The week in investor relations: Bankers back to desks, LSE’s hybrid plans and Larry Fink defends stakeholder capitalism as not ‘woke’
– Goldman Sachs, Citigroup and Man Group are among the firms asking London staff to get back to their desks after the UK dropped its work-from-home guidance, reported Bloomberg (paywall). Goldman employees are being asked to return in line with the government’s announcement on Wednesday, the news agency said, citing a person familiar with the matter. A spokesperson for Man Group said it expects staff to increase their time in the office, while Bloomberg said Citigroup has emailed its London staff telling them to come in at least three days a week.
‘We are now free to gather in our offices, without restriction, where we are better able to generate the energy and collaborative spirit on which Citi thrives,’ wrote EMEA CEO David Livingstone and UK head James Bardrick in an email to staff that has been seen by Bloomberg.
– The London Stock Exchange (LSE) Group is seeking to ‘blur the line between public and private companies,’ reported The Wall Street Journal (paywall), as part of what the paper says is a plan to attract fast-growing technology firms to list in the UK in the wake of Brexit. The LSE has proposed the creation of a special market for private companies to trade their shares publicly on the exchange on certain days, it said, citing a person familiar with the matter and proposals from the LSE to the UK’s Financial Conduct Authority and the UK Treasury, which have been seen by the WSJ.
– BlackRock CEO Larry Fink sought to defend a shareholder movement focused on putting the interests of wider society ahead of profits, saying so-called stakeholder capitalism is neither political nor ‘woke’, CNBC reported. In his annual letter to corporate leaders, Fink pushed back against accusations that the asset manager was using its heft and influence to support a politically correct or progressive agenda.
‘Stakeholder capitalism is not about politics,’ he wrote. ‘It is not a social or ideological agenda. It is not ‘woke’. It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper. This is the power of capitalism.’
Fink’s letter reaffirmed BlackRock’s policy of engaging with companies seeking to take part in energy transition rather than divesting altogether. He added that companies could not be the ‘climate police’ on their own but would instead need to work together with governments.
– Campaigners in the UK have urged the world’s biggest sovereign wealth fund to pressure cladding firms and builders to fix fire safety issues, reported the BBC. Survivors of the 2017 Grenfell tower block fire – in which 72 people died – and leaseholders since affected by the fire-safety crisis have called on Norges Bank to pull £5.7 bn ($7.7 bn) of funds from companies if they fail to fix issues uncovered in the wake of the tragedy. Lucy Brown-Cortes of the End Our Cladding Scandal campaign said pressure from shareholders was ‘overdue’, while the BBC reported that Norges said it had raised product safety with several of the companies.
– Vanda Research analysts said in a weekly note that retail investors were less enthusiastic about buying the dip in US stocks on Tuesday in the latest sign of a possible fatigue after last year’s tech-fueled trading frenzy, according to Reuters. Individual investors bought $1.6 bn in stocks on Tuesday when US shares sold off sharply. By contrast, they bought close to $2 bn on September 28 when the S&P 500 fell 2 percent.
‘Retail investors bought a lot less than they typically would,’ said Vanda’s Ben Onatibia and Giacomo Pierantoni about Tuesday’s session. ‘This could be the first sign that retail fatigue or capitulation is setting in, at least in the tech space.’
– The market is ‘oversaturated’ with special purpose acquisition companies (Spacs), according to Bloomberg, which described Spacs as having become ‘dysfunctional’. The so-called blank-check firms raised more than $160 bn on US exchanges in 2021 – about double what was raised the prior year – according to Bloomberg data. It said that almost 600 Spacs are now searching for an acquisition, with another 250 or so indicating they plan to list shares. ‘That’s more than enough for a fragile equities market to digest,’ Bloomberg noted.
– The WSJ reported that ExxonMobil said it has set a goal to reduce or offset greenhouse gas emissions from its operations to zero by 2050, amid growing pressure from investors and the public for oil companies to tackle climate change. ExxonMobil said it had developed detailed emission-reduction plans for major facilities and assets, and can profitably transition to greener energy sources. Engine No 1 last year elected three new members to the company’s board after criticizing its transition strategy.
The new goal doesn’t cover emissions from the use of its products, such as gasoline and other fuels made from refined oil, or natural gas burned in homes, which make up most of the emissions connected to the company. It also doesn’t cover oil fields or other assets it is invested in but doesn’t operate.
‘We are developing comprehensive roadmaps to reduce greenhouse gas emissions from our operated assets around the world and, where we are not the operator, we are working with our partners to achieve similar emission-reduction results,’ said CEO Darren Woods.
– Environmental campaigners and activist investors want the SEC, which is drafting a landmark rule proposal, to require companies to disclose not only their own greenhouse gas emissions but also those generated by their suppliers and other partners, according to CNBC. But corporate groups are pushing for a narrower rule that would make it easier and less expensive to gather and report emissions data, and which would protect them from being sued over potential mistakes.
Progressives and climate campaigners want the SEC to deliver a rule that would reveal all the emissions for which a company is responsible, while many investors say they need such data to fully assess companies’ exposure to climate change and related policy measures.
– Hong Kong is ‘transforming itself into a regional center for ESG services,’ reported the South China Morning Post, which described ESG qualifications as being in ‘hot demand’ and ‘commanding 25 percent to 40 percent salary premiums.’ The city ‘has raised the bar’ for banks, publicly listed companies, asset managers and insurers to comply with ESG disclosure requirements by 2025. As many as 2,586 publicly listed companies, licensed banks and asset managers will have to set up ESG-related positions – or outsource them to consultants – by 2025 in Hong Kong, noted the paper, adding that at present, the talent pool for ESG in the region ‘is not very deep’.