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.
Sustainable Debt Joins the Trillion Dollar Club
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.
Goldman Sachs’ Commercially Driven Plan for Sustainability
David Solomon, CEO of Goldman Sachs, says the company is targeting $750 billion of financing, investing and advisory activity to areas focused on climate transition and inclusive growth. He also calls for governments to put a price on the cost of carbon. Mr. Solomon writes, “Looking ahead, the needs of our clients will increasingly be
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 opportunistic investor looking for mispricings with two guiding missions. One is “to show when you incorporate
The Return on Sustainability Investment (ROSI): Monetizing Financial Benefits of Sustainability Actions in Companies
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?
Shh! Companies are Fixing Accounting Errors Quietly
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
How an Italian Energy Company Revolutionized Sustainable Investing in Structured Credit
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 Sees ‘Emerging Threat’ to Oil & Gas Companies from Climate Regulation
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.
How Boeing Lost Its Bearings
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.
Director Characteristics, Gender Balance, and Insolvency Risk: An Empirical Study
An analysis of more than 900,000 private companies finds compelling evidence of a relationship between the gender composition of directorships and insolvency risk.
Delivering through Diversity
McKinsey analysis finds statistically significant correlation between ethnic/cultural and gender diversity in leadership and financial outperformance.
The Bottom Line: Corporate Performance & Women’s Representation on Boards
This post makes the business case, in terms of ROIC and ROE, for high representation of women on boards of directors.
The Bottom Line: Connecting Corporate Performance and Gender Diversity
This post makes the financial case, as measured by ROE and total return to shareholders, for gender diversity.
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
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.