Much has been written about the negative consequences of public companies focused on short-term returns. Investors focused on quarterly earnings are usually blamed, along with the structure of executive compensation plans and pressure from the board of directors. The concern here is that companies are inhibiting investors’ ability to produce sustainable long-term returns.
This debate is an important one, but it is incomplete. It ignores the overall asset allocation strategies of investors across all asset classes. Investors include both asset owners and asset managers, but little can be done without substantial changes by the asset owners, who sit at the top of the “capital markets value chain.” This issue is addressed in great depth in the Working Paper “ESG 2.0: Measuring & Managing Investor Risks Beyond the Enterprise-level” by Delilah Rothenberg, Raphaele Chappe, and Amanda Feldman of The Predistribution Initiative (PDI). […]
Read More… from Asset Owners Need To Take Responsibility For System-Level Risks
A recent article by Nathaniel Bullard on Bloomberg.com noted that heady valuations and investor fear of missing out, coupled with the need to fund planetary-scale innovation has provided a tailwind for climate tech. During the first half of 2021, about $16 billion of funding was invested across carbon, consumer, energy, food and water, industrial, and mobility sectors […]
Read More… from PDI: Climate Solutions Require Supportive Investment Structures
Should we worry that non-financial corporate debt is at a historic high (both in absolute terms and relative to GDP)? Though in theory financial vulnerabilities should be of concern, there are reasons to think that alarm bells may not be ringing quite yet. In a recent opinion brief, Robert Armstrong has recently looked at this issue, and come out not “terribly […]
Read More… from PDI: A Huge Amount of Corporate Debt Might Not Be Ok for Society and Investors
All eyes have been on the U.S. Securities and Exchange Commission (SEC) following the agency’s recent invitation for public comments on how it should approach climate change and environmental, social, and governance (ESG) disclosures. Hundreds of investors, companies, sustainability advocates and civil society organizations voiced their support for the agency’s efforts to “[facilitate] the disclosure of […]
Read More… from Thomson Reuters Foundation News: Why the SEC should consider corporate and investor ESG disclosures
A new report translates the difficult questions we have on sustainability into suggested investment changes […] “Predistribution Initiative’s ESG 2.0: Measuring & Managing Investor Risks Beyond the Enterprise-level tackles these systemic issues head on, providing a detailed analysis of problematic investment trends in recent years. The paper highlights the inherent contradictions of more ‘traditional’ ESG […]
Read More… from Responsible Investor: The state of ESG 2.0: from incremental to systemic change
ESG funds’ bias against workers is unintentional, but it is a feature rather than a bug […] A new paper by The Predistribution Initiative, ESG 2.0: Measuring & Managing Investor Risks Beyond the Enterprise-level, foregrounds potential negative impacts from capital structures themselves, not just portfolio companies. […]
Read More… from Responsible Investor: Why jobs, taxes and competition should be the focus of ESG investors
According to a new report about the private equity (PE) industry, the majority of PE firms are not doing enough to take systematic risks seriously in both their business operations and investment portfolios. The report, “Private Inequity: How the Private Equity Industry Needs to Improve When Addressing Systemic and Systematic Risks,” analyzed how PE firms […]
Read More… from Private Inequity: How the Private Equity Industry Needs to Improve When Addressing Systemic & Systematic Risks
On March 15, 2021, the SEC issued a request for public input on the Commission’s rules and guidance regarding climate change and ESG disclosures. This request signals an inflection point and an important opportunity. We encourage those in the Predistribution Initiative (PDI) community to respond to the SEC’s inquiry with your feedback on why mandatory […]
Read More… from Toolkit For Developing Responses to The SEC Comment Period On Climate & ESG Disclosure
While data suggests that the ESG and impact investing markets are growing rapidly, concerns abound about how financial services firms are measuring and managing their ESG and impact investing performance, writes Delilah Rothenberg. […]
Read More… from Top1000funds.com: New benchmarks for ESG accountability