Investor Relations Week: Climate data audit, Ben & Jerry’s sues Unilever and no news is bad news on racial pay equity
– According The Wall Street Journal (paywall), companies that verify corporate climate data are at odds over who is qualified to do the work, a key feature of the SEC’s proposed requirements for new disclosures on the subject. The SEC has proposed that companies seek independent certification of certain new information, including estimates of greenhouse gas emissions from their operations and the energy they use. The insurance requirement would apply to companies with at least $250 million in publicly traded stock.
Under US securities laws, only certified public accountants can audit the financial statements of public companies. But under the SEC’s proposal, the attestation report could be prepared not only by external auditors, but also by other service providers, such as engineering, consulting or certification companies. The Big Four accounting firms are pushing for tighter criteria on who can do the job, according to comment letters sent to the SEC. Meanwhile, some non-accounting firms say technical expertise is important, and other observers say the market is big enough for both types of firms.
– CNN reported that Ben & Jerry’s is suing its parent company in an attempt to reverse the sale of its Israel business to a local partner that would continue to distribute its products in the West Bank. The ice cream maker has filed a lawsuit in the US District Court in New York seeking an injunction against Unilever “to protect the brand and social integrity that Ben & Jerry’s has taken decades to build.”
Ben & Jerry’s announced in July 2021 that it would stop selling in the West Bank. This caused a dispute with its distributor in Israel. Unilever tried to address the issue by announcing recently that it had sold the Israeli business of Ben & Jerry’s to the distributor. The decision to sell took Ben & Jerry’s board of directors by surprise, according to its court filing. In his complaint, he noted that his brand values are legally overseen by an independent board under a 2000 agreement with Unilever.
In a statement before the lawsuit was filed, Unilever acknowledged that “Ben & Jerry’s and its independent board have been granted the right to make decisions about its social mission.” But he maintained that the parent company “reserved primary responsibility for financial and operational decisions, and therefore had the right to enter into this agreement”. In a statement after the complaint was filed, a Unilever spokesperson reiterated that it “has the right to enter into this agreement”.
“The deal is already done,” the spokesperson said, adding he would not comment on ongoing litigation.
– CNBC said that according to a new analysis by the non-profit organization JUST Capital, only companies with perfect or near-perfect racial pay equity scores share the results. In total, less than half (43%) of America’s 100 largest employers say they conduct pay equity analyzes with a focus on race and ethnicity, JUST Capital found. Even fewer companies are sharing the results: Only 22% of America’s 100 largest companies are disclosing non-white-to-white adjusted pay ratios.
“Companies that don’t disclose this information potentially simply don’t feel like they’ve reached the point where they can tell a good story, and therefore see too much risk in disclosing this data,” said Ashley Marchand Orme. , director of the company. equity at JUST Capital.
Of the 22 companies that disclosed their pay ratios in 2022, JUST Capital found high levels of pay equity, with 13 companies reporting a 1:1 ratio where employees of color receive equal pay to their white colleagues. But JUST Capital stresses that for progress on racial pay equity to be made, companies that are already at parity must not choose to share.
– In an interview with the FinancialTimes (paywall), the European securities regulator has warned that it will “struggle” if it is forced to manage live databases of business information at the heart of a plan to rejuvenate Europe’s capital markets. the region. Verena Ross, chair of the European Securities and Markets Authority, told the newspaper that she had warned policymakers against using the Paris-based organization because it lacks the money and skills to handle this ambitious project. Brussels wants to create a set of real-time databases, known as consolidated tapes, that aggregate basic trading information about stocks and bonds from competing sites in the bloc. It is part of a broader package of reforms, known as Mifir, which could be approved by lawmakers next year.
– The FT also reported that the chief executive of GlaxoSmithKline said a shareholder vote in favor of splitting off its consumer healthcare business justified the British drugmaker’s decision to turn down a £50bn takeover offer. pounds ($59.7 billion) from Unilever for its joint venture with Pfizer. In a ballot at the company’s annual general meeting, 99.8% of investors who voted backed two resolutions needed to allow Haleon to be spun off, paving the way for the biggest London listing in a decade . The spin-off will take place on July 18, with GSK investors receiving one share of Haleon for every share they hold in the parent company.
– According Reuters, GameStop Corp’s board of directors has approved a four-for-one stock split that will make it more affordable for investors to own shares of the video game retailer at the center of the year’s meme stock trading frenzy last. Several major US companies have opted for stock splits over the past two years, including Apple, Tesla and Amazon.
– Swiss bank UBS has reportedly decided to sublet two floors of its iconic London headquarters after its flexible work-from-home policy left it with too much office space, the FT reported, citing people familiar with the bank’s plans. Last summer, UBS rolled out a global flexible working policy that allowed up to two-thirds of its 73,000 employees worldwide to permanently combine working from home and working in the office. The policy has been championed by Chief Executive Ralph Hamers as a way to gain a recruiting advantage over Wall Street rivals, who have taken a tougher approach upon returning to office.
– The WSJ reported that, according to compliance experts, companies must take a multi-pronged approach to comply with a tough new US law aimed at reducing forced labor in China, taking steps such as sourcing other countries and visiting Chinese suppliers for spot checks. The Uyghur Forced Labor Prevention Act, which went into effect last month, gives US Customs and Border Protection the power to block the import of goods linked to Xinjiang, the minority group’s home region. Uyghur from China, as these goods are alleged to be made with forced labor. Businesses can in theory rebut this presumption, but face a heavy burden to do so.
Compliance experts and companies, especially those dealing with cotton, tomatoes and polysilicon solar panel ingredients – exports from Xinjiang are explicitly flagged as enforcement targets in the law – are trying to figure out how the law will be applied in practice. “A lot of companies are down to earth right now,” said Brandon Daniels, CEO of Exiger, a risk and compliance software company. “I don’t think they are properly and properly prepared.”
– “Hong Kong equity markets are recovering,” noted the WSJ, after what it describes as “a harrowing first half” that saw a 91% plunge in the IPO market for what has long been one of the world’s largest stock issuance venues. A resumption of initial public offerings and other stock sales would be good news for the many companies keen to tap investors in the city for funding, he said. It would also be a boost for global investment banks, after a difficult period in which they brought fewer companies to market, often through much smaller deals than in good years.