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CDR survey finds ESG issues driving increase in activism

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Activism has increased during Covid-19, particularly around ESG issues, according to the 13th Annual Investor Relations survey by Citigate Dewe Rogerson (CDR).

Around one-in-five (21 per cent) of respondents report a rise in engagement with activist investors over the past year, with many citing ESG issues as the key driver of the trend. This heightened engagement is reflected in more challenging general meetings during the 2020/21 AGM season, with 27 per cent of companies experiencing an increase in the number of votes against AGM resolutions.

However, despite increased investor focus on social issues driven by the pandemic and greater scrutiny of net zero targets in the run up to the COP26 summit, CDR’s findings show that 72 per cent of boards still do not have social or environmental issues as a standing agenda item at their meetings.

This may be a consequence of many companies remaining light on relevant ESG experience at board level. Fewer than 50 per cent of respondents say that their boards include at least one member with experience of managing ESG issues, and only 8 per cent claim such experience in all board members.

Christen Thomson, CDR’s Head of Hedge Funds, says: “These results indicate that activism is on the rise again, after a decline during the first months of the pandemic. Companies have a clear choice – invest in and focus much more on ESG or face the potential for more activist interventions.”

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