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Sustainalytics Reporter | September 2015

Issue 27 - September 2015


Sustainalytics to Acquire ESG Analytics

Sustainalytics recently announced that it has entered into a definitive agreement to acquire ESG Analytics, the Zurich-based provider of web-based solutions for asset managers and owners. In addition to assisting institutional investors in the analysis and management of their ESG risks and opportunities, ESG Analytics also specializes in collecting and analyzing ESG data for private equity investors. With this acquisition, Sustainalytics continues its commitment to enhance the value provided to clients through product innovation and leveraging new technology. To read the full press release, click here.

Sustainalytics selected by Morningstar in launch of ESG scores for mutual funds and ETFs globally

Last month, Morningstar, the independent investment research firm and mutual funds ratings giant, announced plans to introduce environmental, social and governance (ESG) scores for mutual funds and exchange-traded funds globally. The fund ESG scores, an industry first in rating funds on the ESG performance of their underlying portfolio holdings, will be based on company-level ESG ratings from Sustainalytics. Setting a new standard for the benchmarking of mutual funds, investors will be able to use the fund ESG scores to compare funds across categories, relative to benchmarks, and various time horizons. The move by Morningstar further demonstrates that the consideration of ESG factors in investment processes has moved beyond the traditional sustainable investment community.

For more than 20 years, Sustainalytics has worked predominately with institutional investors, providing ESG research and insights to inform investment processes. With access to fund ESG scores through Morningstar, tens of thousands of financial advisors, a group that historically has not been exposed to ESG data and analysis, will now be better able to help their individual investor clients make more informed decisions and invest in ways that are truly important to them. With our own commitment to product innovation, Sustainalytics is excited about working alongside Morningstar to bring a systematic way of thinking about ESG to the fund industry.

To learn more about Morningstar's fund ESG scores, read the full press release or contact your Sustainalytics account manager.  


Insights

Pensions & ESG Disclosure - It's time to act
by Max Zehrt, CFA 

Max Zehrt, CFA | Director, Institutional Relations, CanadaThe ESG disclosure amendment to the Ontario Pension Benefits Act is another in a growing list of ESG-related requirements for pension plans. In this article we offer some considerations for small-to-medium sized plans that may be unsure of how to navigate these types of requirements.

Read "Pensions & ESG Disclosure..."

Coal in Crisis - The bad and the worse of U.S. coal
by Lucas Schoeppner and Luke Raftis 

Lucas Schoeppner, Energy AnalystLuke Raftis, Energy AnalystThe U.S. coal industry has experienced a historic decline in recent years, resulting in numerous bankruptcies, and leaving most other coal companies in dire straits. Adding to the pressure in this difficult market are the numerous ESG risks facing coal companies across the country. Those risks are elevated for companies in the Eastern U.S. (Appalachia), putting companies with operation in the region at a disadvantage compared to their western counterparts.

Read "Coal in Crisis..."


Product Spotlight

New! Carbon Solution Suite

Carbon Solutions - Analytics, Data, Stranded Assets & High-Impact Fossil Fuels

Increasingly, institutional investors are aiming to better understand their portfolio exposure to carbon, to reduce this exposure and to implement low carbon mandates. To support investors’ wide ranging needs around carbon analysis, Sustainalytics provides a complete set of portfolio analytics, data and research. By leveraging Sustainalytics’ Carbon Solutions, investors can assess their carbon footprint and pursue carbon-related investment strategies.

The Carbon Solution Suite includes:

  • Carbon Portfolio Analytics – Custom analysis of your portfolio’s carbon footprint versus a benchmark
  • Carbon Intensity Data – Analyze individual companies’ carbon emissions or create low carbon indices and portfolios
  • Stranded Carbon Assets Research – Manage and mitigate risks by reviewing oil and gas companies’ exposure to and management of stranded carbon asset risks
  • High-Impact Fossil Fuel Research – Learn which companies have exposure to the most carbon-intense fossil fuels such as thermal coal and oil sands 

Visit our website to learn more about our new Carbon Solution Suite or contact us.

Corporate Governance Insights - Tracking governance issues as they happen

Corporate Governance

Corporate Governance Insights, part of our suite of Corporate Governance research products, are brief, timely reports that capture governance-related events in real time. Our dedicated team of corporate governance analysts monitor companies for significant events related to six key governance areas, namely: Board Management Quality & Integrity; Board Structure; Ownership & Shareholder Rights; Executive Remuneration; Audit & Financial Reporting; and Stakeholder Governance.

A prime example of the timeliness of the Corporate Governance Insights is the continuing saga at Toshiba. Since the revelation of accounting irregularities at three subsidiaries in May 2015, our team produced Insights following the July 21 resignation of seven of Toshiba’s executives, which highlighted some key issues related to board structure (despite being relatively progressive on paper), and company culture. When the company announced sweeping governance reforms on August 18, the subsequent Insight provided an analysis of the proposed changes to the company’s governance, noting that the structural changes and rapid incorporation of new outside board members are both positive signs for the pace and depth of governance reform at the company.

To learn more about our Corporate Governance Research, click here or contact us.


Sustainalytics' Perspective

Insurance Sector Webinar - Replay now available

Sector Report - Insurance: Shedding Light on New Industry Challenges

In July, as a companion to our recent sector report “Insurance: Shedding light on new industry challenges,” Sustainalytics hosted an hour-long webinar to share the report findings. Sustainalytics’ Doug Morrow and Silvana van Schaik discussed the most material ESG issues for the sector, based on our research, and some of its near- and long-term challenges, such as capital regulations and a low interest rate environment.

To download the executive summary or access the webinar replay, click here

Sector Updates

Over the past few months, Sustainalytics' Thematic Research Team has also completed sector updates on the Food & Staples Retailing, Packaged Foods & Meat, Healthcare Equipment & Services, and the Construction Materials industries.

For more information about our Sector Reports or sector updates, please contact your Sustainalytics account manager.

Incident and Controversy Assessments

Incident and Controversy Assessments

This month, Sustainalytics’ Incidents Team examined concerns over cars'  potential vulnerability to “car hackings,” as recently exemplified with Fiat Chrysler vehicles. The team also explored the matter of potentially serious side-effects allegedly caused by Pfizer’s smoking-cessation drug Champix (Chantix) as well as GlaxoSmithKline’s persisting corruption issues.

Read “Incidents and controversy assessment..."


Inside Sustainalytics

Sustainability Bonds News

Sustainability Bond Services

In August, Sustainalytics became a certified climate bond verifier. In a recognition administered by the Climate Bond Initiative, third-party verifiers are assessed on the basis of their ability to demonstrate that they have the required competence to conduct a verification.

Also in August, the Central Puget Sound Regional Transit Authority (Sound Transit) announced its plan to issue green bonds worth almost USD 1 billion. The proceeds from the bonds will be used for railways, buses and related facilities. Sustainalytics provided a second opinion on Sound Transit’s green bonds, which is one of only three municipal green bonds in the U.S. to seek a second opinion. You can learn more about the bond on our Sustainability Bond Services web page or read Sound Transit’s press release here.

Third Annual Sustainalytics Global Volunteer Day

Sustainalytics Global Volunteer Day

Held on August 19 to coincide with World Humanitarian Day, staff members across Sustainalytics’ global offices spent the day working hands-on in their local communities. The aim of Global Volunteer Day is to approach a global issue on a local level, and this year our focus was on health care and education. You can view a full list of Sustainalytics’ Global Volunteer Day activities here.

IN THIS ISSUE

Analysts' Insights

Product Spotlight

Sustainalytics' Perspective

Inside Sustainalytics

Research at Work

Events

Sustainalytics in the Media


RESEARCH AT WORK

Sustainalytics builds research framework for Soft Commodity Forest Risk Assessment Tool
Released by the Natural Capital Declaration (NCD) on August 8, the tool allows institutional investors and banks to assess and manage their exposure to deforestation and forest degradation risks associated with palm oil, soy and beef production via an Excel-based software tool. Sustainalytics played a lead role in the development of a research framework to assess the policies of financial institutions on soft commodities. You can read more about the tool in NCD’s press release here.


EVENTS

30 September - 2 October, 2015 | Boston 
CII Fall Conference

30 September, 2015 | Boston
ICGN Boston

7 October, 2015 | New York
Green Bonds Americas

7 October, 2015 | Kuala Lumpur
CSR Asia Summit

9 October, 2015 | Stockholm
Handelsbanken Sustainability Bonds Seminar

20 October, 2015 | Toronto
Sustainalytics GRI Training Course

Visit our website for a full listing of events

Have your say - Publication Survey

We want to hear from you.

What topics would you like to see Sustainalytics cover in 2015? Click the button below to take our short, one-question survey

TAKE THE SURVEY

IN THE MEDIA

Sustainalytics to Acquire ESG Analytics - Pension and Investments Online

Morningstar to score funds on sustainability - Financial Times

Seattle Transit Authority Plans Biggest-Ever Green Muni Bond - The Wall Street Journal

Physicians group the latest to divest fossil fuel investmentsYahoo! News

Why your kids won't know what "ESG" means - Chief Investment Officer

Foodmakers' turn to palm oil may be adding carbon - Bloomberg BNA


COMING SOON...
Independent Research in Responsible Investment Survey 2015

IRRI 2015

The annual IRRI Survey, published by Extel and SRI-Connect.com, is an opportunity for asset owners, asset managers, quoted companies and ESG research providers to share their opinions about the state of sustainable and responsible investment research.

More details about this year’s survey will be shared in the coming weeks. 


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, New York, Paris, Singapore, Timisoara and Toronto, and representatives in Bogotá, Brussels and Washington, D.C. The firm has over 200 staff members, including more than 120 analysts with varied multidisciplinary expertise and thorough understanding of more than 40 industries.