Since 2002
Postings and Commentaries by Ron Robins
Understanding ESG Ratings: Legal Insights & Perspectives
“This article analyzes the salience of ESG ratings and considers certain methodologies underlying their calculation for professionals. The article also discusses various issues concerning ESG ratings and provides key takeaways about the prudent deployment of ESG ratings products.” [COMMENTARY] This article provides great insight into the ESG rating regime. Understanding ESG Ratings: Legal Insights &…
Taking a Strategic Approach to the ‘S’ in ESG: Creating a Social Impact Strategy
“While the ‘E’ in ESG has received significant attention, effort, and investment from regulators and organizations alike, the ‘S’ pillar, which pertains to social sustainability and social impact, is equally essential for organizations to address.” [COMMENTARY] I largely agree with the ideas contained in this KPMG article. However, many companies might feel the ideas go…
The Payoffs and Pitfalls of ESG Due Diligence
“Although Europe has spearheaded more stringent ESG regulations, dealmakers in all surveyed countries, including those in the US, recognize the importance of performing such assessments before closing a deal.” [COMMENTARY] Due diligence — whether in mergers and acquisitions (M&A) or for regular investment purposes — now recognizes the essential nature of ESG analysis. The Payoffs…
The Missing “T” in ESG
“In a recent paper, we argue that amidst the enthusiasm about ESG, a critical parameter has gone virtually unnoticed: corporate tax behavior. The payment of corporate taxes is a powerful indicator of how a company views its role in society and supports the communities in which it operates and the stakeholders with whom it engages.” [COMMENTARY] This…
How consultants have taken over sustainability reporting – and not for the better
“Companies are hiring external consultants to help report on ESG, but there aren’t enough checks to guard against greenwash.” [COMMENTARY] I suggest the best ESG consultants form an industry standards group so that companies can rely on their advice. For now, investors and companies need to be somewhat wary of external consultants and their reports…
Active or Passive? Seeking Solutions to ESG Confusion
“Investors with an environmental, social and governance (ESG) focus are increasingly leaning toward passive portfolios, which may seem to offer the simplicity they crave in a complex market landscape. But the path to passive is fraught with risks, particularly when it comes to sustainable strategies.” [COMMENTARY] Passive portfolios — where the portfolio manager largely follows…
CEOs Invest Less in Corporate Social Responsibility When Their Own Money Is At Stake
“In a new paper written with Ing-Haw Cheng of the University of Toronto and Harrison Hong of Columbia University and NBER, Shue shows that when corporate do-gooding starts to affect the managers’ own personal income, or their standing with shareholders, their CSR efforts slow down considerably.” [COMMENTARY] This article describes a study that shows when…
Catalyzing Sustainable Investment: Revealing ESG Power in Predicting Fund Performance with Machine Learning
“Our findings substantiate the positive correlation between ESG ratings and fund performance. In fact, our investigation identifies ESG score as one of the dominant variables, ranking among the top five with the highest predictive capacity for mutual fund performance.” By Alexandre Momparler, Pedro Carmona and Francisco Climent. May 2024, Computational Economics.
FDIC bid to strip BlackRock and Vanguard of superpower ‘has legs’ and reckoning may start with curbs on self-certification of passive index funds
“The bank deposit insurer could make the $17-trillion ETF power bloc lose the ability to self-certify as ‘passive’ funds because their sheer scale could make them an active menace to the banking regulator, at least in this political climate.” [COMMENTARY] Anyone with US passive fund investments might want to watch the developments in this space!…
How important is the G in ESG? Latest sustainable investment analysis from Robeco
“Robeco have reminded us that governance can seem neglected compared with the E and S in ESG, although it is actually everywhere and a necessary foundation for sustainable investment (SI) strategies.” [COMMENTARY] Surely, governance is primary when it comes to running a company. The ‘E’ and ‘S’ in ESG are dependent upon the governance policies…
ESG in 2024: Traps for the Unwary
“ESG continues to be a hot topic for 2024 for investors and regulators alike. The specific concerns investors and regulators have – and what they expect to develop over the coming months – differ, however, across jurisdictions, including because of the different maturity of existing regulation between the EU/UK and the US.” [COMMENTARY] This is…
Renewable energy projects can cost more than fossil fuels: DBS’ Piyush
“THE energy-transition journey in South-east Asia is hampered by the high costs involved in developing renewable-energy power plants, which can be ‘substantially higher’ than fossil fuel-based ones, said DBS chief executive officer Piyush Gupta on Monday. The high costs of production come partly from the lower levels of solar efficiency in the equatorial region, which…
Europe stands firm against US-driven ESG backlash
“Europe has so far largely resisted the anti-ESG tide, due to greater political and consumer support for greener products and a swathe of regulations that underpin the operations of the finance industry and companies in the real economy.” [COMMENTARY] One explanation as to the difference between Europe and the USA concerning the anti-ESG sentiment could…
What drives sustainable investing? Adoption determinants of sustainable investing exchange-traded funds in Europe
What drives sustainable investing? Adoption determinants of sustainable investing exchange-traded funds in Europe. “Our results confirm the positive effects of the development of insurance companies and pension funds for the assets of the ESG ETFs.” By Adam Marszkand and Ewa Lechman. Both are associated with Gdansk University of Technology, Narutowicza 11/12, Gdańsk 80-233, Poland. Structural Change…
Walk well and talk well: Impact of the consistency of ESG performance and disclosure on firms’ stock price crash risk
Walk well and talk well: Impact of the consistency of ESG performance and disclosure on firms’ stock price crash risk. “ESG consistency contributes to lower stock price crash risk through the mechanisms of alleviating agency problems and increasing information transparency.” By Jun Huang, Yun Li, and Feifei Han. Authors affiliated with Hunan University, Changsha, 410082, China. International Review…
80% of Global Investors Now Have Sustainable Investment Policies in Place: Deloitte/Tufts Survey
“Deloitte and The Fletcher School surveyed more than 1,000 asset owners, asset managers, and investment advisers, including CEOs, CIOs, Heads of Strategy and other senior investment executives across regions including North America, Europe, and Asia, and also conducted interviews with sustainability and investment leaders, between January and December 2023.” [COMMENTARY] The anti-ESG/sustainability crowd in the…
Do Green Bonds Actually Lead to Rosy Returns?
Do Green Bonds Actually Lead to Rosy Returns? “Skeptics argue these instruments amount to little more than greenwashing. New research supports this critical view, revealing that stock prices, ESG scores, and emissions do not improve following green-bond issuance.” Based on the research of Aaron Yoon, and Sanjai Bhagat, April 1, 2024, Kellogg School of Management, Northwestern University, Illinois,…
How does greenness translate into greenium? Evidence from China’s green bonds
How does greenness translate into greenium? Evidence from China’s green bonds. “The empirical findings show that green labeling bonds have a greenium compared to conventional bonds.” By Xin Hu, Bo Zhu, Renda Lin, Xiru Li, Lidan Zeng, and Sitong Zhou. All associated with the School of Finance and Institute of Chinese Financial Studies, Southwestern University…
On the superior performance of SRI funds
On the superior performance of SRI funds. “We compare the performance of 1126 US mutual funds deemed socially responsible to that of a matching sample of conventional funds over the three-decade period January 1980–December 2019… Our results indicate that SRI funds outperform their peers over the entire sample period.” By Ali Fatemi, Greenleaf Advisors and DePaul University, Chicago,…
