Tag Archives: governance
International Women’s Day Embraces Equity
March 8th marks International Women’s Day, an event that honors and celebrates women worldwide and that has been observed for over a century. This year’s theme is Embracing Equity, and it highlights the fundamental difference between equality and equity. While these words are often used interchangeably, the former means giving everyone equal opportunities, while the…
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Measuring Board Gender Diversity across S&P ESG Indices
According to numerous studies,1 having a gender-diverse board is a key indicator of good corporate governance.2 The gender diversity of a board of an investee company is also one of the mandatory sustainability indicators3 that financial market participants are required to assess and report on under the EU’s Sustainable Finance Disclosure Regulation (SFDR).4 Using the…
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Wirecard’s Chronically Low ESG Scores Reflected Governance Challenges
On June 25, 2020, the German digital payment company Wirecard AG filed for insolvency following reports that over USD 2 billion in cash assets went missing. Wirecard’s stock has gone down 90% since the initial announcement, and the company’s lenders now face deep losses. While the S&P ESG Index Series does not include Wirecard, the…
Capturing and Evaluating Intentionality in Funds
One of the most salient themes in this year’s 29th Annual SRI Conference was intentionality. The topic of intentionality has jumped to prominence in ESG discussions—particularly in regard to ESG ratings for mutual funds—and understanding what it means is important for ESG market participants. In ESG terms, intentionality aims to evaluate whether a given fund…
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Exploring the G in ESG: E & S and Performance – Part 3
In a previous blog, we explored the relationship between corporate governance and stock performance. The results show a wide variance between the top quintile and the bottom quintile, particularly over a long-term horizon (17 years). We applied the same analysis to the RobecoSAM environment (E) and social (S) scores. To do so, we formed hypothetical,…
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Exploring the G in ESG: The Relationship Between Good Corporate Governance and Stock Performance – Part 2
Year-to-date, Facebook (FB) was down 7.13% as of April 12, 2018, compared to its 53% total return in 2017. What started as a data breach issue has expanded to encompass management structure, procedures, and safeguard concerns—issues that are all related to corporate governance. Market participants have a tendency to only care about corporate governance when…
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Exploring the G in ESG: Governance in Greater Detail – Part I
There is increasing evidence of the link between ESG and financial outperformance as better data quality, standardized data, longer data history, and heightened interest in assessing the materiality of ESG drives continued research. However, there is already substantial empirical evidence to suggest that the “G” aspect of ESG ultimately yields better corporate returns. Governance data,…
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Dow Jones Commodity Index Wins Independence
There could be no more symbolic time than just before the July 4th holiday for S&P Dow Jones Indices (S&P DJI) to announce the Dow Jones Commodity Index (DJCI), an alternative to the former DJ-UBS. This is the first ever commodity index under the Dow Jones brand to be fully free from conflicts of interest, plus…
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