ESG: G is for Governance

Diversity, Inclusion, and Other Critical Governance Issues

Numerous studies have been published that demonstrate the significance of corporate diversity to corporate performance. But corporate diversity is about much more than ensuring adequate board representation. Companies should aim to develop inclusive internal cultures that provide equivalent and ample opportunities for success, regardless of an employee's background.

In this set of papers, we present several governance-related issues that corporations are currently grappling with, including the need to protect supply chain workers from demand shocks, carbon emission monitoring, and proxy voting practices.

Asian Credits: The rising importance of governance factors (Manulife IM, 2020)

For compliance reasons, this paper is only accessible in certain geographies

Governance factors are growing increasingly relevant to the practice of credit evaluation. In Asia, assessing corporations for related entities and transactions can be especially challenging, but it can also uncover potential conflicts of interest or other unclear business relationships. This Manulife paper provides several such case studies of governance factors and their relevance to credit quality assessment.

How Governance Factors May Impact Financial Performance (Calvert, 2020)

For compliance reasons, this paper is only accessible in the United States

Calvert's research on corporate governance includes a study encompassing governance practices within over 8500 global companies. This study measures the financial materiality of 10 different governance factors, including corporate ownership structure and shareholder rights.

Investing in Diversity: Analysing the investment risks and opportunities (Janus Henderson, Nov 2020)

For compliance reasons, this paper is only accessible in the United Kingdom

Olivia Gull takes diversity and inclusion far beyond the board room in this expose on global diversity standards. She provides several metrics for ESG analysts in their evaluation of corporate diversity that could also serve as guideposts for corporate managers seeking to futureproof their businesses.

Q&A: Diversity and inclusion challenges in France (Federated Hermes blog, 2020)

Diversity and inclusion are of critical importance for corporations. This Federated Hermes Q&A session focuses upon challenges in addressing inequalities and overcoming unconscious biases in France.

Covid-19 Puts Spotlight on Labor Issues in the Apparel Industry (Robeco, Nov 2020)

Demand shocks (such as the one experienced earlier this year) have the potential to negatively affect global supply chains and the workers that help to maintain them. In this article, Robeco looks at living wages in the garment industry and ways to engage with (and promote best practices for) these companies.

Gender Lens Funds: Ups and downs for women in the workforce (Enterpising Investor blog, Nov 2020)

Gender lens funds are on the rise, due to evidence that companies with more women in leadership positions perform better in the long run. Yet, the pandemic has also disproportionately affected labor force participation rates for women. This article examines several gender issues.

Future Is Female: COVID-19 Fuels a Surge in Women Entrepreneurs (Enterprising Investor blog, 2020)

The author discusses a new indicator of entrepreneurial activity, which surprisingly points towards an influx of female-led start-ups over the last 6 months.

How a Pandemic Brought Inequality into the Board Room (Calvert, Sep 2020)

For compliance reasons, this paper is only accessible in the United States

Calvert examines inequality in the United States and how this problem has been exacerbated by both the GFC and the onset of COVID-19. They also provide suggestions for how some industries can combat material inequality issues.

ESG Focus: Carbon emissions and data centers (American Century, 2020)

This American Century paper looks at carbon risk, specifically focusing on the unique case of data centers and the energy that is required to operate them. In countries such as China, a large portion of this energy is provided by coal-based power plants.

Changes in Proxy Voting and Active Ownership since 2017 (PRI, 2020)

This PRI report contains a snapshot of how listed equities have approached proxy voting issues over the past several years, as well as current practices of ESG integration and active ownership within companies that are PRI signatories.