Daily Brief ESG: Adopting DOE Is Step Forward and more

• Since non-cash expenses are added to net profit for many manufacturing companies, cash on hand will not decrease at all if the dividend policy is based on net profit.
• Using DOE as the basis for dividend policy would help improve ROE because it places certain constraints on the expansion of shareholders’ equity.
• However, the challenge for raising ROE is the strategic allocation of excess cash on hand and cash flow to shareholder returns and growth investments to improve profitability.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess CMA CGM’s ESG as “Adequate”, in line with its Environmental and Governance pillars, while the Social pillar is “Strong”. Controversies are “Immaterial” and Disclosure is “Adequate”. The group notably received a CDP score of A- for 2023.