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.

European Banks at Q119: Big Banks, Greek Banks...a Quantamental Evaluation

Asia Exchanges Lead in ESG: HKEX, JPX, SGX

Saudi Aramco - Prospectus Review - Low Beta Yield Play

Saudi Aramco IPO Steps Closer.  What Do We Know? What Should You Do?

Last week, I published a report and used a proverb as entré into the main topic.For this report, a particular colloquial idiom seems appropriate: "Eating crow."One "eats crow" after taking a position on something, then being proven wrong.In <a href="https://www.smartkarma.com/insights/asia-exchanges-lead-in-esg-hkex-jpx-sgx" target="_blank" data-smartkarma-citation="insights:34447" rel="noopener">Asia Exchanges Lead in ESG: HKEX, JPX, SGX</a>, I stated my belief that private-sector capital is the cornerstone of sustainability, and implied that the public sector's role is limited to policy.I still feel that way, but the timing of a public-sector announcement has me, well, eating crow.Also last week, the European Investment Bank announced a major climate-centered financing strategy that entails, among other things, phasing out all fossil fuel-related lending.It's a move that private-sector banks should aspire to. And it inspired me to write this.In my aforementioned report, I noted that exchanges – movers of the money that makes the world go 'round – are uniquely positioned for impact through ESG and sustainable finance policies.That applies to the financial sector as a whole, not just exchanges.Addressing the entire financial sector in one report would be insanity, for both of us. However, the EIB news prompted me to tackle one critical aspect of sustainable finance.Climate finance. The big "E" in ESG.This Insight analyzes fossil fuel-related financing activities – recent, current, and future – of major money center bank stocks, plus a couple of big investment banks. Key points are:<ul>
<li>Regardless of your stance in climate, fossil financing matters from a purely economic view</li>
<li>European banks are, hands down, the "winners" in what is essentially a no-win situation</li>
<li>U.S. banks, on the other hand, are among the most offensive offenders re: climate finance</li>
<li>Asia Pacific ranked in the relatively unremarkable middle, not a bad thing for this subject</li>
<li>A few banks (<a href="https://www.smartkarma.com/entities/royal-bank-of-scotland-group" target="_blank" data-smartkarma-citation="entities:21008:1" rel="noopener">Royal Bank of Scotland (RBS LN)</a> , <a href="https://www.smartkarma.com/entities/bnp-paribas" target="_blank" data-smartkarma-citation="entities:525:1" rel="noopener">BNP Paribas (BNP FP)</a>) outclass the majority</li>
</ul>

Last week, I published a report and used a proverb as entré into the main topic.For this report, a particular colloquial idiom seems appropriate: "Eating crow."One "eats crow" after taking a position on something, then being proven wrong.In Asia Exchanges Lead in ESG: HKEX, JPX, SGX, I stated my belief that private-sector capital is the cornerstone of sustainability, and implied that the public sector's role is limited to policy.I still feel that way, but the timing of a public-sector announcement has me, well, eating crow.Also last week, the European Investment Bank announced a major climate-centered financing strategy that entails, among other things, phasing out all fossil fuel-related lending.It's a move that private-sector banks should aspire to. And it inspired me to write this.In my aforementioned report, I noted that exchanges – movers of the money that makes the world go 'round – are uniquely positioned for impact through ESG and sustainable finance policies.That applies to the financial sector as a whole, not just exchanges.Addressing the entire financial sector in one report would be insanity, for both of us. However, the EIB news prompted me to tackle one critical aspect of sustainable finance.Climate finance. The big "E" in ESG.This Insight analyzes fossil fuel-related financing activities – recent, current, and future – of major money center bank stocks, plus a couple of big investment banks. Key points are:
Regardless of your stance in climate, fossil financing matters from a purely economic view
European banks are, hands down, the "winners" in what is essentially a no-win situation
U.S. banks, on the other hand, are among the most offensive offenders re: climate finance
Asia Pacific ranked in the relatively unremarkable middle, not a bad thing for this subject
A few banks (Royal Bank of Scotland (RBS LN) , BNP Paribas (BNP FP)) outclass the majority


European Banks: Exemplars of Climate Finance

HSBC Holdings

European Banks: Exemplars of Climate Finance