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Jan 20, 2023

The week in investor relations: ESG debate soars, UK oil businesses slapped and China’s regional investors gain confidence

Our pick of the IR stories from around the web you might have missed this week

– Bank of America chief executive Brian Moynihan said current efforts to produce a set of official global standards on ESG issues were vital to ‘align capitalism with what society wants from it’, reported CNBC. Moynihan asked at the World Economic Forum (WEF) in Davos whether stakeholder capitalism needed a reboot through the creation of common standards for corporate disclosures. He said he was converted to the idea after seeing hundreds of companies sign up to the UN’s sustainable development goals in 2017, followed by ongoing debate over what concepts like sustainability actually mean as well as accusations of greenwashing.

– BlackRock CEO Larry Fink said the narrative around ESG investing has become ugly and is creating ‘huge polarization’, according to Bloomberg (paywall). ‘I’m taking this very seriously,’ Fink said at Bloomberg’s The Year Ahead event in Davos. ‘We are trying to address the misconceptions. It’s hard because it’s not business any more, they’re doing it in a personal way. And for the first time in my professional career, attacks are now personal. They’re trying to demonize the issues.’

– The UK is fiscally unstable and this has led the government to indulge in ‘short-termism’ by slapping oil majors with windfall taxes, according to Amjad Bseisu, CEO of EnQuest, in another WEF report from CNBC. The broadcaster reported Bseisu as saying the North Sea petroleum exploration and production company now sees Asia as its biggest growth area, rather than the UK or Europe. In November, the British government raised an existing windfall tax on oil company profits from 25 percent to 35 percent until 2028. This takes the overall levy rate for North Sea producers to 75 percent once the 40 percent corporation tax charge is applied.

– In tech news, crypto lender Nexo Capital agreed to pay $45 mn in penalties to the SEC and the North American Securities Administrators Association (NASAA) for failing to register the offer and sale of its Earn Interest Product (EIP). The news was announced by the SEC and NASAA in two separate statements on January 19, said Cointelegraph in a report. According to the SEC statement, Nexo agreed to pay a $22.5 mn penalty and cease its unregistered offer and sale of the EIP to US investors. The additional $22.5 mn will be paid in fines to settle similar charges by state regulatory authorities, the report said.

– According to Bloomberg, Chia Network has a new CEO who says he’s planning for an eventual public offering, despite the deep freeze in the crypto markets. The blockchain start-up plans to announce that Gene Hoffman was appointed CEO on January 1. Hoffman, who was the company’s chief operating officer, succeeded Bram Cohen in the top post. Cohen was named chairman of the board and chief technology officer.

– In Asia, mainland Chinese investors are backing Beijing’s reopening playbook, even if foreign investors appear unsure, according to the South China Morning Post. It reported Zurich-headquartered Credit Suisse as overweight on Chinese equities and believing this year’s performance for investors should be better ‘relative to last year’, with plenty of pockets of opportunity. ‘The overall message this year is one of cautious optimism,’ said John Woods, Asia-Pacific chief investment officer at the Swiss bank.

China is a staple market for the bank’s Asia-Pacific clients, with pharmaceuticals, tourism and the internet sector among their top picks. High-yield bonds and investment-grade credit are among the bank’s top investment themes for the first half of 2023, Credit Suisse said.

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