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.
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.
Although there are no material changes to our regional or sector recommendations this month, there have been some noteworthy crosscurrents…
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?
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.
Urban sociology has long focused on the dynamics of neighborhoods and how they affect people’s lives. Poor neighborhoods are expected to negatively affect their residents’ social mobility potential and future income expectations, but also their health, marriage and education prospects.
With earnings season in the rear-view mirror, the global investment narrative remains largely unchanged.
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.
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.
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 »
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.
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.
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 »
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.
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 …
In this month’s JSFB, we offer perspectives on “Japan” and ask how a culture so steeped in tradition can deal with necessary change.
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?
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,
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 …
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.
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 . . .
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 . . .
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 (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 »
In the February edition of the JSFB, we urge global market participants to enhance their perspectives around gender issues in the investment process.
In leveraging capitalism to achieve more sustainable economic growth and development, this month’s edition of the “Cornerstone Journal of Sustainable Finance & Banking” (JSFB), employs a “Gender Lens.” We highlight gender diversity and inclusion as a tremendous stimulator of economic growth . . .
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 »
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.
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 »
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….
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 corporation used to be considered by economists as a profit-maximizing “black box.” The development of industrial organization and business management theories has challenged this traditional view, unveiling the complex structures of transaction costs and decision-making processes that form a company….
On April 4th, 1967 at the Riverside Church in New York City, Dr. Martin Luther King, Jr. gave a speech entitled “Beyond Vietnam: A Time to Break Silence.” In this hugely controversial speech where he came out against the war, and against the establishment and his own advisors, Dr. King also came to terms with… Read more »
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 »
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…
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 — 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.
Cornerstone’s Global Markets Strategist Michael Geraghty offers an “investment clock” to help visualize the global economic cycle and flesh out the equity outlook implied by our sector and regional recommendations. Read more in “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….
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….
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…..
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 »
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 »
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 »
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.
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 »
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….
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…
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 »
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)….
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.
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?
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 »
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 »
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….
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 »
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 »
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….
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 »
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 »
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….
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 »
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?
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….
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….
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 »
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 »
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…
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
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…
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 »
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.
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 »
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 »
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 »
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 –… Read more »
As global markets digest the implications of the latest move from the Obama Administration, we argue that investors must adapt to the evolving reality of climate change with transparency, engagement and pragmatism. In this note, John Wilson, Cornerstone’s Head of Corporate Governance, Engagement & Research, articulates our firm’s position on this pivotal issue. Introduction Although… Read more »
This month in the Cornerstone Journal of Sustainable Finance & Banking (JSFB), we take an in-depth look into the world of “Entrepreneurship.” We celebrate the creative, inspired and dauntless innovators who have the potential to drive disruptive change across industry sectors, and even entire markets….
“Corporate Governance.” Perhaps the term seems out of place in a journal devoted to entrepreneurship? Entrepreneurship, whether found in a start-up or an established company, implies innovation, strategy and corporate renewal. Corporate Governance, by contrast, is seen as a “soft” form of corporate regulation that restricts and perhaps confines management. Moreover, decades of studies of different corporate governance approaches have not produced a consensus on whether and how corporate governance matters for corporate performance….
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 »
Are you “just the right amount of crazy” to start a new business? Do you know that entrepreneurship is like “jumping out of a plane and building the parachute on the way down?” Are you prepared to put enough capital? To put in that same amount in again? And then again? Are you prepared to… Read more »
It has been 25 years since Ceres, the Sustainability Leadership Advocacy organization, was formed by a small group of investors to further the adoption of sustainable business practices that could protect the planet while ensuring long-term prosperity for its people. What better way to celebrate a quarter century of progress than to attend the Ceres Annual Conference, held April 30th in Boston….
At the heart of any successful entrepreneur is the ability to identify and meet a market need. In some cases, meeting this need is premised on the introduction of an original, innovative product while in others it is about improving the process by which it is produced and delivered. The latter appears to be the case in the eyewear industry where startup Warby Parker is aiming to provide consumers with “high quality eyewear at a fraction of the price.”
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 »
首席执行官关于可持续金融和银行业的致辞 在这期的“Cornerstone 可持续金融和银行业的月刊”里, 我们看到全球市场在乌克兰局势压力缓解，强有力的美国经济增长，和中国政府有可能采取经济刺激的背景下逐渐好转。还有，市场的注意力很大程度上在关注欧盟委员会的领导团队，以及公司兼并购活动，如GE和Siemens各自对Alsthom电力业务并购的意图，以及Pfizer对AstraZeneca出价收购的失败，主要由于就业和知识产权仍然是谈判的核心。与此同时，关于收入不平等和公司治理的讨论越发激烈。 后者使我们对“遗产”开始讨论。一个重要的遗产是创业者最伟大的希望之一。创业者对资本报有最伟大的希望。 在这个月的期刊里，我们从多个角度讨论“创业精神”。我们先从具有特征的区域“BuildTheLadder.net”来进行讨论，在这里我们赞扬那些具有创造性，令人鼓舞的，无所畏惧的革新者和他们利用坚强的毅力来使想法和关系在成功的这个目标上达成共识。这其中的一些领导者会认同美国伟大诗人Maya Angelou，他在这个星期去世了。在他极不平凡的一生中，他总是鼓舞别人, Maya提到：“人们将会忘记你所说的，人们会忘记你所做的，但人们不会忘记你让他们有什么样的感觉。”当这些创业者在分享他们在自己的征程中所经历的感受时，我们赞扬他们经济上仅有的最好就业机会创造者的努力。 也是在这个月的期刊里，Cornerstone Captial的全球市场策略师Michael Geraghty进一步考察了“财务阻力对新兴公司和小公司创造就业机会的影响。”银行借贷和IPO市场提醒我们在政策制定上努力的重要性，例如JOBS法案。Janet Pegg，我们的估值和财会主管和我们进一步讨论“关于群众融资原则”的法律。伴随着SEC对“网络融资办法的不断改进，”我们注意到对伴有高透明度和可以理解的风险的公众融资作为一种可存在的融资和资本形成工具验证时的挑战和必需性。 这个月里我们也介绍一下Cornerstone Capital 的全球行业战略模型，在这里Michael Geraghty 对MSCI所有国家世界指数的10个GICS通过定性的多元素方法进行了排序。通过我们特有的估值和盈利（动量，再修正，和利润率）办法我们对行业进行推荐，并且同时考虑环境，社会，和公司治理等指标。 当我们期待我们的模型和过程进一步改进，我们最关键的ESG因素是通过行业来提供另一个视角来分析我们的资产配置。 目前，我们采取有点顺周期的立场来超配信息技术和可支配的消费品行业，而低配日常消费品和材料行业。 如Michael所提到的，对材料行业的配置程度应和地区策略保持一致，我们来到“Regional Imperatives”章节。在这个章节里，中国和巴西的两个创业例子所提供的见解应适用于全球。James Feldkamp在“明鉴：在中国对产品安全质量的测试”验证了需要真正是发明的母亲， 在巴西Camillo Sicherle在“退出：对风险投资的回顾”中讨论了为新企业融资的一个结构问题 — 一种想法会不时的削弱创业精神和资本的最高目的。 在“Open Source Excellence”章节，我们讨论世界上的三个领先公司为达到私有行业的优秀所共有的战略眼光。EBay的Lauren Moore讨论了“制造一个具有创业精神的生态系统来推动商业和社会价值。” Ben&Jerry’s的Jostein Solheim讨论了“拥护者，味道，和失败：从奶牛到冰淇淋筒的创新。”并且Novartis的Michael Fuerst和Integrity By Design的Dan Ostergaard强调了“当在营造廉政的文化时”，传统文化的融合也只能适应到这里。 并且，从开始最关键的事情我们应清晰知道并在检验和平衡中广泛意识到。 在这个月对创业精神进一步深度挖掘时，我们学到了多个的专家的见解。在“The Other Revolution”中，ShellyPorges展示了当“人才是普遍的，但机会不是”（如希拉里克林顿所阐述的）时，发挥人才潜力的巨大前景。David Lubin带来了他多年成功的经验和有价值的实用框架“创业者的工作：梦想制造者 – 梦想的摧毁者。”最后，Bob Lamb和Sadika Hameed建议我们在令人吃惊的地方应能吸取教训“那里安使投资者对进入怀有恐惧，创业者匆忙进入–但投资者通常不进入。” 投资者确实需要一个“提升的分析”世界，在这里我们引用Kara Hurst的工作，她认为可持续的投资者是：“研究很深，甚至寻找在产品层面上的衡量系统，”而Dr. Laurie Bassi问到“为什么“人力资本”能适用到可持续发展日程上？”在两种情况下，我们发现了一个更强大的对资本市场真正“食物链”的理解。最后，在这个月里，我们重点讨论在社会创业者中的“可持续的突出者”（3P Partners和FarmCo New York），对优秀的2014年Ceres年会的总结，对可持续眼镜制造商Warby Parker的评论，和一个来自于克林顿全球倡议组织的号召行动，即对那些愿意在全球资本市场加速影响的号召者给予明显的承诺。 真诚的致礼!… Read more »
ABSTRACT FROM THE JSFB. SUBSCRIBERS CAN READ THE FULL ARTICLE IN THE MAY 2014 EDITION. Start-up companies and investors eagerly await SEC final rules implementing the JOBS Act’s crowdfunding provisions. The SEC, however, must ensure investors are adequately protected. Achieving this goal will help validate crowdfunding as a viable investment and capital raising tool. Janet Pegg, CPA,… 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 »
To read the JSFB’s CEO Letter’s of Sustainable Finance & Banking in Mandarin click here. 首席执行官关于可持续金融和银行业的致辞
Recent announcements by the Food and Drug Administration to regulate e-cigarettes are significant for the future of the $1.2 billion industry, not just because of the material impact of future regulations, but also because of the impact of the public debate and media discourse on the topic. The FDA’s focus is on banning sales to… Read more »
This month in the Cornerstone Journal of Sustainable Finance & Banking (JSFB), we take the opportunity to focus on the theme of “Infrastructure.” While global markets are in the thick of earnings reporting and proxy season, and investors absorb a raft of global manufacturing data showing growth differentials, we consider “Infrastructure” in its many manifestations…..
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….