Coronavirus: Flattening the Misinformation Curve
In February 2020, the WHO Director-General Tedros Ghebreyesus said misinformation about COVID-19 is just as dangerous as the virus itself. “We are not just fighting an epidemic; we are fighting an ‘infodemic.’ Fake news spreads faster and more easily than the virus and is just as dangerous.”[i]
EU Sustainable Finance Action Plan: Final Taxonomy Report Published and Other Developments
The highly anticipated final report by the TEG (Technical Expert Group) on the EU Taxonomy was published in early March, followed by a stakeholder information session. You can read our blog post on last fall’s developments here.
Infographic - Creating Impact Through Thematic Investing
In this year’s edition of our 10 for series, we put an environmental, social and governance (ESG) lens on 10 investment themes that may offer investors an opportunity to create a positive social and environmental impact through the equity market. The trends we identify are driven by corporate initiatives to scale new technologies, improve social conditions, conserve ecosystems and mitigate climate change.
South Africa and ESG Risk
A Case Study On November 1, 2019 Moody’s cut its rating outlook for South Africa from “Baa3 stable” to “Baa3 negative,” putting the country’s bonds on the cusp of junk status after several harbingers of a potential downgrade.[i] Earlier this year, the World Bank and the International Monetary Fund cut their 2019 growth forecasts for South Africa to around 0.8%, while the Institute of International Finance warned that the country’s public debt could grow to 95% of Gross Domestic Product (GDP) by 2024.[ii] The other two big credit rating agencies (CRAs) – Fitch and S&P – downgraded South Africa’s credit rating to sub-investment grade back in 2017, citing a deterioration in the country’s public finances.[iii]
A Case for Impact Investing in Public Equities
As awareness around environmental and social issues has grown, so has the number of investors who deliberately seek to allocate capital to create positive social and environmental impact. Impact investing is as old as the sustainable investment industry, with the bulk of strategies to date having been executed through private equity and debt vehicles. However, as a more diversified pool of investors look to adopt impact investing strategies, fueled by the United Nations’ Sustainable Development Goals (SDGs) and the Paris Climate Agreement, a broader set of asset classes are being considered – here enters public equities.
Sustainable Finance and the EU Taxonomy: Developments from the Trilateral Negotiations
As global leaders meet in Madrid for the COP25 amid mounting concern over the international response to climate change, the EU Taxonomy experienced a setback with the UK and France blocking the plans. The new framework, intended to drive financial flows that will accelerate the shift to a low carbon future, will likely become a global standard affecting investors around the world. If enacted, it could cement the EU’s position as the world’s pace setter on climate legislation.
Revising Mining Codes: Equality for Nations or Nationalization?
In recent years, an increasing number of nations, particularly in Africa, have been amending their mining codes. Governments likely view these amendments as a way of getting more for their people from their natural resources. But are these amendments slowly leading to the nationalization of the sector in some of these countries and how are the companies reacting?
Cybersecurity: A Pervasive Risk
In 2017, in the wake of the WannaCry ransomware attack, we argued that the event should be seen as a cybersecurity wake up call. Since then, cybersecurity risks have remained a source of uncertainty for most companies, driven by the increasing intensity, both in volume and impact, of cyberattacks. These risks are compounded by the continuous expansion of critical infrastructure (energy grids, utilities, hospitals) to digital platforms and the breadth of sensitive information that is housed in online servers. As a result, the pool of lucrative targets for malicious actors continues to grow. This is reflected in the notable rise in the number cyber insurance claims. According to a study by AIG, 2018 had the same number of cyber insurance claims as the preceding two years combined.[i]
The Opioid Crisis and the Continued Uncertainty for Affected Companies
As the first National Prescription Opiates Multidistrict Litigation (MDL) cases are set to get underway in late October, we take a closer look company involvement in U.S. opioid crisis and how it has evolved since our first article on the topic in 2017. We also provide an overview of how the ESG risks highlighted in our initial article have materialized over the last two fiscal years (FY2018 and FY2019) for the companies involved.
Children’s Rights – the smallest things can have the biggest impact
Imagine there was a stakeholder group that formed a third of the global population and was pertinent to business in various ways: as customers, as employees’ family members, and as key participants in local communities and in society at large. These people would be guaranteed to run the world in the future. Almost everyone would know and be related to representatives of this network, and many would consider them the most important people in their lives. You would expect companies and investors to assess the impact they have on these powerful influencers and try to capitalise on the related opportunities, but that is rarely the case. This is because the group I’m talking about is children. When it comes to incorporating children’s rights and needs into business and investment strategies, there is still a long way to go given their number and potential.
The Impact of Country ESG Risks on Company Operations
In this article we explore how operating in Peru affects the world’s second largest mining producer of precious metals, Barrick Gold. Based on analysis from our recently launched Country Risk Ratings, we discuss how the challenges facing Barrick’s mining operations in Peru are strongly influenced by the country’s ESG risks.
Emerging market equities, ESG risk and sector tilts
The International Monetary Fund’s (IMF’s) recent downward revision to its projections of near-term global expansion reflects growing concerns about brewing market tensions. Central issues affecting capital markets include trade disputes between the US and China, Brexit and subdued investment and demand for consumer durables. According to the IMF’s latest outlook, global real GDP will grow 3.2% in 2019 and 3.5% in 2020 – a downgrade of 10 basis points (bps) for each year compared to the IMF’s previous outlook last April.[i]
China’s Millennials and ESG
A country’s demographics has a strong influence on long-term social trends, including the development of ESG issues. With millennials becoming the dominant cohort among the workforce and consumers, we are witnessing the social transformations that come with a new generation. Although occurring globally, these transformations are particularly dramatic in China, due to the contrasting social environments experienced by China’s millennials and their parents.
The role of technology companies in technology addiction
As personal technology and social media platforms become ubiquitous in our personal and professional lives, we explore the role played by technology companies in technology addiction. The term ‘technology addiction’ is a catch-all phrase typically used to describe frequent and compulsive internet, smartphone, gaming and social media use.
ESG Ratings: A Rebuttal of Prevailing Criticisms
“No offence, but…”. This has become a common introduction to questions directed at environment, social and governance (ESG) rating providers and reflects a body of criticism centered on the premise that ESG research and ratings are fundamentally flawed.
Controversial Weapons: Regulatory Landscape and Best Practices
Since the beginning of modern warfare in the 20th century, we have witnessed the development of weapon types that have a severe, disproportionate and indiscriminate impact on civilians, even years after a conflict has ended. Over the past decades, several protest movements have attempted to halt and ban the production of specific, controversial weapon types, and many countries have adopted international conventions to this effect. More recently, some financial institutions have begun to restrict or exclude financing of companies with involvement in certain weapons. This article explores what investors can do, beyond existing legal frameworks, with respect to controversial weapons.
Point of Sale Financing: Inclusive for all?
What is Point of Sale Financing? Point of sale financing (PSF) is a relatively new financial product that has garnered significant interest from consumers, retailers and financial institutions. It provides financing to markets that were previously underserviced by conventional financial products but can also be a gateway to impulsive spending and poor financial choices if not managed properly. This article provides a brief overview of PSF, the pros and cons for consumers, a comparison of PSF with conventional lending vehicles and a sector review looking at policies addressing financial inclusion.