Impact and results of activism

Notable is that after the criticism from BlackRock, Volvo has launched two frameworks to disclose their
sustainability activities. Although the purpose of exit is to pressure management to correct the cause of
the exit (Hirschman, 1970), conclusions regarding if there is a causal relationship between the instances
cannot be concluded.

Critics of the voicing method of publicly criticizing companies argue that the criticism has no legally
binding foundation, however, an article published after Svanberg's reply, articulates that Volvo promises
better disclosure and new ambitious climate-related targets (Stiernstedt, 2020). According to Röhne
(2020), Volvo has implemented two new sustainability reporting frameworks and accelerated their focus
on electric trucks since the critique. The articles explicitly mentions BlackRock’s criticism which is
implying that BlackRock is influencing the company despite its relatively low holdings and the presence
of a controlling shareholder.

As a response, head of communication at Volvo, Claes Eliasson commented on the criticism by noting
that the board was elected with a great majority and that sustainability is deeply rooted in the
operations of Volvo, which appears in the GRI-report (Lindgren, 2020). Claes Eliasson also stated
following (Öhrn & Ekelund, 2020, translated): “As far as the climate issue is concerned, Volvo of course
takes it very seriously, which we have shown through a number of offensive measures in a number of
areas. Sustainability work is deeply integrated into the business, which is clearly stated in both our
sustainability report and GRI-report.”

After BlackRock confronted publicly Volvo by voting against the chairman, the situation changed at
Volvo. The reaction has been immediate. Volvo’s head of communication answered that sustainability is
anchored in Volvo’s activities. In the 2020 report climate risk was present and discussed. Volvo uses
TCFD which means that they publish information related to climate for their investors. So with this
message, Volvo, a big car producer, remind the importance of sustainability and climate issues. This may
have an impact on competitors. Indeed, by doing this, competitors may align to Volvo to stay
competitive in the future challenges. So it might have an impact not only on Volvo but also on other
companies of the industry

Moreover, the result was not only in communication. After the critics, Volvo implemented new better
objectives related to climate change and its focus on development of electric truck has been growing
since. Can we say that this is related to BlackRock activism? Even if the asset manager doesn’t really
have an important share in the company and despite the fact that there is a controlling shareholder, its
activism influenced directly the company. Blackrock is the most important asset manager in the world
and the fact that it criticized Volvo and the chairman put in danger their reputation. That’s why the
company reacted fast and in a positive way for the climate risk.