Posts Tagged: Article – Cornerstone

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 »

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.

Co-Authored with Michael Marinello, Head of Global Communications for Innovation, Technology and Sustainability at Bloomberg LP and an Adviser to the C40 Cities Climate Leadership Group (C40) Money. Ever since the Code of Hammurabi was created around 1760 BC, money has served as a unit of account, a store of value, a medium of exchange for civil… Read more »

June Edition of the JSFB: “Africa”

We take inspiration from South Africa and historic figures such as Nelson Mandela in the political realm, and Mervyn E. King, who has led the way to achieving a level of transparency in corporate financial reporting that can “weave a golden thread” through the information made available to investors. We highlight efforts to drive positive change in commodity exchanges, advances in “agroforestry” to improve the lives of women and children and initiatives to prevent further exploitation of wildlife.

Dissecting the “Sharing Economy:” Business model opportunities and risks

Between Uber’s $50 billion valuation, Etsy’s IPO and the large venture capital infusions into Airbnb, the “sharing economy” is transitioning from a social movement to a large-scale commercial business model.

May Edition of the JSFB: “Precision”

In conjunction with the notion of corporate excellence as synonymous with corporate sustainability, this month’s JSFB focuses on the concept of precision — Precision in language, research, incentives, measurement, methodologies, and the general approach to business. In this issue, we draw upon experts including those from The Milken Institute, PwC, PepsiCo, and the Forté Foundation to discuss practicalities and purpose in disease management, R&D productivity, accounting, philanthropic services, and measuring “impact.” It is with precision that we look for insights to leverage the capital markets on behalf of a more regenerative and inclusive global economy.

What is “Corporate Sustainability”? Simply stated, it’s the same as “Corporate Excellence” but over the very long term. Over the very long term, does the company consider the value of all the capital it deploys in pursuit of its stated mission? Does the company consider the returns on the investments made in terms of the financial capital, human capital, and natural capital engaged in its business? Does the company balance the demands of shareholders, employees and customers in a synergistic cycle while recognizing and articulating the trade-offs that inevitably exist?

Proxy Access: A Core Shareholder Right or the Latest Corporate Governance Fad?

The 2010 Dodd-Frank financial reform law required all companies to provide proxy access to shareholders, but the implementation of this rule has been tied up in court. A small number of companies have moved ahead, and this proxy season roughly 40 companies have made “proxy access” available to shareholders. Meanwhile, the New York City Pension System filed proxy access requests to 75 companies in May. Below we provide some background on the issue, in the form of responses to questions we’re frequently asked.

Regional and Sector Strategy: May Update

We are now underweight the most cyclically sensitive sectors: Industrials, Materials, Energy. While we upgrade the CEEMEA region to Neutral from Underweight — in large part because of an improved earnings outlook — this likely reflects a modest rebound in oil prices, which remain 40% below year-ago levels.

April Edition of the JSFB: “Urban Innovation”

This month’s JSFB features articles that examine many aspects of urbanization – from existential threats (like the lack of natural water resources in Singapore), to tremendous opportunities (like the potential of “green” bonds in financing cleaner energy), and new tools to more effectively measure the ability of the private sector to address societal need. We traverse oceans and green spaces, the state of housing in India and renewable energy projects, as our cities and their planners consider the necessary steps to adapt for decades to come.

A new peak in urban mobility for New York City was achieved in 2014 with 1.7B people having ridden its sprawling subway system. More recently, we saw another notable milestone with the introduction of the “UberChopper,” which offers a $484 sightseeing helicopter ride above Shanghai so that Uber, the disruptive player in transport, can continue to gauge interest in airborne services.

The Drought in California: The New Normal? What Investors Need to Know…

California’s drought poses a resource crisis on a scale that has not been seen in the US for several decades. Experts forecast the drought, now in its third year, will continue at least through 2016, and the lack of rain, combined with a record low water table beneath the Central Valley, may be a “new… Read more »

Market Summary

The first quarter of 2015 is in the books and global equity markets are demonstrating a level of resilience despite mixed economic data and continued turmoil in Greece. Equity bulls seem to be driving the market – weak economic data is viewed as likely to delay the Fed rate hikes and strong data is viewed as generally positive for stocks. Investors are now focused on corporate earnings as they listen for forward-looking commentary that confirms the “grinding higher” action witnessed in equity markets.

Cornerstone Capital at “The Model Room”

In one of the most iconic rooms of New York, Cornerstone Capital Group joined together with the Rockefeller Brothers Fund, Astia Angels, XMS Capital Partners, The Clinton Global Initiative and ATCO Realty, to host entrepreneurs, innovators and financiers at the New York Yacht Club’s “Model Room” to engage in wide-ranging discussions on sustainable and impact investing and the potential for the private sector to drive system-level change at scale.

UBS’ Intellectual Capital Blog: Interview with Erika Karp

The following interview with sustainable investing expert, Erika Karp, Founder and CEO of Cornerstone Capital Group, first appeared on the UBS Intellectual Capital Blog.  Stephen Freedman, CFA, Head of Thematic and Sustainable Investing Strategy, UBS Many of you may remember Erika Karp, a long-term UBS veteran, who was head of Global Sector Research at UBS Investment Bank until… Read more »

Updating the Global Equity Strategy Investment Clock

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.

Regional and Sector Strategy: April Update

We continue to have a defensive tilt in our regional recommendations, and are Underweight the commodity-rich regions of Central and Eastern Europe, Middle East and Africa (CEEMEA) and Latin America …

March Edition of the JSFB: “Japan”

While Japan has proven to be a difficult market for investors over decades, the past few years have seen dramatic outperformance spurred by the prospects of the outcomes of massive quantitative easing. In fact, the extent to which the eurozone can take some lessons from Japan’s experience as it embarks on its own program is notable. It also leads us to question what else can be learned from Japan, and what are the persistent challenges?

Market Summary

As we approach the end of the first quarter, the environment for risk assets continues to be favorable with several major equity indices at or near all-time highs. Despite the bullish moves in equities, currency markets are dominating the global investment narrative in light of the dollar’s outsized move higher. Some pundits suggest that currency volatility is a harbinger of instability across other asset classes,

Japan’s New Corporate Codes – Studying the Impact on Valuations

Corporate governance represents the relationship among various corporate stakeholders that determines the strategic direction of a company. Practically, corporate governance adjudicates the balance among key stakeholder interests within the firm. Japan is unveiling a new corporate governance code for companies …

Environmental Issues & Country Valuations: What Matters?

What Matters? — Some environmental issues that are the subject of popular focus — such as carbon dioxide emissions — do not appear to be statistically significant for global investors. Moreover, many countries’ environmental “health” has moved in the opposite direction of their economic development i.e., more pollution and higher per capita GDP.

The Economics of Automation: Quick Serve Restaurant Industry

Increasing cost pressure. Labor and food represent a significant portion of restaurants’ cost structure. While these inputs have been relatively predictable in the past, the twin threats of rising wages and increasingly volatile food prices suggest a more challenging environment ahead. It’s not clear that cost inflation can be consistently offset by raising menu prices, so companies are considering new strategies to protect margins . . .

Regional and Sector Strategy: March Update

Our regional strategy is unchanged. We continue to have a defensive tilt in our regional recommendations, and are Underweight the commodity-rich regions of CEEMEA and Latin America. Japan continues to be the top-ranked country. Over the past twelve months, share buybacks in Japan have been the largest of any country / region, the first time that country has been the global buyback leader since we launched the regional model in April 2014. We highlight changes in the Energy suggesting, perhaps, that stock prices in the sector have not fallen as fast as earnings estimates . . .

Towards Decent Jobs and Sustainable Business: the Long Road Ahead for Walmart

Walmart surprised the markets last week when it announced, along with its year-end results, a salary increase for 500,000 of its employees, raising company minimum wages to $9 per hour in April 2015 (bringing the average wage to $13) and $10 per hour beginning February 2016. The retail giant’s financial results were otherwise unremarkable, with… Read more »

Schneider Electric and the Power of Energy Efficiency

Schneider Electric (SU) published its annual results yesterday, posting a profit increase of 2.8% and revenue growth of 6.6%. With a 170-year history, starting in metallurgy, Schneider Electric is now betting on one core element of its strategy, across all its business lines: energy efficiency. Last November, the International Energy Agency reminded markets that energy… Read more »

When last we met our “Superheroes of Capitalism” (alias: “ Sustainable Investors”), they were valiantly fighting to highlight the critical importance of analyzing Environmental, Social and Governance (ESG) factors in predicting corporate financial performance. They were coming to terms with the trade-offs inherent in taking a long-term perspective. They had acknowledged that in order to… Read more »

Investing in Diversity … Painful, but Profitable

The diversity of perspective and experience that comes from having women on corporate boards and in senior management allows for more creativity, innovation, productivity and profitability than might otherwise be achieved. This is particularly crucial in a complex world, where skilled human capital and talent management is essential. Attracting, retaining, engaging, compensating, motivating and inspiring talented employees in a growth-starved world is a major challenge.

A Closer Look at Alibaba’s Corporate Governance

The recent, apparently resolved conflict between Alibaba and the Chinese government agency SAIC over counterfeit goods raises questions about whether shareholders should have confidence in the future growth of the company. With a valuation of over 30 times earnings, the market is pricing in a high degree of conviction about the company’s future growth. In… Read more »

Regional and Sector Strategy: February Update

Our regional strategy is unchanged, even with a heightened focus on monetary policies and exchange rates in the past month driven, in part, by fears of deflation. We continue to have a defensive tilt in our regional recommendations, and are Underweight the commodity-rich regions of CEEMEA and Latin America. Our sector strategy is also unchanged and remains “less cyclical, more defensive.” We maintain our relatively defensive posture given pockets of economic weakness globally. We are Overweight Health Care in North America, the U.K. and Europe ex U.K. We are Underweight or Neutral Energy in the majority of regions….

January Edition of the Cornerstone JSFB Themed “Transparency”

In this month’s “Cornerstone Journal of Sustainable Finance and Banking” (JSFB) we focus on “Transparency.” We begin by examining Transparency as it relates to the banking sector with articles on physical commodity markets, the notion of “legitimacy” in banking and ultimately, a framework for a new industry ‘scorecard’ . . .

The Prince’s Accounting for Sustainability Project (A4S) Summit

As 2014 came to a close, HRH the Prince of Wales hosted the 10th anniversary Accounting for Sustainability Project (A4S) Summit and rightly stressed that “We need 21st century tools for 21st century problems…and time is not on our side.”  That does indeed capture the sense of urgency and purpose shared by the attendees of… Read more »

Market Summary

As we look back at 2014, an environment categorized by slow economic growth, low interest rates and minimal inflation rewarded investors that followed a long-term strategy and took prudent risk. Looking ahead, many investors expect a continuation of the post-crisis bull market, which is now the second-longest annual winning streak on record. While the global economic backdrop appears to be generally supportive of this view, there are several risks confronting investors…

Corporate Social Strategies, Investment Decision Making and Income Inequality

In our recent report, “Income Inequality: Market Mechanism or Market Failure?” we argue that unequal incomes are a normal feature of a free market economy. It is the extent of this inequality, coupled with stagnating wages and persisting poverty, which led us to focus on this topic. Why We Chose to Write on Income Inequality… Read more »

“The Integrated Reporting Movement”

“The Integrated Reporting Movement — Meaning, Momentum, Motives and Materiality,” by Robert G. Eccles, Michael P. Krzus, Sydney Ribot) follows the publication in 2000 of the first book on this topic by Eccles and Krzus, “One Report: Integrated Reporting for a Sustainable Strategy.” In just four years, integrated reporting has been transformed from an idea to a growing best practice for companies all over the world.

Introducing the Global Equity Strategy Investment Clock

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….

“Legitimacy” in the Banking Sector

Earnings and valuation uncertainty – In a post Global Financial Crisis world, investors are questioning long-term earnings and valuation prospects for the banking sector. Tougher regulation, particularly on capital, liquidity and structure, are exerting pressure on the traditional banking business and clouding the outlook for investors….

Regional and Sector Strategy: January Update

This month we, upgrade Financials to Overweight from Neutral reflecting the combination of relatively attractive valuations and improving earnings momentum. In addition, Financials’ earnings estimate revisions are only modestly negative (i.e., downward revisions just outpace upward revisions), in sharp contrast to most other sectors where estimate revisions are strongly negative. Our regional strategy remains unchanged…..

The Social Costs of Business: Implications for Sector Strategy

Executive Summary The social responsibility of business — In pursuit of the goal of increasing profits, businesses incur costs to nurture relationships with key stakeholders: local communities, suppliers and their workers, the company’s own employees, customers.  Some of these costs are straightforward; others are tougher to quantify.  To be sure, many business‑stakeholder relationships have benefits too…. Read more »

Redefining Energy Utilities: The E.ON Revolution

On December 1st, the German energy utility company E.ON announced it would spin off its conventional energy generation, upstream and trading businesses, and focus on renewable energy, networks and customer solutions. E.ON’s current shareholders will receive shares in this new company, in addition to their holdings in the parent company. E.ON will keep a minority… Read more »

Harnessing ‘Sustainable Brand Power’

How does a brand stay true to its purpose?  And how does a company create an emotional connection with its stakeholders, employees and consumers? These were just a few of the questions addressed by Jostein Solheim, CEO of Ben & Jerry’s during a Roundtable session Nov. 19th on “Sustainable Brand Power” at Cornerstone Capital Group. … Read more »

ESG Essentials – A Guide for Investors

There is increasing recognition globally that environmental, social and governance (ESG) factors are relevant and material for investment decisions. If you are involved in the world of finance, the words “sustainability” or “ESG” have either crossed your desk or are about to. For investors that are new to the topic, this report will serve as a primer that provides a basis for additional avenues of inquiry. For those that are already familiar with the subject, this report will act as a supplement and may offer new or different perspectives on the most critical issues.

Income Inequality: Market Mechanism or Market Failure?

Tools to assess corporate performance and enhance investment decisions Income inequality is a normal feature of a free market economy. However, in recent years, it has been on the rise in most developed countries and has reached relatively high levels, especially in the US. Extreme income inequality affects economic growth prospects and societal stability. It… Read more »

November Market Summary

In a sign of bullish investor sentiment, risk assets broadly retraced the losses incurred in the October market swoon. A combination of receding global growth fears, continued monetary policy report, and strong earnings results contributed to the rebound, in some cases driving equity indices to new highs. Central bank policy remains a focal point for investors and they continue to consider the ramifications of less accommodative Fed policy offset by more aggressive ECB and BOJ actions….

Opportunities in Waste, or Wasted Opportunities?

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 »

My Smart Car and Me

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…

Nils Anderson, the CEO of AP Moller Maersk, spoke at this month’s BSR Conference in New York City and articulated his company’s aspiration to be “Taking the lead in a world of change.”  This company represents the ultimate player in global trade. And, if one subscribes to the economic theory of comparative advantage, then the… Read more »

Regional and Sector Strategy: November Update

This month we, upgrade Financials to Overweight from Neutral reflecting the combination of relatively attractive valuations and improving earnings momentum. In addition, Financials’ earnings estimate revisions are only modestly negative (i.e., downward revisions just outpace upward revisions), in sharp contrast to most other sectors where estimate revisions are strongly negative. Our regional strategy remains unchanged. We are Overweight or Neutral the majority of developed regions (Japan, U.K., Australia, North America) and Underweight most emerging markets (Latin America, CEEMEA)….

The Economics of Environmental Issues in Sector Strategy

Increasing environmental pressures — Corporations globally are experiencing growing pressure about environmental issues reflecting, in large part, regulatory initiatives that could potentially increase costs. Among the factors driving the growth and stringency of environmental regulations: energy security issues, public health challenges, impact of pollution on economic growth. We examine the implications of a potential increase in key environmental costs for ten industry sectors. Subsequent research will examine the implications — positive or negative — of social and governance factors for these sectors.

A Closer Looks at GMOs

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?

Transforming Snacks for Foodies: Exo Bars and Runa Tea

The soft drinks and snacks markets are changing. Consumers are progressively turning towards healthier, and more sustainable alternatives. Three deep trends are behind this slow evolution: our greater understanding of how climate change affects water, energy and food systems; increased awareness of how our choices affect communities that produce food commodities; and growing health consciousness…. Read more »

Market Summary: Overview

In a year of surprisingly muted market volatility, this month we saw risk assets tumble as investor concerns reached a decisive tipping point. Anxiety over a less accommodative Fed, the pace and sustainability of global economic growth, continued conflict in Ukraine, escalating violence in the Middle East, and even the Ebola crisis have investors fleeing… Read more »

In an effort to ignite and support the efforts of the next generation of business leaders, and a form of capitalism that is based upon greater collaboration and transparency, we launch this initiative among the world’s students who will be essential drivers of sustainable innovation…This is a call to action for social entrepreneurship: “Sustainable Games:… Read more »

Regional and Sector Strategy October Update

Still defensive — We maintain our relatively defensive posture given pockets of economic weakness globally. We are Overweight Health Care in the U.K., North America and Europe ex U.K. We are Underweight or Neutral Energy, Materials and Utilities in the majority of regions Regional strategy — We upgrade the U.K. to Overweight from Neutral, in large part because the earnings outlook has improved materially. We downgrade CEEMEA to Underweight from Neutral….

Ebola as a Challenge to Health and Investment

The latest Ebola outbreak has killed at least 1,200 people and probably infected 3,000 to 4,000 more across several West African countries, making it the biggest on record. From an initial start in Guinea, the focus of this deadly virus has shifted to Liberia and Sierra Leone (with limited numbers in Nigeria and Senegal), devastating… Read more »

Are You Thinking Like a Universal Owner?

Imagine it is 2006, and a savvy and perspicacious Chief Investment Officer of a large pension fund foresees a looming threat to the stability in the financial markets. Having lost confidence in the banks, what can she do? Unlike hedge funds or active managers, she cannot short or even exit the shares of the financial sector because her fund is so large that it must hold every name in the public markets…


As leaders from across the globe are set to convene this month in New York City at the United Nations and an unprecedented number of citizens worldwide are expected to take action in support of a comprehensive response to climate change, we are reminded how important it is to amplify the voices of progress. We… Read more »

Flagship Research: Gauging Governance Globally – Macro & Micro Metrics

Much analysis has attempted to find an empirical link between Environmental, Social & Governance (ESG) factors and investment returns. By contrast, the focus of our research has been the significance of ESG factors for equity valuations….

Regional and Sector Strategy: Monthly Update

In this Executive Summary, we introduce the inaugural edition of a regular monthly update of our regional and sector strategy models, both of which explicitly take into account Environmental, Social & Governance (ESG) factors. More defensive — We extend our relatively defensive posture given more pockets of economic weakness globally. Regional strategy — We upgrade… Read more »

The Cornerstone Capital Strategy Update: Less Cyclical, More Defensive

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 »

Cornerstone Summary of “Earnings Guidance A White Paper from KKS Advisors & the Generation Foundation”

The fact of the matter is that capital markets have moved away from a long-term mindset and more towards a focus on short-term results. This trend has been well observed by market participants and academics alike, yet the question as to what will serve as a catalyst to reverse the trend remains. To this end, it’s worth highlighting a recently released white paper by The Generation Foundation and KKS Advisors focusing on the impact of regular Earnings Guidance. Thorough examination of the topic leads to the following conclusions….

Update on Golf Industry

As we proceed through earnings season, our concerns (read our “Par for the Course” article published in the June edition of The Cornerstone Journal of Sustainable Finance & Banking) about demographic secular headwinds is starting to play out.  Our thesis, which began with near-term overhangs in the golf value-chain, are coming to fruition. First, as of… Read more »

What is Shareholder Engagement… Why is it Important?

The article by Susan Baker and Jonas Kron provides a fascinating example of how Trillium Asset Management has used its influence as an investor to impact corporate policies on an important social issue. But is Trillium’s story an outlier or part of a trend? Do companies change their governance practices in response to input from shareholders? If so, why? And more importantly, does it benefit the bottom line?

Confirmation Bias in the Investment Process

The ancient Greek historian, Thucydides, wrote, “It is a habit of mankind . . . to use sovereign reason to thrust aside what they do not fancy.” The phenomenon to which he speaks manifests itself in all walks of life, from politics to religion and investing. Today, this concept is termed “confirmation bias” and refers to the tendency of people to favor information that confirms their beliefs or hypotheses….

The Cornerstone Capital Strategy Update

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….

Embracing the New Market Opportunity: LGBT+A

The traditional courting of the “gay market” ignores a much larger market opportunity. LGBT friends and family i.e. Allies, are showing their support not only as citizens, but also as consumers — making purchasing decisions that align with their views on LGBT equality. The latest estimates (2012) put the total buying power of the adult LGBT population at nearly $800B. When you add Allies, that number is far greater. This is the “LGBT+A” market.

“Intentionality” has been a word used a great deal lately as the definition of “Impact Investing” has been evolving. Front and center is the clearly stated intent to not only drive financial returns, but to seek measurable positive impact towards societal and environmental goals. In this note we simply argue for the same kind of… Read more »

Jazz Inspired Finance

Imagine if capitalism could harness the power of communication, collaboration and culture. Imagine if capitalism could serve its best and highest purpose of driving global economic prosperity. Imagine if capitalism were in the hands of leaders who strive for both long-term corporate profitability and to meet the needs of society for better nutrition, healthcare, education,… Read more »

The Cornerstone Capital Sector Strategy: Incorporating ESG Factors into Media Sector Valuations

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 »

Principles of Responsible Gaming

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…

首席执行官关于可持续金融和银行业的致辞 – The Cornerstone JSFB CEO’s Letter in Mandarin, June 2014

The June edition of the Cornerstone Journal of Sustainable Finance & Banking puts the focus on “Sports, Media and Entertainment,” understanding the broad influences they have on cultures, businesses and nations. Read the CEO’s Letter on Sustainable Finance & Banking in Mandarin here. 首席执行官关于可持续金融和银行业的致辞

Governance & the NFL

ABSTRACT FROM THE CORNERSTONE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE JUNE 2014 EDITION. In sports, fixing the game is the ultimate sin, and all sports leagues work hard to prevent contests from being decided by anything other than the skill and the effort of the players and coaches. No sport survives for long if it does not make the delight of its fans its central purpose…

The Spin on Spin-Offs

ABSTRACT FROM THE CORNERSTONE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE JUNE 2014 EDITION.  Time Warner Inc. completed the spin-off of Time Inc. earlier this month. Likewise, CBS Corp. announced that it would split off its remaining shares in CBS Outdoor Americas Inc. It’s clear that tax-free spin-offs continue to be popular transactions for… Read more »

A Focus on India

The outlook for Indian equities likely remains supportive. GDP is a key driver of corporate profits in India and, as noted, GDP estimates have started to trend up. Moreover, given current low capacity utilization rates and margins near historic lows, a modest improvement in profit margins could result in a meaningful boost to earnings. In terms of valuation, the Indian market is currently trading at around 15x one year forward earnings, which is in line with historical averages.

Par for the Course?

The modern game of golf has come a long way from its humble beginnings in 15th-century Scotland, and its fans are some of the most ardent of any sport. Ironically, it is golf’s deep-rooted traditions that have left it struggling to adapt to structural shifts, and the industry is now facing declining interest in many… Read more »

A Perspective on GoDaddy’s IPO

This commentary is co-authored by John Wilson and Janet Pegg. Some recent comments in the media raise concerns about how GoDaddy Inc.’s upcoming initial public offering will be impacted by the original shareholder’s retention of future tax benefits from GoDaddy’s prior tax losses.  However, care should be taken before drawing conclusions about the company’s tax… Read more »

The Cornerstone Climate Change Conference Call Recap

How should investors respond to the challenges of climate change?  On our June 12th conference call, Cornerstone Capital CEO Erika Karp and John Wilson, Head of Corporate Governance, Engagement and Research, provided investors and corporate constituents with our perspective on this pivotal issue. The Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC)… Read more »