Capital Markets and Investor Relations Australia

Welcome to the June edition of Global IR Insights, where our Australian Strategic Communications team shares insights from our global network in the world of capital markets communications and what it could mean for Australia.

Activism increases in the first quarter of 2022

Our colleagues at FTI Consulting in the US released their quarterly Activism Vulnerability Report, showing a slight year-over-year increase in activist campaigns launched in the first quarter of 2022.

Activist shareholders continued to target large-cap companies (>$10 billion in market capitalization) at an increasing rate.

Technology, media and telecoms were the top target for shareholder activism over the period, accounting for nearly a quarter of campaigns. Next come health care and life sciences (and within that, biotech companies). Financial institutions were the third most targeted sector.

Interestingly, despite more campaigns, there has been only a small increase in the number of activists on the board compared to the corresponding periods of the past four years.

Read the full report here.

Shareholder activism continues to rise around the world, and this trend is evident in Australia, particularly with Mike Cannon-Brookes’ recent campaigning campaign in the proposed AGL Energy split, and other disputes between shareholders that take place throughout the AGM season. Businesses need to plan for this to continue in the long term.

The report on the energy sector was recently published as part of FTI Consulting’s semi-annual edition Resilience Barometer® campaign, assessing what some of the world’s largest energy companies are looking at when considering the energy transition.

The report found:

  • Increased pressure to improve ESG and sustainability for energy companies. 45% of survey respondents believe they will face increased pressure to improve ESG and sustainability measures, compared to 36% of companies in other industries.
  • Supply-side pressures are driving industry-wide change. The global urgency to decarbonize, as well as the geopolitical vulnerabilities highlighted by the Russian invasion of Ukraine, are pushing energy companies to engage in the energy transition. 31% of energy companies think ESG will hurt their bottom line, compared to 22% in other sectors.
  • The energy supply chain will become a source of opportunities and risks. 49% of energy companies surveyed plan to conduct reviews of their supply chain and suppliers over the next 12 months in response to anticipated consumer activism.

For IR practitioners, this means communicating at a time of significant change and public interest. Much of this centers around ESG policies and initiatives for stakeholder groups, including investors, capital markets, media, employees and suppliers.

Technology, media and telecoms were the top target for shareholder activism over the period, accounting for nearly a quarter of campaigns. Next come health care and life sciences (and within that, biotech companies). Financial institutions were the third most targeted sector.

Interestingly, despite more campaigns, there has been only a small increase in the number of activists on the board compared to the corresponding periods of the past four years.

Read the full report here.

Shareholder activism continues to rise around the world, and this trend is evident in Australia, particularly with Mike Cannon-Brookes’ recent campaigning campaign in the proposed AGL Energy split, and other disputes between shareholders that take place throughout the AGM season. Businesses need to plan for this to continue in the long term.

The report found:

  • Increased pressure to improve ESG and sustainability for energy companies. 45% of survey respondents believe they will face increased pressure to improve ESG and sustainability measures, compared to 36% of companies in other sectors.
  • Supply-side pressures are driving industry-wide change. The global urgency to decarbonize, as well as the geopolitical vulnerabilities highlighted by the Russian invasion of Ukraine, are pushing energy companies to engage in the energy transition. 31% of energy companies think ESG will hurt their bottom line, compared to 22% in other sectors.
  • The energy supply chain will become a source of opportunities and risks. 49% of energy companies surveyed plan to conduct reviews of their supply chain and suppliers over the next 12 months in response to anticipated consumer activism.

For IR practitioners, this means communicating at a time of significant change and public interest. Much of this centers around ESG policies and initiatives for stakeholder groups, including investors, capital markets, media, employees and suppliers.

Experts with impact

The opinions expressed are those of the authors and not necessarily those of FTI Consulting, its management, its subsidiaries, affiliates or other professionals.

FTI Consulting is an independent global business consulting firm dedicated to helping organizations manage change, mitigate risk and resolve conflict: financial, legal, operational, policy and regulatory, reputational and transactional. FTI Consulting professionals, located in all major business centers around the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities. For more information, visit www.fticonsulting.com

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