The week in investor relations: Rise in European ESG assets and FRC calls for improved reporting
– Assets held in ESG funds could more than triple over the next five years, according to the Financial Times (paywall). An analysis by PwC found that, in a best case scenario, ESG assets could grow from 15 percent to 57 percent of the European fund sector by 2025. Under such a change, companies would come under much greater pressure over their approach to sustainability.
– Euronext suffered a trading glitch on Monday that saw markets across Europe shut for three hours, reported Bloomberg. The affected locations included Paris, Belgium, the Netherlands, Ireland and Portugal. It was the biggest technical issue for two years at the European exchange operator.
– FactSet Research Systems, the financial data provider, announced plans to acquire ESG data firm Truvalue Labs, noted Pensions & Investments. Truvalue Labs analyzes more than 19,000 companies using artificial intelligence tools to track ESG performance. The deal follows a number of other acquisitions of ESG data providers amid record inflows into sustainable investment funds.
– While investors are saying publicly they want to see more women in senior corporate roles, less than half of asset managers are including gender diversity when considering investment ideas, reported the FT. A study by pension consultancy Redington finds only 47 percent of investment teams take this factor into account in their work.
– The UK’s Financial Reporting Council (FRC) wrote to 96 companies about their reporting approach after concluding its annual review of corporate reporting, explained the Wall Street Journal (paywall). The FRC, which reviewed the annual reports of 216 companies in total, said improvement is needed to information on accounting issues, such as liquidity risk.
– Overseas investors may be given access to companies listed on China’s STAR Market, reported Reuters. Authorities are discussing adding the STAR Market – which contains many of China’s fastest-growing companies – to the Stock Connect program, which links stock markets in mainland China with Hong Kong, allowing foreign investors to access mainland-listed companies.