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Clarkston CEO Quoted in Wall Street Journal on M&A and ESG Priorities

Clarkston CEO and Chairman Tom Finegan was quoted recently in an article by the Wall Street Journal discussing the ESG implications of the recently-announced Microsoft-Activision deal. An excerpt of the article can be found below. To read the full article visit the WSJ story here

Microsoft Corp. could have its work cut out getting Activision Blizzard Inc.’s sustainability programs up to its own standards if the $75 billion acquisition goes ahead.

Microsoft has developed environmental, social and governance policies for many years, including numerous environmental and workplace-diversity disclosures and plans to compensate for all its historical greenhouse-gas emissions. Activision lags far behind, disclosing much less ESG information and having far fewer policies in place. If the deal goes through, it could take years for Microsoft to bring Activision into line with its practices, experts said.

Sustainability-focused funds hold more than $53 billion of Microsoft shares as of Jan. 19, according to data provider Morningstar Inc., making it the No. 1 stock for such funds. That compares with nearly $859 million for Activision. ESG ratings providers often disagree about companies’ sustainability credentials, but Refinitiv, Morningstar-owned Sustainalytics, MSCI Inc. and S&P Global Inc. all rank Microsoft higher.

Activision’s ESG problems prompted Microsoft to pursue the acquisition, as accusations of sexual harassment and workplace misconduct weighed on the videogame maker’s share price. Addressing risks stemming from Activision’s workplace culture will be a priority for Microsoft, but the ESG integration challenge won’t end there.

There is a big gap between the companies’ disclosures. Microsoft discloses information in separate reports covering matters such as corporate social responsibility, the environment and diversity and inclusion. Its most recent environment report alone included more than 90 data items, such as greenhouse-gas emissions and water use broken down by region, according to a review by WSJ Pro.

For example, Microsoft reports how much energy it uses from renewable and nonrenewable sources by type and region. North America accounts for Microsoft’s largest use of energy, followed by the Europe, Middle East and Africa region. In North America, Microsoft said it purchased and consumed more than 6.8 million megawatt hours in the 2020 financial year, versus more than 186,000 MWh from non-renewable sources.

Read the full article here