Companies are increasingly correcting accounting problems by quietly updating past numbers, rather than alerting investors and reissuing financial statements. A study finds that almost half of these “quiet” revisions to SEC filings from August 2004 through 2015 met at least one of the guidelines for them to be considered “Big R” restatements that require alerts
Why Enel’s SDG-linked issuance is a potential game-changer in the world of sustainable credit. Sustainability KPI linked to interest margin step-up Expands investor base for ESG-linked products Unconstrained use of proceeds broadens the issuer base
Moody’s lowered ExxonMobil’s credit outlook to negative from stable – in part due to the “emerging threat” to fossil fuel companies from climate change regulation and tax, with the oil major also exposed to “rising” litigation risk linked to climate change and related disclosures.
An interesting and timely reminder of the long-term impact of company culture on performance. The Atlantic tracks the genesis of Boeing’s current troubles to the early 2000s when the financially-driven management culture of acquired McDonnell Douglas started replacing the engineering-driven culture of legacy Boeing.
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
A deep dive on the private companies that are working on commercializing fusion.
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.
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.
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 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.
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.
“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
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.
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.
Consumers are increasingly focusing on sustainability when making purchasing decisions, according to research by the Center for Sustainable Business at NYU Stern. Their analysis shows that 50% of the growth in sales of consumer packaged goods in the last five years came from purchases of products marketed as ‘sustainable’.
As consumers move away from single-use plastics, Coke and Pepsi are starting to embrace a ‘bring your own bottle’ business model, particularly on college campuses.
A recent study by CDP, formerly known as the Carbon Disclosure Project, reveals that some of the largest companies in the world expect climate change to pose a trillion dollar financial burden to their businesses. And, many of those effects are expected to be felt within the next five years.
The impact of ESG ratings on companies’ cost of capital is on the rise. According to Bloomberg New Energy Finance, $32 Billion in loans are now tied to ESG ratings. That’s up from $3 Billion just two years ago. However, the data is still controversial and inconsistent, as the ratings don’t necessarily reflect actual performance
A 2017 study reported that companies with the highest ESG ratings outperformed the lowest-rated firms by as much as 40%. In 2018, Bank of America Merrill Lynch observed that “firms with a better ESG record than their peers produced higher three-year returns, were more likely to become high-quality stocks, were less likely to have large
Berkeley, California is requiring coffee shops to charge a 25-cent fee per disposable cup to encourage people to produce less plastic waste.