The week in investor relations: Climate goals, recession debates and governance standards
– Investors have warned companies to stick to their emissions targets despite the pressure on businesses stemming from the Covid-19 outbreak, reported the Financial Times (paywall). The newspaper spoke to eight major investment firms that said, while companies may have more ‘leeway’ on climate-change goals this year, reducing carbon emissions should remain a priority. Many companies have set targets to reduce carbon emissions to net zero by 2050.
– CEOs are ‘preparing for a drawn-out U-shaped recession,’ according to an article by Reuters. A survey by YPO, a business leadership network, finds that roughly 60 percent of business leaders expect a U-shaped recovery. By contrast, 22 percent predict a double-dip recession. Around one in 10 say the crisis poses a threat to their business survival. The survey polled 3,534 CEOs around the world between April 15 and April 19.
– Legal & General Investment Management, the biggest asset manager in the UK, has called on companies to maintain high governance standards during the coronavirus outbreak, reported the Guardian. ‘I worry the industry could fall short at this juncture,’ said Sacha Sadan, director of investment stewardship at LGIM, as the firm launched its annual stewardship report. ‘Sustainability, good governance and fair treatment of employees will be the building blocks of a better future.’
– One of the key Europe-based activist investors at Elliott Management has left the firm, noted the FT (paywall). Franck Tuil had worked at US hedge fund Elliott since 2001 and was responsible for activist campaigns in countries such as France and Germany. The news comes in the same week Elliot was fined by the French regulator for obstructing an investigation into a takeover and not properly disclosing certain positions.
– Morningstar has announced the acquisition of the remaining 60 percent of ESG research and ratings firm Sustainanalytics, reported Investment & Pensions Europe. Morningstar already owns 40 percent of the Netherlands-based firm, which offers ‘data on 40,000 companies worldwide and ratings on 20,000 companies,’ according to the article. Morningstar said the move would help it to further integrate ESG data across its products.
– Direxion, the ETF provider, plans to launch a new fund that would focus on companies benefitting from the need to work from home amid the Covid-19 outbreak, according to CNN Business. The ETF would include companies such as Zoom Video Communications, Fortinet and Box, while the ticker symbol would be WFH.