Ratings provider Apex Group has said that ESG concerns hit Deliveroo’s valuation following its IPO last week.
Will Chignell, Chief Commercial Officer, Apex ESG Ratings & Advisory has said “ESG concerns played a major part in the disappointing stock market debut of Deliveroo: whilst the ‘E’ (environment) and ‘G’ (governance) credentials of a newly listed business get most of the airtime, the issue here is the ‘S’ (social).
Deliveroo’s current employment practices expose it to significant regulatory and legislative risk. Ultimately, actions by regulators could adversely impact any plans to reach sustainable profitability. Employment rights, living wages and demonstrating a duty-of-care to key stakeholders are indispensable ESG metrics. Whether a company is public or private, these metrics are intrinsically linked to a business’ risk, profitability and valuation.
With regulators, investors and wider society scrutinizing companies and their ESG practices in increasing detail, these links to financial performance will only become clearer and better defined for all to see. It is essential that we see rigorous, independent, data driven ESG assessments and benchmarking implemented by a business’ management team, board, private equity owners or advisors and book-runners pre-IPO.”