IR Monitor – 19 February 2025

In this week’s newsletter:

• A Rothschild who crusaded for kinder capitalism adjusts to the Trump era: the turn against do-gooder capitalism is a fascinating case study in how investment fads get going, and how they die suggests The Wall Street Journal.
• Raise a Manhattan to the activist investors holding corporate giants accountable.
• Multiple star state: NYSE to launch exchange in Texas, according to The Times. The move will intensify competition among listing venues in the buoyant state.
• Goldman Sachs abandons IPO board diversity pledge for the US and Western Europe.
• A pared-back CSRD might sound good but ESG-minded investors won’t be happy suggests IR Magazine. Rumours have been swirling that the European Commission is expected to ‘heavily water down’ the requirements of its landmark CSRD legislation.
• And finally … playing the no-numbers game. If there were awards for the least information given in a statement to the stock market, it would be competitive.

This week’s news

The great DEI & ESG reversal 

The ESG movement seems to have lost one of its most prominent spokespeople as Lynn Forester de Rothschild announced it has become an “alphabet soup” whilst speaking on a panel at Davos. The Wall Street Journal reports that the former advocate of inclusive capitalism now expresses regret over the push for ESG, suggesting that businesses should focus on treating workers and customers well for practical business reasons, without adhering to the DEI or ESG labels. She instead pointed to Trump as the new hope for the working class by increasing minimum wage and opportunities. This shift coincides with the rise of anti-ESG sentiment, particularly as the business world aligns with Trump 2.0. The falling out of love with ESG is a case study in how investment fads get going, and how they die.  According to Rothschild, “We have to go back to common sense: What are those factors that make businesses better?” The same basic skepticism should extend to the new trend of anti-woke capitalism. 

Shaking up corporate giants

In his Sunday Times piece Oli Shah goes after corporate boards that seem to have fallen asleep at the wheel – a sentiment spurred by Elliott Management’s approach to BP. Activist investors like Elliott Management are stepping in to hold large companies accountable, particularly in the wake of the rise of passive index funds, which have weakened traditional shareholder scrutiny. BP has been slow to adjust its energy transition strategy first laid out by Bernard Looney and the slow strategic adjustments under current CEO Murray Auchincloss have severely damaged the company, making it vulnerable to takeover. Despite their efforts sometimes being perceived as ‘aggressive’, activists like Elliott and Trian are filling the accountability gap left by passive investors and their involvement is beneficial in shaking up complacent corporate giants. 

Multiple star state: NYSE to launch exchange in Texas says The Times

The New York Stock Exchange announced on Wednesday that it will launch an exchange in Texas, increasing competition among listing venues in the buoyant state. The move comes as cheaper rents and the perception of a more favourable legal and regulatory environment has resulted in several large businesses moving their headquarters to Texas.  Consequently, it has become the state with the largest number of NYSE listings, representing over $3.7 trillion in market capitalisation.  

Goldman Sachs abandons IPO board diversity pledge for US and Europe  

In yet another blow to the DEI movement, Goldman Sachs has announced that it’s abandoning its IPO diversity pledge.  In 2020 the bank said it would only work on IPOs for a company if it had at least one diverse board member, moving to the requirement of at least two ‘diverse’ members by 2021. The announcement, which underscores the increasingly harsh environment in the US around diversity programmes, has been attributed to a recent US court decision, that removed a Nasdaq requirement for companies to publicly disclose board-level diversity statistics annually, as reasoning behind their decision.  The bank has emphasised its commitment to internal diversity goals and plans to keep in place its dedicated team to help companies source diverse board candidates. 

EU set to water down ESG rules 

The EC may weaken key ESG reporting rules in its upcoming Omnibus package, potentially scaling back the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). Firms with fewer than 1,000 employees could be exempt, releasing 85% of companies from CSRD obligations. Double materiality reporting may also be replaced with single materiality. Investors managing $6.9 trillion oppose the changes, arguing they undermine sustainability transparency. While some businesses welcome reduced burdens, others warn of disrupted ESG data infrastructure. PwC found 97% of firms were ready for CSRD in 2025. With political pressure against ESG policies growing, companies need clarity ahead of the Omnibus package’s release on 26 February. 

And finally … the no-numbers game

In last week’s Tomorrow’s Business, Simon English spoke to Leisure Industries Correspondent from The Times, Jess Newman about the intersections of journalism and PR. Key takeaway? Time to bring numbers back to press releases.  Newman highlighted that business stories need at least one number, and the best are sales numbers or pre-tax profits. English also pointed out that this recent trend seems to have spread from press release pitches to RNS releases, citing facilities management group REACT making much of their recent contract win while failing completely to share with whom it was or for how much.