The week in investor relations: ‘Immoral’ oil profits, BlackRock to offer crypto to institutional investors and shareholder proposals up following SEC changes

– The Guardian reported on comments by António Guterres, the UN secretary general, describing the record profits of oil and gas companies as immoral as he urged governments to introduce a windfall tax, using the money to help those in most need. Speaking in New York, Guterres said the ‘grotesque greed’ of the fossil fuel companies and their financial backers had led to the combined profits of the largest energy companies in the first quarter of this year hitting almost $100 bn.

‘It is immoral for oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities, at a massive cost to the climate,’ he said.

– BlackRock, the world’s biggest asset manager, has formed a partnership with publicly traded crypto exchange Coinbase to make crypto directly available to institutional investors, reported CoinDesk. Mutual customers of Coinbase and BlackRock’s investment management platform, Aladdin, will have access to crypto trading, custody, prime brokerage and reporting capabilities, it said.

‘Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,’ CoinDesk quoted Joseph Chalom, global head of strategic ecosystem partnerships at BlackRock, as saying in a company blog post. ‘This connectivity with Aladdin will allow clients to manage their Bitcoin exposures directly in their existing portfolio management and trading workflows for a whole portfolio view of risk across asset classes.’

– The Wall Street Journal (paywall) reported that, according to data analytics firm ESGUAGE, investors submitted 650 proposals to S&P 500 companies as of July 29, up from 613 proposals and 556 proposals during the same period in 2021 and 2020, respectively. The increase follows changes to SEC guidance on the conditions under which it will give no-action relief for companies to exclude proposals. The SEC last month proposed additional changes.

‘These changes will make it more challenging to get shareholder proposals excluded,’ said Laura Richman, counsel at law firm Mayer Brown, who didn’t speak about specific proposals. ‘So we may see more of them next year.’ Companies have to spend more time and money to engage with investors as they submit more proposals and become more prescriptive in what they are seeking, lawyers said. The latter is resulting in a lower percentage of proposals gaining majority support.

– Mark Moran, formerly of Centerview Partners but who joined financial influencer firm Litquidity last year as its first public hire after a stint on the reality show FBoy Island, is reportedly leaving the New York-based start-up after 10 months. Bloomberg (paywall) reported that the 30-year-old is starting a company called Equity Animal, which will focus on investor relations and corporate marketing. The news agency said that among the firm’s first clients are RCI Hospitality Holdings – which owns strip clubs and bars across the US – and diversified holding company Ballantyne Strong.

– The Financial Times (paywall) reported that Robinhood is laying off almost a quarter of its staff. The company that ‘rode the coronavirus pandemic-era retail trading boom and promised to revolutionize stockbroking’ is contending with a decline in customer activity, said the paper. The company announced in a blog post on Tuesday that it was slashing its headcount by 23 percent – or roughly 780 employees – as part of a reorganization that would also result in the closure of two of its offices. ‘We will be parting ways with many incredibly talented people today in an extremely challenging macro environment,’ Robinhood co-founder Vlad Tenev wrote.

– Ben & Jerry’s independent board said parent company Unilever, with which it is in a dispute over the sale of its Israeli business, had frozen its directors’ salaries in July as a pressure tactic ahead of a mediation on the matter, Reuters (paywall) reported. Ben & Jerry’s sued Unilever on July 5 to try to stop the sale of its business in Israel to local licensee Avi Zinger. Ben & Jerry’s last year said it no longer wanted to sell its products in the occupied West Bank because it was ‘inconsistent’ with its values, which prompted Unilever to make the sale.

‘This decision for us to go to court is because of Unilever’s sale without our input, which is a clear violation of the letter and the spirit of our original acquisition agreement with Unilever,’ said board chair Anuradha Mittal. ‘If Unilever is willing to so blatantly violate the agreement that has governed the parties’ conduct for more than two decades, then we believe it won’t stop with this issue. If left unaddressed, Unilever’s actions will undermine our social mission and essential integrity of the brand, which threatens our reputation and ultimately our business as a whole.’

Unilever did not respond immediately to a request for comment.

– Amendments to Mifid II came into force this week, regarding the integration of sustainability factors, risks and preferences into certain organizational requirements and operating conditions for investment firms, noted The TRADE. But it added that recently published data suggests many buy-side firms are not yet ready to submit the data required by the new rules. One of the key requirements is that fund managers must from today provide ESG data for all their EU products to their fund distribution channels.

‘Many buy-side and sell-side firms are still figuring out their companywide ESG strategies but are committed to ESG in the short/medium and long term,’ Anita Karppi, head of ESG, chief revenue officer and strategic adviser at counterparty due diligence repository Plia, told the publication. ‘When it comes to regulation and standards, ESG is a fast-moving space and it’s imperative that firms are in control and committed to long-term sustainability.’

– Net inflows into sustainable funds in Asia, excluding China and Japan, tumbled 27 percent in the second quarter of 2022 from the previous quarter, mirroring the global trend as markets sold off, reported Citywire Asia. Net inflows to the region totaled $929 mn in the three months ended June, down from $1.27 bn in the first quarter, said the publication, citing Morningstar’s quarterly report on global sustainable fund flows.

Taiwan again accounted for the greatest volume of net new money over the quarter, at $911 mn. Hong Kong drew $129 mn while Thailand attracted $800,000, reversing the negative trend from the previous quarter. By contrast, South Korea, India and Indonesia had net outflows. The largest outflows in South Korea occurred in fixed-income funds while some equity funds continued to attract money, Morningstar said.

– Reuters reported that HSBC pushed back on a proposal by top shareholder Ping An Insurance Group Co of China to split the bank, which HSBC said would be costly. HSBC’s comments represented its most direct defense since news of Ping An’s proposal for carving out its Asian operations emerged in April. It came ahead of HSBC’s meeting with shareholders in Hong Kong on Tuesday, where the Chinese insurer’s proposal was discussed.

Without directly referencing Ping An by name in its earnings presentation on Monday, HSBC said a break-up would mean a potential long-term hit to the bank’s credit rating, tax bill and operating costs, and bring immediate risks in executing any spinoff or merger. Ping An has not confirmed or commented publicly on the break-up proposal. A Ping An spokesperson declined to comment on HSBC’s results and its strategy.

– AMC Entertainment appears to have found ‘a creative solution’ to boost its share count and raise funds after investors balked at a proposal to issue more shares last year, noted CNBC. The news outlet reported that AMC plans to issue a dividend to all common shareholders in the form of preferred shares. The company has applied to list these preferred equity units on the NYSE under the symbol ‘APE’, in a nod to those dubbed ‘apes’: retail investors who helped rescue the largest movie theater chain in the world from the brink of bankruptcy in early 2021.