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Mar 01, 2019

The week in IR: Etsy to offset emissions from shipping, and assets invested in ETFs and ESG products rise 30 percent

This week’s investor relations-related stories from around the web

Etsy has pledged to offset its carbon emissions from US e-commerce deliveries by green investments, reported Bloomberg. Etsy will begin buying carbon offsets to manage the environmental impact of sellers and buyers shipping items sold on its website, becoming what may be the first US e-commerce firm to take that step. Carbon offsets allow a company that emits greenhouse gases to buy credits from a green project that reduces carbon dioxide in the atmosphere.

Assets invested in exchange-traded funds (ETFs) and products around ESG increased 30 percent last year, despite a poor year for equities, to $22 bn across 208 funds, reported Pensions & Investments. During January this year, the cohort added another $3 bn in assets while adding three new funds.

Positive data from the US and China has strengthened Asian stocks, according to FXStreet. Adding to the upbeat concern are optimism surrounding the US-China trade deal and MSCI’s announcement that it will give a higher proportion to mainland shares.

According to the Wall Street Journal, Rio Tinto pledged record returns to shareholders as the mining industry’s cash bonanza continues, despite executives raising concerns over the global outlook. The WSJ reported that Rio Tinto, the world’s second-biggest mining company by market value, said annual capital returns would total $13.5 bn for 2018, including a final dividend valued at $3.1 bn and a special dividend amounting to $4 bn.

One of the biggest shareholders in Barrick Gold and Newmont Mining has thrown its support behind the merger of the two long-term rivals but only if they can come to an amicable agreement, according to the Financial Times. Flossbach von Storch, the biggest active shareholder in both gold miners, with holdings worth more than $1 bn, said the idea of combining the best gold mining assets in the world was attractive if they could be integrated seamlessly.

Reuters said an agreement on tighter rules for asset managers and investment firms offering ‘bank-like’ services, such as proprietary trading and underwriting of financial instruments had been reached by European Union governments and lawmakers. The agreement will give the European Commission more power in overseeing foreign financial firms operating in the EU and more clout over London-based financial firms after the UK leaves the EU.

Initial public offerings for special-purpose companies that raise cash for acquisition received more than $10 bn in new listings last year, according to the WSJ. It noted that these firms – which don’t have assets or any operating histories and are largely bets on their executives – were enjoying their highest popularity in more than a decade.

Vanguard Group is cutting management fees on 10 ETFs, according to the WSJ. It noted that Vanguard was the latest money manager to trim fees on a host of investment products. The ETFs, with combined assets of almost $175 bn, include funds that invest in international stocks and bonds. The biggest of these is the $62 bn Vanguard FTSE Emerging Markets ETF, which will now cost $12 a year for every $10,000 invested.

According to Reuters, the European Central Bank (ECB) is ‘determined’ to push forward an instant payment system in a direct challenge to US firms like PayPal, Google, Facebook and Amazon and China’s Alibaba and Tencent, which currently dominate such services in Europe. ECB board member Yves Mersch said: ‘We will do it either through our collaborative, co-operative efforts together with the industry or we will do it through our regulatory capacity.’

A US appeals court ruled that the $85 bn purchase of Time Warner by AT&T does not violate federal antitrust rules, declining to force the deal – which closed last summer – to be undone, reported The Street. It said AT&T countered attempts to undo the deal because it never competed with Time Warner: their merger represented ‘vertical’ integration rather than the creation of a monopoly.

Almost £4 bn ($5.3 bn) of UK investors’ money languishes in so-called ‘orphan funds’ – sub-scale funds with persistently low inflows and often high charges, the FT reported, citing figures from data company Morningstar. Many of the funds offer poor value and should be removed, according to the report. Late last year, UK investors had £3.6 bn invested in nearly 200 separate funds that have decreased in size, it noted.

Warren Buffett is not giving up on Kraft Heinz Co after its $15.4 bn write-down last week, but he will not be buying more of its shares, according to Bloomberg. In an interview, Buffett admitted that Berkshire Hathaway overpaid for Kraft and said that while he thinks Kraft Heinz is a ‘wonderful business’, he sees better places to spend more money than buying the portion of the company he doesn’t already own.

The WSJ reported that the US Department of Labor is investigating Fidelity Investments over an obscure and confidential fee it imposes on some mutual funds. The publication stated that the annual charge, which Fidelity calls an infrastructure fee, is aimed at companies selling shares on the asset manager’s fund platform, and was described in a 2017 internal Fidelity document.