Executive Summary

Intangible Factors Can be Material Too. Most investors focus on tangible income statement and balance sheet items, but intangible factors can be material too.

Analyzing Intangible Factors at the Industry Level. In our report ““ESG in Sector Strategy: What’s Material?”” we developed an approach to analyze intangible factors that can potentially have a material financial impact on sectors. We now apply our approach at the industry level.

Industry Risks are Constantly Evolving. In a subsequent report,“A Shifting ESG Materiality Matrix: What Has Mattered, What May Matter,”  we concluded that the likelihood of an intangible factor having a financial impact, and the potential magnitude of that impact, are constantly evolving. We analyze industry risks associated with intangible factors currently.

Counterintuitive Conclusions. Based on our methodology, Tobacco is currently a less risky industry than Non Alcoholic Beverages. Food Retailers are currently more risky than Investment Banks.

Figure 1:  Ten “Most” and “Least” Risky Industries Currently
Based on Ranking of Intangible Factors

Geraghty Industry Risk fig 1

Source: Cornerstone Capital Group

Click here for important disclosures. Our full report is available to clients of Cornerstone Capital Group.

Michael Geraghty is the Global Markets Strategist for Cornerstone Capital Group. He has over three decades of experience in the financial services industry including working as an investment strategist at UBS and Citi.