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Issue 19 - March 2014

Environmental, social and governance research at times has been criticized for being too focused on past corporate actions. Investors want to know how these past actions will impact their returns in the long term. In our “10 Companies to Watch in 2014” report released in January, our analysts looked at major ESG-related events for a select group of companies and analyzed how these incidents aligned with industry and regulatory trends within the sector. This forward-looking approach to ESG analysis allows investors to take note of company preparedness and is intended to provide insight to help inform investment decisions.

Whether anticipating a changing regulatory environment in China’s energy industry, investigating possible human rights violations within a foreign labour force or assessing a company’s decision whether to re-start operations in a politically unstable region, investors should take notice of the companies that make a concerted effort to examine past patterns and act on emerging trends. While no one can claim to predict with 100% accuracy the impact of ESG factors on shareholder value, patterns do emerge that can act as a pretty good predictor of future outcomes. 


Analysts' Insights

Shale Gas Development in China through an ESG Lens
by Alberto Serna Martin

Alberto Serna Martin, Associate Analyst, Energy

Energy industry lead analyst Alberto Serna Martin recounts the recent stakeholder fieldtrip to Royal Dutch Shell’s tight and shale gas operations in China. The trip provided valuable insights into the unique operating environment of shale gas operators in the country. The visit highlights how Shell is managing common shale gas-related ESG issues in China.

Read more about shale gas operations in China

Labour Rights of Qatar's Migrant Workers
by Davina Berttram & Dana Maria Pop

Davina Berttram, Client Relations AdviserDana Maria Pop, Analyst, Research ProductsIn the run-up to the 2022 World Cup to be held in Qatar, both the country and FIFA are being heavily criticized over their failure to protect the rights of workers in the construction industry. As the vast majority of these workers are migrants they are often afforded few avenues to air their grievances or remedy hazardous circumstances. Client relations adviser Davina Berttram examines the ESG landscape facing construction companies entering into development projects in Qatar and outlines ways to mitigate the human rights-related risks they face.

Read Setting the stage for FIFA 2020

Investor Outlook: Private Prisons and Immigrant Detention Centres 
by Alexander Read-Brown

Alexander Read-Brown, Analyst

The poor conditions and mistreatment of inmates at private correction and immigration detention facilities continues to make headlines globally. A flawed business model has created an incentive structure that exacerbates social and business risks. Companies in this industry are continually embroiled in human rights and business ethics controversies, making them potentially risky investments for both mainstream and values-based investors. In this article analyst Alexander Read-Brown outlines some of the risks facing private prison operators.

Read more about private prisons


Sustainalytics' Perspective

Asia Insight - Yearly ESG Review and Outlook of the Xi-Li Administration 
by Sun Xi

ESG Asia Insight - Xi-Li Administration update

In this update to our October 2012 Asia Insight report, analyst Sun Xi looks back at the first year of the Xi-Li administration in China and the impact that its ESG-related policies have had on the country’s corporate sector. The report details six key areas of focus and outlines the industries and companies best positioned to take advantage of the shifting policies and those most at risk.

Dowload Yearly ESG Overview and Outlook of the Xi-Li Administration in China

10 Companies to Watch in 2014

10 Companies to Watch in 2014In case you missed it…
In January Sustainalytics published 10 Companies to Watch in 2014, a collection of stories detailing various corporate environmental, social and governance events. This forward-looking report highlights some potentially material ESG issues that should be on every investor’s radar screen. Our analysts also provided their outlook for the selected companies over the next 12 months, providing insights to help investors make more informed decisions.

Download 10 Companies to Watch in 2014

Tax Transparency report short-listed for Farsight award

Tax Transparency and Multinational Corporation: Issues for Responsible InvestorsSustainalytics’ 2013 report Multinational Corporations and Tax Transparency: Issues for Responsible Investors, is among five publications shortlisted for the Farsight Award  presented by Long Finance. The Farsight Award rewards the best individual piece of analysis done by an investment research institution that integrates traditional financial analysis with longer-term ESG issues. Sustainalytics is the only ESG research firm up for consideration. The winner will be announced during the Sustainable City Awards ceremony in London, England on March 27.

Download Multinational Corporations and Tax Transparency

Know the Chain blog post: The human impact of corporate behaviour

In a guest post for the KnowtheChain.com blog, Heather Lang and Ilse Griek discuss the role that the California Transparency in Supply Chains Act, and others like it, have on company disclosure of supply chain issues. Compliance levels vary both within and across industries, with some surprising leaders and laggards.

Read the full post


Inside Sustainalytics

Sustainalytics now providing research to NGPF Council on Ethics

The Council on Ethics (Council) of the Norwegian Government Pension Fund Global (Fund) has appointed Sustainalytics to provide ESG research on its global equity and fixed income investments for the coming four years. Following the Council’s competitive public tender process in late 2013, Sustainalytics was chosen as one of the providers of detailed company ESG ratings and analysis, as well as for screening services which will be applied to the Fund’s close to 9,000 holdings.

Read the full press release

Sustainalytics welcomes...

Michelle McCulloch, Manager, Research Products, TorontoMichelle McCulloch, Manager, Research Products
As head of the indicator team, Michelle will evaluate and report on key environmental, social and governance indicators among companies within Sustainalytics’ research universe. Most recently, Michelle was senior manager of TD Environment where she was responsible for environmental risk management. Michelle has worked in sustainability for more than 15 year and is an accredited Environmental Professional. 

 

Arik Brutian, Product Innovation Manager, ICTArik Brutian, Product Innovation Manager, ICT
Arik is responsible for the development and innovation of Sustainalytics suite of products and services. He is focused on research related to the integration of ESG information gathered through various media sources.

 

Christoph Matschke, Researcher, Advisory ServicesChristoph Matschke, Researcher, Advisory Services
Following the successful completion of his master's degree in finance and investments, Christoph rejoins Sustainalytics as a member of the advisory services team. He will be focused on supporting client services and projects in France, Germany, Belgium and Switzerland. 

New office in London & UKSIF networking event

Sustainalytics London

We've put down roots in the UK! Sustainalytics London officially opened its doors on January 31. Located at 18 King William Street, the office sits in the heart of London’s financial district.

To celebrate our new office space and to ring in the New Year, Sustainalytics hosted a networking drinks event with the UKSIF. With over 80 UKSIF members and others from the investment community in attendance, the event was an opportunity to chat with peers and celebrate another great year for sustainable investing. 

Sustainalytics' Global Platform honoured by Microsoft

Microsoft Case StudiesThe Sustainalytics Global Platform, foundation of our ESG research and analysis, was recognized by Microsoft as a top application worldwide. The platform was also featured in a Microsoft case study highlighting the successful transition of the database to a more efficient cloud platform. This recognition highlights our continued commitment to providing powerful solutions to clients. Not only has this transition boosted productivity on our ICT team, but more importantly, it has helped us improve our level of service to clients.

Read the case study

Latin American sustainability ranking coming in March!

SemanaColombian public affairs magazine Semana will publish the first-ever regional ranking of the most sustainable companies in Colombia. On newsstands March 23, the entire issue will focus on sustainable investment and corporate social responsibility. Created in partnership with Sustainalytics, this project leverages our expertise in generating high-profile assessments of corporate ESG performance. The launch of this ranking follows a growing responsible investment and corporate social responsibility movement in the Latin America.

IN THIS ISSUE

Analysts' Insights

Sustainalytics' Perspective

Inside Sustainalytics

Events

Sustainalytics in the Media


Have your say - Publication Survey

We want to hear from you.

What topics would you like to see Sustainalytics cover in 2014? Click the button below to take our short, one-question survey

TAKE THE SURVEY

MEET SUSTAINALYTICS IN YOUR REGION

18 & 19 March, Toronto
24 & 25 March, Vancouver
GRI Training 

26-28 March
GLOBE 2014 - Vancouver, Canada

27 March
Integrating Controversy Analysis in Responsible Investments - Paris, France

15 March
Social Responsibility in Finance - Ottawa, Canada

26 March - Copenhagen, Denmark
27 March - Helsinki, Finland
Responsible Investments in Emerging Markets Roadshow with Hermes EOS

8 April
RIAA Member Meeting: Tax Transparency and Multinational Companies - Melbourne, Australia

17 April
UKSIF Edinburgh Conference - Scotland

28 April
Pension Summit 2014 - Toronto, Canada

Visit our website for a full listing of events

View upcoming events in the Toronto Sustainability Speakers Series.


IN THE MEDIA

Do-gooders emerging in emerging markets fund - CNBC.com

The rise of the responsible quant: How quantitative investors are tapping ESG for an information advantage - Responsible-Investor.com [subcription required]

RI INSIGHT - Fixed Income - Responsible-Investor.com [subscription required]


TELL US WHAT YOU THINK

In a continuous effort to improve the overall quality of our newsletter, we would appreciate any feedback, ideas and/or suggestions from our readers. What would you like to see in upcoming newsletters? Share your views with us by sending an email: communications@sustainalytics.com.


ABOUT SUSTAINALYTICS

Sustainalytics | Your responsible investment partner

Sustainalytics supports investors around the world with the development and implementation of responsible investment strategies. The firm partners with institutional investors, pension plans, and asset managers that integrate environmental, social and governance information and assessments into their investment decisions.

Headquartered in Amsterdam, Sustainalytics has offices in Boston, Bucharest, Frankfurt, London, Paris, Singapore, Timisoara and Toronto, and representatives in Bogotá, Brussels, Copenhagen, New York City and San Francisco. The firm has 150 staff members, including more than 80 analysts with varied multidisciplinary expertise and thorough understanding of more than 40 industries. In 2012 and 2013, Sustainalytics was voted best independent sustainable and responsible investment research firm in the Thomson Reuters Extel’s IRRI survey. www.sustainalytics.com