The Power of Parity
McKinsey analyzes how advancing women’s equality can add $12 trillion to global growth. MGI Power of parity_Full report_September 2015
Author: Michael Ellis
Posts by Michael Ellis
Enel Launches the First SDG-Linked Bond
A subsidiary of Enel, the Italian energy company, issued a $1.5 billion bond where the interest payment steps up 25bps if the company fails to meet specific sustainability performance metrics. This bond marks the first issue of its kind, where a sustainability KPI causes a rate to step up, rather than down. And, the issue
Rise of the SHEconomy
Morgan Stanley draws the link between diversity and stock performance.
Making an Impact: Earning Returns on Sustainable Terms
This piece outlines the link between ESG performance and portfolio performance.
Shareholder Engagement on Environmental, Social, and Governance Performance
The authors study the financial impact of investor activism promoting ESG improvements. Click here to access the study.
Is “Being Green” Rewarded in the Market?: An Empirical Investigation of Decarbonization and Stock Returns
An empirical investigation of the risk-return relationship between corporate environmental performance and financial performance, with a focus on companies’ carbon footprint.
Corporate Sustainability: A Strategy?
The performance implications of adopting strategic sustainability practices for both return on capital and expectations of future performance, as reflected in price to book valuation multiples.
The Relationship between Investor Materiality and the Sustainable Development Goals: A Methodological Framework
How performance on financially material ESG issues, as identified by the Sustainability Accounting Standards Board (SASB) can contribute to the United Nations’ Sustainable Development Goals.
The Impact of Corporate Sustainability on Organizational Processes and Performance
An investigation of how a corporate culture of sustainability affects multiple facets of corporate behavior and performance outcomes.
Decarbonization Factors
An exploration of the relative performance of portfolio decarbonization strategies, and how performance is affected by institutional investor fund flows.
Integrating Alternative Data (Also Known as ESG Data) in Investment Decision Making
The authors suggest more effective ways to integrate ESG data, however imperfect, into investment decision-making processes.
Clean Energy the World Needs: Startups Take Aim at Nuclear Fusion
A deep dive on the private companies that are working on commercializing fusion.
Progress Report: Accelerating Action for a Low-Carbon World
The Investor Agenda 2019 Annual Progress Report showcases investor action and progress made on climate change. To date, nearly 1,200 investors have taken action in one or more of the focus areas of The Investor Agenda since its launch in September 2018.
Decarbonization Factors
Abstract
In the face of accelerating climate change, investors are making capital allocations seeking to decarbonize portfolios by reducing the carbon emissions of their holdings. To understand the performance of portfolio decarbonization strategies and investor behavior towards decarbonization we construct decarbonization factors that go long low carbon intensity sectors, industries, or firms and short high carbon intensity. We consider several portfolio formation strategies and find strategies that lowered carbon emissions more aggressively performed better. Decarbonization factor returns are associated with contemporaneous institutional flows into the factors. Buying decarbonization factors when coincident flows are positive while selling when they are negative produces significantly positive alphas. Combining decarbonization factors that have positive contemporaneous flows would provide investors with significantly superior returns and continuous exposure to low carbon portfolios. The results are more pronounced in Europe relative to the US. Our results suggest that institutional investor flows contain information about anticipated fundamentals related to climate change developments.
Examining the Macroeconomic Impacts of a Changing Climate
Written Testimony of Alicia Seiger, Managing Director, Stanford Sustainable Finance Initiative. Prepared for the U.S. House of Representatives, Committee on Financial Services, Subcommittee on National Security, International Development and Monetary Policy.
Peabody Scraps $800 Million Bond Amid Investor Pushback on Coal
Peabody Energy Corp. scrapped an $800 million junk-bond sale meant to refinance existing debt and pave the way for a joint venture as investors increasingly wary of the prospects for coal producers demanded double the average yield of similar BB rated peers.
Inside North Carolina’s Big Effort to Transform Health Care
Case study from North Carolina how value-based care is being implemented at the individual provider level, and some of the issues to be worked through.
Transformative Capital: How Mission-Related Investing Can Deepen Foundations’ Impact
“I no longer find it defensible to say that our investment strategy is only to maximize the value of our endowment—just as it’s no longer defensible for a corporation to say its only responsibility is to maximize shareholder value.”
—Darren Walker, Ford Foundation President
Founder’s Grip on WeWork May Be Hard for Investors to Stomach
Investors in the upcoming initial public offering of The We Company are being asked to lower their standards for corporate governance beyond what other technology startups have demanded, say securities law experts.
The Last Straw: Will Plastic Become the Next Stranded Asset?
MSCI analyzes what tighter anti-plastics regulation and negative consumer sentiment could mean for the oil and gas companies producing petrochemicals – the main inputs for plastics. The financial impact could be significant.