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ESG: a new driver for activist campaigns

The Old Continent is not spared by activist campaigns, quite the contrary. According to Alvarez & Marsal’s latest report on activism in Europe, 155 companies could be the subject of a campaign in the next 18 months, including 23 French companies. France thus ranks third in terms of the number of potential targets, behind the United Kingdom and Germany. The January/February period alone also shows a 30% increase in the number of activist operations in Europe compared to the same period in 2021. “ This growth is explained by the collision between long-term transformation needs, linked in particular to environmental transition, and economic difficulties such as supply issues, inflation or the cost of energy. underlines Guillaume Martinez, partner of Alvarez & Marsal.

Industry and consumer goods unsurprisingly concentrate the majority of campaigns, with respectively 34% and 22% of the expected actions. The energy sector is also targeted. Although its place remains very marginal in terms of the number of operations, it is the subject of increasing attention with 8 potential targets identified, compared to 5 in November 2021. In question? ” Growing pressure to move towards more sustainable alternatives to hydrocarbons » coupled with « energy security concerns “which, they, can encourage” to support the production of fossil resources notes the report. Two sometimes contradictory objectives that can be the subject of competing campaigns.

A 20% increase in ESG-related campaigns

The subject of the energy transition more broadly illustrates the incursion of ESG issues into activist strategies. Recently, the British fund Bluebell, for example, opposed Solvay because of polluting discharges dumped into the sea by an Italian factory of the group. One example among many that testifies to the increase in campaigns motivated by concerns related to ESG: + 20% in the first two months of the year compared to 2021, according to the study. ” IToday there are two types of campaign. A first category, classic, linked to the improvement of the operational and financial performance of the company, and a second which encourages groups to increase their ESG actions, summarizes Guillaume Martinez. Companies must communicate on these different priorities, and explain how they articulate financial and extra-financial, short term and long term. »

These campaigns are also valued differently by the stock market. The consulting firm has indeed analyzed the evolution of company prices after an activist campaign, comparing it to the evolution of the benchmark index. Result: the activist offensives turn out to be, on the whole, not very profitable. The price of the targeted companies has in fact not exceeded that of the market during the last three years. However, this observation must be qualified. Campaigns aimed at operational transformation of the company lead to higher performance: +14.8% compared to the market after three years. The other campaigns, related to ESG topics, show lower performance. ” That doesn’t mean they’re bad strategies, warns Guillaume Martinez, but their effects are only visible in the long term. The development of these extra-financial actions testifies to the desire of financial investors to establish their strategy over the long term. »

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