Businesses and BLM – Evaluating their commitment

The last few months have seen a moment of national reckoning, as Americans confront the racial inequalities that have underpinned society for centuries. And the corporate world is finding that it can no longer stand on the sidelines. As consumers increasingly expect businesses to take greater responsibility for their impact on society, companies have begun more and more to speak out on a wide range of social, environmental and political issues. As the May 25th murder of George Floyd by police, the latest in a long list of brutalities and injustices perpetrated against the black community, sparked a wave of…

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ESG in a Post-COVID World

The COVID-19 crisis marks an inflection point in the evolution of ESG. On the one hand, it has provided proof once and for all that ESG is here to stay, as investors pour money into ESG funds that are significantly outperforming their peers in the market downturn. On the other, it has heightened public scrutiny of companies and expectations for their social performance. What does this mean for ESG?  It means moving beyond a model of ESG that is still focused primarily on minimizing harm and what Unilever CEO Alan Jope refers to as “seductive incrementalism” – creating change on the…

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HMI launches database of global corporate responsibility initiatives

BOSTON – High Meadows Institute is excited to announce the launch of the Business Leadership in Society Database, a comprehensive new resource for tracking and assessing industry associations and partnerships promoting responsible business leadership. Developed by High Meadow Institute, with support from KKS Advisors, the database profiles over 200 initiatives, operating both nationally and globally and will officially launch June 3. Self-regulatory initiatives that address major Environmental, Social and Governance (ESG) issues have become an increasingly important contributor in setting standards for corporate social responsibility in the 21st century. While the number of these initiatives is rapidly growing, there is…

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BlackRock drives a tipping point on climate action

Larry Fink’s 2020 CEO letter and his commitment that BlackRock will now be front and forward on climate change across all of BlackRock’s assets under management represents a critical turning point in the climate fight. As the world’s largest asset manager, with $7 trillion under management, BlackRock’s leadership will now put pressure on State Street and Vanguard, the other two members of the big three asset managers, to follow suit. Together, these three firms are the majority shareholders in 88% of the S&P 500, with the power to dramatically influence corporate behavior and ensure climate change is on the agenda of every corporate…

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Modernizing modern portfolio theory

The following blog by HMI Senior Fellow Jon Lukomnik and Jim Hawley, the Head of Applied Research at Truvalue Labs, is a modified version of an article requested by the Principles for Responsible Investment. It is a “preview” of the book the two are researching and writing for Routledge. The anticipated publication date is late 2020 or early 2021. By Jim Hawley and Jon Lukomnik Modern portfolio theory (MPT) – the dominant investment paradigm across the world – is in major need of a refresh. Simply put, MPT is not up to the challenges that confront today’s investors. Although this…

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The Role of Trade Associations in ESG

  While ESG integration has been widely explored from company, investor, and broader capital market perspectives, there has been less focus on the role of trade associations in ESG integration and their influence on regulation and policy development on ESG issues such as climate change. This research note, prepared by KKS Advisors, shines a light on the role that trade associations play in promoting and inhibiting the integration of ESG in business practices and reporting. It examines the ways that companies currently disclose their trade association memberships and identifies barriers to increased disclosure and transparency. Specifically it makes a case for…

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Sustainability in Capital Markets: A Survey of Current Progress and Practices

In the three years since our 2015 survey on the state of ESG integration in Capital Markets, interest and engagement with ESG in capital markets can truly be said to have gone mainstream. ESG investment products flood the market in almost every investment category, from ETFs to fixed income and alternatives. ESG assets under management now total $30 trillion, up from $23 trillion in 2016 and are projected to grow to $35 trillion by 2020. The first version of this report was published in January 2016, using 2015 data. The report offered a landscape analysis of the mainstream capital market…

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Introducing the newest HMI Fellow, Jon Lukomnik

The High Meadows Institute is pleased to welcome Jon Lukomnik as a senior fellow of the Institute. Jon has had a long and distinguished career in the investment management industry and is one of the pioneers of modern corporate governance. He has written and published over 200 academic and practitioner articles on how to strengthen the contribution and accountability of the financial systems and asset management industry. He is the past executive director of the Investor Responsibility Research Center (IRRC) Institute, whose research has been widely praised for objectively examining fundamental corporate governance and capital market issues. He is a…

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The End of Sovereignty: The Challenge to Investors

This year, there have been many important developments in the discussion on the role of investors in corporate responsibility and leadership in a global society. In the spring PGIM, the global investment management businesses of Prudential Financial, Inc. (PFI) and one of the top 10 largest global investment firms, issued a provocative paper titled The End of Sovereignty, on globalization, nationalism and the implications for institutional investors. The paper explores how the sovereignty of nation-states is now challenged by the forces of globalization and technology beyond their direct control. It notes that 70 of the top 100 global “economies” are…

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Is It Time to Rethink Corporate Governance?

  For the last fifty years, the mandate and role for corporate governance have been set within well-defined boundaries, in which the business of business was business and the well-being of society was the responsibility of governments. This paradigm was summed up succinctly in 1970 by economist Milton Friedman who noted, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” Today, thanks to globalization and the international economy, we live in a world in…

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