Environmental Social Governance (ESG)

Delivering the "E" in ESG

ESG-Environmental Social & Governance score used to only matter to investors specializing in Socially Responsible Investing. Not anymore.

Recent studies from Bank of America Merrill Lynch, Morningstar and Barron’s are proving that companies not only emphasizing strong financial practices along exhibiting robust ethical and sustainable behaviors are consistently delivering higher returns and lower risks.

Financial advisors have another incentive to understand and compare ESG ratings.  U.S. funds with high sustainability ratings tend to perform better than funds with lower ratings. In addition, TruValue Labs and Quantopian found that a portfolio of companies in the S&P 500 scoring high on their ESG Insight and ESG Momentum Scores outperformed the benchmark index over a five-year period. According to Morningstar and Barron’s.  

Corporations are increasingly expected to disclose all extensive environmental, social and governance practices, but also are held accountable to rapidly improve their stance. In today’s age of transparency and acute environmental awareness, forward-thinking corporations are seeking to inspire customers and rely on high ESG scores to prove the authenticity and efficacy of their efforts.

Despite the stronger performance of these companies and funds, there are issues with ESG data. Close to 70% of institutional asset owners surveyed by Morgan Stanley recently said that lack of quality ESG data is one of their biggest challenges when investing according to ESG principles. Nearly 60% reported they did not have access to adequate tools to assess how investments align with their sustainability goals. According to BAML 2019 study

How confident are you about the quality of your corporate disclosure on environmental issues?

Are you concerned that analysts my identify key disclosure omissions or discount your environmental accomplishments?

The lack of clear scoring guidelines, defined metrics to track or methodologies to follow, makes it awfully easy to fall into the traps of self-disclosing inaccurate data that will haunt you for many years.

You deserve to feel good about your environmental accomplishment

You deserve full visibility into the enterprise wide data aggregation

You deserve to be head and shoulders above the completion -  becoming the coveted stock of the year

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