Posts Tagged: Article – Cornerstone

Advice for Retail Workers in an Automating Age

The “skilling up” of the retail workforce has the potential to enable retail workers to improve their productivity and career prospects, while enabling retail companies to build their future workforces. Purposeful investors can identify these companies and take a long-term investor view to encourage these companies to train and deploy this workforce. The widely reported… Read more »

Retail Automation: Stranded Workers? Opportunities and risks for labor and automation

Executive summary (download full report here) The retail landscape is experiencing unprecedented change in the face of disruptive forces, one of the most recent and powerful being the rapid rise of automation in the sector. The World Economic Forum predicts that 30-50% of retail jobs are at risk once known automation technologies are fully incorporated…. Read more »

Why the Choice Act Is a Threat to Corporate Stewardship

For over 40 years, some shareholders have been protecting the environment, improving working standards and increasing corporate accountability using a little-known but effective tool called a shareholder proposal. But now this tool is threatened by the legislative push to reform financial regulation. Shareholder proposals allow investors to put questions related to a company’s environmental, social… Read more »

Partnering with Rutgers and the G&A Institute

21st Century executives and their teams need the skills, networks, and increased expertise to achieve important CSR, sustainability, environmental, social and community impact goals while delivering value to their organization, investors and other key stakeholders. The Rutgers Institute for Ethical Leadership, in partnership with the Governance & Accountability Institute, Inc., offers a two-day, deep dive… Read more »

Tackling Water Scarcity for Business

Last week at the New York Stock Exchange, Ecolab hosted an event to unveil a new version of its Water Risk Monetizer (WRM) solution. WRM, a financial modeling tool, was developed through Ecolab’s partnership with sustainability data firm Trucost and in collaboration with Microsoft. The event focused on WRM’s new operating features. Alongside the debut… Read more »

“Super Bugs & Super Risks” — Takeaways from Recent FAIRR Meeting

As part of Cornerstone’s ongoing research on antibiotics and livestock production, we attended the FAIRR Initiative’s event on antibiotic resistance and investment risk in New York City on Monday, March 20. Attendees who were new to the topic received a useful overview, while those that have been following the issue were presented with valuable perspective.

Our Comments to the SEC on the CEO/Worker Pay Ratio Rule

Because our investor clients seek to invest for the long term, we have a strong interest in urging corporate disclosures that enable investors to evaluate risks and make decisions that will affect the long-term health of our clients’ portfolios. Our corporate clients believe that meaningful disclosure that communicates how they are managing environmental, social and governance matters helps them to attract long-term capital.

JSFB November Edition: “Proximity”

“Proximity” is a central question for so many sectors and for the capital markets.  As policy proposals and realities evolve, and while uncertainty and volatility will persist, there is no doubt that macro and structural trends in the US and Global markets are bigger and more powerful than any administration or regulatory regime over the… Read more »

JSFB November Edition: “Proximity”

With this edition of the Cornerstone Journal of Sustainable Finance and Banking (JSFB), issued in such close proximity to the rather astounding US Presidential election, we see investors driving a dramatic downward move in bonds and a strengthening dollar based upon expectations of fiscal stimulus driving more rapid growth and the prospect of inflation. How close we are to these trends actually materializing is another story entirely. “Proximity” is a central question for so many sectors and for the capital markets.

Systems Thinking in Impact Entrepreneurship

We recently attended the SOCAP conference in San Francisco and came away invigorated by the hive of activity occurring within the social entrepreneurship space. New businesses are proliferating and tackling some of the world’s most daunting challenges. However, we noted that systems thinking was often absent from the discussion. It is important for impact entrepreneurs to incorporate this mindset into their business models from the outset, in order to maximize the scale and scope of the impact that they can create.

Extractive Company Values: Environmental & Social Issues as Indicators of Strategy Execution Potential

With a market cap of over US$6 trillion, the extractive sector encompasses over 5,000 companies. It provides raw materials for everything from energy creation to high-tech manufacturing to electronics. Even as the world starts to transition from greenhouse gas emitting commodities like oil and coal, natural resource extraction will remain essential. Smartphones and electric vehicles, for instance, require metals sourced from extractive operations around the world. Yet natural resource extraction is, by its very nature, environmentally destructive and socially disruptive — and managing the risks inherent in mining is of prime concern to extractive companies and the host countries in which they operate. Extractive companies’ success will be in part determined by their ability to position themselves for this future.

Food Safety: Is Whole Foods Prepared?

On October 20, the Detroit Health Department announced an investigation into two cases of Hepatitis A potentially linked to Whole Foods’ stores. Whole Foods contacted the Detroit Health Department to report one of the cases, while the second case has not been definitively linked to Whole Foods. While we view the reporting of this incident to health officials as positive, we have concerns about the grocery chain’s food safety preparedness given its exposure to prepared/ready-to-eat food and its lack of food safety disclosure.

Cornerstone’s Kirshman Named to Board at Calvert Foundation

Cornerstone Capital Group’s Phil Kirshman has been elected to the Board of Directors at Calvert Foundation, an impact investing institution that invests in underserved communities around the world. He was confirmed for a three-year term. Also named to the board on Sept. 12 was Jaime Yordan, former Vice Chairman of Citigroup. Earlier this year the Calvert board also… Read more »

Poultry Antibiotics in Emerging Markets: Should We Rethink Growth?

Recent survey results indicate a move away from antibiotics in emerging market poultry production. Our read of the survey results is that investors should be cautious assuming that growth in emerging market poultry production will translate into similar growth in medicated feed additives.

Evolving Lifecycles in an ESG Materiality Matrix

For most sectors, the likelihood of adverse ESG events and their potential financial impacts evolve through a lifecycle. ESG lifecycles determine the time it takes for a sustainability issue to become relevant to a sector as well as the magnitude of the financial impact. We believe the ability to anticipate ESG lifecycles can enhance the investment decision-making process.

Cornerstone Contributes to FAIRR’s Investor Case Studies Report

The Farm Animal Investment Risk & Return (FAIRR) Initiative has issued a second booklet of case studies that showcases how leading investors and investment service providers from around the world are integrating issues relating to factory farming into their investment processes. Cornerstone’s Michael Shavel was asked to contribute to the booklet regarding his work on antibiotics and animal farming.

Solving for Nonfinancial Data as Part of the Investor’s Mosaic: Meeting with the NYSSA and CFA Institute

Bloomberg, the NYSSA and The CFA Institute recently held a sustainable investing conference titled “Sustainability and Value – Using Data and Valuation to Drive Returns.” The day included panel discussions from a variety of participants including the Chief Investment Officer of the State of Connecticut, institutional asset managers, a partner from Jeff Skoll’s family office, Capricorn Investment Group, a professor from Yale and Stanford Universities, and sustainability professionals from Waste Management, Huntsman Corp. and Lockheed Martin.

Antibiotics and Animal Health: Recent Data Points Highlight an Accelerating Move

US markets moving away from antibiotics; our thesis remains intact. In our October 5, 2015, report Antibiotics and Animal Health: Value-Chain Implications in the US, we posited that consumer demand could push food supply chain companies to phase out antibiotics beyond the level required by FDA guidelines. We are seeing this play out as a… Read more »

Cornerstone Capital Names Douillet as Executive Director

Cornerstone Capital Group is pleased to announce the appointment of Nicole P. Douillet as Executive Director responsible for Business Development and Client Portfolio Management at Cornerstone Capital Investment Management (CCIM), its investment advisory business. “As we scale up operations at Cornerstone, we are truly delighted to be joined by a colleague with Nicole’s track record… Read more »

Cornerstone Contributes to FAIRR’s Investor Case Studies Report

Many investors now acknowledge the sustainability issues that surround the growth of intensive farming around the world. But what practical steps can investors take to ensure any risks and opportunities emanating from this trend are accounted for in investment decisions? The Farm Animal Investment Risk & Return (FAIRR) Initiative has issued a second booklet of case studies that showcases how leading investors… Read more »

JSFB Summer Edition: “Explorations and Aspirations”

This month in the Cornerstone Journal of Sustainable Finance and Banking (JSFB), we consider an array of subjects ranging from “smart contracts” in the blockchain to empowering investors with sharper measurement tools. And ultimately, we hope to go beyond “sustainability,” and move towards value creation and regeneration through capitalism.

Tracking our Thesis on Food Safety Opportunities: A Look at Neogen

As we discussed in our July 2016 report Food Safety: In a State of Transformation, the global food safety testing market is expanding. Our optimistic view on growth in food safety testing is supported by Neogen’s fourth quarter earnings release. Neogen is flagged in our report for having high exposure to the food safety theme.

A Voice in the Boardroom: Practical Guidance for Voting Proxies

“A Voice in the Boardroom” is written for organizations and individuals who want to use their voice as shareholders to influence companies, but are not sure how to get started. It is meant primarily for asset owners — endowments, foundations, family offices, individuals or others — who are long-term stewards of capital on behalf of themselves and others.

Cornerstone and IRRCi Publish Benchmark Report on Food Safety

New study examines food safety practices of 60 public companies and identifies five key industry trends. Results indicate progress, but much room for improvement. The research also indicates that executive compensation rarely is linked to food safety goals, and that there currently is little food safety expertise present on most food company boards.

Food Safety: In a State of Transformation

The food industry is undergoing a transformation as it addresses food safety risks in an increasingly global, complex supply chain. A number of highly publicized cases of foodborne illnesses and product recalls have occurred in recent years; these events highlight vulnerabilities in the food safety chain that present opportunities and risks for investors.

Sector and Regional Strategy: Monthly Update

Executive Summary Sector implications of Brexit fallout. Uncertainty likely to prevail globally, at least until U.S. presidential election. Major corporate and consumer spending decisions potentially on hold, a negative for Information Technology, Industrials, and Consumer Discretionary (downgraded to Neutral). Low rates continue to pressure Financials. Regional strategy. Russia and Australia still rank at top of… Read more »

Cornerstone Hires Carolyn Trabuco for Research Team

Cornerstone Capital Inc., a leading financial services firm offering investment advising, corporate consulting, and investment banking services, has named Carolyn Trabuco as a Managing Director and Global Thematic Research Analyst. Trabuco has spent over 25 years in global investing, where she has identified dynamic secular changes, made investment recommendations, developed business and industry models, valued… Read more »

Regional and Sector Strategy: Monthly Update

Executive Summary Upgrade U.S. to Overweight from Neutral. Earnings estimate revisions turned sharply positive, adding to other favorable fundamentals including margins, share buybacks. Information Technology: Still Neutral; Earnings Outlook Remains Unfavorable. We downgraded Information Technology to Neutral last month reflecting, in part, negative earnings estimate revision trends and a deceleration in expected earnings momentum. Both… Read more »

JSFB May Edition: “Relativity”

This month in the Cornerstone Journal of Sustainable Finance and Banking (JSFB), we consider the issue of “Relativity” in the capital markets. Einstein showed that even though the laws of physics are the same everywhere, people experience time and space differently. It follows that individual perspectives on change are relative to one’s own current position.

Regional and Sector Strategy: Monthly Update

Our earnings momentum metric has been refined. In addition, we have also introduced a methodology for weighting ESG factors in sectors and regions. These modifications have resulted in an unusually large number of changes in recommendations.

Cornerstone Opens Washington DC Office, Adds Strategic Policy Expert

Cornerstone Capital Group, a leading financial services firm, has named Dr. Robert D. Lamb as Director of Strategic Policy Research, and will open a new office in Washington, DC, effective March 21st. “Given the critical nature of civic entrepreneurship in the capital markets, Cornerstone is pleased to expand our footprint to include Washington DC,” said Erika Karp, CEO… Read more »

JSFB March Edition: “Leadership & Learning”

In this edition of the Journal of Sustainable Finance & Banking (JSFB), we highlight ideas that foster “Leadership & Learning.” Leadership is a process of continually absorbing information and transforming it with strategic and tactical clarity. The commitment of business leaders, from the Board room through operations, in understanding their vital role in innovating for… Read more »

Country Valuation: An ESG Synthesis

Effective national governance (“G”) facilitates a country’s efficient transformation of environmental resources (“E”) into wealth. Both are strongly influenced by social factors (“S”). By way of example, France’s social objective of maintaining a rural economy necessitates heavy government intervention and likely detracts from its potential for economic development.

Cornerstone Capital Names Morgan to Managing Director Role

NEW YORK – Cornerstone Capital Inc. has named Janet M. Morgan (Jan) as Managing Director, responsible for strategic business development for the firm, effective immediately. Noted for her work as an environmentalist, leader and advocate for women and girls, Morgan has been dedicated to solving pressing global problems through nonprofit action, dialogue and socially responsible… Read more »

Cornerstone Capital Names Dusenbury as Corporate Business Development Lead

NEW YORK — Cornerstone Capital Inc. is pleased to announce the appointment of David Dusenbury, CFA, as Managing Director, responsible for strategic corporate business development. Dusenbury will join the firm’s Executive Committee and serve on the Investment Policy Committee for Cornerstone Capital Investment Management, its investment advisory business. “We are thrilled to have another Wall Street veteran… Read more »

January Edition of the JSFB: “Order & Chaos”

Complexity and volatility seem to be the defining characteristics for global markets as we experience an extraordinarily challenging start to 2016.  In this season of extremes, we digest China macro concerns,  the trajectory for commodity prices, and an evolving geopolitical and economic landscape.  All the while, we try to assess how the capital markets can… Read more »

“Legitimacy” in the Banking Sector – Revisited

In January 2015, we published a report introducing a framework to enable analysis of the “legitimacy” of an institution by understanding its relationships with stakeholders. We used the banking sector as our test case given the recency of the Global Financial Crisis, but the framework can be applied to any industry or institution. Given this edition’s focus on “Order and Chaos,” we felt it would be relevant to revisit our previous work. This article is an excerpt from the report.

Wilson and Karp on “Shareholder Alignment” in American Banker

In the late 1990s, some shareholders became concerned that new practices in subprime mortgage lending could harm low-income borrowers. Companies like Wells Fargo received shareholder resolutions asking them to adopt anti-predatory-lending policies. Wells engaged in discussions with the shareholders and ultimately implemented practices that helped keep its mortgage origination business relatively free of “toxic mortgages.”… Read more »

December Edition of the JSFB: “Through a Health Lens”

As the Federal Reserve deftly orchestrated a short-term rate rise for the first time in nearly a decade, there is less clarity on the pace of the normalization ahead. Clearly, both Janet Yellen and Mario Draghi have articulated that progress will be predicated upon the health of their respective economies.  And so in this month’s… Read more »

Our Principles of Corporate Engagement

Consistent with our mission as a purpose-built, research-driven sustainable finance platform, Cornerstone Capital Group engages with asset owners, asset managers, and companies to help them integrate environmental, social and governance (ESG) considerations into their capital markets activities.  The specific objective of our corporate consulting business is to encourage companies to adopt best disclosure practices that… Read more »

Paris Agreement: Validates national and local actions

We view the Paris Agreement as accelerating the ‘race to the top’ in responding to climate change. Developed countries will need technologies and business models that de-carbonize their existing economies. Developing nations will focus on technologies that drive strong economic growth and improve living standards.

Global Earnings Synthesis

As a complement to our Regional and Sector Strategy: Monthly Update we introduce a new publication that will examine in detail the outlook for global earnings on a regular basis.

Thoughts on Paris and Shareholder Alignment

As world leaders, investors and members of civil society meet in Paris to forge a new global accord on climate change, we are seeing a greater appreciation for the value of  systematically analyzing Environmental, Social and Governance (ESG) factors not only at the policy level, but also as part of shareholders’ holistic assessment of corporate strategies. Beyond… Read more »

Tracking Our Thesis on Automation in Restaurants

In our March 2015 report The Economics of Automation: Quick Serve Restaurant Industry, we asserted that the twin threats of rising wages and increasingly volatile food prices suggested a more challenging environment ahead. While commodity inflation doesn’t appear to be a threat in the near term, increasing labor cost pressure has emerged as a major… Read more »

Antibiotics and Animal Health: California Raises the Bar

On October 10, 2015, California Governor Jerry Brown signed into law SB 27, a bill limiting the use of medically important antibiotics (MIA) in animal agriculture, thus going beyond federal policy as outlined by the FDA. This action increases our confidence in our thesis that the potential for more restrictive regulation (as seen with SB 27) and shifting consumer demand pose a risk to antibiotics sales for animal health companies.

Alibaba: Uniquely Conflicted

With Alibaba’s first annual meeting scheduled for October 8, we conducted an examination of its corporate governance structure. We are not aware of another corporation that lists its corporate governance structure as a risk to shareholders. In fact, numerous concerns about the company’s corporate governance have been widely cited.

Sustainable Investing: Addressing the Myth of Underperformance

Despite growing demand for sustainable and impact investment solutions and a body of evidence to support the effectiveness of sustainable investing from a strictly financial perspective, many investors are still unclear about the relationship between ESG factors and financial performance.

Featured Domain: Hillel’sVoice.net

In reflecting on the future of capitalism, we draw from wisdom of the great scholar Hillel, who was said to not only advance his own thoughts, but those of his opposition. It is in that context that we revisit an article first published in Forbes a couple of years ago: “Sustainable Capitalism… If not now, then when?” It is in light of this context that we select HillelsVoice.net as our “Featured Domain.”

New York City Comptroller Talks “Work-Life Integration”

New York City Comptroller Scott M. Stringer engaged executives from both HR and investment/asset management in a robust conversation about the importance of flexibility, diversity and work life issues at a roundtable on August 11th co-hosted by Families and Work Institute (FWI) and Cornerstone Capital Group, a sustainable finance advisory platform. Several of FWI’s Corporate… Read more »

Addressing Deforestation Through Sustainable Finance

Trends in Standards and Certification in Brazil are Focus of Workshop How might LatAM banks advance their policies, products and tools to better incorporate sustainability measures? And what models for engagement might evolve as best practices for public and private entities addressing deforestation concerns?  Those were just some of the subjects discussed at a daylong workshop organized by… Read more »

Cornerstone’s Karp Addresses UN General Assembly: “Trust, Transparency, Entrepreneurship & Corporate Legacy”

Cornerstone Capital Group’s Founder and CEO Erika Karp today delivered an address at the UN General Assembly representing the “voice of global investors in the capital markets” before leaders from across the public and private sector gathered at the United Nations’ Global Compact + 15 plenary event, “Business as a Force for Good.” Marking the UN Global Compact’s 15th… Read more »

SocratesVoice.com

In late May, the highly regarded Ceres organization, which advocates for sustainability leadership, partnered with BlackRock, the world’s largest asset manager, to issue “21st Century Engagement: Investor Strategies for Incorporating ESG Considerations into Corporate Interactions.” Cornerstone Capital is proud to have contributed to this publication. Our article is reprinted below. The smartest people we know,… Read more »

Learning from History: How do Historical and Forecast Electricity Prices Connect?

We believe that the rising electricity prices forecast by the US Energy Information Agency (EIA) in their Annual Energy Outlook 2015 do not account for the dampening effect of rapidly declining renewable energy costs and low financing costs. In particular, rooftop solar should act as a cap on the price that utilities will be able to charge retail customers while falling wholesale solar prices, set at a fixed price for up to 20 years, could reduce wholesale electricity prices for the long term.

Uber: Red Light, Green Light

The decision by New York City to drop a proposed bill that would limit growth of for-hire vehicle (FHV) companies – such as Uber and Lyft – attracted significant media attention. Based on prior analysis, we reiterate our view that the status of providers (i.e., employees versus independent contractors) poses a greater risk to FHV companies…. Read more »

Scenario: What if electricity prices fell?

US electricity prices have steadily increased in nominal terms over the last five decades. However, using history as a guide, we observe two distinct periods of falling prices driven by technology and government subsidies. We believe that a confluence of factors could once again result in structurally lower prices – with potential impact to power market participants.