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In 2019, a wave of litigation related to per- and polyfluoroalkyl substances (PFAS) emerged in the United States, as several states filed lawsuits against PFAS manufacturers, including DuPont, Chemours and 3M. This legal action accompanies increased regulatory scrutiny of this potentially risky class of chemicals. In this article, we will focus on the risks chemical companies face related to PFAS contamination of drinking water in the United States and the ESG risks posed to chemical companies and their investors.

In recent years, an increasing number of nations, particularly in Africa, have been amending their mining codes. Governments likely view these amendments as a way of getting more for their people from their natural resources. But are these amendments slowly leading to the nationalization of the sector in some of these countries and how are the companies reacting?

In October 2019, China posted its lowest quarterly GDP growth rate (6.0%) in 30 years. While the country’s trade war with the US might have added to the economic headwind, the economic results are in line with a decade of cooling down following years of double-digital growth.

In this article we explore how operating in Peru affects the world’s second largest mining producer of precious metals, Barrick Gold. Based on analysis from our recently launched Country Risk Ratings, we discuss how the challenges facing Barrick’s mining operations in Peru are strongly influenced by the country’s ESG risks.

As Benjamin Franklin once said, “in this world nothing can be said to be certain, except death and taxes.” He was referring to the world in 1789. In today’s world, death remains a certainty. Taxes on the other hand, are less certain as companies, accountants and lawyers have found ways to reduce tax obligations.

The newly updated European Shareholder Rights Directive (“SRD II”) (2017/828/EU) aims to promote long-term shareholder engagement at companies listed in EU-regulated markets. These changes were prompted by an almost decade-long conversation that arose in the wake of the 2008 global financial crisis. Since then, many market actors have flagged shareholder short-termism as a key contributor to the crisis, with long-term engagement conversely seen as a bulwark against similar failures in the future.

“No offence, but…”. This has become a common introduction to questions directed at environment, social and governance (ESG) rating providers and reflects a body of criticism centered on the premise that ESG research and ratings are fundamentally flawed.

Since the beginning of modern warfare in the 20th century, we have witnessed the development of weapon types that have a severe, disproportionate and indiscriminate impact on civilians, even years after a conflict has ended. Over the past decades, several protest movements have attempted to halt and ban the production of specific, controversial weapon types, and many countries have adopted international conventions to this effect. More recently, some financial institutions have begun to restrict or exclude financing of companies with involvement in certain weapons. This article explores what investors can do, beyond existing legal frameworks, with respect to controversial weapons.

India saw several enhancements to its corporate governance framework on April 1, 2019, when the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 came into effect. The amendments to SEBI listing regulations reflect the adoption of a slew of recommendations made by the “Kotak Committee” – a blue-ribbon panel formed in June 2017 under the chairmanship of banker Uday Kotak, with the purpose of improving corporate governance standards in India. The committee’s recommendations are being phased in between October 1, 2018 and April 1, 2020.

The global equities market experienced substantial growth over the first quarter of 2019 as the FTSE All-World (AW) index returned 12.5%. But this growth spurt comes on the tail of a significant selloff during the preceding quarter; the total return of the FTSE AW over Q4 2018 sunk to -12.6%.[i]

Recent inquiries and public scrutiny have questioned the accountability and ethical conduct of companies in Australia. The performance and integrity of the public sector, as well as the private sector, are being closely watched.

Much has been written about the rise of responsible investing and environment, social and governance (ESG) integration over the past decade. From 2014 to 2016, assets that systematically considered ESG factors in the investment process grew from USD 7.5 trillion to USD 10.4 trillion, with continued momentum over the past several years[i]. However, recent commitments to ESG integration (vs. values-based strategies) have yet to be tested by a significant market downturn. The spike in market volatility experienced in late 2018 has led some to question whether the consideration of ESG factors by investors will continue to flourish in a market environment characterized by investor fear and valuation corrections.

On Monday 4 February, the final report from the Royal Commission inquiry into misconduct in the Australian financial sector was published. It contained a scathing review of years of misconduct and of the failures by regulators to appropriately supervise and hold companies accountable. The report also provided 76 recommendations to fix these issues.

In August 2019, the U.S. Business Roundtable (BRT), a non-profit association composed of corporate CEOs, issued a statement redefining the purpose of a corporation. The BRT has defined a corporation’s purpose as working for the benefit of all stakeholders, such as customers, employees, suppliers, communities where the company operates, as well as shareholders. Drafted following months of consultation with CEOs and members of the political, academic and NGO sectors, the statement was signed by 181 CEOs, or 95% of BRT members (though not by the companies they represent).

All organizations have hidden vulnerabilities. Whistleblowing exposes fraud and other financial crimes, thereby giving society an opportunity to act against misbehaviour. Globally, whistleblowers have helped save lives, recover billions of dollars, and protect the environment and local communities.

In a new Medium article highly worth the read, Jon Hale, Global Head, Sustainable Investing Research at Morningstar, writes about recent misleading attacks on the credibility of ESG assessments and sustainable investing. He takes aim at a critical report from The American Council for Capital Formation, a Washington D.C. policy group financed by the National Association of Manufacturers, the fossil fuels industry and various other corporate lobbying organizations.

On July 16th, the Financial Reporting Council released the revised UK Corporate Governance Code,[1] which will take effect on 1 January 2019. The new Code focuses on the relationship between companies, their shareholders, stakeholders and corporate culture. It is shorter and sharper and sets higher standards of corporate governance.

While blockchain technology is popularly associated with cryptocurrencies such as Bitcoin, its inherent use case lies in its capacity to maintain registries that are at once speedy, secure, transparent, coherent and reliable. As a result, new solutions have either been proposed, or are being developed, for such disparate areas as land registries, insurance, financial products, healthcare records, and smart appliances. Many of these fields are currently overseen by government bureaucracies or other third-parties, with comparatively sluggish manual input occurring for such mundane tasks as data entry, data retrieval, and user verification. Theoretically, blockchain-enabled “smart contracts” would allow these clerical tasks to be accomplished in a fraction of the time.

I recently traveled from the US to Europe to learn about the major market differences in sustainable investing. For context, investors long rooted in sustainable investing practices have viewed the general US market as lagging compared to Europe. As it pertains to values-based investing, I agree. However, the US has embraced ESG integration in a very sophisticated and pioneering way as it relates to risk mitigation.

China’s growing economic power, continuous reforms and liberalizations have made it increasingly important to global capital markets. In 2017, MSCI announced it would add around 230 “A-Shares” to its Emerging Markets and All Country World Index indices in June and September 2018. Due to the large amount of passive-strategy funds worldwide, it is estimated that a total of USD 20 billion, and as much as USD 300 billion at full inclusion, will flow into A-Shares market.