Daily Brief ESG: The Essence of the Matter Is the Low Return on Cash Flow Generated by the Company’s Business and more

• It’s necessary to clearly present cash allocation policy to investors and communicate with them, but unless this policy is convincing and feasible, investors cannot envision an increase in corporate value.
• Companies that use ROE or ROIC as KPIs and disclose their cost of capital are still limited. The low return on cash flow may be the reason behind this.
• As TOPIX is correlating more rapidly with nominal GDP than with P/B after 2020, there’s increasing need to communicate to investors that free cash flow will grow through cash allocation.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Genting Berhad’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Huhtamaki’s ESG as “Adequate”, in line with its Social pillar, while the Environmental and Governance pillars scored “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.