The week in investor relations: Board diversity, climate votes and stock exchanges
– Legal & General (L&G), which manages £1.2 tn ($1.6 tn) in assets, called on FTSE 100 companies to have at least one non-white director by 2022, reported the BBC. The British firm said it would vote against boards that do not meet the target. ‘We’re trying to give companies an early warning,’ said Sacha Sadan, L&G’s head of governance.
– BlackRock was criticized for supporting fewer environmental proposals this year than it did previously, according to the Financial Times (paywall). In the 12 months to June, the asset manager backed 6 percent of environmental proposals, down from 8 percent in the preceding 12 months. The firm countered that resolutions are not the only way to influence corporate behavior.
– The London Stock Exchange (LSE) agreed to sell Borsa Italiana to Euronext for €4.3 bn ($5.1 bn), reported Reuters. The deal is being done to help the LSE secure regulatory approval for a takeover of data firm Refinitiv. ‘The sale is contingent on the European Commission formally stating it will only approve the Refinitiv deal if all or part of Borsa Italiana is sold,’ explained the article.
– Investors are betting on the cannabis sector after US vice presidential candidate Kamala Harris spoke of legalizing marijuana at the federal level during an election debate, noted Reuters. Cannabis companies listed in the US and Canada saw their valuations surge on the comments: the MJ ETF, which tracks the cannabis industry, climbed more than 5 percent.
– The switch to online annual meetings in the UK stifled the ability of some shareholders to hold companies to account, reported the Wall Street Journal (paywall). The Financial Reporting Council reviewed around 200 UK AGMs and found 30 companies didn’t try to facilitate questions before or during the meeting.
– The Church of England Pensions Board, which controls £2.8 bn in assets, fully divested from ExxonMobil after the energy company didn’t set emissions goals related to customers, according to Bloomberg. The money raised is being placed in the FTSE TPI Climate Transition Index, said a spokesperson.
– US stock markets seesawed back and forth during the week as US President Donald Trump delivered differing messages on a possible stimulus package, reported CNBC. Stocks fell on Tuesday after Trump tweeted he would call off stimulus talks. They then rose after the president indicated support for certain aspects of a deal. Investors may be too optimistic that an agreement can be reached before the election, noted market strategists.