Alpha-Centric ESG Research

Kyle Rudden

<p>During the 2020 U.S. Presidential Election and transition (August 2020 through February 2021), I published a series of Insights on the likely U.S. sustainability/ESG policies under various election outcome scenarios. Too many Insights to list, but the following are representative examples:</p><ul>
<li>
<a href="https://www.smartkarma.com/insights/u-s-elections-a-biden-win-would-be-a-win-for-esg-investing-and-sustainable-finance" target="_blank" data-smartkarma-citation="insights:44503" rel="noopener">U.S. Elections: A Biden Win Would Be a Win for ESG Investing and Sustainable Finance</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/u-s-elections-a-biden-win-would-include-reversing-trump-s-anti-esg-handiwork" target="_blank" data-smartkarma-citation="insights:44764" rel="noopener">U.S. Elections: A Biden Win Would Include Reversing Trump's Anti-ESG Handiwork</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/biden-making-good-on-major-environmental-promises-new-sec-is-more-esg-focused" target="_blank" data-smartkarma-citation="insights:48662" rel="noopener">Biden Making Good on Major Environmental Promises: New SEC Is More ESG-Focused</a> </li>
</ul><p>Since then, I have not written much about ESG in the U.S., for two reasons: 1) the interesting ESG activity in Asia stole my attention, and 2) there was little worth writing about here. Early in 2021, there were a few events – individually important, but too isolated to be collectively substantive.</p><p>That changed in the last month, as the Biden administration's climate agenda manifested itself in several areas, not the least of which is ESG disclosure – ESG disclosure <em>legislation</em> in Congress, and ESG disclosure <em>regulation</em> at the U.S. Securities and Exchange Commission (SEC). </p><p>This Insight is a brief update on the ESG disclosure legislation working its way through Congress, notably House Bill 1187 (H.R.1187), the "<em>ESG Disclosure Simplification Act.</em>" H.R.1187 is likely dead on arrival in the Senate (too much Republican opposition), but it heralds more to come.</p><p>It is the proverbial tip of an iceberg.</p>

During the 2020 U.S. Presidential Election and transition (August 2020 through February 2021), I published a series of Insights on the likely U.S. sustainability/ESG policies under various election outcome scenarios. Too many Insights to list, but the following are representative examples:

U.S. Elections: A Biden Win Would Be a Win for ESG Investing and Sustainable Finance 

U.S. Elections: A Biden Win Would Include Reversing Trump's Anti-ESG Handiwork 

Biden Making Good on Major Environmental Promises: New SEC Is More ESG-Focused 
Since then, I have not written much about ESG in the U.S., for two reasons: 1) the interesting ESG activity in Asia stole my attention, and 2) there was little worth writing about here. Early in 2021, there were a few events – individually important, but too isolated to be collectively substantive.That changed in the last month, as the Biden administration's climate agenda manifested itself in several areas, not the least of which is ESG disclosure – ESG disclosure legislation in Congress, and ESG disclosure regulation at the U.S. Securities and Exchange Commission (SEC). This Insight is a brief update on the ESG disclosure legislation working its way through Congress, notably House Bill 1187 (H.R.1187), the "ESG Disclosure Simplification Act." H.R.1187 is likely dead on arrival in the Senate (too much Republican opposition), but it heralds more to come.It is the proverbial tip of an iceberg.

U.S. ESG Legislation (H.R.1187) Unlikely to Survive the Republican Senate But There Is More to Come

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>For our next Smartkarma Webinar, we are thrilled to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/kyle-rudden" target="_blank" data-smartkarma-citation="accounts:4495" rel="noopener">Kyle Rudden</a> , who will be sharing insights on the trending issue of Environmental, Social, and Governance Investing. ESG investing is widely seen as a way of investing “sustainably” where investments are made with consideration of the environment and human well-being, as well as the economy. Kyle believes global sustainability is imperative and views private-sector capital as its cornerstone. As such, he supports the various impact-oriented strategies typically associated with ESG investing. However, his views on ESG and investing lean more pragmatic than idealistic, and his research focuses on applying ESG analysis to general investing rather than to "ESG investing" per se. Kyle subscribes to the Triple Bottom Line view of sustainability, where economic and financial metrics are deemed as important as ESG factors.</p><p>This webinar is organised jointly by Smartkarma and SGX.</p><h3>The webinar will be hosted on Wednesday, 14 July 2021, 17:00 SGT/HKT.</h3><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=86937019742" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div><p>Kyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.</p>

For our next Smartkarma Webinar, we are thrilled to welcome back Insight Provider Kyle Rudden , who will be sharing insights on the trending issue of Environmental, Social, and Governance Investing. ESG investing is widely seen as a way of investing “sustainably” where investments are made with consideration of the environment and human well-being, as well as the economy. Kyle believes global sustainability is imperative and views private-sector capital as its cornerstone. As such, he supports the various impact-oriented strategies typically associated with ESG investing. However, his views on ESG and investing lean more pragmatic than idealistic, and his research focuses on applying ESG analysis to general investing rather than to "ESG investing" per se. Kyle subscribes to the Triple Bottom Line view of sustainability, where economic and financial metrics are deemed as important as ESG factors.This webinar is organised jointly by Smartkarma and SGX.The webinar will be hosted on Wednesday, 14 July 2021, 17:00 SGT/HKT.Register for the Webinar hereKyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.

Smartkarma Webinar | Foundations of Sustainable/ESG Investing and Finance

<p>As ever-increasing numbers of companies report sustainability performance, and as more investors integrate ESG into their investment processes, sustainability/ESG data becomes more critical than ever. In turn, sustainability reporting standards-setters take on greater responsibility.</p><p>There is a problem, however... a big problem. There are too many standards-setting organisations and frameworks. This generates confusion, hinders corporate reporting, and diminishes usefulness and compatability and of reported sustainability/ESG data and information.</p><p>Too many cooks in the kitchen, as it were.</p><p>Well, there is one less cook in that kitchen now, with the recent closing of the merger between the International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB), creating a new standards organisation called the Value Reporting Foundation.</p><p>It's still a crowded kitchen, however (there are more than 700 standards in the world). A singularity is neither realistic, nor desirable. Niche frameworks, which comprise the majority of that 700, play important roles. But the <em>top</em> of the ecosystem – large general frameworks – needs streamlining.</p><p>The IIRC/SASB merger is a small, but important, step in aligning and streamlining sustainability reporting. This Insight is a very brief look at the IIRC/SASB merger, as well as GRI's reboot of its Sector Program – and 40 sector-specific GRI standards that will start rolling out later this year.</p>

As ever-increasing numbers of companies report sustainability performance, and as more investors integrate ESG into their investment processes, sustainability/ESG data becomes more critical than ever. In turn, sustainability reporting standards-setters take on greater responsibility.There is a problem, however... a big problem. There are too many standards-setting organisations and frameworks. This generates confusion, hinders corporate reporting, and diminishes usefulness and compatability and of reported sustainability/ESG data and information.Too many cooks in the kitchen, as it were.Well, there is one less cook in that kitchen now, with the recent closing of the merger between the International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB), creating a new standards organisation called the Value Reporting Foundation.It's still a crowded kitchen, however (there are more than 700 standards in the world). A singularity is neither realistic, nor desirable. Niche frameworks, which comprise the majority of that 700, play important roles. But the top of the ecosystem – large general frameworks – needs streamlining.The IIRC/SASB merger is a small, but important, step in aligning and streamlining sustainability reporting. This Insight is a very brief look at the IIRC/SASB merger, as well as GRI's reboot of its Sector Program – and 40 sector-specific GRI standards that will start rolling out later this year.

Sustainability/ESG Reporting Frameworks: One Less Cook in the Kitchen But It Is Still Too Crowded

<div>
<p>In our next Smartkarma Webinar, we are delighted to welcome Insight Provider <a href="https://www.smartkarma.com/profiles/kyle-rudden" target="_blank" data-smartkarma-citation="accounts:4495" rel="noopener">Kyle Rudden</a>, to discuss <a href="https://www.smartkarma.com/insights/sustainability-and-esg-indices-a-booming-ecosystem-and-new-investing-and-trading-opportunities" target="_blank" rel="noopener">the rising ecosystem of index providers</a> and the SRI (sustainable and responsible investing) and ESG (Environmental, Social, and Governance) indices and benchmarks they create, enabling the current growth in sustainable investing.</p>
</div>
<div>
<h3>The webinar was hosted on Wednesday, 14 April 2021, 17:00 SGT/HKT.</h3>
<p>Subscribe and listen on the go:</p>
<p><iframe src="https://open.spotify.com/embed/episode/3Ox6p00UpMomMDdQXqDT9B" width="100%" height="232" frameborder="0" allowtransparency="true" allow="encrypted-media"></iframe></p>
<p><a href="https://www.smartkarma.com/profiles/kyle-rudden" target="_blank" data-smartkarma-citation="accounts:4495" rel="noopener">Kyle Rudden</a><span> is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.</span></p>
</div>


In our next Smartkarma Webinar, we are delighted to welcome Insight Provider Kyle Rudden, to discuss the rising ecosystem of index providers and the SRI (sustainable and responsible investing) and ESG (Environmental, Social, and Governance) indices and benchmarks they create, enabling the current growth in sustainable investing.


The webinar was hosted on Wednesday, 14 April 2021, 17:00 SGT/HKT.
Subscribe and listen on the go:

Kyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.


Smartkarma Webinar | Sustainability and ESG Indices: A Booming Ecosystem

<p>We see those big numbers in the press, almost daily it seems. About ESG assets under management (AUM) reaching US$40 trillion, expected to hit US$53 trillion by 2025. Or about quarterly ESG fund flows nearing US$100 billion, and the seismic shift in ESG AUM to passively-managed funds.</p><p>Recent growth in SRI (sustainable and responsible investing) and ESG (Environmental, Social, and Governance) assets and investment products would not be possible without the growing ecosystem of index providers, and the SRI/ESG indices and benchmarks that they create.</p><p>The ongoing boom in SRI/ESG indexing, which shows no signs of slowing, creates new opportunies for investors – and I do not mean investing in indexed mutual funds or ETFs. Too obvious, and too retail. I am referring to emergent opportunities associated with SRI/ESG index arbitrage.</p><p>Index rebalancing/reconstitution events often create windows of abnormal returns for constituents being re-weighted, added, or dropped. That much is obvious, and the effects of broad market index changes are well-known. For SRI/ESG indices, this is uncharted territory with huge potential.</p><p>This Smartkarma Original looks at the evolving SRI/ESG indexing landscape, and more importantly the emergent investing (e.g., stocks of listed indexers) and trading (e.g., arbitraging index changes) strategies arising from this global boom in SRI/ESG indices... from an Original perspective.</p><h2>WHAT'S ORIGINAL?</h2><p>Typically, discussions about SRI/ESG indices focus on their performance and in the context of that age-old "ESG-Alpha" debate – i.e., whether incorporating ESG factors into the investment process is worth the effort. To be clear, that is an important debate to have (and win). However, this report takes a different angle on SRI/ESG indices by focusing on investing and trading and strategies that capitalise on the boom in SRI/ESG indices. Theory (and a little speculation) backed by analysis.</p>

We see those big numbers in the press, almost daily it seems. About ESG assets under management (AUM) reaching US$40 trillion, expected to hit US$53 trillion by 2025. Or about quarterly ESG fund flows nearing US$100 billion, and the seismic shift in ESG AUM to passively-managed funds.Recent growth in SRI (sustainable and responsible investing) and ESG (Environmental, Social, and Governance) assets and investment products would not be possible without the growing ecosystem of index providers, and the SRI/ESG indices and benchmarks that they create.The ongoing boom in SRI/ESG indexing, which shows no signs of slowing, creates new opportunies for investors – and I do not mean investing in indexed mutual funds or ETFs. Too obvious, and too retail. I am referring to emergent opportunities associated with SRI/ESG index arbitrage.Index rebalancing/reconstitution events often create windows of abnormal returns for constituents being re-weighted, added, or dropped. That much is obvious, and the effects of broad market index changes are well-known. For SRI/ESG indices, this is uncharted territory with huge potential.This Smartkarma Original looks at the evolving SRI/ESG indexing landscape, and more importantly the emergent investing (e.g., stocks of listed indexers) and trading (e.g., arbitraging index changes) strategies arising from this global boom in SRI/ESG indices... from an Original perspective.WHAT'S ORIGINAL?Typically, discussions about SRI/ESG indices focus on their performance and in the context of that age-old "ESG-Alpha" debate – i.e., whether incorporating ESG factors into the investment process is worth the effort. To be clear, that is an important debate to have (and win). However, this report takes a different angle on SRI/ESG indices by focusing on investing and trading and strategies that capitalise on the boom in SRI/ESG indices. Theory (and a little speculation) backed by analysis.

Sustainability and ESG Indices: A Booming Ecosystem and New Investing and Trading Opportunities

United States

MSCI Inc. provides investment decision support tools to investment institutions worldwide. The Company produces indices and risk and return portfolio analytics for use in managing investment portfolios.

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MSCI Inc (MSCI US)

U.S. ESG Legislation (H.R.1187) Unlikely to Survive the Republican Senate But There Is More to Come

After much of nothing for years, U.S. ESG policy is coming to life. This is a brief look at ESG legislation in Congress. Just the tip of an...

Kyle Rudden

Smartkarma Webinar | Foundations of Sustainable/ESG Investing and Finance

On 14 July, 5pm SGT, join our webinar with Kyle Rudden, who will be sharing his insights on the trending issue of ESG Investing and the Triple...

Smartkarma Research

Sustainability/ESG Reporting Frameworks: One Less Cook in the Kitchen But It Is Still Too Crowded

A brief word on the recently-closed IIRC/SASB merger and what it portends for sustainability reporting, plus a bit on GRI's reboot of its sector...

Kyle Rudden

Smartkarma Webinar | Sustainability and ESG Indices: A Booming Ecosystem

On 14 April, 5pm SGT, we welcome Insight Provider Kyle Rudden to discuss the growing ecosystem of SRI-ESG index providers that enable the current...

Smartkarma Research

Sustainability and ESG Indices: A Booming Ecosystem and New Investing and Trading Opportunities

Index rebalancing and reconstitution often creates a window of abnormal returns (and opportunity). For broad market indices, these effects are well...

Kyle Rudden

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