ESG's coming to America

ESG Insights

We are excited to launch our weekly ESG newsletter. For the next few weeks it will be available to all Daily KnowHow subscribers before forming part of our wider KnowHow product suite. That will include macro strategy and individual stock analysis. BUT, the Daily KnowHow will remain free. In the meantime, here’s a little teaser of what we’re up to.

What is our why? 

While there has been increasing attention paid to ESG over the years (see chart below), it can be challenging to see the wood from the trees. Reporting is often voluntary and so data simply does not exist for many companies. Even when it does, reporting and metrics are not standardised, meaning that organisational performance can vary considerably across ESG indexes.

But don’t hate the player...it’s the game! Some ESG data is better suited to standardisation, such as carbon emissions or simple metrics relating to company composition. However if we are to see real change, we will require more substantial efforts by organisations, which quantification simply does not do justice to. 

We therefore need to roll up our sleeves if we are to investigate ESG progress in a meaningful way. If that feels overwhelming, fear not, we’re here to help! Our newsletter will cover ESG hot topics, showcase businesses that are doing well and call-out ones that are likely to face pressure to up their games. 

Our focus will be on the US, which is about to be hit by ESG in a big way. President Biden’s Leaders Summit on Climate was just one indication that he is not here to play!

No more distancing from “Social”

We will take one topic at a time, with social up first. 

At the heart of social is an organisation's responsibility to its workforce and the societies in which it operates. This includes everything from D&I, worker pay and conditions, safeguarding and geopolitical impact. 

Although we have been moving in the right direction over the last few years, the social playbook was very much focused on defence - an attempt to not cause harm. But 2020 has flipped the script. The tragic death of George Floyd was a seminal moment, along with the disproportionate impact of Covid-19 on minority ethnic groups. 

Passing the baton - consumers are demanding more 

Consumers are driving change and organisations will need to work harder to keep up. 

Research conducted by Edelman shortly after George Floyd’s death found that 60% of respondents said a brand’s reaction to the protests “will influence whether I buy or boycott them in the future”. 

The research also highlighted that the events are likely to create pressure from the inside - over half (53%) of 18-34 said they would not work for a firm that failed to speak out during the protests (vs. 42% overall).

While the financial returns of ESG are often debated and researched, given the current consumer mindset, there is no question that a failure to act in a meaningful way will impact an organisation's bottom line.  

We’re kicking off with sports 

The eagle-eyed among you may have noticed the sports references peppered throughout this announcement. This was, of course, no coincidence. Our first newsletter will focus on big-hitting sports brands. 

Here’s a trailer: Nike has been named in Time 100’s 2021 Most Influential Companies list for “Channeling change”, with a particular focus on its $140 million funding pledge for social-justice organisations. We’ll look in detail at Nike and its key competitors, highlighting their social missteps as well as positive strides.