Daily Brief ESG: The First Thing Managers Should Do Is Disclose Their Cost of Capital and Their Company’s Return and more

• While 4% of the number of companies mentioned in annual securities reports regarding P/B, half of companies have P/B of below 1x, which suggests managers still lack sense of urgency.
• Many companies that mention P/B in their annual securities reports rely on share repurchases, and their presentation of strategies to increase cash flow is weak.
• Clearly stating the cost of capital will lead to more appropriate ROE and ROIC targets and disclosure of specific measures to achieve them.

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