce greenhouse gas emissions and transition to renewable fuels. The company also defended its executive compensation practices, stating that they are in line with industry standards and are linked to performance-based metrics.


However, Engine No. 1 has persisted in its opposition, stating that it believes that its nominees would bring fresh perspectives and expertise to Parkland's board and would help to drive the company towards a more sustainable future.


The outcome of the upcoming election will have significant implications for Parkland and its stakeholders, including shareholders, employees, and customers. As such, the situation is being closely monitored by investors and analysts in the energy and sustainability sectors.


In recent years, activist investors like Engine No. 1 have become increasingly influential in corporate governance and ESG practices, and their impact on companies is likely to continue to grow in the future.


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