The week in investor relations: Climate action, home-grown CEOs and record engagement
– Climate Action 100+, an investor group with $47 tn in assets under management, sent a letter to companies with large greenhouse gas emissions calling for them to become net-zero emitters by 2050, reported the Financial Times (paywall). The group has already had a number of successes forcing change at large companies. Investors in the group include BlackRock and PIMCO.
– The FT noted that the Australian government has suggested Rio Tinto appoint an Australian as its new CEO. The mining giant’s current CEO Jean-Sébastien Jacques has agreed to step down following widespread criticism over the destruction of an historic Aboriginal site. The call comes amid a tightening of foreign direct investment controls in Australia, driven by heightened tensions with China and the Covid-19 pandemic.
– Caixabank reached an agreement to acquire Bankia for €4.3 bn ($5.1 bn), a deal that will create Spain’s largest bank, reported Reuters. The move comes as ‘the coronavirus crisis puts more pressure on Europe’s banks to join forces to deal with rising bad debts and record-low interest rates,’ explained the article, noting that other Italian and Spanish banks were exploring tie-ups.
– BlackRock upped its corporate engagement to record levels over the last year, according to Pensions & Investments. In its stewardship annual report, the asset manager said it had undertaken 3,000 engagements with more than 2,000 companies. The firm also voted against a record 5,100 directors, targeting areas such as board independence, director overboarding and diversity.
– The UK’s Financial Reporting Council (FRC) fined Deloitte and two former partners over audits of Autonomy between 2009 and 2011, reported the Wall Street Journal. Hewlett Packard bought Autonomy in 2011 but later claimed it had overpaid due to inflated financial statements. Deloitte said its practices ‘have evolved significantly since this work’. The two partners said they disagree with the FRC’s findings and believe they ‘acted professionally, diligently and in good faith’ at all times.
– Snowflake became the biggest company to ever see its stock price double on the first day of trading, reported Marketwatch, citing data from Dealogic. The cloud-based data storage company saw its shares rise more than 110 percent on Wednesday.
– The London Stock Exchange (LSE) was in ‘exclusive talks’ to sell Borsa Italiana to Euronext, noted City AM. The LSE is currently seeking regulatory approval for its proposed $27 bn acquisition of financial data provider Refinitiv. ‘Brussels is concerned that LSE’s control of both a key financial data provider and one of the world’s biggest exchanges could give it unfair advantages,’ explained the article.