On Our Minds

Inherent’s CEO Tony Davis on HBS Climate Conference Panel

In a Harvard Business School (HBS) panel discussion March 4, 2020 titled Uncovering and Pricing Climate Risk in Long-Term Investments moderated by George Serafeim of HBS, Wendy Cromwell of Wellington, Tony Davis of Inherent Group, Audrey Choi of Morgan Stanley, … Read More

Hedge Funds Push Deeper Into ESG as More Products Come Online

Inherent Group is featured in this article on alternative strategies and ESG integration: For Tony Davis, the route to ESG investing came after a successful run as the co-founder of Anchorage Capital Group… Davis describes [Inherent Group] as an … Read More

Inherent Innovation: Financing Education via Pursuit Bonds

Inherent Foundation helped create and invested in an innovative financing structure called Pursuit Bonds, which are helping provide workforce training to those with great potential and great need via the Pursuit organization. ‘So far, the graduate placement rate exceeds … Read More

The Third Dimension

Over the coming year, global capital markets may face a trio of torpedoes in the water: slowing growth, rising interest rates, and net aggregate withdrawal of liquidity by the world’s major central banks. Value-oriented managers are looking forward to … Read More

SDG Investor Seminar

On December 3, 2018, Tony spoke at the Morgan Stanley SDG Investor Seminar. (The SDGs are the UN’s Sustainable Development Goals.) Tony discussed how Inherent integrates the SDGs into our investment process, primarily using them as a way to … Read More

Despite Headlines, US Climate Policy Advances

Mid-term election results showed that decarbonization remains a second-tier issue for most voters. Initiative 1631, a carbon tax in Washington State was defeated, the second time the Washington electorate voted no on a carbon tax. In addition, Carlos Curbelo, … Read More

Inherent Group Joins Open Letter to New GE CEO

Inherent Group joined a group of investors in signing an open letter, released today, to Mr. Lawrence Culp, the new CEO of General Electric. The letter urges GE to invest more in the development and deployment of clean power … Read More

ESG Can Improve Corporate and Investment Performance

There’s long been a debate about the role of business in society, which I’ll address in a later post. For now, let’s stick with related question of whether it pays for an investor to focus on ESG. There’s a … Read More

Death by Survey

Over the past year we have spoken with dozens of companies about ESG performance and disclosure. Sustainability teams are thinly staffed and overwhelmed by the sheer volume of surveys, requests for information, and the alphabet soup of reporting frameworks … Read More

February 2020

Generate Capital raises >$1B for sustainable infrastructure

Inherent Group's portfolio company Generate Capital announced on February 4 that it has secured over $1 billion in funding. Participating investors included AustralianSuper, QIC, Railways Pension, and AP2 of Sweden. The funds will accelerate the company's deployment of sustainable infrastructure in asset classes including battery storage, solar, energy efficiency, and electric vehicles.

Vital Farms’ industry-first traceability effortFast Company

Inherent Group's portfolio company Vital Farms, in a pioneering initiative in food traceability, enables consumers to see (pre-recorded) 360-degree video of the pastures where the eggs from a given carton are laid. The effort comes amidst increasing consumer interest in understanding where their food comes from, which is particularly relevant in a vertical where claims like "free-range" are frequently misleading.

January 2020

Ceres: BlackRock CEO letter on sustainable investing is a game changerCeres

"BlackRock’s renewed promise to actively engage, and when necessary, vote against companies that are not making sufficient progress on sustainability and climate risk will help to build a more transparent capital market system." -Mindy Lubber, CEO & President, Ceres

20 Things to Watch in 2020Financial Times

From an international carbon pricing regime to 'going olive', The FT's Moral Money team highlights 20 ESG 'resolutions' to watch for in the new year.

December 2019

Sustainable Debt Joins the Trillion Dollar ClubBloomberg

Investor demand is surging for green, social and sustainability bonds and loans as well as debt securities that react to the sustainability performance of the borrower.

Explore our library of third-party research and analysis on ESG integration and
sustainable investing.

 
ESG & Performance
Corporate Sustainability: First Evidence on Materiality
The Accounting Review | 2016

This study analyzes the financial and operational performance link between a company’s sustainability practices and how material those practices are to the company’s business vertical.

ESG & Performance
The Return on Sustainability Investment (ROSI): Monetizing Financial Benefits of Sustainability Actions in Companies
St. John's University Review of Business: Interdisciplinary Journal on Risk and Society | 2019

NYU Center for Sustainable Business analyzed to two different industries (agriculture and automotive) to answer the question: Do sustainable practices lead to positive financial return for the business?

 

ESG & Performance
Corporate Sustainability: A Strategy?
Harvard Business School Accounting & Management Unit | 2019

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.

Credit
Pricing ESG Risk in Credit Markets
Hermes | 2017

Identifying the influence of ESG risks on credit-default spreads.

ESG & Performance
Integrating Alternative Data (Also Known as ESG Data) in Investment Decision Making
SSRN (Soh Young In, Dane Rook, Ashby H. B. Monk) | 2019

The authors suggest more effective ways to integrate ESG data, however imperfect, into investment decision-making processes.

Environment
Decarbonization Factors
SSRN (Alexander Cheema-Fox, Bridget Realmuto LaPerla, George Serafeim, David Turkington, Hui (Stacie) Wang) | 2019

An exploration of the relative performance of portfolio decarbonization strategies, and how performance is affected by institutional investor fund flows.

ESG & Performance
Shareholder Engagement on Environmental, Social, and Governance Performance
European Corporate Governance Institute | 2018

The authors study the financial impact of investor activism promoting ESG improvements.

Governance
Measuring the Economic Impact of Short-Termism
McKinsey Global Institute | 2017

A performance study comparing the financial results of management teams focused on long-term versus short-term performance.

ESG & Performance
Active Ownership
Review of Financial Studies | 2015

How active investor engagement with corporate management on material corporate social responsibility issues can positively impact profitability, efficiency, governance, and stock performance.

Governance
The Error at the Heart of Corporate Leadership
Harvard Business Review | 2017

The authors argue for a management approach beyond shareholder primacy, focusing on the long-term health of the business that can deliver both strong performance and value to society.

Environment
Is “Being Green” Rewarded in the Market?: An Empirical Investigation of Decarbonization and Stock Returns
Stanford Global Projects Center | 2018

An empirical investigation of the risk-return relationship between corporate environmental performance and financial performance, with a focus on companies’ carbon footprint.

ESG & Performance
The Relationship between Investor Materiality and the Sustainable Development Goals: A Methodological Framework
SSRN (Gianni Betti, Costanza Consolandi, Robert G. Eccles) | 2018

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.

ESG & Performance
The Impact of Corporate Sustainability on Organizational Processes and Performance
Management Science | 2017

An investigation of how a corporate culture of sustainability affects multiple facets of corporate behavior and performance outcomes.

ESG & Performance
ESG and Financial Performance: Aggregated Evidence from More Than 2000 Empirical Studies
Journal of Sustainable Finance and Investment | 2015

Analysis of 2,200 studies finds ESG’s influence on corporate financial performance is positive and the results appear to be stable over time.

Credit
Sustainable Investing and Bond Returns
Barclays | 2016

A rare analysis of the positive impact that ESG integration can have on fixed income portfolios, specifically investment grade corporate bonds.

Equity
A Practical Guide to ESG Integration for Equity Investing
UN PRI | 2016

Case studies that illustrate the range of ways in which equity investors incorporate ESG factors into their investment processes.

ESG & Performance
Making an Impact: Earning Returns on Sustainable Terms
Credit Suisse | 2019

An overview of the ESG investing ecosystem and the link between ESG performance and portfolio performance.

ESG & Performance
Impact Investing: The Performance Realities
Bank of America Merrill Lynch | 2018

An overview of the impact investing landscape and tools investors can use to effectively incorporate ESG factors.