The popular corporate equity “baskets” including: the Dow Jones Industrial Index, Nasdaq 100, S&P 500, the Russell 1,000 - 2,000 - and 3,000– in essence consists of the underlying value of the corporate shares. Today, there is an ocean of stock indexes for asset managers to license from the creators and then apply process and approaches for keeping track of the companies in the fiduciary portfolio, or to analyze and pick from the underlying issues for their portfolio.
For almost a decade in this newsletter we’ve brought to you a steady stream of news, research and experts’ perspectives that focus on two related subject areas: (1) the escalating interest in the investment community in corporate ESG factors and adoption of sustainable investing approaches and (2) the corporate response, clearly in recognition of the intensifying competition for capital and so exerting efforts to excel in ESG strategy-setting, operational performance and disclosure.
“The United Nations” began as a World War II era concept as President Franklin D. Roosevelt talked about the allies of the United States partnering in the fight to save democracy and collectively battling the regimes of fascist dictators in Europe and Asia. On January 1, 1942, 26 nations “united” in Washington DC to battle the “Axis” powers. In February the president addressed the nation in his 20th “fireside chat” (broadcasting nationwide on the radio) to talk about the progress of the war.
Questions: What about the dramatically-increasing corporate ESG / sustainability / responsibility / citizenship disclosure and reporting? Should it be regulated? How? What would be regulated in terms of disclosure and reporting – what should the guidelines for issuers be? Does this topic become an important part of the SEC’s ongoing Reg FD (disclosure) revamping? What do investors want? What do companies want? Many questions!
As the global coronavirus pandemic continues to uproot our normal business, financial, economic and personal pursuits, questions that we could logically ask are (1) what impact does the virus crisis have on the ongoing corporate sustainability / ESG / citizenship efforts; and (2) what is the investor reaction – does the move into more sustainable / ESG investment vehicles continue?
Some answers come from Sanghamitra Saha, of Zack’s, writing in Yahoo Finance – “Here’s Why ESG ETFs Are Hot Amid Pandemic”.
Shorthand terms do matter – the “titling” of certain developments can sum up trends we should be tuning in to. Some examples for today: Sustainable Capitalism - Stakeholder Primacy – Sustainable Investing – Corporate Sustainability. Corporate ESG Performance Factors.
Since the “new world order” ushered in a new era in global trade some 30 years ago with the end of the Cold War, barriers to trade have continued to tumble. “GATT” (the “General Agreement on Tariffs and Trade” rounds of global trade talks that began in 1947) gave way to the World Trade Organization (WTO) in 1995. New rules were applied, and trade continued to become “more liberalized”. Corporate interests responded with dispersal of many their operations.
What might our world look like when the COVID-19 global emergency winds down and we move into the “recovery and restoration” phase? What is in store for business in the transition? And beyond? Looking at risk and opportunity through an ESG lens.
BNP Paribas Asset Management has offered up some important perspectives. ESG analyst Anupama Rames asks and answers: (1) Will the world go back to status quo when we exit the dis-location? (2) Probably not. “We believe,” she writes, “that the learnings from the go-remote experiment are here to stay.”