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Mar 17, 2023

The week in investor relations: US ESG debate heats up, Hong Kong calls for more ESG talent and SEC reacts to SVB crash

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

– Ron DeSantis joined with 18 other red states to fight against corporate virtue-signaling and ‘woke-ness’, which has come to be known as ESG, according to the Daily Mail. Denounced by DeSantis and other right-leaning politicians, the acronym ESG is a favorite Republican buzz word to rail against companies and organizations for using their power in the business and financial world to push an agenda – usually a progressive one. Nineteen governors signed a joint statement declaring: ‘Yet again, President [Joe] Biden put his political agenda above the well-being and individual freedoms of hard-working Americans.’

– Meanwhile, the South China Morning Post reported that Hong Kong needs to attract and train more ESG talent to reinforce its leadership role in shaping sustainability standards and taxonomies acceptable to both Asian and western investors and issuers. As Asia’s leading international financial center, Hong Kong serves as a conduit between investors and issuers in the East as well as the West, said Joseph Chan Ho-lim, acting Secretary for Financial Services and the Treasury, at a forum entitled EU and Hong Kong: The Green Way Forward, organized by the European Chamber of Commerce in Hong Kong and the European Union Office to Hong Kong and Macau. But a shortage of sustainability professionals was a major challenge that needed to be overcome to develop sustainable finance in the city, he added.

– SEC chair Gary Gensler called for a strengthening of ‘the guardrails of finance’ in the wake of the collapse of Silicon Valley Bank (SVB), as he pushed to implement a swath of new rules in the face of industry pushback. According to the Financial Times (paywall) Gensler said earlier this week that the SVB’s dramatic implosion was ‘a reminder of the importance of these resilience projects for everyday Americans’.

‘Unfortunately, history tells us that events like those of this past week will occur from time to time,’ he added ahead of an SEC vote on new proposals including cyber-security risk management. ‘Thus, we should do our best to make them less frequent, strengthen the guardrails of finance for when they do occur, and protect the American public.’

– In crypto news, Bloomberg (paywall) reported that a group of investors set out to raise $100 mn for a Bitcoin-focused fund even as implosions and scandals rock the crypto world. Dubbed the Bitcoin Opportunity Fund, the investment vehicle caters to high-net-worth investors looking to diversify into the world’s largest cryptocurrency. Led by six investors, including managing partners James Lavish and David Foley, the fund will target both public and private Bitcoin-adjacent companies. The team told Bloomberg it is putting ‘a significant portion of [managers’] own net worth’ toward the fund.

– Meanwhile, Binance faces being further pushed out of the financial system after the cryptocurrency exchange revealed it was being forced to stop deposits and withdrawals in sterling, noted The Times (paywall) in a report. The business, which has faced mounting regulatory scrutiny, said these services had halted for new customers on Monday and would be suspended for all of its clients on May 22 after a decision by Paysafe, the payments group, to pull back from its partnership with Binance.

–  According to Reuters (paywall), China’s commerce ministry said it will continue to push for the relaxation of market access for foreign investors, renewing efforts to lure foreign capital as the world’s second-largest economy emerges from three years of Covid-19 disruptions. As China reopens after dropping its zero-tolerance policy for Covid-19 in December, convincing foreign investors to return to China will help reinvigorate an economy that in 2022 grew at its slowest rates in half a century. China will ‘help foreign companies seize the opportunity to deepen their presence in China,’ Shu Jueting, a Ministry of Commerce spokesperson, told reporters.

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