Social Factor round-up
A few bits and pieces that caught my eye
Tesla is deep into a labour dispute in Sweden. On one level this should not be a surprise, as Elon Musk has always had a problematic orientation towards unions within the company. However, it’s one thing to oppose unionisation in the US, where it’s much harder for workers to organise and much easier for a determined employer to grind them down even if they win an election (see Starbucks for details). It’s something else to try an anti-union approach in a Scandinavian country where a) unions still have strength and b) secondary action is permissible. It reminds me a bit of Ryanair when it was still a non-union company.
Tesla is always the go-to example of why ESG ratings are of limited value, something I think is a little unfair. Obviously the mission of the company is a fundamental part of decarbonising the economy, but social and governance concerns are both well-known and nothing new. However, ESG ratings do pick this up. The reality is - as with Amazon - if you’ve got this stock in an ESG portfolio / product it’s a signal that the S has a low weighting. Caveat emptor.
CCLA has released a fascinating benchmarking report on modern slavery in the FTSE100. This is from the official announcement this morning:
It was notable that all of those companies appearing in tier one and half those appearing in tier two were consumer discretionary and consumer staples. These sectors are at greatest risk of modern slavery and are more answerable to consumers. Performance tiers three and four were dominated by financials, industrials and materials.
Some *interesting* names in the lower tiers. Well worth a read
A little FT Alphaville piece on NMC Health. I’m quite staggered by how the discussion of UK corporate governance and listing rules has managed to memory hole the NMC / Finablr scandal. NMC was a FTSE100 constituent and Finablr was on the FTSE250 and they shared common board members. Both ended up in series trouble and the latter never even made it to its first AGM.
There were a lot of governance red flags at NMC, yet the company routinely got the thumbs up from major investors. I know the scandal properly blew up right at the start of lockdown, but I really thought this would become a reality check for those complacent about corporate governance standards at UK-listed companies. How wrong I was, and now the pressure is very much in a deregulatory direction.