IRRCi, IRRCi Research
Thursday, April 27, 2017
Competition Opens for Sixth Annual IRRC Institute Research Award Focused on the Interaction Between the Real Economy and Investing
Practitioner and Academic Submissions Accepted Until October 6, 2017;Winners to Receive $10,000 Each and Present at the 2017 Columbia University Millstein Center Forum
NEW YORK, NY, APRIL 27, 2017 – The Investor Responsibility Research Center Institute (IRRCi) today opened its sixth annual competition for research that examines the interaction between the real economy and investment theory. Practitioners and academics are invited to submit research papers by October 6, 2017, for consideration by a blue-ribbon panel of judges with deep finance and investment experience. Two research papers – one academic and one practitioner – each will receive the 2017 IRRCi Research Award along with a $10,000 award. The winning papers will also be presented at the Millstein Center for Global Markets and Corporate Ownership at Columbia University in December 2017 in New York City. The panel of respected judges includes:
- Robert Dannhauser, Head of Capital Markets Policy, CFA Institute
- James Hawley, Professor and Director of the Elfenworks Center for Fiduciary Capitalism at St. Mary’s College
- Erika Karp, Founder, CEO and Chair of the Board of Cornerstone Capital
- Nell Minow, Governance Expert and Huffington Post Columnist
Biographies of the judges are available here. Additional judges may be added. “This award has become both high profile and highly valued. It shines a remarkably strong spotlight on academic and business research that dissects and analyzes pressing investment issues,” said Jon Lukomnik, IRRCi executive director. “Last year’s two winning papers both offered important contributions to the global debate on the need for businesses to maintain a long horizon focus in a short-term world,” Lukomnik said. “But whether it is investor rime frame, sustainability concerns or insider trading in the derivatives markets, the papers have constantly been high quality. That, in turn, has attracted widespread attention to the winning papers.” Award submissions are accepted online here.
Submissions may be an original work created specifically for the IRRCi Research Award, or relevant unpublished papers, or papers that have been published after July 1, 2016. Winning papers will be presented at the Columbia University Millstein Center’s conference, published by the IRRCi on its website, and distributed to some 6,000 individuals interested in the organization’s research.
As noted on the IRRCi web site, Modern Portfolio Theory (MPT) has dominated investment theory for a half century. MPT focuses on security selection, portfolio construction, and other financial issues rather than the intersection of the real economy and investing. Simultaneously, the growing importance of the private sector relative to the public sector in the real economy has increased scrutiny of private sector behavior and economic activity.
The IRRCi Research Award encourages new research that analyzes how investments interact with real world economic activity. More information regarding the award process, submission guidelines and calendar is available here, along with the award submission form and Frequently Asked Questions. Information on past winners is available here. More information about the award is available here. Read the full body of IRRCi research here.
The IRRC Institute is a nonprofit research organization that funds academic and practitioner research that enables investors, policymakers and other stakeholders to make data-driven decisions. IRRCi research covers a wide range of topics of interest to investors, is objective, unbiased and disseminated widely. More information is available at the IRRCi Website.
Follow IRRCi on Twitter at @IRRCResearch. IRRCi Award Contact: Jon Lukomnik +1.212.344.2424 | jon@irrcinstitute.orgIRRCi Media Contact: Kelly Kenneally | +1.202.256.1445 | kelly@irrcinstitute.org
IRRCi, IRRCi Research
Tuesday, April 25, 2017
First-ever Typology Helps Investors Navigate Varied Approaches to ESG Integration
Report identifies key differences in ESG integration approaches among 70 profiled investors with $19.9 trillion in assets; classifies six prevailing ESG archetypes
Webinars on May 8th and 9th to Review Report Findings
NEW YORK, NY, April 25, 2017 – A new report examining how investors integrate environmental, social and governance (ESG) factors into their portfolios finds that investors are leveraging a diverse set of integration strategies. Based on an analysis of the investment practices of 70 institutional investors with total assets under management of $19.9 trillion, the report presents the first-ever typology for classifying the approaches that investors are taking to integrate ESG factors into their investment processes.
The report, How Investors Integrate ESG: A Typology of Approaches, classifies ESG integration approaches along three dimensions: management (who is integrating ESG), research (what is being integrated), and application (how the integration is taking place). Each dimension includes key differentiators — for example the degree of centralization of ESG functions within an organization, or the degree to which macro-level sustainability trends (as opposed to individual company ESG factors) are integrated – as the basis for distinguishing between approaches.
The report authors used the typology to identify six prevailing approaches of ESG integration in the market today: 1) The Believer, 2) The Cautionary, 3) The Statistician, 4) The Discretionary, 5) The Transition-Focused, and 6) The Fundamentalist. Commissioned by the Investor Responsibility Research Center Institute (IRRCi), the report is authored by ESG experts Kevin Ranney, Doug Morrow, Martin Vezér and Trevor David from Sustainalytics. Download the full report here.
To review the findings and respond to questions, there will be three webinars:
Monday, May 8, 2017
- For North America (New York – 1 PM ET), register here.
- For Europe (London – 1 PM GMT), register here.
Tuesday, May 9, 2017
- For Asia Pacific region (Sydney – 10 AM), register here.
“While ESG factors are increasingly integrated into investment decisions, how that is being done varies considerably, and the market to-date has lacked an analytical framework to organize the full range of ESG integration techniques. This report provides that framework,” said Jon Lukomnik, IRRCi executive director. “The goal of this typology is to advance the dialogue around what ESG integration really means. Asset owners can use it to understand how asset managers consider ESG factors, and asset managers can use it to compare their approaches to their peers, and, if necessary, refine them.” “The investment community’s growing use of ESG information has raised the importance of understanding how investors are addressing ESG factors in their investment processes,” said Sustainalytics’ CEO Michael Jantzi. “We are honored to have worked with IRRCi to support the development of this groundbreaking report and hope it will provide value to investment professionals and decision-makers.” The report also includes several high-level observations about the current landscape for ESG integration, including:
- Despite the continued groundswell of investor interest in ESG, limitations defined in investment mandates may be constraining ESG integration.
- A growing number of large investors are paying increased attention to companies’ sustainability impacts and how these impacts may generate systemic risks that can jeopardize economic value.
- Access to ESG research and public commitments to consider ESG issues do not necessarily ensure that ESG information is integrated into investment decision-making.
The Investor Responsibility Research Center Institute is a nonprofit research organization that funds academic and practitioner research enabling investors, policymakers, and other stakeholders to make data-driven decisions. IRRCi research covers a wide range of topics of interest to investors, is objective, unbiased, and disseminated widely. More information is available at the IRRCi Website.
Sustainalytics is an independent ESG and corporate governance research, ratings and analysis firm supporting investors around the world with the development and implementation of responsible investment strategies. With 13 offices globally, Sustainalytics partners with institutional investors who integrate environmental, social and governance information and assessments into their investment processes. Today, the firm has more than 300 staff members, including 170 analysts with varied multidisciplinary expertise of more than 40 sectors. Through the IRRI Survey, investors selected Sustainalytics as the best independent responsible investment research firm for three consecutive years, 2012 through 2014, and in 2015 and 2016 Sustainalytics was named among the top three firms for both ESG and Corporate Governance research. For more information, visit www.sustainalytics.com.
Media Contacts: Kelly Kenneally | +1.202.256.1445 | kelly@irrcinstitute.org | @irrcresearch Sarah Cohn |+1.646.963.6944 | sarah.cohn@sustainalytics.com | @sustainalytics
IRRCi, IRRCi Research
Doug Morrow, Kevin Ranney, Martin Vezée, Trevor David – Tuesday, April 25, 2017
Understanding how investors are applying the growing supply of corporate ESG information into their investment decision-making is an increasingly important exercise. While several recent publications have contributed to this research, the market to date has lacked an analytical framework to organize the full diversity of integration techniques. This report aims to help investors navigate the rapidly changing responsible investing landscape by developing a typology that classifies approaches to ESG integration.
IRRCi, IRRCi Research
Tuesday, March 21, 2017
NEW STUDY FINDS LITTLE AGE DIVERSITY WITHIN CORPORATE BOARDS
80 Percent of S&P 500 Boards Have Average Age in 60s; Little Difference By Company Size and Industry
Recent Director Turnover Has Not Resulted in More Age Diverse Boards
NEW YORK, NY (March 21, 2017) – A new report finds that there is little age diversity within the boardrooms of S&P 500 companies. The new analysis also finds that the median average age for all boards is 62.4 years, and that the average is persistent across companies by size and industry segment. While technology firms do have the youngest average board age, with a median of 61.3 years, it is barely a year less than the median of all S&P 500 firms. In all, some 80 percent of boards have an average age in the sixties. These findings are contained in a new study, Age Diversity Within Boards of Directors of the S&P 500 Companies, conducted by Board Governance Research LLC and funded by the Investor Responsibility Research Center Institute (IRRCi). The report examines the age diversity within each board of the S&P 500 companies by industry, company size (market capitalization) and company age (years since the company’s initial public offering).
Download the full study here.
Register for a webinar here on Tuesday, March 28, 2017, at 3 PM ET to review the findings.
“The news in this report is how little variation in average board age there is. One would think that some fields like technology would skew much younger, but it does not,” said Jon Lukomnik, IRRCi executive director. “As with other types of diversity, change seems to come slowly to the boardroom.” “We found that few companies are tapping into the potential benefits of having directors with a wide variety of ages serving on boards,” said Annalisa Barrett, report author, chief executive officer and founder of Board Governance Research, and clinical professor at the University of San Diego. “Surprisingly, recent director turnover has not improved the age diversity of the boards studied. One might conclude that corporate boards are not taking age diversity into consideration when identifying director candidates.”
The report’s key findings include:
- There is little dispersion in the average age of directors between different S&P 500 company boards. The median average age of all boards was 62.4, and 80 percent of boards have an average age in the sixties. Fewer than 2 percent of S&P 500 boards have an average age of more than 70 or less than 55.
- Within individual boards, more than half (55%) of the S&P 500 boards have only three decades represented on their boards, most commonly directors in their fifties, sixties and seventies. Only 5% of S&P 500 companies have directors from five or six different decades serving on their boards.
- In general, board age diversity does not vary significantly by company size or by industry segment. However, boards in the Information Technology industry have the most age diverse boards (a standard deviation of 8.1 years), while Utilities companies have the least age diverse boards (standard deviation of 6.1 years). Information technology firms also have the youngest average board age, with a median of 61.3 years, but that is only about a year younger than the median of all S&P 500 firms. Real estate firms boast the oldest average board age, with a median of 63.4 years, a year older than the index median.
- Companies which have been publicly-traded for more than 50 years have the least age diverse boards (standard deviation of 6.5 years, compared to the index average of 7.2 years).
- More director turnover, as measured by the number of director changes made between 2014 and 2016, did not result in more age diverse boards in most cases.
- The vast majority (77%) of the directors studied with tenures over ten years joined their respective boards when they were in their forties or fifties.
Download the full study here. Register for the webinar here.
The Investor Responsibility Research Center Institute is a not-for-profit organization headquartered in New York, NY, that provides thought leadership at the intersection of corporate responsibility and the informational needs of investors. More information is available at the IRRCi Website.
Media Contact: Kelly Kenneally Investor Responsibility Research Center Institute +1.202.256.1445 kelly@irrcinstitute.org
IRRCi, IRRCi Research
Annalisa Barrett – Tuesday, March 21, 2017
This study examines age diversity within the boards of the companies in the S&P 500. At a time when board refreshment of public companies and director diversity, or lack thereof, is a key concern of companies, investors and others, the dispersion of age within the board has largely been ignored. Therefore, this analysis examines the age diversity of boards with analyses by industry, company size (market capitalization), and company age (years since the company’s initial public offering). We also consider the number of age groups (de ned by decades) represented on each board.
IRRCi, IRRCi Research
Wednesday, March 1, 2017
State Lobbying Spending Concentrated Among Handful of Corporate Giants, Health Care Companies, and Altria
Only 25 Percent of Corporate Boards Have Board-level Policies on Lobbying
Webinar on Wednesday, March 22 at 1 PM ET to Review Findings
NEW YORK, NY (March 1, 2017) – A new study reveals virtually no disclosure of corporate expenditures related to political lobbying activities at the state level among the S&P 500 companies. Even at the federal level, only 25 percent of companies have board-level policies on lobbying and only 12 percent disclose actual spending. Using data gleaned from state reports, the report finds that health care firms dominated the spending of 100 large companies studied. This sector spent $41 million from 2012 to 2015 in six states studied, selected because they are believed to have the most lobbying. It also finds that state lobbying spending is concentrated among a few large companies. AT&T, Altria, Verizon and Chevron top the list, with each incurring four-year state lobbying expenses of more than $13.5 million in the six states analyzed.
These findings are contained in a new study, How Leading U.S. Corporations Govern and Spend on State Lobbying, conducted by the Sustainable Investments Institute (SI2) and funded by the Investor Responsibility Research Center Institute. (IRRCi).
Download the full study and selected company profiles here.
Register for a webinar here on Wednesday, March 22, 2017 at 1 PM ET to review the findings.
“As the recent court-ordered release of e-mails between then Oklahoma Attorney General and now Environmental Protection Administrator Scott Pruitt reveal, companies spend and lobby extensively to influence state policies,” said Jon Lukomnik, IRRCi executive. “However, investors have learned that election spending is fraught with both risk and opportunity for companies. That is why many companies have adopted board-level campaign contribution policies and disclosures. It is time for companies to take the same approach to lobbying at both the federal and state level. It’s time for lobbying expenditures to come out of the darkness.”
Investors have increasingly called for corporate disclosure of both election contributions and lobbying. Some 90 percent of S&P 500 companies have board level policies regarding campaign contributions, compared to the quarter which have policies on lobbying. However, those policies largely apply to the federal government. But even then, only 12 percent of companies disclose actual federal lobbying expenditures to investors. Disclosure at the state level is virtually non-existent. Only Walmart reports all its state lobbying expenditures; five percent of S&P 500 companies reveal which states they lobby in and two percent reveal aggregate lobbying costs.
”The federal government, increasingly, is asking states to take the lead on major policymaking, touching everything from healthcare to immigration and the environment,” report author Heidi Welsh says. “But we know almost nothing about corporate spending to influence state officials who are making the decisions. Uniform disclosure standards for companies could fix this problem and enable investors compare companies rather being left in the dark.”
As the report notes, investors are concerned about these issues. Since 2014, more than half of shareholder proposals at public companies that concern political activity have included requests for actions related to lobbying. Considerable information is available about federal political spending, including lobbying, but data are not available for all the states. There are no disclosure requirements for 22 states.
Even where disclosure requirements do exist, they are mixed in their comprehensiveness and utility. Si2 researchers therefore hand collated lobbying reports from six states believed to have the highest level of lobbying expenditures (among the 28 which have some level of disclosure): California, Florida, New Jersey, Minnesota, New York and Washington. The report finds that state lobbying spending is concentrated among a small number of very large companies. AT&T, Altria, Verizon and Chevron top the list, with each incurring four-year state lobbying expenses of more than $13.5 million in the six states analyzed. The average company in the study spent a total of $2.6 million in the six states over the four years.
Looking at spending intensity, the average company spent $11.40 per $1 million of revenue during the same time period. Altria was by far the most intense spender, writing lobbying checks for $143.70 out of each $1million in revenue, or about four times that of runner-up, Pfizer, which spent $36.40. Health care firms dominate the spending of the 100 biggest companies in the six states studied. This sector spent $41 million from 2012 to 2015 in those six states.
Health insurers in particular opened their wallets to influence state governments as the Affordable Care Act was being set up—five companies spent $19.3 million; UnitedHealth Group alone spent $5.5 million. A third of the spending by insurers occurred in California. Chevron accounted for $15.7 million, or 52 percent of the $27.7 million spent by energy companies in the selected states over the four years. Nearly all of this was in California, where the state is implementing its Global Warming Solutions Act to curb greenhouse gas emissions and bolster a renewable energy economy Download the full study and selected company profiles here.
The Investor Responsibility Research Center Institute is a not-for-profit organization headquartered in New York, NY, that provides thought leadership at the intersection of corporate responsibility and the informational needs of investors. More information is available at the IRRCi Website.
The Sustainable Investments Institute is a nonprofit organization based in Washington, D.C., that conducts impartial research on corporate and investor responsibility issues. Si2 also conducts research into emerging sustainability issues to better help investors and the public understand the implications for companies and their key stakeholders. www.siinstitute.org
Media Contact: Kelly Kenneally Investor Responsibility Research Center Institute +1.202.256.1445 kelly@irrcinstitute.org
