Keeping You Informed

Our Updates pages is designed to ensure that our current clients and partners, as well as our future clients and partners are kept up to date on all the latest ASSET4 partnerships, activities and events.

ESG Practices Across Developed Markets

Comparison of Trends Across Americas, Europe, and Asia

Environmental, social, and corporate governance (ESG) issues are increasingly gaining attention from all types of stakeholders, ranging from government to media to investors and asset managers. As more asset managers assess ESG exposure, and even use it as a basis for investing, it becomes important to understand and evaluate the degree to which ESG efforts can be maintained, creating long-term value, while reducing risk.

Read the full report from Thomson Reuters Proprietary Research here.

Guide Short Term, Create Value Long Term

Companies That Issue Quarterly Guidance Score Higher on ESG Metrics

Given some of the concerns in the market that companies that issue earnings guidance focus too much on short-term profits, it would be interesting to see if ESG (environmental, social and corporate governance) scores, which indicate a focus on long-term value, confirm this thesis. This note examines if there is a link between corporate guidance and ESG scores.

Read the full report from Thomson Reuters Proprietary Research here.

New StarMine Quant Research Note on ASSET4 Data

The StarMine research note "shows that ASSET4’s ESG overall score and pillar scores have significant value as stock selection factors with their value generally increasing with the duration of the investment horizon."

This is consistent with the "theory that the ASSET4 ESG scores represent an overall measure of the quality of a company’s business practices, identifying those companies that look beyond the next quarter and manage with an emphasis on creating long-term shareholder value."

For a copy of the study, please contact us at info@asset4.com.

Industry's First Dynamic ESG Ratings

Environmental, social, and governance news stories can often provide warning signs of developing problems long before they make headlines which can have significant impacts on corporate valuations. While BP recently lost $10 billion in market cap in a single day following revelations of the gravity of its oil spill in the Gulf of Mexico, warning signs of the environmental risks of BP have been developing over the past year.

The company had an oil spill in late 2009 at its Prudhoe Bay operations, the location of a devastating spill in 2007, and the company has recently faced a law suit brought by employees over exposure to toxic chemical releases at its Texas City refinery, the site of an explosion in 2005 that killed 15 workers. In addition, in recent weeks, the company has also come under increasing criticism from a series of pension funds over its investments in the Canadian oil sands, which they argue pose significant levels of environmental risk for the company.

Now for the first time:

ESG compliance screening can reflect the most recent controversies a company faces
ESG ratings reflect the most up-to-date picture of a company's actual ESG performance

Traditionally, ESG ratings have been based on a company's fiscal year reporting independently of ESG news. And while ESG news services exist, these have provided information independent of company ratings. To meet the market's need for the most up-to-date picture of a company's actual ESG performance, ASSET4 has created dynamic ESG ratings which incorporate the latest ESG news stories and controversies into the company ratings themselves.

ASSET4's dynamic company ratings incorporate the most recent ESG-related news into the ratings for all of the over 3,000 companies covered by ASSET4. We do this by leveraging information from across Thomson Reuters including Reuters news, the world’s largest international news agency with 200 bureaus and 2700 journalists worldwide, and Westlaw, the world’s leading legal research database and search tools.

To read more about this new capability and the issues that are covered, please click here.

Global 100 -- ASSET4 Provides Data for Ranking

Corporate Knights Global 100 Most Sustainable Corporations Announced in Davos -- Over 70% of top companies on sustainable path

DAVOS, SWITZERLAND January 27, 2010 – Corporate Knights, the magazine for clean capitalism, announced its sixth annual Global 100 list of the most sustainable large corporations in the world. This edition of the Global 100 list establishes a new standard of transparency for such rankings.

The 2010 Global 100 tapped intelligence from the world's largest sustainability research alliance put together by Legg Mason's Global Currents Investment Management to isolate the top ten per cent of companies from a universe of 3000 global stocks, which were then transparently ranked based on 10 indicators, with data sourced from ASSET4, a Thomson Reuters business . . .

To read this complete press release, please click here.
To view the interactive website, please click here.
Watch a clear explanation of the Global 100 in 100 seconds here.

The Importance of Consistent and Comparable ESG Performance Data

For the attendees to the Responsible Investor "Integrating ESG into Mainstream Portfolios" conference in Amsterdam, ASSET4's Director of Data Content, Christopher Greenwald, prepared the following article . . .

Socially responsible investment (SRI) funds have experienced remarkable growth since the mid-1990s, and the total market size of SRI initiatives in Europe reached €2.7trn in 2007, according to the European Social Investment Forum. The impressive growth in responsible investment mandates as well as the increased attention paid in the media to the environmental, social and governance (ESG) performance of corporations have led an increasing number of asset managers to become interested in incorporating ESG information into their valuation models of companies. One of the biggest needs to make this incorporation successful is reliable, neutral and objective information on the ESG performance of companies that allows for the impact of various ESG factors to be carefully analysed and understood.

Inconsistency

There are several challenges in ESG data that make the need for a standardised and organised information source particularly important for investors. First, partly because reports are both voluntary and often unaudited, company reporting standards differ dramatically (the figure provides a brief example of the variety of reporting guidelines that exist). Companies use very different units in reporting their ESG performance,
often reporting only for a portion rather than all company facilities, and sometimes providing ESG data in the form of ratios or in charts or in graphical form without providing absolute numeric values.

Although the Global Reporting Initiative (GRI) has served as an essential and very useful means in improving the standardisation of company reporting, companies continue to have differing degrees of compliance with the GRI and sometimes differing interpretations of the best means to apply the standards to their reporting. To be comparable across all companies, and thus useful for mainstream investment analyses, it is important that ESG information is transformed into consistent units and is presented in a balanced and coherent manner.

Timing and formatting

Second, not only is ESG data reporting generally inconsistent across companies, but the timing and format of reporting is varied. While a number of the leading companies provide annual sustainability reports, many companies produce bi-annual reports, while others produce reports only irregularly. Consequently, in addition to making data consistent across companies, the organisation of data must allow investors to benchmark data from various fiscal years to use the latest reported information.

In addition, companies are increasingly providing reporting via websites (with approximately 20% of companies reporting ESG performance only on their websites). This requires regular monitoring to ensure that the latest information is included. Collecting ESG data must consequently be done both flexibly and continuously to allow for the integration of information reported across different time frames and from a variety of company sources.

To read this complete article, please click here.

AccountAbility includes ASSET4 information in Fortune Global 100 Rating

How accountable are the world’s largest companies? The 2007 AccountAbility™ Rating is the most ambitions yet.

This autumn, the world’s largest companies will once again be rated on their progress in building social and environmental responsibility into business strategy, operations and community engagement. For the first time, the AccountAbility Rating™ will be enhanced by new data on social and environmental impacts.

The AccountAbility Rating™, which is devised by CSR consultancy csrnetwork and think-tank AccountAbility, ranks the Fortune Global 100 (the world’s 100 largest companies by revenue), examining how successfully companies integrate responsible business practices into their core activities. Now in its fourth year, the Rating has so far drawn on data that companies themselves put into the public domain. However this year, the Rating, which is published annually in Fortune Magazine, will include performance data from investment research information provider ASSET4.

ASSET4 is contributing information on key global indicators covering environmental, social and governance issues, such as progress towards climate change targets and recent public controversies. “We are obviously very excited to help enhance the AccountAbility Rating”, says Peter Ohnemus, CEO and President of ASSET4. "Our objective and measurable information on how well companies are performing in these areas gives the AccountAbility Rating a real edge."

csrnetwork director Mark Line adds, "A company might have all of its i’s dotted and t’s crossed in its boardroom strategy, but unfortunately this does not always mean that the implementation is successful. Some of our most respected companies continue to hit the headlines, and not always for the right reasons, so the AccountAbility Rating will be carefully cross-checking reported performance with actual impacts."

Alex MacGillivray, head of research at AccountAbility says that the new performance information provided by this unique collaboration with ASSET4 is an enormous contribution to the AccountAbility Rating™. "This keeps us firmly ahead of other CSR ranking exercises and allows researchers and investors to engage constructively with the world’s largest companies and understand actual performance and areas for improvement."

The Fortune Global 100 and other companies are increasingly using the AccountAbility Rating™ as a benchmarking tool to analyse their CSR performance and guide future strategies. The full results of the AccountAbility Rating 2007™ will be published in the November 12th edition of FORTUNE Magazine, and on the website at www.accountabilityrating.com

"The Working Capital Report" from the UNEP FI, Global Compact and ASSET4 is now online

Two simple questions rest at the heart of "The Working Capital Report." Firstly, is the recent interest and focus on ESG (environmental, social and governance) issues contributing to positive change in the way finance is conducted and investments are made? Secondly, what must come next to ensure more effective integration of ESG values in the marketplace?

"The Working Capital Report," which was sponsored by ASSET4, traces a number of the key developments that have accelerated in the uptake of ESG approaches with mainstream finance, investment and the capital markets. The report also provides an opportunity for a group of recognised global thought leaders to provide their perspective on recent achievements and the challenges ahead.

To download the complete report, please click here.

“European Summit on Corporate Governance and Responsible Investment“ in Copenhagen is sponsored by ASSET4

ASSET4 is a sponsor of the above mentioned event that will be held in Copenhagen on June 13-14, 2007. The event looks at the integration of corporate governance and corporate responsibility and addresses the growing interest in identifying, quantifying, and evaluating governance, social, environmental, and ethical risks and their impact on shareholder value. Since only 20% of a corporation’s capitalisation can be explained by its financial accounts alone, it is clear that these factors have a huge impact on a company’s performance.

At 11:45 on June 13, Peter Ohnemus, ASSET4 CEO & President, will be presenting an integrated approach to responsible investment, in which he will explain strategies of integrating ESG issues into your decision making to improve returns. Additionally, ASSET4 will have an exhibit space at the conference.

For further information about this event, please click here.

ASSET4 sponsors the „Hedge Fund Performance & Risk Management Forum“ in New York

This 3rd annual forum is designed to discuss the emerging developments in quantitative modelling, qualitative methods and analytical tools and will be held in the Union League Club in New York.

The forum takes place on April 17, 2007. At 3:00 pm, Bijan Foroodian, Vice President Client Solutions ASSET4, will take part in a demo panel entitled “Showcasing Technologies and Analytic Tools for Measuring Hedge Fund Risk & Performance.” In addition, ASSET4 will be exhibiting at the event in order to have the opportunity to meet with clients and demonstrate the ASSET4 system. ASSET4 is looking forward to meeting you at the event.

For further information about this forum, please click here.

Red Herring selected ASSET4 to the top 100 European companies

On 19 March 2007, the magazine Red Herring announced that ASSET4 was selected to the top 100 new and innovative technology companies and entrepreneurs. The top companies were selected by Red Herring's editorial staff which analyzed and compared about 700 private firms. Peter Ohnemus, CEO and president of ASSET4, will pick up the award at the Venture Market Europe conference that will be held in Cannes on 25-27 March 2007.

ASSET4 is very proud of this award.

On February 6-9 in Geneva, Switzerland, ASSET4 will be participating in IFM 2007

One of Europe's leading forums for senior members of the institutional investment management community. ASSET4 is a sponsor of the event and will be presenting as well. We will also have a booth at the conference for a demonstration of the ASSET4 system and to answer questions.

ASSET4 Presentations

On February 7, Peter Ohnemus, CEO and President of ASSET4, will be moderating a panel entitled, “CIO Horizons: Predicting the Winning Investment Strategies in an Industry Increasingly Focused on the Quest for Alpha.” The panel begins at 8:55 immediately following the opening keynote presentation.
Henrik Steffensen, Vice President of Marketing and Business Development, will be presenting a breakout session for institutional investors entitled, “Mainstreaming Responsible Investment: Assessing the Considerations for a Successful Responsible Investment Strategy.” This presentation takes place on February 8 at 15:10.

IFM 2007 focuses on the evolving dynamic of the institutional fund management industry; trends in investment strategies, business development and marketing, as well as the strategic business challenges facing those leading today's market, whether institutional investors, consultants, fund managers, investment banks, multi managers or fund manager selectors.

ASSET4's commitment and presence at IFM 2007 is just one element in our ongoing efforts to ensure that the integration of ESG (environmental, social, governance) aspects into investment research and decision-making processes is on the agenda of mainstream asset owners and investment managers. ASSET4 provides the world's largest ESG database enabling professional investors to achieve superior returns and reduce risks through the use of this new range of information.

Intangibles are Having a Tangible Effect on Corporate Performance and ASSET4 Can Help You Monitor Them

As recently as August 31, 2006 the Chairman of the US Federal Reserve, Ben S. Bernanke stated that “One recent study estimated that, by the late 1990s, investments in intangible capital by U.S. businesses were as large as investments in traditional tangible capital such as buildings and machines.” [1] He is not the only one focusing on this issue. Other estimates of the impact of intangibles on the US economy are just as startling:

Excluding intangibles may understate America’s capital stock by $3.6 trillion. [2]
One half to two-thirds of corporate market values reflects the value of intangible assets. [3]
84% of the market value of the S&P 500 comes from intangible assets. [4]
U.S. private gross investment in intangibles is at least $1 trillion . . . the long-run equilibrium value of intangibles is $6 trillion. [5]

Yet, how are investment professionals tracking and monitoring this data?

The simple answer is that if they are doing it, they are doing it with great difficulty. Because up until now there has been no objective and comparable data on intangibles and no robust analysis tools, making it nearly impossible to incorporate information about intangibles into investment decision-making processes.

However, the ASSET4 system resolves this dilemma, by systematically gathering and monitoring data on hundreds of different intangibles within the areas of environmental, social and governance (ESG) performance on over 800 of the world’s leading companies, with a commitment to cover the 3,000 firms making up the MSCI All World Index. As is clear from the comments above, only by taking into consideration this range of data can investors have an accurate picture of corporate performance and potential for long-term value creation and risk. Since, the data determining long-term value creation clearly varies by country and sector, and is changing over time, a broad range of data points must be monitored and analysed, and presented in an objective and quantifiable format to enable investors to compare and benchmark the data.

Through the ASSET4 system, intangibles-driven investment can be optimised by applying country, sector and theme-specific approaches to the analysis. For example, one may wish to focus on human resources issues when looking at the pharmaceutical and financial sectors, or climate change in regard to the manufacturing, energy and transportation sectors and/or sector-independent issues like litigation risk and good corporate governance.

By providing these theme-specific approaches, as well as robust benchmarking capabilities that allow for comparisons between sectors, industries and peers, the ASSET4 system enables the creation of intangibles-driven investment models that are clearly not replacing, but instead complementing existing valuation models.

Footnotes

[1] Remarks by US Federal Reserve Chairman Ben S. Bernanke, before Leadership South Carolina, Greenville, South Carolina, August 31, 2006. He was referencing “Intangible Capital and Economic Growth” / Carol Corrado, Charles Hulten, and Daniel Sichel / April 2006.

[2] “Intangible Capital and Economic Growth” / Carol Corrado, Charles Hulten, and Daniel Sichel / April 2006.

[3] “Remarks on the Measurement, Valuation, and Reporting of Intangible Assets” / Baruch Lev / September 2003.

[4] Juergen H Dalum, Intangible Assets and Value Creation, John Wiley & Sons, 2002.

[5] “A Trillion Dollars a Year in Intangibles Investment and the New Economy” / Leonard Nakamura, Federal Reserve Bank of Philadelphia / 2001.

Responsible Investment is Gaining Momentum and a New Acronym is Emerging - ESG

When the UNEP FI's Principles for Responsible Investment were signed in the Spring of 2006 in New York and Paris, representatives from a total of 50 different major institutional investors and asset managers attended the ceremonies. The assets of these investors totaled over 4 trillion USD. During this event, it became clear that the investment community is no longer simply focusing on traditional acronyms, like EPS or EBITDA. In addition, investors are now focusing on ESG, which stands for the environmental, social and governance factors that are now recognized as having a significant influence on corporate performance. What also became clear from the signing, is that the industry is not simply talking about these issues, but is taking action to incorporate them into their mainstream business.

The momentum for this growing recognition of ESG issues did not stop there, as a significant number of new companies have signed the PRI since then. In fact, as of September 2006, there were 78 institutional investor and asset manager company signatories. In addition, the UNEP FI has also published an important study called “Show Me the Money” that has as its objective “to unequivocally link environmental, social and governance (ESG) issues to financial value in such a manner that the mainstream value-driven investor can no longer disregard or dismiss them as irrelevant to investment performance.”

For investors, it is not just about the environment or sustainability, but it is also about fiduciary responsibility. As the study makes clear, what is driving this increased interest is the general acknowledgement that ESG issues have a material impact on corporate performance. Demonstrating and analysing this materiality is where the ASSET4 system comes into the picture and is one of the reasons that ASSET4 is also a proud PRI signatory.

With the ASSET4 system, investors have the transparent and objective data and tools necessary to monitor, analyse and compare companies performance on ESG issues. The system enables asset owners and investment managers to systematically integrate ESG issues into their investment analysis and decision-making processes, engagement strategies and communications. By monitoring over 250 specific economic, environmental, social and governance factors, the ASSET4 system provides its users the broadest and most integrated vision of corporate performance available today. Yet, ASSET4 is not standing still. It is committed to building the world's largest database of corporate extra-financial information. The current universe of 800 corporations provides users a unique capability to compare and benchmark companies with their peers, sectors and industries. By year-end 2006, the ASSET4 universe will cover 1,200 companies with the commitment of covering the more than 3,000 corporations that make up the MSCI-All-World Index. This vast array of detailed and historical data enables users, among other benefits, to improve investment performance and reduce risk by facilitating the monitoring and management of extra-financial aspects with potential impact on shareholder value.

For a more detailed discussion on how ASSET4 supports the Principles for Responsible Investment click on ASSET4 PRI Services.

ASSET4 Sponsors Seventh International Sustainability Leadership Symposium

ASSET4 is proud to sponsor the seventh annual International Sustainability Leadership Symposium organised by the Sustainability Forum Zürich. The symposium will be held from 31 August through 1 September 2006 at the Swiss Re Centre for Global Dialogue in Rüschlikon/Zürich, Switzerland. ASSET4 is sponsoring this event because it believes that the focus for this year's symposium, “From Short- to Long-Term: Who Cares?” is directly aligned with the integrated approach to understanding and managing corporate performance that ASSET4 brings to its clients.

At this year's symposium, discussion will center on the similarities and differences of the respective approaches utilised to achieve sustainable returns by long-term oriented institutional investors (insurers, pension funds and their trustees), asset managers, investment advisors and listed companies. Through its support of the symposium and its presentations at the meeting, ASSET4 is hoping to help focus attention on the fundamental importance that intangibles and extra-financials play in determining long-term corporate performance.

Peter Ohnemus, President and CEO of ASSET4, will be joining leading industry and academic figures to discuss these important topics. Mr. Ohnemus will be speaking on two panels. On the first he will be joined by the ASSET4 Vice President of Research, Dominique Habegger, to discuss “Making Best Use of the Right Information”. Mr. Ohnemus will also be a member of a panel to discuss “Theses – New Aspects – Conclusions“. Mr. Ohnemus will join this concluding panel together with Colin Melvin, Corporate Governance Director, Hermes Pensions Management; Peter Forstmoser, Chairman of the Board of Directors, Swiss Re; Peter Voser, CFO, Shell and Ernst A. Brugger, CEO, The Sustainability Forum Zürich.

On CNBC Europe, ASSET4 President and CEO, Peter Ohnemus Discusses ESG Issues

During the Fund Forum in Monaco in July 2006, ASSET4's President and CEO, Peter Ohnemus, was featured on CNBC Europe's “Today's Business” broadcast with Stephen Sedgwick. He and Mr. Sedgwick discussed the increasing interest of fund managers in environmental, social and corporate governance (ESG) issues, as well as the recently announced agreement with Goldman Sachs.

Discussion Highlights

There is a growing awareness in the importance of ESG issues in a “carbon-constrained world” from the banks, asset managers and pension funds.
An example of how ESG awareness is right at the “core of the strategies of the funds” is the over $4 trillion in investment funds that are now supporting the six principles of the UN's Principles of Responsible Investing initiative.
Large pension funds are leading the way in the ESG area, for example the ABP pension fund in Holland recently announced that it would be integrating ESG issues into its investment decision process.
Goldman Sachs will be integrating the ASSET4 ESG data feed into their global research efforts in their asset management, mergers and acquisition and hedge funds businesses.
ASSET4 will be collecting ESG data on 3,000 of the world's largest companies.
Depending on the algorithm used, ASSET4 studies have shown an outperformance between 20% and 30% when looking at corporate governance performance over a five-year period.
Goldman Sachs will also be incorporating the ASSET4 ESG data into its upcoming reports on the how the overall environmental performance of the world's leading corporations have a direct correlation to the share price.

Click here to watch the entire discussion.

ASSET4 Attends the United Nations Launch of the „Principles for Responsible Investment“

In New York on April 27, 2006, the United Nations Secretary-General Kofi Annan joined a group of the world's largest institutional investors at the international launch of the Principles for Responsible Investment (PRI). The Principles were developed during a nearly year-long process convened by the UN Secretary-General and coordinated by the UN Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact.

“These Principles grew out of the understanding that while finance fuels the global economy, investment decision-making does not sufficiently reflect environmental, social and corporate governance considerations – or put another way, the tenets of sustainable development,” the Secretary-General said.

Peter Ohnemus, CEO, Chairman and co-founder ASSET4 attended the event and stated that "The launch of the Principles for Responsible Investment is clearly a turning point for the global investment industry in the way they integrate environmental, social and corporate governance considerations. The fact that the Principles are backed by more than USD 2 Trillion in institutional assets and a further USD 1 Trillion in asset management funds sends a powerful signal to global markets.”

"The PRI has the potential to create a fundamental shift in the way the investment chain deals with new and rapidly evolving environmental, human rights, and other non traditional risk that companies operating in a global market place are now facing. As a provider of investment data and ratings to the financial services sector and other corporates we believe the PRI will unleash a tidal wave of new business drivers that will transform the way investors and the broader business community see ESG - environmental, social and corporate governance. The PRI is truly a foundation stone of a new way of business that will dominate the 21st century," added Mr. Ohnemus.

Funds from 16 countries signed the principles, including CalPERS from the US, ABP from the Netherlands, BT Pension Scheme from the UK, the Canada Pension Fund and the Norwegian Government Pension. Click here for a complete list.

As a provider of integrated financial and extra-financial information and ratings, as well as a signatory of the UNEP FI, ASSET4 is playing a key role in enabling the PRI vision. “While having large investors sign the Principles of Responsible Investment is certainly an important step, the next step is monitoring and benchmarking corporations against these principles. The ASSET4 IntegratedRating™ framework provides the tools necessary to make this a reality,” stated Henrik Steffensen, VP Marketing / Business Development and co-founder ASSET4.

ASSET4 Becomes Signatory to the United Nations Environment Programme Financial Initiative

ASSET4 is pleased to announce that it has become a proud signatory to the United Nations Environment Programme Finance Initiative (UNEP FI), thereby enabling it to share its knowledge and expertise with a global organisation of key financial players. This initiative is a unique global partnership between the United Nations Environment Programme (UNEP) and the private financial sector.

ASSET4 believes that its integrated approach can become a key factor in achieving the initiative's desire to develop and promote linkages between the environment, sustainability and financial performance. ASSET4 brings to this organisation a unique understanding and framework for tracking and evaluating the total performance of a company by monitoring, not just the financial aspects of a company, but the environmental, social and corporate governance factors as well. Through the UNEP FI organisation, ASSET4 hopes to bring its knowledge of how to improve key elements of mainstream asset management (the investment process, portfolio management, risk monitoring and communications) through enhanced financial and extra-financial information to an ever broader audience.

"We see joining the United Nations Environment Programme Finance Initiative as a key step toward helping professional investors around the world to better recognise the importance and influence of social, environmental and corporate governance issues to the long-term performance of companies," said Henrik Steffensen, Vice President of Marketing and Business Development for ASSET4. "Along with all our partners in this initiative, we believe that together we can make a difference in helping the business community identify, promote and implement best practices in all these key areas."

For more information about the United Nations Environment Programme Finance Initiative, please see its website at www.unepfi.org.

Scanning 5,000 News Sources via LexisNexis

ASSET4 has begun working with LexisNexis - a leading provider of legal, news and business information - to enable it to search through over 5,000 global news sources for information related to the ASSET4 framework.

As an additional resource to publicly available information from company websites, annual reports, filings, etc., LexisNexis efficiently provides ASSET4 access to an enormous amount of global information related to the ASSET4 framework.

ASSET4 Luncheon Briefings

ASSET4 is currently planning a number of briefings that will give investment executives an overview and live demonstration of the ASSET4 system.

If you are interested in a briefing, please use the information request form.