Quantitative Credit-Rating Models Including ESG Factors

Summary We constructed a discriminant function that includes an ESG factor. It has a higher explanatory power in discriminating between industrial companies’ good and poor credit qualities than similar models that don’t include an ESG factor. While empirical credit quality research has focused on “classic” credit ratios in the past, we find that adding at least one ESG factor improves …

Development of a Quantitative Model for the Top-Down Estimation of Greenhouse Gas Emissions from Transportation and Distribution Activities of Companies’ Supply Chains

Mette Emsholm Kjær, MSc ESG Analyst at responsAbility Investments AG Abstract Assessing and managing companies’ climate-change-related investment impacts and risks require a detailed understanding of their greenhouse gas (GHG) emissions. Yet for many companies, the dominant source of GHG emissions is indirect emissions that appear outside the company’s main operating space (Hertwich and Wood 2018; EIT Climate-KIC 2018b). Of the …

Some Statistical Considerations for Assessing Model Value when Estimating Greenhouse Gas Emissions

A Comment on “Development of a Quantitative Model for the Top-Down Estimation of GHG Emissions from Transportation and Distribution” Robert J. Erhardt, PhD Associate Chair and Associate Professor of Statistics, Department of Mathematics and Statistics, Wake Forest University To quantify a company’s full greenhouse gas (GHG) emissions, life cycle analysis represents a valuable standard and active area of research (Reijnders, …

The Proof in the Pipeline: Fossil Fuels and Social Inequality

Arina Abbott oversees marketing at Green Alpha Advisors, an asset manager that invests public equities in the innovation-driven, sustainable economy. While fossil fuel risk has reared its ugly head in the form of blazing fires, stronger storms, and oil-stained beaches, the U.S. remains home to the highest number of climate change deniers in the world. Meanwhile, systemic inequality has continued …

Impact through Shareholder Engagement

Tim Smith Director of Environmental, Social & Governance Shareholder Engagement, Walden Asset Management       In the early 1970s, business history was made when religious investors filed the first shareholder resolutions on a social issue. The company was General Motors and the issue was GM’s investment in South Africa, a country known for apartheid and racial segregation. In those …

Beyond Intrigue

William H. Page, MBA Portfolio Manager, Essex Global Environmental Opportunities Strategy (GEOS)       Since we launched the Global Environmental Opportunities Strategy (GEOS) at Essex Investment Management over six years ago, we have been constantly reminded by industry peers, prospects, friends, and family that we are “very well positioned.” My co-manager, Rob Uek, and I frequently laugh that we would …

Balancing Corporate Values with Investor Demands

The Challenges of Industry-Led Scaling of a Low-Carbon Power Supply Parker Liautaud Abstract The private sector is under increasing pressure to address the financial risks of climate change. At the same time, opportunities for low-carbon economic growth are becoming more attractive to potential investors, especially in scaling up renewable energy (in particular, solar and wind power), retrofitting coal power plants …

Introducing the Carbon Impact Factor

A Family of Financial Instruments to Differentiate and Reward Carbon Efficiency in Commodity Production Joe Madden,* CEO, EOS Climate Stephen Lamm, VP Business Development, EOS Climate Jeff Cohen, SVP Science and Policy, EOS Climate Tom Baumann, Co-Founder, ClimateCHECK and Interactive Leader Collaborase Mary Grady, Director of Business Development, American Carbon Registry Arjun Patney, Policy Director, American Carbon Registry Eric Ripley, ...

Portfolio Management Must Become Existentially Conservative | The JEI

Garvin F. Jabusch, Cofounder and Chief Investment Officer of Green Alpha®Advisors, LLC Traditional asset management spends a lot of time worrying about traditional macroeconomic indicators. Slowing Chinese growth. Eurozone GDP. The latest gyrations in gold. And in the short term, these things can and do cause market volatility. Yet history has shown over and again that these and their like …

Audi’s Blue Crude: Lingering Questions

Mimi Reichenbach 5/7/15 Update from Germany: Carbon dioxide has become an alternative fuel source. On April 21, Audi announced that its partner Sunfire, a German energy-conversion technology developer, had successfully synthesized a batch of “blue crude.” The fuel is derived from carbon dioxide, water, and renewable energy, and can be used as (and mixed with) diesel fuel today. The production …