Investor revolt looms at boohoo AGM over ESG concerns

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boohoo Group PLC (LON:BOO) is facing a potential bust-up with some of its investors when the fast fashion giant holds its AGM later today.

The main point of concern among shareholders appears to be progress made in the company’s ESG agenda and whether top executives are doing enough to draw a line under a supply chain scandal that emerged last summer.

READ: boohoo still an attractive stock, says Barclays

The firm, which is the second-largest on the AIM market with a market cap of around £4bn, appointed former high court judge Sir Brian Leveson to review its supply chains, which in turn has revealed a clear lack of oversight, dismal monitoring and poor governance at the company.

Glass Lewis, which advises institutional investors, has pushed for a vote against the reappointment of executive director and co-founder Carol Kane, despite recent improvements made to the business, and have also raised concerns about company chair and co-founder Mahmud Kamani even though he won’t face re-election this year.

“Given the proportion of shares held by Carol Kane and the Kamani family, Ms Kane is likely to still be re-appointed. However a revolt would demonstrate again the growing demand for responsible investing,” said Susannah Streeter at Hargreaves Lansdown.

“There is growing awareness among investors that investing with ethical concerns in mind is good risk management. Businesses are increasingly facing pressure to force them to think longer term, and be mindful not just of environmental issues but also the way they treat their employees and the way they make money.”

‘’boohoo is discovering ESG isn’t a label that can be sewn into the company’s fabric fast enough to satisfy investors’ concerns”, Streeter added.

Ahead of its AGM, which is due to begin at 2pm, boohoo’s shares were up 0.2% at 332.3p in late-morning trading.

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