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.

Climate Pledges: Singapore and Japan Lead APAC Issuers in Quality of Climate Pledges

Climate Pledges By Utilities Are Among the Best in Europe

Engine Versus Exxon: Activist Hedge Fund's Proxy Fight Win Reverberates Through "Big Oil" Boardrooms

Corporate "net-zero" climate pledges are all the rage of late, with proud press releases being issued on a daily basis. This is a welcome trend – the world is woefully behind climate goals and based on current national pledges, we have a 5% chance of achieving the Paris Agreement's 2-degree goal.Corporate climate action is imperative.However, corporate pledges aren't always what they purport to be. Occasional greenwashing aside, even well-intentioned pledges from reputable companies can be misleading. Not intentionally, but due to ambiguous "net-zero" vernacular and the complexities of corporate climate action plans.The devil is in the details, for example:<ul>
<li>
<a href="https://www.smartkarma.com/entities/royal-dutch-shell-plc" target="_blank" data-smartkarma-citation="entities:22108:1" rel="noopener">Royal Dutch Shell (RDSA LN)</a> has a 2050 goal premised on carbon offsets (not reductions) of a magnitude larger than today's entire global carbon offset markets in those specific areas.</li>
<li>
<a href="https://www.smartkarma.com/entities/bp-plc" target="_blank" data-smartkarma-citation="entities:21847:1" rel="noopener">BP plc (BP LN)</a> plans net-zero by 2050 via offsets and continued oil production is incompatible with 2-degree global warming (plus it funds lobbying against climate-change regulations).</li>
<li>
<a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft (MSFT US)</a> aims to be carbon negative by 2030, and by 2050 to have removed all CO2 emitted in its entire history (impossible with current technologies and offset markets).</li>
</ul>This Insight addresses those details. What to look for, and how to scrutinize climate pledges. Major differences between net-zero emissions, net-zero carbon, and carbon neutral. Emissions reduction versus offsetting. And the need for careful planning and long lead times, with no room for error.This will also serve as theoretical context for upcoming Insights that delve deeper into corporate climate pledges (e.g., a thematic report on science-based targets, and critiques of company-specific pledges).

Corporate "net-zero" climate pledges are all the rage of late, with proud press releases being issued on a daily basis. This is a welcome trend – the world is woefully behind climate goals and based on current national pledges, we have a 5% chance of achieving the Paris Agreement's 2-degree goal.Corporate climate action is imperative.However, corporate pledges aren't always what they purport to be. Occasional greenwashing aside, even well-intentioned pledges from reputable companies can be misleading. Not intentionally, but due to ambiguous "net-zero" vernacular and the complexities of corporate climate action plans.The devil is in the details, for example:

Royal Dutch Shell (RDSA LN) has a 2050 goal premised on carbon offsets (not reductions) of a magnitude larger than today's entire global carbon offset markets in those specific areas.

BP plc (BP LN) plans net-zero by 2050 via offsets and continued oil production is incompatible with 2-degree global warming (plus it funds lobbying against climate-change regulations).

Microsoft (MSFT US) aims to be carbon negative by 2030, and by 2050 to have removed all CO2 emitted in its entire history (impossible with current technologies and offset markets).
This Insight addresses those details. What to look for, and how to scrutinize climate pledges. Major differences between net-zero emissions, net-zero carbon, and carbon neutral. Emissions reduction versus offsetting. And the need for careful planning and long lead times, with no room for error.This will also serve as theoretical context for upcoming Insights that delve deeper into corporate climate pledges (e.g., a thematic report on science-based targets, and critiques of company-specific pledges). 

Climate Pledges: Promise and Potential for Planet and Profit... But the Devil Is in the Details

BP PLC

Climate Pledges: Promise and Potential for Planet and Profit... But the Devil Is in the Details