Capital Markets & Investor Relations Australia


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

Activism ticks up in Q1 2022

Our FTI Consulting colleagues in the US delivered their quarterly Activism Vulnerability Report, showing a small year-on-year lift in activist campaigns launched during the first quarter of 2022.

Shareholder located have continued to target large-cap companies (>$10 billion market-cap) at an increasing rate.

Technology, Media and Telecom was the largest target in terms of shareholder activism in the period, representing nearly a quarter of the campaigns. This was followed by Healthcare and Life Sciences (and within that, Biotech companies). Financial Institutions represented the third most targeted sector.

Interestingly, despite more campaigns, there was only a small gain in taking Board seats compared to corresponding periods in the last four years.

Read the full report here.

Shareholder activism continues to increase around the world, and that trend is evident in Australia, particularly with the recent campaign activist of Mike Cannon-Brookes in the proposed demerger of AGL Energy, and other shareholder disputes playing out through the AGM season. Companies should anticipate it will continue for the long term.

The Energy Sector Report was recently released as part of FTI Consulting’s biannual Resilience Barometer® campaign, assessing what some of the world’s largest energy firms are considering when looking at 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 metrics, compared to 36% of companies from other sectors.
  • Supply-side pressures are driving sector-wide changes. The global urgency to de-carbonise, as well as the geopolitical vulnerabilities highlighted by Russia’s invasion of Ukraine, are driving energy companies to engage in the energy transition. 31% of energy companies believe ESG will harm their bottom line, compared to 22% in other sectors.
  • The energy supply chain will become a source of opportunity and risk. 49% of energy companies surveyed plan to conduct reviews of their supply chain and suppliers in the next 12 months in response to anticipated consumer activism.

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

Technology, Media and Telecom was the largest target in terms of shareholder activism in the period, representing nearly a quarter of the campaigns. This was followed by Healthcare and Life Sciences (and within that, Biotech companies). Financial Institutions represented the third most targeted sector.

Interestingly, despite more campaigns, there was only a small gain in taking Board seats compared to corresponding periods in the last four years.

Read the full report here.

Shareholder activism continues to increase around the world, and that trend is evident in Australia, particularly with the recent campaign activist of Mike Cannon-Brookes in the proposed demerger of AGL Energy, and other shareholder disputes playing out through the AGM season. Companies should anticipate it will continue for 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 metrics, compared to 36% of companies from other sectors.
  • Supply-side pressures are driving sector-wide changes. The global urgency to de-carbonise, as well as the geopolitical vulnerabilities highlighted by Russia’s invasion of Ukraine, are driving energy companies to engage in the energy transition. 31% of energy companies believe ESG will harm their bottom line, compared to 22% in other sectors.
  • The energy supply chain will become a source of opportunity and risk. 49% of energy companies surveyed plan to conduct reviews of their supply chain and suppliers in the next 12 months in response to anticipated consumer activism.

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

Experts with Impact

The views expressed are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.

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

.

Leave a Comment