This document presents a methodology enabling fund selectors to standardize and automate ESG due diligence on funds, while taking into account their internal ESG policies and performance. Unlike tools that evaluate funds on the basis of an ESG framework taken as a reference, the process we present is designed to assess the affinity between a fund selector and an asset manager on the basis of their own ESG convictions.
Bias assessment and mitigation for ESG scoring models
This study explores methods for identifying and dealing with bias in ESG rating models. It analyzes the factors that influence bias and proposes ways of calculating a more objective score. It also creates a framework for identifying companies that truly outperform on the basis of their intrinsic qualities, independently of model biases.
The ESG Equity Barometer H1 2023 report highlights the continued growth and significance of socially responsible investments amid challenging macro-economic conditions.
ESG opinions are affecting the shape of bank spread curves
This article studies the relationship between a company's ESG rating and the steepness of its credit curve (data provided by ValueCo). The hypothesis is that companies with lower ESG ratings, particularly environmental ratings, will have steeper credit curves due to the expected future pressure to adapt to stricter environmental regulations. The study examines senior non-preferred bank bonds to test this theory.
Navigating ESG Integration: Accessing the extra-financial landscape of listed companies in the MENA region
This white paper, co-authored by ValueCo and Instinctif Partners, looks at how listed companies in the Middle East and North Africa (MENA) region are perceived by professional investors from an extra-financial perspective. Despite historical associations with high carbon emissions and fossil fuel dependency, the report aims to shed light on how MENA companies align with ESG principles compared to their global counterparts.
This book chapter offers a comprehensive guide to post-investment strategies for impact investing. It covers engagement and stewardship, ESG performance measurement, and the risks and opportunities associated with these strategies, providing valuable insights for sustainable investment professionals.
This study examines the links between ESG ratings from rating agencies (MSCI and Sustainalytics) and asset managers' and institutional investors' own ESG ratings. We look at the correlation between market sentiment and MSCI ratings, as well as the correlation between consensus and Sustainalytics ratings, and the correlation between the managers' own internal ratings.
The ESG-efficient frontier under ESG rating uncertainty
This academic article examines the impact of ESG score uncertainty on the risk-return profile of socially responsible portfolios. It finds that considering investor-assessed ESG score uncertainty significantly worsens the trade-off between return and volatility for highly responsible and low-risk portfolios.
Valuation and Sustainability: A Guide to Including Environmental, Social, and Governance Data in Business Valuation
Want to know how to integrate environmental, social and governance (ESG) data into company valuations? This book, co-written by Mathieu Joubrel, co-founder of ValueCo, Dejan Glavas, Laurent Inard, Frédéric Le Meaux, Paul Jouy and Elena Maksimovich, will help.
The paper discusses how investors use their own ESG rating methods for bonds and equities, which are not shared publicly. ValueCo aggregates these ratings confidentially to create standardized and comparable ESG ratings, revealing that investors' ESG views significantly influence bond prices, and that inefficiencies exist at the level of individual issuers.
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