Governance in Brief – April 01, 2021
The UK Government has launched a public consultation on proposed measures to improve the audit and governance regimes of public interest entities. The process was prompted by a spate of corporate failures such as those seen at Carillion and Thomas Cook. The proposals address audit purpose and scope, auditing market competitiveness, director accountability, and the creation of a new regulator with increased powers
Personal Products and the New Ethics of Product Naming
Over recent years, personal product (PP) companies have faced an increasing demand for more inclusive product governance – from formulations to labels – and marketing that reflects the diversity of consumers. To grow sustainably within their communities and stay relevant for their target customers, such companies need to create value for society proactively. Some of the major players in this industry have already started paving the way for others.
Governance in Brief – Mar 25, 2021
Starbucks shareholders revolt over executive pay Starbucks faced a rare rebuke at its 2021 AGM, where its advisory say-on-pay resolution was rejected following opposition by 53% of votes cast. The executive pay proposal included two special one-time retention awards granted in December 2019
Investing in Companies with Positive Momentum in ESG Risk and Economic Moat Development
In Sustainalytics’ paper, Combining ESG Risk and Economic Moat,[i] we examined the effect of combining the two metrics, showcasing the benefits of higher returns and lower downside risk. More specifically, investing in companies with negligible/low ESG risk and wide economic moats was advantageous for creating alpha over the past four years.
A Reflection of Water Reporting Around the World
On World Water Day, we reflect on global companies’ dedicated attention to this most vital resource. Water risks are related to nine of the top ten worst global risks in the Global Risk Report published by the World Economic Forum, with risks likely to increase due to climate change. As global water resources contend with increased stress, companies are expected to face growing scrutiny of their water use due to the significant impacts that it can have on resource security and the health of ecosystems. This scrutiny may manifest in business risk, including limits placed on water withdrawal, increasing costs and heightened regulations.
Water Security: Global Challenge, Local Solutions
The growing scarcity of freshwater resources is a risk to the economic, social, and environmental well-being of populations worldwide, and a material issue for companies. Corporate-wide water strategies are essential, but because water security challenges are experienced at the local level, and water basin conditions are unique, there is no one-size-fits-all solution for companies to implement.
Deepwater Plays Against Rising Risks: The U.S. Gulf of Mexico
As onshore resources became harder to locate over the past decades, offshore exploration and production have grown into a global industrial activity. The prospect of finding hydrocarbons has led some companies to explore deeper waters in some regions.
Applications of Country Risk Ratings in Fixed Income Investing
How are Country Risk Ratings being utilized to identify risk and to construct a sovereign ESG fixed income index? Listen in as Manna Neghassi, Manager, Product Strategy and Development at Sustainalytics and Katie Binns, Senior Product Manager, Fixed Income Indexes at Morningstar Indexes tell us more.
Governance in Brief – Mar 11, 2021
A Delaware court has invalidated a poison pill that had been adopted by U.S. energy firm The Williams Companies in March 2020. While poison pills have been traditionally conceived of as takeover protections, Williams’ pill is meant to deter activist campaigns by imposing substantial dilution on any shareholder acquiring a specified stake without prior board approval.
Governance in Brief – Mar 11, 2021
A recent review commissioned by HM Treasury recommends a slew of measures aimed at boosting the attractiveness of the post-Brexit London Stock Exchange as an IPO destination. Under the recommendations, the LSE premium listing segment would allow dual class share structures with a maximum 20:1 voting rights differential for up to five years post-IPO.
Gender Equality in Supply Chains: An Opportunity to Increase Positive Impacts
It’s well known that inequalities between men and women still exist in the workplace. Women are less likely to fill senior leadership positions (29% in North America), earn less (81 cents per dollar in the US) and own fewer businesses (39% of businesses in the US) than men.
Is the COVID-19 Pandemic Threatening Progress on Gender Equity?
The COVID-19 pandemic has disrupted lives and livelihoods on an unprecedented scale. Despite massive government spending, the pandemic resulted in the global economy shrinking by 3.5% in 2020.[i] However, the financial burden of this pandemic has not been borne evenly.
Enhancing Risk-Return Profile by Combining ESG Risk and Economic Moats
Hear from Sustainalytics' Methodology and Portfolio Research specialist, Liam Zerter, as he talks us through the key findings from Sustainalytics' recent Combining ESG Risk and Economic Moat report, which shows that economic moat and ESG risk can be combined to create investment strategies that generate value both in terms of returns and portfolio risks.
Governance in Brief – Feb 25, 2021
The Carlyle Group has secured a USD 4.1 billion credit line that it describes as “the largest ESG-linked private equity credit facility in the US…and the first to focus exclusively on advancing board diversity.” The facility’s price of debt will be dependent on the firm achieving its goal of 30% board diversity across its portfolio companies within two years of ownership.
Five Commonly Asked Questions About Sustainalytics’ Approach to Impact
We launched our new Impact Metrics product to support investors’ growing need for more robust data that can be used to demonstrate how ESG-focused strategies can deliver real-world social and environmental outcomes. Since the launch, I have connected with many enthusiastic institutional investors eager to make sense of the rapidly evolving world of impact, excited to dive into impact data, and cautiously optimistic about supporting their clients’ Sustainable Development Goal (SDG) and impact needs.
Governance in Brief – Feb 18, 2021
Regulatory inquiry calls out governance failures at Crown Resorts Four Crown Resorts directors, including the CEO, have resigned after a report commissioned by New South Wales (“NSW”) authorities found “serious corporate failures” at the firm and deemed it unsuitable to hold a license for its Barangaroo casino.