How Much Does ESG Matter? — As equity investors struggle with the extent to which ESG factors are relevant, we examine the issue from a quantitative perspective.
How Much Does ESG Matter? — As equity investors struggle with the extent to which ESG factors are relevant, we examine the issue from a quantitative perspective.
An Increasingly Cautious Near-Term Equity Outlook — Plotting our sector and regional equity recommendations on the face of an “investment clock” suggests an increasingly cautious near-term outlook for global equities. A Tilt Away from Cyclical Sectors and Regions — Last month, we tilted further from cyclical sectors and regions. As for sectors, we are underweight Energy and Materials, neutral Industrials. In terms of regions, we are underweight CEEMEA and Latin America.
To a physical commodities trader, Eddy Murphy’s down-and-out character in 1983’s film “Trading Places” became a futures trader, a speculator, and a paper trader. To him, I would be described as a cash trader, a physicals trader or spot trader (despite frequency or negotiating long-term, forward contracts), who focuses on the underlying market….
Developing a multi-class asset allocation model — that also incorporates Environmental, Social and Governance (ESG) factors — is a lofty undertaking. In this report, we take a first step by introducing our global equity strategy “investment clock”, which helps flesh out the equity outlook implied by our sector and regional recommendations….
From a resource management point of view, the second half of the 20th century will probably be seen as an anomaly. In this very short period of modern human history, unprecedented amounts of natural resources were extracted, used as energy or materials in manufactured goods and services, and ultimately transformed into piles of rubbish. This… Read more »
When my wife and I lived in New York City, we never owned a car. Then the kids came, and, like other many other New Yorkers, we moved to the suburbs. Despite our commitment to the environment, there was no choice but to drive. Our town isn’t walkable. I tried getting around by bike for a while, but I always felt moments away from death…
My journey to the recycling world, is a circuitous one primarily driven by environmental and social motives. A child of immigrants from India and the UK, and one of six children, I never sought easy answers. We came from England with just the clothes on our backs. My parents had big dreams of not only… Read more »
Red wine, it is believed, has many virtues, from antioxidants to its high levels of resveratrol to promoting weight-loss. However, the virtues of wine can quickly be undone by harmful chemicals, pesticides and fungicides that are found in many varietals today. Unless a wine is certified organic and biodynamic, the consumer can be exposed unknowingly… Read more »
As the world’s consumers increasingly eat their way up a middle class ladder replete with growing portions of meat, dairy, cooking oils and fruits and vegetables, farmers find their jobs growing harder by the day. Facing ever-hotter temperatures, record-busting cycles of drought and flood and finite amounts of irrigation water, farmers have the unenviable task… Read more »
Will Baird also contributed to this article. Solving non-communicable diseases such as heart disease, diabetes, and obesity is one of the biggest challenges facing sustainable financing. Two thirds of American adults are either overweight or obese, and the cost of heart disease is projected to reach $818 billion by 2030. Heart disease is the… Read more »
Diabetes can be characterized as a new type of pandemic. It is probably the first pandemic to be mostly caused by our modern lifestyle: what and how much we eat and how much we exercise. Historically, people over 65 years of age used to develop diabetes. Today, however, younger people tend to develop diabetes, especially… Read more »
Are laws requiring the labeling of food containing genetically modified organisms (GMO) justified? Do consumers have a right to know what is in their food, or will the labels simply confuse the public?
Fossil-free by 2075. That is the answer the International Energy Agency (IEA) found when it explored technology transition paths for the global energy sector consistent with stabilizing climate change. As an intergovernmental formation of industrialized nations, the IEA’s aim was the same target as the one repeatedly sought by in international negotiations – 2 degrees Celsius above pre-industrial global average temperatures, a level intended to avoid the most catastrophic effects of climate change. While investment analysts are often bound to performance horizons of just a few quarters, the IEA view to 2075 has implications for capital allocations today….
This is an abstract from the September edition of The Cornerstone JSFB. Subscribers can read the full article here. Learn more about the JSFB here. When discussions about the imperative to lower greenhouse gases turn to the subject of hydraulic fracturing, or fracking, tensions get white hot. Opponents cite the horrors of gas and… Read more »
Climate forecasters breathed a collective sigh of relief earlier this month as predictions of a “mega El Niño” on par with severe incidents that took place in 1997-98 were downgraded. Scientists now believe a more modest event will develop later this year and run through the winter of 2014/2015. Nonetheless, the revised “60-65% chance” forecast… Read more »
We have updated the inputs to the Cornerstone Capital Sector Strategy Model in which we rank the ten GICs in the MSCI All Country World Index (ACWI). Figure 1 summarizes the most recent rankings. Figure 1: Cornerstone Capital Global Markets Equity Strategy Model Sector Overview Relative to the previous rankings (published in the June edition… Read more »
In the April edition of The Cornerstone Journal of Sustainable Finance & Banking we introduced the Cornerstone Capital Regional Strategy Model in which we ranked seven of the world’s regions/major economies. At the time, we excluded Australia and Canada but, following client feedback, we are now incorporating those two countries in our model – Australia as a stand-alone country, and Canada as part of the North America region….
Cornerstone Capital’s sector strategy model is overweight on the MSCI ACWI Consumer Discretionary Index, which contains a number of global media industries including Cable & Satellite (9% of the index’s market cap, the second largest weight after Auto Manufacturers), Movies and Entertainment (7% weight, fourth-largest in the index), and Casinos & Gaming (4% weight, tenth… Read more »
A Chinese proverb says, “If you must play, decide upon three things at the start: the rules of the game, the stakes, and the quitting time.” Unfortunately, in not heeding this advice, some casual gamblers find themselves grappling with gambling addiction. Partly because of the well-documented adverse effects of compulsive gambling, a subset of ethics-based investors exclude gaming companies, along with other “sin stocks,” from their investment universe…
In this note, we introduce the Cornerstone Capital Global Sector Strategy Model. The model ranks the 10 GICS in the MSCI All Country World Index. As discussed in detail below, the model employs a quantitative multi-factor methodology to generate sector recommendations based on proprietary measures of valuation and earnings. The Cornerstone Capital model also takes… Read more »
ABSTRACT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE MAY 2014 EDITION While older firms are important with regard to employment levels, it is new and young businesses (i.e., less than one year old) that are a key source of job growth. The U.S. economy is comprised of more than 6 million establishments with… Read more »
ABSTRACT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE MAY 2014 EDITION In the April edition of The Cornerstone Journal of Sustainable Finance & Banking we introduced the Cornerstone Capital Regional Strategy Model. This month there is no change in our regional weightings. We provide a quick update by region. Michael Geraghty is the… Read more »
ABSTRACT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE MAY 2014 EDITION We introduce the Cornerstone Capital Global Sector Strategy Model which ranks the 10 GICS in the MSCI All Country World Index. The model employs a quantitative multi-factor methodology to generate sector recommendations based on proprietary measures of valuation and earnings and incorporates… Read more »
In this note, we introduce the Cornerstone Capital Global Markets Regional Equity Strategy Model. As discussed in detail below, the model employs a quantitative multi-factor methodology to generate regional recommendations based on proprietary measures of valuation and earnings. The Cornerstone Capital model also takes into account corporate governance metrics by region. We will be updating… Read more »
As we strive towards a system change, replacing linear business models with circular, impact-integrating strategies, network infrastructures are at the core of a major shift. From low-risk, low-return physical assets, they are being transformed into smart grids….
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE APRIL 2014 EDITION. Our national economy is in a world of hurt when it comes to its very foundation: the public infrastructure and buildings that enable and support economic activity. Bridges, highways, transit, energy, and environmental infrastructure as well as social infrastructure including healthcare, education… Read more »
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE APRIL 2014 EDITION. New data and technology advancements in the infrastructure design industry have the potential to revolutionize how finance and banking professionals screen opportunities for impact investments. The design industry is rapidly moving from the practice of drawing lines and circles to an intelligent,… Read more »
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE APRIL 2014 EDITION. When we commute and travel, do we think about the long-term sustainability of the facilities we use? Does it matter that these buildings are efficient and provide healthy environments? Up until now, we have considered multi-modal transit facilities as positive infrastructure since… Read more »
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE APRIL 2014 EDITION. While impact investing is still far from being an accessible opportunity for the general population, investor demand for greater liquidity and platforms such as Kiva and Kickstarter make it clear that the potential for involving retail investors in the sector is immense…. Read more »
Oftentimes, the way a corporation responds to a crisis ultimately leads to a binary outcome: the company stumbles and fails to survive or, alternatively, it responds effectively and thrives. As the focus on sustainability continues to grow, it’s likely that corporate crises will increasingly involve ESG issues. While most crises are idiosyncratic in nature, in some instances there are commonalities, both in terms of the precipitating factors and the responses of the companies involved. It’s for this reason that analyzing successful responses to prior crises can be enlightening for managements and investors….
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE MARCH 2014 EDITION. Although March may mean St. Patrick’s Day, that’s not the only reason some apparel companies are hoping you’ll be wearing more “green.” While child labor and other social concerns have been on the radar screen for a while now, apparel/footwear companies are now… Read more »
Mature economies have witnessed steadily declining productivity growth since the late ‘90s. Greater efficiencies in major emerging economies have been an offsetting factor, but they, too, are now seeing productivity growth decelerate. The challenge we’re now faced with is not only putting capital to work, but accelerating the flow of capital to innovative, sustainable businesses that in aggregate will help reverse this alarming productivity trend.
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE MARCH 2014 EDITION. In addition to the material bounty provided by our natural world, we also have access to great stores of wisdom that are embedded in natural organisms and natural systems. The principles of biomimicry, Life’s Principles, are not the newest theories: they are… Read more »
EXCERPT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE FEBRUARY 2014 EDITION. In the U.S., domestic developments have made New Jersey the third leading state in solar energy. This reflects a changing energy landscape in which sustainability has become a global policy consideration. The long-term trend is towards the adoption of renewable energy… Read more »
2013 was a stellar year for stocks — the S&P 500 reached new highs and finished with a gain of 30%. Other developed markets performed well too — the MSCI All Country World Index (ACWI) rose 23% — but the MSCI Emerging Markets index fell 3%. As for 2014, we started the year with a dip begging the question of whether a material correction might be in store, as some observers have predicted….
Extract from the Cornerstone Journal of Sustainable Finance & Banking, January 2014 written by Michael Shavel, CFA, a Research & Business Analyst at Cornerstone Capital Inc. and a former Research Analyst on AllianceBernstein’s Global Growth & Thematic team. Subscribers can view the full article in the January edition. While technology has evolved, there still remains the… Read more »
Extract from the Cornerstone Journal of Sustainable Finance & Banking, January 20134written by Robert DiMarsico, Managing Director at Poseidon Capital Corp and Senior Advisor to Shipping Practice at FTI Consulting Inc. Subscribers can view the full article in the January edition. Carrying 90% of world trade, shipping is a critically important industry, one which until recently… Read more »
Extract from the Cornerstone Journal of Sustainable Finance & Banking, January 2014 written by William Sarni, Director and Practice Leader, Enterprise Water Strategy | Sustainability, Deloitte Consulting LLP. Subscribers can view the full article in the January edition. What should the future of water look like? Achieving the desired outcomes, in 21st century water management, means… Read more »
Extract from the Cornerstone Journal of Sustainable Finance & Banking, December 2013, written by Gustavo Piras Oliveira, LatAm Director of Research and Consumer Analyst, UBS. Consumers are becoming highly alert to socially responsible and sustainable actions. Consumers want things that are meaningful for their lives. Sustainable actions should drive demand and profitable growth in Brazil…. Read more »
As last year’s Earth summit in Brazil, Rio+20, clearly showcased, many people believe indeed that a “green growth” economic model, integrated within the long term vision of sustainable development, is incompatible with the economic growth countries like Brazil strive to achieve in order to bring prosperity and progress to all. Is this antagonism relevant, or is there a way to reconcile these major objectives?
Extract from the Cornerstone Journal of Sustainable Finance & Banking, November 2013, written by Diane B. Glossman, an independent Director at Powa Technologies, WMI Holdings, and Ambac Assurance. Ultimately companies and industries cannot be regulated into behaving well: ethical mores have to be established by senior managements and become ingrained throughout organizations from within.
Extract from the Cornerstone Journal of Sustainable Finance & Banking, November 2013, written by Nikos Theodosopoulos, Founder of NT Advisors LLC, a consulting and advisory firm for the Technology Industry. While China represents a large and rapidly growing market for US Technology companies, the path to success in this market has proven difficult and sometimes… Read more »
Extract from the Cornerstone Journal of Sustainable Finance & Banking, October 2013, written by Nikos Theodosopoulos, Founder of NT Advisors LLC, a consulting and advisory firm for the Technology Industry. The boards of large and “legacy” technology companies have to be cognizant of increasing shareholder activism in the technology industry and that more shareholder friendly… Read more »
Extract from the Cornerstone Journal of Sustainable Finance & Banking, October 2013, written by Pete Hickson, Founder of Global Materials Advisors Ltd. and an Advisory Director at TrafalgarCopley. Consumers claim that the practices of metal warehouses, owned in part by ‘Wall Street’ banks, have constrained supply and inflated costs. The LME warehouse operators counter claim… Read more »