Alpha-Centric ESG Research

Kyle Rudden

I am 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. I believe 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.

More importantly, you. I value your investment in Smartkarma research, and commit to Insights worthy of your time and money. That means giving ASEAN ESG the attention it deserves, and with Insights that are substantive and differentiated; the intersection of material and under-covered. You can expect investigative research into emergent ESG issues; data-driven analyses of deals (pre-IPO ESG research, ESG-focused M&A consequence analyses, etc.); and trading-oriented ideas like ESG short selling and playing ESG index constituency changes.

I bring both ESG expertise and traditional investing experience, as well as some rather unique perspectives on ESG (a lesson in governance from Enron, anyone?). I spent the last decade exclusively on ESG, researching links to equity returns, credit ratings, cost of capital, and yield spreads. I also contributed to ESG reporting standards (SASB and GRI), and the MBA curriculum (Impact Investing) at the Kellogg School of Management. Previously, I was an Institutional Investor and Wall Street Journal All-Star sell-side analyst at J.P. Morgan.

Please, feel free to contact me about anything.

FAANG Splinters - Weak and Strong Pullback Targets

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

One of the challenges in taking an "alpha-first" approach to ESG investment research is that it isn't always possible to make the connection between ESG and alpha, at least not with a straight face. In cases where the two can be reasonable linked, getting to that discovery is never easy.Amazon has changed that for us.Normally, ESG works its way into valuations slowly and circuitously. It takes time for non-financial factors to impact the variables that more directly drive stock prices. There are exceptions – such as juicy executive transgressions or epic oil spills – but for the most part ESG is rarely in a hurry.Amazon has accomplished in mere weeks what would normally takes years. Amazon's multitude of ESG blunders and Corporate Social Responsibility (CSR) missteps are swiftly going from little more than fodder for a stern moral admonishment, to a litany of real near-term investment risks.I wouldn't short Amazon, but I wouldn't buy it either.Amazon has a lot going for it, and will continue to benefit from this pandemic. But the company's situation has gone from a straightforward ESG/CSR collapse with mostly social consequences, to something more complex with a host of news risks – regulatory, political, legal, commercial.This Insight covers one in particular, the growing momementum behind unionisation of Amazon workers. It is the most tangible, and with the greatest near-term relevance.

One of the challenges in taking an "alpha-first" approach to ESG investment research is that it isn't always possible to make the connection between ESG and alpha, at least not with a straight face. In cases where the two can be reasonable linked, getting to that discovery is never easy.Amazon has changed that for us.Normally, ESG works its way into valuations slowly and circuitously. It takes time for non-financial factors to impact the variables that more directly drive stock prices. There are exceptions – such as juicy executive transgressions or epic oil spills – but for the most part ESG is rarely in a hurry.Amazon has accomplished in mere weeks what would normally takes years. Amazon's multitude of ESG blunders and Corporate Social Responsibility (CSR) missteps are swiftly going from little more than fodder for a stern moral admonishment, to a litany of real near-term investment risks.I wouldn't short Amazon, but I wouldn't buy it either.Amazon has a lot going for it, and will continue to benefit from this pandemic. But the company's situation has gone from a straightforward ESG/CSR collapse with mostly social consequences, to something more complex with a host of news risks – regulatory, political, legal, commercial.This Insight covers one in particular, the growing momementum behind unionisation of Amazon workers. It is the most tangible, and with the greatest near-term relevance. 

Amazon's COVID-19 ESG/CSR Blunders Are Fast Becoming Real Investment Risks

Amazon.com Inc

Amazon's COVID-19 ESG/CSR Blunders Are Fast Becoming Real Investment Risks