ESG in Earning Calls, Assessing Impact, Investor Watch, and Academic Research
Here are 5 ESG insights you might have missed this week:
UBS Investor Watch 2021-
UBS' most recent survey of more than 3,800 clients with a minimum of $1 million in investable assets, across 15 global markets, shows clear ESG tilt.
Nearly six in 10 investors want to indulge in the things they missed while in isolation, with travel and entertainment topping the list of planned expenditures. But something else is going on.
Seven in 10 investors want to make more of a difference in the world. Six in 10 report that the pandemic made them more spiritual. Forty percent say they want to be part of something bigger than themselves.
With this new perspective, investors are more interested in using their capital to effect change. Nearly half plan to increase charitable giving from their pre-pandemic levels, led by Latin America. And almost 60% are more interested in investing sustainably than they were before the pandemic. As a global recovery continues to advance, look not just for hotels and stadiums to fill up, but hearts and minds too.
How to Bring ESG Into the Quarterly Earnings Call-
Why should these calls emphasize short-term profit-taking over long-term investments in employees, research and development, and sustainability, given that environmental, social, and governance (ESG) issues have direct, material effects on how well companies succeed in the long run?
On quarterly earnings calls, companies may be playing to analysts who they assume don’t care about ESG. CEOs often say that analysts do not ask for ESG information; analysts say that if the CEOs are not providing it, ESG issues mustn’t be material to the business. Wherever the blame lies, the effect has been limited discussion and disclosure of ESG themes.
Source (Registration required): https://sloanreview.mit.edu/article/how-to-bring-esg-into-the-quarterly-earnings-call
Methodology for Comparing and Assessing Impact-
The Global Impact Investing Network released the Compass methodology which allows investors to compare and assess impact investments.
The Compass methodology offers investors insight into three critical impact performance figures: scale, pace and efficiency. It also makes it possible to compare impact results.
In all, this effort aims to accelerate progress toward impact benchmarks, ratings, and other tools for analyzing and managing performance that are needed to further develop the impact investing industry and fill the existing market infrastructure gap.
Source: https://thegiin.org/research/publication/compass-the-methodology-for-comparing-and-assessing-impact
Valuing ESG: Doing Good or Sounding Good?-
For Professor Aswath Damodaran from NYU, the ESG bandwagon may be gathering speed and getting companies and investors on board, but companies will not be any more socially responsible than they were before ESG was invented.
In the last decade, companies have come under pressure to be socially conscious and environmentally responsible, with the pressure coming sometimes from politicians, regulators and interest groups, and sometimes from investors. The argument that corporate managers should replace their singular focus on shareholders with a broader vision, where they also serve other stakeholders, including customers, employees and society, has found a receptive audience with corporate CEOs and institutional investors.
The pitch that companies should focus on “doing good” is sweetened with the promise that it will also be good for their bottom line and for shareholders. In this paper, we build a framework for value that will allow us to examine how being socially responsible can manifest in the tangible ingredients of value and look at the evidence for whether being socially responsible is creating value for companies and for investors.
Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3557432
Impact in Place: Emerging Sources of Community Investment Capital-
The U.S. Impact Investing Alliance Launches New Report on the Future of Community Investing
The report examines key trends in the community investing field, such as increased corporate engagement, the leveraging of donor advised fund capital and innovative, participatory models for community wealth building.
The document includes five case studies on corporate and nonprofit actors engaged in community investing – to learn more about how community investing can be leveraged in building a just and equitable recovery.
One more thing: If you are still craving for more ESG insights, have a look at this list of the top recently published ESG and Impact Investing papers, compiled by Savvy Investor.
Find the list here- https://www.savvyinvestor.net/blog/Impact-Principles-ESG-Priorities
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