More signs of investors starting to bring broader ESG concerns into their voting activity. First up the UK’s Railways Pension Fund has unveiled its new voting policy. This includes a commitment to challenge companies on issues including climate change, fair pay and workforce issues. The last point is particularly interesting as in our experience it’s still rare for UK asset owners to tie their voting activity to the S in ESG. The policy states: ‘We expect boards to be able to communicate the importance of the workforce in the context of the company’s business model and strategy, and how they engage with their employees –Read More →

PIRC recently held an ESG webinar focusing on the issues of industry and ownership concentration, and the questions that this might pose for investors. We are continuing to dig into the topic on behalf of our clients. But in the meantime we thought it useful to flag the issue of monopsony. Much of the emphasis in the literature on concentration relates to monopoly, where a dominant firm, or firms, has market power and can therefore have significant influence over prices. However, firms in concentrated industries might exert as much power as price-takers as price-makers. A single buyer is a monopsony. This is often understood asRead More →

In 2019 the High Court and the BEIS Parliamentary Select Committee debunked the myth that the public expected more of auditors in respect of dealing with fraud and going concern than is required of auditors. Some large auditors for many years have described this as the ’expectations gap’. However, from the High Court case, rather than the public expecting too much, the legal expectations might make people’s hair stand on end. Because of failing to find a management fraud the Court held that the auditor Grant Thornton was accountable for the financial consequences of the company trading unlawfully with defective accounts. The damages included dividendsRead More →

Two-fifths of green claims made in company websites are bogus, according to the Competition and Markets Authority (CMA). A CMA co-ordinated global review of randomly selected websites found that companies are ‘using tactics that could be considered misleading and therefore potentially break consumer law’. These included: • Vague claims and unclear language including terms such as ‘eco’ or ‘sustainable’ or reference to ‘natural products’ without adequate explanation or evidence of the claims. • Own brand eco logos and labels not associated with an accredited organisation. • Hiding or omitting certain information, such as a product’s pollution levels, to appear more eco-friendly. And since it isRead More →

Before outgoing president Donald Trump pardoned the Thanksgiving turkey last November, he took the opportunity to highlight his incredible contribution to US stock market performance. In a 60-second press conference Trump said: ’The stock market Dow Jones Industrial Average just hit 30,000, which is the highest in history. We’ve never broken 30,000, and that’s despite everything that’s taken place with the pandemic,’ he said. ’Never been broken, that number. That’s a sacred number, 30,000,’ he added. And to be fair to a man so noted for his hyperbole and misplaced self-congratulatory behaviour, the US did indeed lead global stock markets to surprisingly positive returns inRead More →

In the week that we hear of yet another Covid-19 outbreak at a food manufacturer, cases reported as workplace infections continue to look surprisingly low. The Health and Safety Executive (HSE) updated its RIDDOR figures this week, which show the number of workplace Covid-19 cases reported. Between the 10 April 2020 and the 9 January 2021, RIDDOR reports totalled 236 cases of Covid-19 in the food manufacturing sector, and one fatality. In comparison, through analysis of media reports, PIRC has identified more than 2,000 confirmed Covid-19 cases identified across the sector. Whilst, as we always stress, cases identified at work are not necessarily contracted atRead More →

Throughout the pandemic PIRC has reported on the biggest winners and losers from Covid-19. Clearly, the travel and leisure sectors have fared badly while online retailers have mopped up, yet within those sectors themselves some companies have streaked ahead swallowing up weaker rivals along the way. The FT reports of a K-shaped recovery on the US markets indicating the gulf between the best financed corporate behemoths and those unable to keep pace with a world driven by a global pandemic has extended further. Covid-19 has served as an accelerator to corporate concentration where an ever-shrinking pool of names dominates more and more sectors. Research fromRead More →

As the Covid-19 pandemic continues, millions of employees across the world have grown used to the discomfort of working from a cramped dining table surrounded by the remnants of breakfast, but at least this was compensated in some way by being out from under the boss’s beady eye. But even that small solace is under threat as Microsoft gives employers the chance to survey their workforce at home. According to the Guardian, the tech giant has come under fire from privacy campaigners for its Microsoft 365 tool, which ostensibly is there to help employers understand how their organisation works, but can also be used toRead More →

The Financial Conduct Authority (FCA) is reportedly watching with interest after the share price of Dignity, one of the UK’s biggest funeral providers, behaved ’unusually’ during the Covid-19 outbreak. It is of course no surprise that Dignity’s share price is rising as the UK’s coronavirus death toll stays in the hundreds each day, yet it is the ups and downs during the Competition and Market Authority (CMA) investigation into funeral services that are catching the financial watchdog’s eye. The Times reports that the FCA is aware of sharp increase in Dignity’s share prices just days before the CMA surprise announcement it was to shelve plansRead More →

As the UK stumbles into a second Covid-19 lockdown, we continue to be concerned about the transmission of the virus in food processing. It’s worth remembering that a common claim has been that cases in the sector have resulted from community transmission. In other words infections are taking place at home, but being identified at work. This might make the situation in Watton in Norfolk a bit of a puzzle. According to a report in the Eastern Daily Press this week, Watton has recorded the highest Covid-19 infection rate anywhere in the country, with 1,515.5 cases per 100,000 people. Across the Breckland area, where WattonRead More →