ESG

• Managers/Executives should receive compensation that is appropriate to increase corporate value and stock price, and executive compensation should be tied to the realization of corporate value and stock price growth.
• Not many companies have been able to increase their corporate value by hiring global talent on their boards like Hitachi, MUFG, Mitsui & Company, and Daikin.
• Currently, the relationship between executive compensation and corporate value is inconsistent. The optimal proportion of variable compensation and the acquisition/utilization of global human resources to strengthen competitiveness will be key.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Samvardhana Motherson’s (SM) ESG as “Adequate”, in line with its “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Weak”.
• The score is based on the ESG reporting of parent Motherson Group (encompassing ultimate parents Samvardhana Motherson International Limited and Motherson Sumi Systems Limited), which reports ESG on a consolidated level without providing meaningful details at the SM level.

• The percentage of stockholdings by individuals will continue rising. Their tendency to buy-on-decline will continue to serve as a cushion in times of falling stocks as well as voting behavior.
• Now that the BOJ’s ETF purchases have subsided, an increase in trust bank stock holdings is not expected. A limited increase in pension assets is also expected.
• The reduction in cross-shareholdings has reduced the shareholding ratio of corporations to 19.6%. Meanwhile, corporations repurchased total of 5,790.7 billion yen in FY2022, indicating that share repurchases have taken root.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We view Altice International’s ESG as “Adequate”, in line with the Environmental, Social and Governance pillars. Controversies are “Material” and Disclosure is “Adequate”.
• Altice International offers cable TV, broadband Internet as well as fixed and mobile telephony services in Portugal, Israel and the Dominican Republic.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Oriflame’s ESG as “Adequate”, in line with its “Adequate” Social and Governance scores. The company has a “Strong” score for the Environmental pillar. Controversies are “Immaterial” and Disclosure is “Strong”.
• Oriflame is a global beauty direct seller that markets its products through 3.1 mn members across 60 countries.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Aegea’s ESG as “Strong”, in line with its Environmental and Social pillars, while Governance is “Adequate”. Controversies are “Immaterial” and Disclosure is “Strong”.
• Aegea is the largest water and sewage private company in Brazil, providing services throughout the water cycle process (e.g. water supply as well as water and sewage collection/treatment).

• Cash generation through the subsidiaries’ IPOs will only buy time, and investors are likely to focus on when Rakuten will move to solve the problems in its cell phone business.
• In recent years, TSE’s market reorganization has focused attention on parent-subsidiary listings, and there’ve been moves to convert listed subsidiaries into wholly owned subsidiaries or sell subsidiaries to other companies.
• For Rakuten, subsidiary IPOs are an essential means of raising cash, but TSE’s recognition of the governance issues involved in parent-subsidiary listings raises questions about Rakuten’s two parent-subsidiary listings.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Ardagh Metal Beverage Packaging’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Ardagh Metal Beverage Packaging (AMBP) is a carve-out from Ardagh Group. The business operates in the high-growth metal beverage can packaging segment, with a presence in North America, Europe and Brazil. Ardagh Group owns a 80% stake in the business, with the rest being mostly public float.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Adani Transmission Limited’s ESG as “Adequate”, in line with the Environmental and Social pillars. Governance is “Weak”. Controversies are “Material”, but Disclosure is “Strong”.

• Domestic investment managers are expected to show a higher percentage in favor of shareholder proposals, but life insurances still face a high hurdle in voting in favor of shareholder proposals.
• It is relatively easy to decide for or against a proposal based on quantitative criteria such as the level of ROE or whether there are zero female directors.
• Few institutional investors adequately disclose the reasons for approval or disapproval of individual proposals. Disclosure of reasons for approval or disapproval is required for company proposals that are controversial.

• Few companies disclose human capital quantitatively, and most do so in text without numbers. Rarely do companies like Sysmex show how much added value their human capital investments have generated.
• To ensure that information necessary to understand how much value investment in human capital creates is disclosed, investors should scrutinize annual securities reports to identify areas for improvement in disclosure.
• Human capital and diversity disclosures are not available in a database. Allowing comparisons over time in the same company and comparative analysis with other companies will advance companies’ efforts.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Novelis’ ESG as “Adequate”, in line with its Social and Governance scores. The company has a “Strong” score for the Environmental pillar. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Novelis is the world’s largest producer of flat-rolled aluminium products and the largest recycler of aluminium globally.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Usiminas’ ESG as “Adequate”, reflecting its “Adequate” scores for the Environmental, Social and Governance pillars. Controversies are “Immaterial” and Disclosure is “Strong”.
• Usinas Siderurgicas de Minas Gerais SA (Usiminas) is one of Brazil’s largest steel-makers. The company’s key flat-steel production and iron-ore mining business units together account for the bulk of consolidated EBITDA.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Nobian’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Strong”.
• Nobian is a leading integrated European chemicals manufacturer and supplier in the energy-salt-chlorine value chain.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Aeropuertos Argentina 2000’s ESG as “Adequate”, in line with its Social, Environmental and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Aeropuertos Argentina 2000 (AA2000) is Argentina’s largest airport operator. In 1998, it was granted a 30-year concession by the national government for the use, operation and management of 37 airports, out of a total of 56 in the country.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess EVOCA’s ESG as “Adequate”. The company has “Adequate” Governance and Social scores, but a “Weak” Environmental score. Controversies are “Immaterial” and Disclosure is “Adequate”.
• EVOCA (formerly N&W Vending) is a manufacturer of professional coffee machines, as well as machines for hot & cold beverages and snacks.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Cable Onda’s ESG as “Adequate”. The score mirrors our “Adequate” ESG assessment for parent Millicom. The parent discloses ESG-related information on a consolidated basis, without meaningful details for its opco issuers of USD bonds, Cable Onda (Panama), Comcel (Guatemala) and Telecel (Paraguay).
• Millicom’s ESG is “Adequate”, reflecting “Adequate” Social and Environmental scores, along with a “Strong” score for the Governance pillar. Controversies are “Immaterial” and Disclosure is “Strong”.

• Employee motivation is reflected in the fact that employee salaries have barely increased in 10 years (employee engagement in Japan has been 5% for four consecutive years).
• First, employee salaries must be increased. Even during deflation, the consumption tax has been raised twice in the past decade, and the national burden rate has also increased.
• When introducing employee stock compensation plan, it will be necessary to make sure that the plan is not only designed to supplement employee pay, but also to increase employee engagement.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We view Hapag-Lloyd’s ESG as “Adequate”. The company’s “Adequate” Environmental score offsets its “Strong” Social and Governance scores, as the Environmental pillar carries the highest weightage in our assessment. Controversies are “Immaterial” and Disclosure is “Adequate”. 
• Following a wave of consolidations and its merger with UASC, Hapag-Lloyd has become the fifth-largest provider of container shipping services globally, with its market share of 8% placing the company behind Maersk/Hamburg Sud, Mediterranean Shipping Company, Cosco-OOCL and CMA CGM-NOL.

• Unless 10% male/female of lawmakers, is changed, the quota system cannot be expected to be introduced. It’s not easy to replace male incumbents who have vested interests with female candidates.
• Gender wage gap relies on the low number of female managers, but there’s no sense of acceleration in the government’s goal of achieving 30% of female managers by 2030.
• The gender gap in higher education is affecting female managers and the gender wage gap. It’s important to solve this fundamental problem by providing equal higher educational opportunities through scholarships.

• Considering that about half of the listed companies had P/Bs below 1x, the fact that 13% of the companies that published medium-term management plans mentioned P/Bs is too small.
• More companies should mention ROE in mid-term business plans, but the reason they don’t is because they recognize that the company isn’t generating return that exceeds its cost of capital.
• While P/B is rising due to rising stock prices, foreign ownership is increasing. In exchange, managers must realize that they need to develop measures for sustainable expansion of corporate value.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Hidrovias’ ESG as “Adequate”, in line with its “Adequate” Social and Governance scores. The company has a “Strong” score for the Environmental pillar. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Headquartered in Sao Paulo, Hidrovias Do Brasil SA is South America’s largest independent provider of integrated inland waterway logistics transport services. Its operations include shipping, trans-shipment, storage and port services for dry-bulk cargo (including agricultural commodities, iron ore and bauxite) in the Paraguay-Parana and Trombetas-Tapajos-Amazon river systems.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Mooney’s ESG as “Adequate”, in line with the company’s “Adequate” Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Formed by the merger of Sisal and Banca5’s payments businesses, SisalPay (since renamed Mooney) is the leading player in the Italian proximity payments market.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We view Nemak’s ESG as “Adequate”, in line with the Environmental and Social scores. The company has “Strong” Governance. Controversies are “Immaterial” and Disclosure is “Strong”.
• Based in Mexico, Nemak is a global Tier 1 supplier to automotive OEMs. It specialises in aluminium components for powertrain, body and structure applications, as well as electric vehicle components.