Many newspapers now talk of the declining demand for ESG funds (defined as funds with ESG or sustainability-related terms in their name). 

So is investment into ESG funds really falling? Yes - but not for the reasons you may think.

A key reason behind this is that the actual number of 'ESG funds' on the market has decreased, due to the regulatory clampdown on greenwashing.

The bar on greenwashing is rising

In most jurisdictions, financial regulators are increasingly determined that the sustainability characteristics of any fund marketed under an ESG banner are robust, transparent and quantifiable. Unsurprisingly, this has made the marketing teams and legal compliance units of most asset managers very nervous.

As an example, Blackrock has just dropped sustainability-related terms from 56 funds, representing ~£40bn of managed assets. Blackrock has admitted there will be no change to the actual investment strategies of these funds - but these 56 funds do not meet the new EU criteria for sustainability-related fund names.

So are investors leaving the funds that retain ESG nomenclature?

Even with this name-change trend, inflows into ESG-named funds are still rising. Global inflows in Q4 2024, using Morningstar data, were $16.0bn. This was up on the Q3 2024 inflow of $9.4bn.

The US however, is seeing ESG fund outflows. This is all because of the socio-political backlash against ESG, right?

Wrong. The US has seen ESG fund outflows for every quarter since Q2 2022. The Biden administration was still driving a sustainability agenda then, but then 2 very important things happened around Q2 2022:

🇷🇺 Russia invaded Ukraine in February, causing a surge in oil & gas prices 

📈 US interest rates started rising in April

A majority of US ESG funds share 2 characteristics: they have no oil & gas exposure, and they are long renewable energy generation.

Renewable energy generators are what investors call a ‘long duration asset’; meaning the bulk of the net cash flow comes far out in time, and therefore the asset’s present value will be particularly hurt by rising interest rates.

So, both the macroeconomic events of Q2 2022 badly impacted ESG funds, and the ongoing impacts led to a widespread loss of confidence in 'ESG as an investment'.

Will this continue to be the case?

At this point, there are too many unknown variables to make a definitive judgment.

For example, if oil prices started a reversion to where they started this decade ($20 per barrel), the landscape for investment in ESG funds might improve sharply once again.

Global demand for sustainable funds is not going away. And once we see a period of stronger investment performance, convincing wary investors that sustainability does not reduce returns, we will see a boost to demand.

An activist investor group is urging Woodside Energy shareholders to vote against the re-election of all three directors.

This was shared in our sentiment round up last week, with the investors concerned citing poor returns and failures in managing climate risks.

Are these investors right?

The data speaks for itself - Woodside’s absolute emissions increased by 8% year-over-year from 2023 to 2024.

Their Global Scope 1 and Scope 2 greenhouse gas emissions, scaled by revenue, place them in the bottom quartile - not just compared to the entire Integrum ESG universe, but also among their global sector peers.

It is Woodside’s poor performance relative to other Oil and Gas E&P companies which underscores why investors are losing confidence.

Why is this important?

Boards that fail to align with the energy transition will face increasing scrutiny from investors who expect more than empty promises.

With regards to Woodside, the key question remains: will they change course, or will shareholders force their hand?

Are the Net Zero Alliances falling apart?

Sadly yes.

But the reason why is not what many observers believe.

Most of the large banking and investment management groups who have withdrawn from the Net Zero Banking Alliance or Asset Managers Alliance have publicly reiterated their commitment to net zero targets, and continue to invest in their sustainability advisory teams.

𝗧𝗵𝗲 𝗿𝗲𝗮𝘀𝗼𝗻 𝘄𝗵𝘆 𝘁𝗵𝗲𝘆 𝗵𝗮𝘃𝗲 𝗽𝘂𝗹𝗹𝗲𝗱 𝗼𝘂𝘁 𝗼𝗳 𝘁𝗵𝗲𝘀𝗲 𝗮𝗹𝗹𝗶𝗮𝗻𝗰𝗲𝘀 𝗶𝘀 𝗳𝗲𝗮𝗿 𝗼𝗳 𝗹𝗶𝘁𝗶𝗴𝗮𝘁𝗶𝗼𝗻.

The House of Representatives Committee on the Judiciary has written to most members of these alliances and, essentially, accused them of having joined a cartel, which is colluding to defund the American oil and gas industry.

The recipients of these accusatory letters, after extended deliberations with their lawyers, have concluded (or likely will do soon) that the probability of successful legal action against them is too great.

𝗪𝗶𝗹𝗹 𝘁𝗵𝗲𝗿𝗲 𝗯𝗲 𝗮 𝗳𝗶𝗴𝗵𝘁𝗯𝗮𝗰𝗸? 𝗜𝘁 𝗱𝗼𝗲𝘀𝗻'𝘁 𝗹𝗼𝗼𝗸 𝗹𝗶𝗸𝗲 𝗶𝘁.

NZAM (The Net Zero Asset Managers alliance) has even suspended its activities, after Blackrock, the world's largest asset manager pulled out recently. The only news we now see is incremental departures.

Looking at the pullback on DEI we are seeing from many of the US' largest companies, it seems no one wants to pick a fight with the new Republican-led US legislature.

And Mark Carney, the principal architect of these alliances (which sit under the umbrella known as GFANZ), has remained quiet.

As of this week, he arguably has bigger battles to fight. 🇨🇦

DEI (standing for Diversity, Equity and Inclusion) has become a popular buzzword in recent years, linked with targets and priorities for many businesses.  

However, the re-appointment of President Trump has caused many of the largest US companies to scale back or entirely drop their DEI targets.  

How have companies reacted? 

Accenture, the global consulting firm is one example, sharing an internal memo to their 700,000 employees saying, “the company will start “sunsetting” the diversity goals it set in 2017, along with career development programmes for “people of specific demographic groups”. 

Other corporates who have either axed or rolled back their DEI commitments since Trump’s inauguration include Target, Google and Amazon.  

This roll back has also extended to financial institutions including Deloitte, Goldman Sachs and Blackrock amongst others. 

What reason have corporates given for moving away from DEI? 

One of the arguments anti-DEI advocates have made is that it may negatively impact performance and returns.  

This argument has been best illustrated by the Florida State Board of Administration, who oversee public employee retirement funds, bringing a class action lawsuit against American retailer Target.  

They allege that the company’s board of directors deceived shareholders about the true risk of its 2023 Pride Month campaign, a campaign which provoked consumer backlash and “wiped out over $25 billion in Target’s market capitalization”. 

This lawsuit of course does not mention the number of other issues that Target have faced in the past few years that has led to their declining performance.  

How are consumers and shareholders reacting? 

Amidst the roll back, companies John Deere and Apple are proving that shareholder appetite for DEI is still prevalent.  

Both companies recently held votes on their respective DEI plans, with both sets of shareholders recording a rejection rate greater than 95%.  

The Securities and Exchange Commission (SEC) also looks to be taking a firm stance on this, having recently blocked an attempt from Boeing to “no action” a civil rights audit proposal, filed in response to their alleged DEI roll back.  

Companies who have already decided to scale back their programs are also facing the risk of consumer backlash.  

This has been demonstrated by the “Target-Fast” boycott that started on Wednesday, a 40-day consumer boycott driven by the BAME community.  

The boycott stems from disappointment that Target, who pledged to add products from more than 500 Black-owned businesses by 2025, have scaled back their DEI efforts with minimal resistance. Upwards of 100,000 people have already signed up.   

What next?

The retreat from DEI targets by major US companies shows how vulnerable corporate commitments can be to political trends and is symbolic of how politicised ESG continues to be.  

Genuine DEI progress requires long-term commitment, regardless of political pressure, and the recent response by shareholders and consumers alike proves that we will not see a complete erasure of these standards anytime soon.

The People’s Pension (TPP), managed by one of the U.K.’s largest independent trusts, has reallocated £28 billion away from their previous manager State Street.

Amundi and Invesco have instead been chosen to oversee this mandate, with a TPP Chairperson Mark Condron stating the pension fund chose “to prioritize sustainability, active stewardship, and long-term value creation for our nearly seven million members”.

This follows shortly after a group of financial institutions and pension funds, including TPP, publicly asked their asset managers to engage more actively with investee companies regarding climate risk.

Why does this matter?

Following Donald Trump’s inauguration, the common rhetoric has been that most corporates and investors will need to wheel back their sustainability commitments to avoid negative scrutiny.

Even in recent conversations with some emerging asset managers, they have expressed some reluctance to actively incorporate ESG into their processes, due to the fear of it harming their capital raising efforts.

This is the clearest example that that there is still significant appetite from the largest and most influential European investors for ESG integration into fund management, which they regard (to quote TPP) as creating long-term value.

TPP identified two asset managers who actively market their responsible investing efforts as clearly differentiating them from their peers.

Amundi integrates ESG considerations across all of its funds and has credited responsible investing for being one of the key cornerstones of their process.

Likewise, Invesco carries out over 2,200 engagements with portfolio companies annually on ESG topics - and TPP referred to this active engagement as being key to the manager's selection.

Integrum ESG is constantly in discussions with new and emerging fund managers who - despite making it clear they are not running sustainable/responsible/environmental funds - have been asked by would-be investors to demonstrate how they are managing ESG risks in the portfolio.

Rather than being pressured to de-prioritise ESG, unless their client is a US governmental organisation, most fund managers are being asked to produce more ESG data - in order to back up their claims of integrating sustainability with ever more granularity.

Savvy emerging managers should see this for the opportunity it is - a chance to truly differentiate themselves from their peers, and reassure potential investors that they understand ESG as a set of non-traditional risks that need to be managed.

WiseTech Global Ltd's [WTC:ASX] share price has tanked, caused mainly by a boardroom fallout in response to the ongoing role of highly controversial founder Richard White.

We reviewed the company's ESG profile to breakdown what investors should know, and should have known, about this ongoing controversy:

What actually happened?

Last Monday, four out of six board members resigned from their roles at WiseTech. This included the chair Richard Dammery, standing down due to “differing views around the ongoing role of the founder”.

Founder Richard White has been involved in a number of different scandals in the past few months regarding allegations of inappropriate relationships and behaviour towards women.

In October 2024 when allegations initially broke, White stepped down as CEO and agreed to a role as an external consultant.

However new allegations came out this month which led to the exodus from the board, and has also led to White controversially returning as Executive Chairman.

How did investors react?

WiseTech's share price has been volatile since these stories broke out.

Looking back to when these allegations first emerged, share price fell 31.62% (137.46 AUD on Oct 1 2024 to a low of 99.37 AUD on Oct 24 2024).

With the new allegations coming out against the founder and the subsequent board exodus, a trading halt on WiseTech Global shares was put in was put in place from Thursday 20 October to Monday 24 October.

As the halt was lifted, share price immediately fell 20.1% to 97.25 AUD, and as of the time of writing is currently sitting at a low of 89.50 AUD.

Could ESG data have helped investors mitigate this loss?

It depends on what ESG data solution you have access to.

Looking at MSCI and Sustainalytics' ratings on this company, for example, one might think there was little to be concerned about.

MSCI give WiseTech the highest possible overall ESG rating of an 'AAA', stating they are a leader among 451 companies in their industry. This data was unhelpfully only updated in June 2024, prior to the emergence of these scandals.

Sustainalytics' ESG rating similarly raises no immediate red flags - WiseTech is a 'low risk' company, which is concerning given the last update is listed as having been done on 27 February 2025.

Both solutions provide 'controversies' offerings which would have flagged these scandals, but only after the damage was done - giving conviction to the argument that ESG data and analysis is 'backwards looking'.

What did Integrum pick up on WiseTech?

Integrum ESG provides transparent actionable data on companies, including WiseTech.

Not only does the Platform score the company a middling 'C' grade, but has a 'Live ESG Sentiment Score' of negative 100%.

In both October 2024 and this month, when the controversies surrounding WiseTech's founder and governance broke, the real-time sentiment tracker picked up these stories early.

This real-time sentiment tracker is updated every 15 minutes and looks over 47,000 data sources to alert users to emerging stories before they become a full blown controversy.

Taking advantage of this combination of timely data, any investor would have the ammunition they needed to mitigate the losses they were due to make from WiseTech's share price falling.

Late last year, the European Commission published the final rules for regulating ESG ratings providers in the EU.

These rules have now ‘entered into force’, although this is a rather misleading legal term - ratings firms like us will only have to comply from the ‘application date’, which is in July 2026.

So, we should have another 18 months of opaqueness, at least. 👎

The EU rules will share the same principles as the proposed UK ESG ratings regulation, aiming to:

🚫 Prohibit conflicts of interest

🔎 Enforce greater transparency of both ratings methodology and supporting information

📖 Open the process by which ESG ratings are set and reviewed to regulatory scrutiny

We at Integrum ESG will be in scope of this new regulation, and we are quite looking forward to seeing the light it will shine on our industry.

For example, if you scroll to Annex III on page 45, you will see that the regulation demands a set of “minimum disclosures to the public”.

The 8th disclosure required of “an aggregated ESG rating”, is “the weighting of the three overarching E, S and G categories of factors, and the explanation of the weighting method, including weight per individual E, S and G category.”

This new disclosure requirement shouldn’t be demanding right?

We for example, use the SASB/IFRS framework to determine which individual categories are material, and we weight each of them equally. If a client wants to override this, then can click on ‘customisation’ and do so. Simple.

But I have not yet met anyone who can tell me exactly how the largest legacy ESG ratings firms set their weightings.

When I say “exactly”, I mean explain how a precise % weighting is calculated, not offer a general approach statement like :

“The selection of Key Issues and their respective weights are readjusted on an annual basis, through a process that combines quantitative assessment of industry exposures to emerging issues and wide consultation with investment practitioners” (MSCI Ratings Methodology, November 2022) ❓

The importance of how one weights different categories (sustainability issues) is that it can influence the overall rating as much as how one scores each category.

Indeed, analyses of the disparity between the ESG ratings for the same company, from different ratings providers, suggest that very different category weights are a key reason. 

Consider the table below, which snapshots how MSCI weights the same “individual category” (in this case, employee health and safety) for three beverage sectors:

We asked ChatGPT what Impact Investing is, and this is what it said:

𝘐𝘮𝘱𝘢𝘤𝘵 𝘪𝘯𝘷𝘦𝘴𝘵𝘪𝘯𝘨 𝘪𝘴 𝘰𝘧𝘵𝘦𝘯 𝘢𝘭𝘪𝘨𝘯𝘦𝘥 𝘸𝘪𝘵𝘩 𝘧𝘳𝘢𝘮𝘦𝘸𝘰𝘳𝘬𝘴 𝘭𝘪𝘬𝘦 𝘵𝘩𝘦 𝘜𝘯𝘪𝘵𝘦𝘥 𝘕𝘢𝘵𝘪𝘰𝘯𝘴 𝘚𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘭𝘦 𝘋𝘦𝘷𝘦𝘭𝘰𝘱𝘮𝘦𝘯𝘵 𝘎𝘰𝘢𝘭𝘴 (𝘚𝘋𝘎𝘴) 𝘢𝘯𝘥 𝘪𝘴 𝘨𝘢𝘪𝘯𝘪𝘯𝘨 𝘵𝘳𝘢𝘤𝘵𝘪𝘰𝘯 𝘢𝘮𝘰𝘯𝘨 𝘪𝘯𝘥𝘪𝘷𝘪𝘥𝘶𝘢𝘭𝘴, 𝘪𝘯𝘴𝘵𝘪𝘵𝘶𝘵𝘪𝘰𝘯𝘴, 𝘢𝘯𝘥 𝘧𝘶𝘯𝘥𝘴 𝘴𝘦𝘦𝘬𝘪𝘯𝘨 𝘵𝘰 𝘢𝘭𝘪𝘨𝘯 𝘵𝘩𝘦𝘪𝘳 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵𝘴 𝘸𝘪𝘵𝘩 𝘵𝘩𝘦𝘪𝘳 𝘷𝘢𝘭𝘶𝘦𝘴.

Large Impact funds generally have their own bespoke, highly sophisticated frameworks.

But when other funds are asked to report on their impact, they typically consider the extent to which the issuers of the fund's investments support the UN SDGs.

So how hard is that to do? 🧮

It depends on the degree of granularity.

We have seen asset managers breaking down an investee company's revenues into highly-specific activities, and map these not only to the 17 UN SD Goals, but also the 169 SD Targets that sit beneath the overall goals.

We however favour the Cambridge Impact Framework. We adopted it as our Impact framework because it is simple, sensible and comparable.

Moreover, the CISL is gaining ever more respect as an academic centre for sustainability analysis, which gives the Framework credibility with asset owners.

We are sometimes challenged on why we deploy a framework where the overall assessment is not intensely focused on the investee companies' products and services.

The answer is that a company's products can have a considerable positive impact on the world, but its activities also have considerable 'operational impact' that should be assessed.

Consider this hypothetical example 💭

An Asian company produces a branded pharmaceutical that reliably treats childhood cancers.

This company may appear in many impact funds, due to its life-saving product – highlighting its role in supporting SDG 3 (Good Health and Well-Being).

However, the price point of the product is unaffordable outside of Western markets, the product is packaged by child workers paid $2 per day, and the net waste and emissions generated by the manufacturing process are vast.

Thus by using the Cambridge Impact Framework, we can see how these activities are actually detrimental to SGDs 1, 8,10, 13 & 15.

So should we look at sustainability or impact? 🤔

Since inception, we have always believed that a true sustainability assessment must involve what is now called 'double materiality'; how sustainability issues affect the company, and how the company impacts the world.

So we apply a SASB/IFRS ESG Risk framework to every company, and also apply the Cambridge Impact Framework alongside it.

And when one considers recent EC proposals and the enquiries we are receiving, it is clear this will be the expectation from fund managers moving forward.

The Carbon Transitional Benchmark (CTB) and Paris Aligned Benchmark (PAB) exclusions are lists of excluded corporate activities.

The CTB exclusions can be summarised as controversial weapons, tobacco, and violations of UNGC and OECD principles. 

The PAB exclusions are more extensive.

Managers are also expected to disclose in their benchmark methodology any additional exclusion criteria they use which are based on climate-related or other environmental, social and governance (ESG) factors.

See the full breakdown below:

𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝘄𝗮𝘀 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗙𝗼𝘂𝗻𝗱𝗲𝗿 𝗮𝗻𝗱 𝗖𝗘𝗢 𝗦𝗵𝗮𝗶 𝗛𝗶𝗹𝗹.

Any fund marketed in the EU will have to comply with a new set of rules from 21 May this year.

The ESMA guidelines on funds’ names using ESG or sustainability-related terms even includes funds which are closed to new investors.

The new rules vary, depending on which of these 3 categories your fund is in:

1️⃣ Funds with these words or synonyms in the name: transition, net-zero, social, governance

2️⃣ Funds with these words or synonyms in the name: environmental, green, climate, impact, ESG

3️⃣ Funds with this word or synonyms in the name: sustainable

Funds in all categories must reach an 80% threshold; where 80% of the fund holdings must be made to meet the fund's E, S or G objectives.

Funds in category 1 must apply the CTB exclusions, whereas funds in categories 2 or 3 must apply the PAB exclusions.

What are the CTB and PAB exclusions?

The Carbon Transitional Benchmark (CTB) and Paris Aligned Benchmark (PAB) exclusions are lists of excluded corporate activities.

The CTB exclusions can be summarised as controversial weapons, tobacco, and violations of UNGC and OECD principles. 

The PAB exclusions are more extensive.

Managers are also expected to disclose in their benchmark methodology any additional exclusion criteria they use which are based on climate-related or other environmental, social and governance (ESG) factors.

See the full breakdown below:

An E. coli outbreak across multiple U.S. states has been directly linked to McDonald's Quarter Pounder sandwiches.

What was picked up on the Integrum ESG Platform?

On Tuesday 22nd Oct 2024, our real-time ESG tracker picked up this story for McDonald's Corp [NYSE: MCD] and as the red spike continued to grow an alert was sent out to our clients. The company's net real-time ESG score dropped to a low of negative 61.5%.

What actually happened?

The American Centers for Disease Control and Prevention (CDC) announced that they were investigation links between an outbreak of E. coli and McDonald's Quarter Pounder sandwiches. According to the CDC, at least 49 people in 10 states have been sickened, 10 of whom have been hospitalised.

The Quarter Pounder is the one sandwich that the company does not utilise frozen patties for, having used fresh meat for the product since 2018. The product and specific ingredients have been pulled from distribution across multiple states.

In a statement, McDonald’s said that it was taking ''swift and decisive action'' and that their ''initial findings from the investigation indicate that a subset of illnesses may be linked to slivered onions used in the Quarter Pounder and sourced by a single supplier that serves three distribution centers.''

How did investors react?

Closing at 314.70 USD, as the story spready the company's share price fell over 9% in after-hours trading to a low of 284.48 USD.

Investors will be looking at previous E.coli outbreaks, such as those suffered by Chipotle Mexican Grill [NYSE:CMG] and Jack in the Box [Nasdaq:JACK], with both companies at the time seeing sales decline as a direct result.

Can investors use ESG data to anticipate these events?

On 'Product Quality & Safety', Integrum ESG give McDonald's Corp an overall ESG risk score of a '1' (the second lowest score obtainable).

Indeed when comparing them to their sector peers, they are ranked only 37th out of 56 companies.

This poor ranking is due to a lacklustre awareness score (the qualitative data assessing how aware the company is of this issue in absolute terms) and a rock bottom performance score (the quantitative data assessing how the company performs relative it to its sector peers).

Poor quantitative disclosures are an issue for McDonald's across the board, with the company only scoring a higher than a '2' on performance for 6 out of 19 of the metrics they are scored on.

Investors investing in NYSE: MCD should utilise this material fundamental data alongside real-time alerts to properly incorporate ESG risk into their decision making, identifying these areas of concern early to make qualified and timely decisions on holding or trading.

𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝘄𝗮𝘀 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗦𝗲𝗻𝗶𝗼𝗿 𝗔𝗻𝗮𝗹𝘆𝘀𝘁 𝗠𝗼𝗹𝗹𝘆 𝗙𝗿𝗮𝘇𝗲𝗿.

The U.S. Department of Justice has filed a lawsuit against Visa, accusing the company of engaging in practices that stifle competition in the debit card market.

This is the latest competition lawsuit that has arisen following the Biden administration’s crackdown on monopoly concerns.

The case, flagged by the Integrum ESG real-time tracker, underscores rising concerns about Visa’s market dominance; more than 60% of debit transactions in the US are processed by the company, according to the lawsuit.

Visa allegedly used its power to block alternative networks and impose excessive fees, which not only raises costs for businesses and consumers but also hampers innovation in the payments sector.

For investors, this highlights why tracking ESG metrics—notably those related to competitive behaviour —is so critical. Early warnings like these can offer valuable insight into potential legal and regulatory risks before they escalate.

Visa currently performs poorly in the material metric of ‘Competitive Behavior’ on the Integrum ESG Platform, with an overall risk score of 1.5 out of 4. While they do have an anti-trust policy in place, their disclosure lacks clarity regarding potential liabilities from ongoing legal proceedings mentioned in their 10-K report.

A prime example of this transparency gap is highlighted in the Integrum ESG Performance Score Glassbox, where Visa’s statement reads,

"...on June 17, 2020, the Supreme Court found that Visa's UK domestic interchange restricted competition under applicable competition law. On September 30, 2021, Visa reached a confidential settlement agreement resolving on Merchant's claims."

Visa’s failure to disclose how much was spent on fines or legal defence during that fiscal year reflects a lack of transparency. As a result, they’ve been given a Performance Score of 0, placing them among the lowest in their peer group.

This low score serves as a clear warning for investors, signalling that Visa is not adequately managing this significant sector-specific risk.

The recent lawsuit highlights how neglecting such important ESG risks can have significant financial repercussions - evident in the 5% drop in Visa's share price following the news.

In a world increasingly focused on transparency and fair competition, investors must prioritise monitoring such ESG risks to better understand the long-term health and sustainability of their portfolios.

𝗧𝗵𝗲 𝗳𝗼𝗹𝗹𝗼𝘄𝗶𝗻𝗴 𝗶𝘀 𝗮 𝘄𝗿𝗶𝘁𝗲-𝘂𝗽 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗮𝗻𝗮𝗹𝘆𝘀𝘁 𝗠𝗼𝗹𝗹𝘆 𝗙𝗿𝗮𝘇𝗲𝗿 𝗮𝗳𝘁𝗲𝗿 𝗵𝗮𝘃𝗶𝗻𝗴 𝗮𝘁𝘁𝗲𝗻𝗱𝗲𝗱 𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗜𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝗮𝗹’𝘀 𝗘𝗦𝗚 𝗖𝗹𝘂𝗯 𝗖𝗼𝗻𝗳𝗲𝗿𝗲𝗻𝗰𝗲 𝗼𝗻 𝟭𝟯 𝗦𝗲𝗽𝘁𝗲𝗺𝗯𝗲𝗿 𝟮𝟬𝟮𝟯. 𝗧𝗵𝗶𝘀 𝘄𝗮𝘀 𝗮𝗻 𝗲𝘃𝗲𝗻𝘁 𝗮𝘁𝘁𝗲𝗻𝗱𝗲𝗱 𝗯𝘆 𝗺𝗮𝗻𝘆 𝗹𝗲𝗮𝗱𝗶𝗻𝗴 𝗳𝗶𝗴𝘂𝗿𝗲𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗨𝗞 & 𝗘𝗨 𝗔𝘀𝘀𝗲𝘁 𝗢𝘄𝗻𝗲𝗿 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝘁𝘆, 𝘄𝗵𝗲𝗿𝗲 𝗶𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝗮𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗲𝗻𝗴𝗮𝗴𝗲𝗱 𝗼𝗻 𝗵𝗼𝘄 𝘁𝗼 𝗿𝗲𝗱𝘂𝗰𝗲 𝘁𝗵𝗲 𝘄𝗼𝗿𝗹𝗱’𝘀 𝗿𝗲𝗹𝗶𝗮𝗻𝗰𝗲 𝗼𝗻 𝗳𝗼𝘀𝘀𝗶𝗹 𝗳𝘂𝗲𝗹𝘀, 𝗽𝗿𝗼𝘁𝗲𝗰𝘁 𝘁𝗵𝗲 𝗲𝗰𝗼𝘀𝘆𝘀𝘁𝗲𝗺, 𝗮𝗻𝗱 𝗽𝗿𝗼𝗺𝗼𝘁𝗲 𝗴𝗿𝗲𝗮𝘁𝗲𝗿 𝗲𝗾𝘂𝗮𝗹𝗶𝘁𝘆.

“𝙃𝙤𝙬 𝙘𝙖𝙣 𝙥𝙚𝙤𝙥𝙡𝙚 𝙩𝙧𝙪𝙨𝙩 𝙀𝙎𝙂 𝙧𝙖𝙩𝙞𝙣𝙜𝙨 𝙩𝙝𝙚𝙮 𝙙𝙤𝙣’𝙩 𝙪𝙣𝙙𝙚𝙧𝙨𝙩𝙖𝙣𝙙?”

During the event, our CEO Shai participated in a panel discussion focused on the question of whether investors can place trust in ESG ratings and take them seriously. 

One of the many questions he raised was why are people taking ESG ratings which they don’t understandseriously?

Investors need to see the underlying data behind these ratings to explain the scores. Transparency around methodology and reason for score should therefore be a key priority for EGS ratings providers.  

𝙉𝙚𝙩 𝙯𝙚𝙧𝙤, 𝘽𝙞𝙤𝙙𝙞𝙫𝙚𝙧𝙨𝙞𝙩𝙮 & 𝙩𝙝𝙚 ‘𝙎’ 𝙞𝙣 𝙀𝙎𝙂

The other three panel discussions also provided many invaluable insights, including but not limited to:

♳ On the discussion of transition assets and the net zero pathway, it was emphasised that public markets are not going to be able to solve the issue on their own, emphasising the need for clear, uniform regulation to drive progress in this area.

♴ There is no silver bullet when it comes to measuring biodiversity loss; but we do not need perfection in data to start trying to reverse biodiversity loss.

♵ While in environmental issues we can think about ‘offsets’ to counter poor behaviour in one area, this cannot be the same for social issues. Providing a universal living wage for your employees does not negate the poor treatment of a company’s tier 2 supplier workforce.  

𝘼𝙘𝙩𝙞𝙤𝙣 𝙥𝙤𝙞𝙣𝙩𝙨 𝙛𝙤𝙧 𝙩𝙝𝙚 𝙛𝙪𝙩𝙪𝙧𝙚

The conference revealed a path forward in ESG investing; transparency, collaboration, and holistic approaches. Imperfect data shouldn’t hinder action on pressing environmental and social challenges.

Asset owners and managers alike have the capacity and responsibility to shape a more sustainable and equitable future – act now!

𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝘄𝗮𝘀 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗮𝗻𝗮𝗹𝘆𝘀𝘁 𝗞𝗶𝘁 𝗠𝗮𝗿𝗸𝘀.

Although not the first topic that springs to mind, ESG is a significantly polarising topic between Democrats and Republicans.

This year it adopted a new symbol of partisanship: Biden’s rejection of a Republican proposal in March, which prevented pension fund managers from basing investment decisions on factors like climate change, was the first veto of his presidency.

The US Department of Labor ruling would make it easier for fund managers to consider ESG issues in investments and shareholders in decision making. Republicans believe ESG politicises investing by allowing managers to pursue ‘liberal’ causes, which would hurt financial performance.

The Dems have expanded the scope of ESG through large investment in green infrastructure from the Inflation Reduction Act, as well as the aforementioned DoL rule on pension plans (and other legislation).

However, across the House, the two front-runners for the 2024 Republican nomination, Trump and DeSantis, both vehemently oppose ESG; the former in a 2024 campaign video blasted ESG as Wall Street “radical-left garbage.”

In March, DeSantis formed an alliance with 18 US states to pushback against the DoL’s new rule allowing ESG-aligned funds in 401(k) plans. Florida’s Senate also approved a bill banning state and local governments from using ESG criteria when selling debt or investing public money in April. It also prohibits Florida municipalities from selling bonds related to ESG projects and bans seeking ESG ratings.

A Republican victory, even if the potency of any future legislation is diluted by Democrat defiance, would be a far cry for ESG compared to the Biden administration.

According to Morningstar, anti-ESG sentiment, coupled with rising interest rates, have resulted in a pullback of $US5.2bn from sustainable funds in Q1 of 2023, making it the third quarter of continuous withdrawal in a year.

ESG debt, according to Bloomberg, made up only 2.5% of US$248bn of bonds issued by US companies in Q1 of 2023, as opposed to 6.08% of US$209bn of bonds issued in Q1 2022.

Owing partly to this backlash, it’s likely that greeniums could diminish on US ESG debt, as demand for ESG bonds may decrease significantly.

𝗪𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻 𝗳𝗼𝗿 𝗘𝗦𝗚 𝗶𝗻 𝟮𝟬𝟮𝟰? 

In 2024, the House and one-third of the 100-seat Senate will be up for election.

Currently, Republicans have a slim majority in the House, while the Democrats have a slim majority in the Senate. A clear majority in both the houses after the elections will give greater clarity on the future of ESG in the US.

However, if the narrow majority margins in the two houses persist after the elections, ESG will continue to be the centre of a big political divide.

"Let's talk about why you need high quality & transparent ESG data"

Every week, we speak to a new fund manager or private equity investor. They vary in size, AUM and purpose, and the level of ESG integration within their reporting systems they can boast can be significant or minimal. 

Recently, a lot of these investors seem to say the same thing:

"We do not have the budget for better ESG data right now." 

The majority of these investment firms seem to accept the idea that implementing good ESG data is costly - and it is no surprise why.

The existing large legacy ESG ratings and data providers offer exorbitant subscription fees and lock you in for years at a time.

These prices have only continued to rise despite difficult market conditions.

Their data is often opaque and their scores are built upon unclear methodologies - which only serves to increase the cost to you of implementing these systems. Investment analysts are required to do more work to unpack any ratings or leave themselves vulnerable to 'greenwashing' claims. 

"But good ESG data does not need to be expensive."

When we tell these same managers the cost of our entirely transparent, customisable and yet still comprehensive ESG ratings and data solution, they are usually surprised. Their suspicion grows when we tell them that we do not need them to sign on for years, we just offer a rolling quarterly subscription.

💭 "Are you really able to offer all of this for so little?"

💭 "Is the quality of your data really as good as you say?"

💭 "Is your company even able to survive with these low costs?"

The simple answer to all of the above is yes - the reason why, is also relatively simple. It is because we are an AI-powered ESG data provider. 

How does AI save you costs exactly?

We are the only ESG data provider able to provide you with this level of speed and precision, built upon our innovative data-centric AI methodologies - this is what makes us stand out from the rest:

➡️ Quality and Accuracy.

Our systems' focus on transparency and 'explainability' means the ESG scores you see are always up to date and trustworthy - you can export all data we pick up and verify its quality for yourself.

➡️ Better and broader Benchmarking.

The thousands of data sources we are able to pull from ensures that the level of benchmarking we provide is industry leading. 

➡️ Ability to scale up at a low cost.

Our unique 'Human-in-the-loop' approach effectively blends Artificial and Human Intelligence - meaning that we only need a small team of ESG experts overseeing the rating process of every company. 

These systems mean that we can continue to expand our coverage and improve data quality while saving on the costs usually anticipated with this level of growth - and we can then share these savings with you.

Integrum ESG is pleased to announce that it is a founding member of the European Association of Sustainability Rating Agencies (EASRA). The EASRA stands for transparency, rigor, independence and the promotion of double materiality.

The association aims to become the representative body of a new breed of sustainable finance service providers, with a view to enhancing the functioning of ESG rating provision and its contribution to a more sustainable European economy.

EASRA founding members are 𝗖𝗼𝘃𝗮𝗹𝗲𝗻𝗰𝗲 (𝗖𝗛), 𝗘𝘁𝗵𝗶𝗙𝗶𝗻𝗮𝗻𝗰𝗲 (𝗙𝗥, 𝗚𝗘, 𝗦𝗣), 𝗜𝗻𝗿𝗮𝘁𝗲 (𝗖𝗛) and 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 (𝗨𝗞) and other leading independent players are expected to join in the coming weeks.

Emmanuel de La Ville, founder of EthiFinance and EASRA Acting Chairman said:

"We are proud of setting up this association. European ESG rating providers need a forum to exchange views, share best practices and align themselves where possible on an evolving regulatory agenda. All stakeholders should benefit from this new organization at a time when sustainable finance is facing considerable challenges and opportunities. We look forward to welcoming additional ESG rating services providers in the membership and to engaging with all interested stakeholders in due course."

𝗘𝗦𝗚 𝗥𝗲𝗱 𝗦𝗽𝗶𝗸𝗲𝘀 📈

𝗨𝗻𝗶𝗼𝗻 𝗱𝗶𝘀𝗽𝘂𝘁𝗲𝘀, '𝗣𝗼𝘀𝘁𝗮𝗹 𝗱𝗲𝘀𝗲𝗿𝘁𝘀' & 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗮𝗰𝘁𝗶𝗼𝗻

𝗪𝗵𝗮𝘁 𝗱𝗶𝗱 𝘄𝗲 𝘀𝗲𝗲?

Our Real-time ESG Tracker picked up growth in negative sentiment for Royal Mail (IDS.L), flagging numerous stories across the past week which correlated with falling share value.

Our systems immediately sent out an alert to our clients with Royal Mail in their portfolio.

𝗪𝗵𝗮𝘁 𝗱𝗶𝗱 𝘄𝗲 𝗹𝗲𝗮𝗿𝗻?

In what seems to be a worrying trend for Royal Mail, with the company only earlier this year having threatened to declare insolvency, both investor and consumer confidence continues to be challenged - we were able to capture each different story early and flagged it to our clients.

𝗪𝗵𝗮𝘁 𝗼𝘂𝗿 𝗥𝗲𝗮𝗹-𝗧𝗶𝗺𝗲 𝗘𝗦𝗚 𝗧𝗿𝗮𝗰𝗸𝗲𝗿 𝘀𝗮𝘄

We have summarised the main stories which we captured across wider media and Twitter for you below:

🗓️ 𝗧𝘂𝗲𝘀𝗱𝗮𝘆 𝟵𝘁𝗵 𝗠𝗮𝘆

Reports begin to filter through that Royal Mail CEO, Simon Thompson, is set to announce his departure from the company as a step to finally resolve a long running dispute with the Communication Workers Union (CWU).

Share price for IDS.L had a high of 250.20 🔻 to a low of 244.47. 📈

🗓️ 𝗪𝗲𝗱𝗻𝗲𝘀𝗱𝗮𝘆 𝟭𝟬𝘁𝗵 𝗠𝗮𝘆

The story regarding the soon-to-be resignation of the Royal Mail CEO begins to spread throughout wider media.

Outsourcing firm and government contractor Capita, whose systems are used to administer pensions for the Royal Mail amongst other organisations, reveal it will take a hit of around £20m from a recent cyber attack that saw some customer, supplier and colleague data accessed by hackers.

Share price for IDS.L had a high of 246.62 🔻 to a low of 232.8. 📈

🗓️ 𝗙𝗿𝗶𝗱𝗮𝘆 𝟭𝟭𝘁𝗵 𝗠𝗮𝘆

Reports that Royal Mail reportedly failing to frequently deliver post were causing dozens of areas to become “postal deserts” - with some areas receiving letters as little as once a fortnight.

Share price for IDS.L had a high of 236 🔻 to a low of 229.2. 📈

🗓️ 𝗠𝗼𝗻𝗱𝗮𝘆 𝟭𝟱𝘁𝗵 𝗠𝗮𝘆

It is widely reported that the UK regulator Ofcom has launched an investigation into Royal Mail’s failure to meet its delivery targets in the past year - and will fine the company if it cannot reasonably explain why it missed the targets.

Share price for IDS.L had a high of 229.13 🔻 to a low of 224.9. 📈

The ESG Data Converge Initiative (EDCI) was created to provide GPs & LPs with a set of universal ESG data points for all of their PortCos.

Using Integrum ESG’s innovative Direct Entry Model, any GP can easily collect the data needed from their PortCos to submit to the EDCI.

Just send a link to your PortCo - when they have submitted the data, you can see it in the ‘EDCI’ tab on our Dashboard.

All mandatory 11 metrics will be listed and any scores will be colour coded to alert you to any data point which may require your attention.

You can then export all of this information and send it directly to the EDCI.

𝗧𝗵𝗶𝘀 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝘄𝗮𝘀 𝘄𝗿𝗶𝘁𝘁𝗲𝗻 𝗯𝘆 𝗜𝗻𝘁𝗲𝗴𝗿𝘂𝗺 𝗘𝗦𝗚 𝗮𝗻𝗮𝗹𝘆𝘀𝘁 𝗛𝗮𝘇𝗲𝗹 𝗖𝗿𝗮𝗻𝗺𝗲𝗿.

Carbon offsetting has been a hot topic in sustainability discussion circles for years and is viewed by many as a vital, if not the sole, option for some companies meeting their net-zero targets. Unless they plan on a complete product shift, Oil and Gas companies will almost entirely rely on offsetting. But how effective is it, and is it our only path forward?

Carbon offsetting is a process of compensating CO2 emissions by investing in external initiatives that actively reduce or remove GHG emissions. In practice, this looks like companies investing in reforestation or renewable energy projects, or simply buying trade-able carbon credits.

The calculated negative emissions associated with these projects (e.g. the carbon captured by newly planted trees) is presented as negating the positive carbon emissions resulting from a company’s business activities.

While offsetting projects can create genuine sustainable outcomes, they are not without criticism. They are seen by many as an attractive quick fix to achieve a clean conscience and present an illusion of sustainable practices to consumers and investors.

Disney, Shell and Gucci have all been caught up in recent backlash following a Guardian investigation into the leading carbon offsets certifier, Verra. The research concluded that more than 90% of their rainforest offset credits were worthless “phantom credits” failing to make “genuine” carbon reductions. Ultimately, it opens all Verra users up to greenwashing allegations.

At Integrum ESG, we follow guidance from the GHG Protocol and do not include Carbon offset figures when evaluating a company’s carbon footprint or when we compare their performance to their sector peers. We do this to effectively communicate the real climate change and reputational risk associated with these emissions and potential carbon inefficiencies in their business activities. Not only that, but climate commentators predict legal scrutiny and regulation to hit the $2bn voluntary carbon market in the near future.

Newly coined carbon ‘insetting’ challenges a reliance on offsetting. It advocates a proactive approach to tackling carbon emissions within a company’s supply chain. Ultimately, it aims to avoid producing emissions at the source rather than being forced to clean them up.

While it is a new buzzword, it’s not a new concept and many companies have already embraced ‘insetting’ initiatives. Examples we’ve found at Integrum ESG include Nestle’s commitment to sustainable farming practises resulting in improvements in biodiversity while reducing water consumption and GHG emissions.

Decarbonisation of a company’s supply chain is clearly the more demanding path to net-zero but it is overwhelmingly the preferred course of action.
Ultimately, carbon offsets should be used as a supplement to cross the net-zero finish line rather than the instrument we rely on to take us the whole way.

Effective today, Integrum ESG’s industry-leading data, scoring, and benchmarking is integrating with the preeminent ESG advisory services of Malk Partners.

More and more, top-tier private market clients tell us they want ESG data and analysis that is accurate, framework-aligned, and comparable. The partnership will deliver exactly that, through a software-and-services pairing aimed at supercharging the ESG performance of portfolio companies.

“We are very excited to be working with Malk, which has been a first mover and leader in the ESG advisory space since its founding in 2009,” said Shai Hill, CEO and Founder of Integrum ESG. “By combining Malk’s preeminent advisory services with our industry-leading repository of public and private company ESG data, we can become even more valuable to our private market clients.”

“Our clients have been very clear. They want the best ESG data available – by which they mean, ESG data that is seamlessly and accurately captured, intuitively displayed, scored in a customizable way, benchmarked against industry peers, and consistent with widely-respected ESG frameworks. In Integrum ESG, we have found the innovative partner that best aligns to our clients’ needs,” said Max Hong, CEO of Malk Partners.

Above all else, client satisfaction is our highest priority, and we are excited about the ways Malk’s field-leading advisory services will complement Integrum ESG’s unmatched data capabilities.

We now look forward to serving top-tier private market investors together.

NOTE: This table has been updated as of 29 September 2022, following the news of easyJet switching from a strategy of carbon offsetting to emission reductions.

Below is a list of the top 9 airline companies with the biggest difference between their Awareness Score and their Performance Score - i.e, they have policies and targets in place but they are still the worst performing airlines relative to their peers in the airline industry in terms of CO2e emissions.

The below table shows the countries which are worst at managing risks from climate change.

The Climate Change Risk metric includes two sub-metrics:

1. Vulnerability vs readiness for a changing climate whichlooks at a country's propensity to be impacted by climate change hazards vs its ability to make effective use of investments for adaptation.

2. Demographic Pressures which considers pressures upon the state deriving from the population itself or the environment around (including pressures stemming from extreme weather events).

This metric is scored from 0-4 with 4 being the highest score awarded.

The below table shows the companies within the Chemical sector that do not have a policy in place to protect the environment.

The table below shows, from highest to lowest, the top 10 companies which have seen the largest year on year increase of CO2 emissions.

Question related to Regulation (EU) 2019/2088 of the European Parliament (Sustainable Finance Disclosure Regulation 2019/2088)

Published by the European Commission 14/07/2021:

The “comply or explain mechanism”

The underlying objective of Article 4 of Regulation 2019/2088 is to encourage financial market participants to pursue more sustainable investment strategies in terms of reducing negative externalities on sustainability caused by their investments. The compliance with disclosure requirements under Article 4 should incentivise the interest in investing in activities that do not harm environment or social justice, curb greenhouse gas emissions of their investments, stimulate investee companies to transition away from unsustainable activities and improve their environmental impacts or and even induce portfolio adjustments and divest from investments in activities that are harmful to sustainability. Article 4 also encourages financial advisers to pay more attention to how the consideration of negative externalities is integrated in their investment or insurance advice.

This is why the “comply or explain mechanism” under Article 4(1) of Regulation 2019/2088 distinguishes between ‘principal adverse impacts’ and ‘adverse impacts’.

Whilst the “comply mechanism” under point (a) of paragraph 1 encompasses the consideration of principal adverse impacts of investment decisions, financial market participants that decide not to apply the “comply mechanism”, must under point (b) of that paragraph that establishes “explain mechanism”, provide clear reasons for why they do not consider ‘adverse impacts’ of investment decisions on sustainability factors. Under point (b), by way of example, financial market participants must provide clear reasons for why they do not consider degradation of the environment or social injustice caused by their investments.

The aim of Article 4(3) and (4) of Regulation 2019/2088 is to introduce a more stringent “disclosure mechanism” and reduce a hypothetical incidence of application of “explain mechanism”.

New regulation comes into force in January 2023, called “SFDR” (Sustainable Finance Disclosure Regulation) - setting out rules for asset managers to classify and report on sustainability and ESG factors in investments.

This regulation applies to all investment managers and advisors (a) in the EU, (b) should they have EU-based shareholders, and/or (c) if they are marketing within the EU. 

Moreover, the FCA regulator in the UK opened a consultation on its own version, called “SDR”, in November 2021. So even if you plan to market your fund in the UK, and not the EU, you are going to have to meet the requirements.

We have summarised how these new rules could apply to YOU and what steps you should take to best prepare yourself - in a comprehensive but digestible guide below.

Below is a list of the top 10 companies (with remuneration reports) with the largest 'limit on long-term bonuses as a percentage of base salary (%) ' - i.e. the potential size of a CEO bonus ~~can be~~ in comparison to their salary.

The universe is companies that disclose salary and bonus % AND have a remuneration report showing the numbers

The companies not on this list may have larger bonus sizes in absolute values, this table focuses on potential bonus as % of salary

Of the 314 companies we have under full coverage in the sub-sectors of: Commercial Banks, Asset Management & Custody Activities, Insurance, Investment Banking & Brokerage - i.e. the financial subsectors where "Integrating social & environmental concerns into planning & design" is material we have found that the below 9 companies do not clearly disclose sufficient policies for the metric "Integrating social & environmental concerns into planning & design". In the case of these sub-sectors, this could refer to integrating ESG or sustainable finance strategies into their products, for example.

The below list shows the ESG scores of the top 10 and worst 10 extractives & minerals processing companies.

The below table shows the companies within the processed food sub-sector and their awareness scores for auditing their suppliers' labour code of conduct. Most score a 3 out of a possible highest score of 4 as our scoring logic gives a score of 3 for companies with a policy in place for conducting labour audits of suppliers and for disclosing numbers, but does not give detailed percentages or set itself a target.

Only one company has scored a maximum score of 4 as they have also set themselves a target for conducting labour audits of suppliers.

The table below ranks each sub-sector from highest to lowest on how they manage labour relations.

Chile have issued a new USD$2bn 20-year sustainability-linked bond (SLB), the first Sovereign to do so. Unlike green bonds, the proceeds of SLBs are not segregated for use towards specific green or sustainable projects, but instead the payout to investors depends on whether the issuer meets agreed-upon KPIs. The KPIs attached to Chile's SLB are related to their annual greenhouse gas emissions and renewable energy generation.

On the Integrum ESG Sovereign Dashboard, compared to its Latin America & Caribbean peers, Chile ranks no1 on overall ESG and sits within the top 3 on Social and Governance. However, the country is 7th on Environmental issues, due to factors such as water stress, waste and % of power coming from renewable sources

Below is a list of countries that are best at managing the risks associated with climate change. Each scores 3.75 out of a maximum score of 4

The Climate change risk metric has 2 sub-metrics. The qualitative "Vulnerability vs readiness for a changing climate", and the quantitative "Demographic pressures".

The first sub-metric in particular (vulnerability vs readiness) assesses how the country is managing the risk from climate change, so for example, seeing the small island state of Mauritius on this list might be surprising, but they are deemed to have a high readiness to adapt to risks they are facing from climate change.

Last week The World Economic Forum released 'The Global Risks Report 2022', and of their 10 most severe risks on a global scale over the next 10 years, 5 were environmental risks. 

These 5 risks are climate action failure, extreme weather, biodiversity loss, human environmental damage and natural resource crises. 

The list below is the top 20 companies who score highest on managing business risk from climate change.

The below tables shows which 14 automobile companies score highest on the governance metric 'Risk Management'.

The list below shows the 12 companies with the highest Governance score. Integrum ESG licences the Minerva framework to assess corporate governance. Minerva are stewardship experts and their framework assesses corporate governance using 9 metrics and 39 sub-metrics.

In the table below, we show the 5 countries which rank highest and lowest on the Freedom of the Press Index. This 2021 data is an annual ranking of countries (the greater the index score, the worse the situation is regarding press freedom) published by Reporters Without Borders and is one of the 31 datapoints we track for every Sovereign in our ESG database.

In the table below, we show the 5 countries where unemployment is lowest and highest. This 2020 data is sourced from the International Labour Organization, and is one of the 31 datapoints we track for every Sovereign in our ESG database.

Below is a list of the companies with the sharpest deterioration in ESG sentiment from the past seven days. Our A.I. powered sentiment tracker trawls through ~850,000 global news sources, in 92 languages, and assigns a neutral, negative or positive sentiment score to ESG relevant comments.

The companies below are experiencing an acute deterioration in ESG sentiment for different specific reasons, such as ransomware attacks, undisclosed CEO perks and even a US Senator calling for an investigation into price fixing in their sector.

With the recent 'rise in child obesity' article published by the BBC (data taken from the NHS), we have highlighted the UK Food & Beverage companies that are most focused on managing health risks to customers. You might be surprised by some of the names below.

The UK companies below (with a score of 3) state that their procedures related to managing customer health risks either align with a third-party standard, or are audited. The companies with a score of 4 also have a target in place, for supporting customer health.

How do companies improve their ESG rating? It might be by reducing carbon emissions, it might be by adopting new employee policies. But it is very often achieved by better disclosure on ESG issues. 

Below is a list of the top improvers when it comes to (uncustomised) ESG score improvements. 

We are now seeing a clear trend of improving ESG disclosure in the US – and thus it is no surprise that all but 2 of this list are US companies.

Using the SASB framework, we assess certain sectors for employee turnover - as an indicator of how good a company's labour practices are.

Rather than focus on the negative, we thought we would list below the 10 companies with the lowest staff turnover:

The list below shows the 10 companies who pay their accountants the most, relative to the cost of auditing from the accountants.

For example, Volkswagen paid EY €19m in audit fees, but it paid EY €33m in non-audit fees (€21m for tax advisory, €7m for advice on new legal standards, and €5m for 'other assurance services').