Resource Center

President Trump’s announcement last week that he will pull the US out of the Paris Agreement is unlikely to have any meaningful impact on clean energy transition. This is because the global pivot to renewable energy is increasingly being driven by economic fundamentals, not policy (an argument we made in our deep dive of the Paris Agreement in January 2016).

The recent Wanna, also called WannaCry, ransomware attack once again highlighted the importance of cybersecurity and protecting online data and systems. In our 10 for 2017 report, we argue that such attacks are likely to increase in frequency and intensity making it prudent for investors to integrate cybersecurity risk management into their investment decision making processes. Understanding these risks is crucial since most companies provide poor visibility into their ability to proactively manage such threats.

On 23 May 2017, German prosecutors raided Daimler AG’s offices in Stuttgart as part of their investigation into alleged emissions fraud. The company’s shares have since tumbled 4.3 percent. Daimler’s experience is the latest reminder that investing in clean technologies is money better spent than paying penalties for non-compliance in an increasingly stringent regulatory environment.

Today marks the fourth anniversary of the deadliest accident in the garment industry. On 24 April 2013, the collapse of the Rana Plaza Building in Savar, Dhaka, Bangladesh resulted in the death of 1,200 workers and left several thousand injured. The tragedy was linked primarily to poor health and safety practices, but it also highlighted the intense wage pressure in Bangladesh’s garment industry. This issue is becoming more pressing with disputes over minimum wages having resulted in massive social unrest in December 2016 and January 2017.

The US health care industry is facing some uncertainty under the current administration. Recent news coverage focused primarily on the failed attempt to repeal the Affordable Care Act, but question marks related to deregulation and pricing remain. Investors will need to monitor developments closely to ensure they proactively manage emerging ESG risks.

Due to the success of anti-smoking campaigns and regulation, tobacco companies are increasingly struggling with a dwindling customer base. This has led to a wave of consolidation in an effort to maximize profits through industries of scale. As these behemoths gobble each other up and cigarette brands change hands, it leads investors to question what happens to the societal liabilities attached to them.

The Fearless Girl stands in front of the Charging Bull, her hands on her waist, her stare strong and defiant. She challenges Wall Street’s bull, which has long symbolized strength and prosperity in a male-dominated corporate culture. She also is a poignant representation of the growing demand for greater gender diversity.

The use of palm oil has become commonplace in packaged food and personal care products. This ubiquity is stimulating the rapid growth of the market. While this growth is creating several opportunities for investors, it is also exposing them to a growing number of ESG risks.

This year’s theme for World Water Day is wastewater. It was aptly chosen given the United Nations’ prediction of a 55% increase in global water demand by 2050 (compared to 2000). To meet this demand, companies will need to manage (waste)water far more efficiently than they do today. The risk of failing to do so becomes concrete when you look at a water-intensive industry such as semiconductors.

In late January 2017, 200,000 Uber users deleted their accounts in just one week. Meanwhile, the company’s closest competitor, Lyft, surpassed Uber in the number of daily iOS downloads for the first time. This consumer action formed part of the #DeleteUber campaign on social media. Given the campaign’s impact, it is important to ask how it differs from more traditional consumer boycotts and what investors can learn from it.

In recent years, we have seen a significant increase in the number of investors that integrate environmental, social and governance (ESG) considerations into their fixed income strategies. This is especially true when it comes to corporate bonds. The use of our Country Risk Research & Ratings in sovereign bond investments is however still comparatively new and clients often ask me how our research can support them.

On January 25th Sustainalytics published 10 for 2017: Investment themes in a changing world, the fourth installment in our 10 for series. As the title suggests, the report looks at thematic ESG investing.

– Celebrating Sustainalytics’ 25th anniversary. This year Sustainalytics turns 25. It is an important event to celebrate, but, for me, the true value of such milestones lie in the fact that they give you pause to reflect. While Sustainalytics is a success story, it doesn’t mean we didn’t have some peaks and valleys. At any rate, I ask myself how we were able to create a company that has built responsible investing into its very DNA.