Key Takeaways
- • TCI Fund Management, the hedge fund founded by British billionaire Chris Hohn, reported holding about 14.3 million Moody's shares (roughly $6.5 billion) and 14.1 million S&P Global shares (roughly $5.7 billion) as of June 30, according to SEC filings cited by the Daily Caller.
- • The Moody's stake represents approximately 8.2% of the company's outstanding shares, and the two positions together make up about 23% of TCI's publicly disclosed stock portfolio.
- • TCI previously filed climate-related shareholder proposals at both rating agencies under its Say on Climate campaign; Moody's joined the campaign in December 2020, and both firms put management-sponsored climate proposals to shareholders in 2021, which passed with 93.3% (Moody's) and 99.5% (S&P Global) support.
- • Critics, including State Financial Officers Foundation CEO Dr. OJ Oleka, argue that influential ownership in rating agencies could affect borrowing costs for municipalities and businesses if used to advance political or ideological goals; TCI declined to comment and neither rating agency responded.
Summary
British billionaire Chris Hohn's hedge fund, TCI Fund Management, holds major stakes in Moody's and S&P Global, the two credit-rating firms whose assessments influence how much American businesses, schools and local governments pay to borrow. According to SEC filings cited by the Daily Caller, TCI reported approximately 14.3 million Moody's shares and 14.1 million S&P Global shares as of June 30, valued at roughly $6.5 billion and $5.7 billion respectively. A separate SEC filing indicated the Moody's position equaled about 8.2% of the company's outstanding shares. Together the positions accounted for about 23% of TCI's publicly disclosed stock portfolio.
Hohn, who founded TCI Fund Management and the Children's Investment Fund Foundation, has used shareholder activism to pursue climate objectives. In November 2020, according to Reuters, he launched a campaign pressing hundreds of companies to adopt more aggressive climate policies through shareholder resolutions. TCI's Say on Climate proposals at Moody's and S&P Global sought annual emissions disclosure, reduction plans and shareholder votes on climate strategy; these votes would not legally bind the companies. Moody's announced in December 2020 that it would join the campaign. Both companies later put management-sponsored climate proposals to shareholders in 2021 after TCI withdrew its original proposals, and those proposals received 93.3% support at Moody's and 99.5% at S&P Global, according to a Harvard Law School corporate governance review.
Both agencies incorporate climate-related risks into their ratings. In January 2021, S&P Global placed nine oil and gas companies, including ExxonMobil, Chevron and Shell, under review for potential downgrades, and lowered outlooks for BP and Suncor Energy. Moody's January 2025 framework outlines how ESG factors, including the transition away from fossil fuels, could affect borrowers' earnings and ability to repay debt.
Oleka said credit-rating decisions carry consequences for smaller communities financing sewer districts, schools and public safety equipment, and warned that significant ownership becomes concerning if it is used to push political ideology. He also argued that asset managers investing other people's money should focus on returns and questioned the line between passive investing and active engagement. Hohn, in a 2022 interview reported by Bloomberg, criticized voluntary ESG engagement as ineffective, stating, "Talk doesn't work, voluntary doesn't work, there need to be forcing mechanisms." The article presents critics' views on whether climate considerations could disadvantage certain industries; the agencies maintain that climate risks affect borrowers' financial health.
Hohn, who founded TCI Fund Management and the Children's Investment Fund Foundation, has used shareholder activism to pursue climate objectives. In November 2020, according to Reuters, he launched a campaign pressing hundreds of companies to adopt more aggressive climate policies through shareholder resolutions. TCI's Say on Climate proposals at Moody's and S&P Global sought annual emissions disclosure, reduction plans and shareholder votes on climate strategy; these votes would not legally bind the companies. Moody's announced in December 2020 that it would join the campaign. Both companies later put management-sponsored climate proposals to shareholders in 2021 after TCI withdrew its original proposals, and those proposals received 93.3% support at Moody's and 99.5% at S&P Global, according to a Harvard Law School corporate governance review.
Both agencies incorporate climate-related risks into their ratings. In January 2021, S&P Global placed nine oil and gas companies, including ExxonMobil, Chevron and Shell, under review for potential downgrades, and lowered outlooks for BP and Suncor Energy. Moody's January 2025 framework outlines how ESG factors, including the transition away from fossil fuels, could affect borrowers' earnings and ability to repay debt.
Oleka said credit-rating decisions carry consequences for smaller communities financing sewer districts, schools and public safety equipment, and warned that significant ownership becomes concerning if it is used to push political ideology. He also argued that asset managers investing other people's money should focus on returns and questioned the line between passive investing and active engagement. Hohn, in a 2022 interview reported by Bloomberg, criticized voluntary ESG engagement as ineffective, stating, "Talk doesn't work, voluntary doesn't work, there need to be forcing mechanisms." The article presents critics' views on whether climate considerations could disadvantage certain industries; the agencies maintain that climate risks affect borrowers' financial health.
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