Company ESG Critique
•Prepare a short memo detailing why you believe a Company should be excluded from the ESGU index.
•Identify a publicly traded US company with a market capitalization greater than $1B and write about why it should be added to the index.
The csv file is ready to join to the MSCI data.
When evaluating the suitability of the companies for the ESGU investment fund, consider the stated mission from Blackrock’s marketing materials (available at https://www.blackrock.com/us/financialprofessionals/products/286007/ishares-esg-aware-msci-usa-etf)
“Why ESGU?
1. Obtain exposure to large- and mid-cap U.S. stocks with favorable environmental, social and governance (ESG) practices.
2. Seek similar risk and return to the MSCI USA Index with a more sustainable outcome.
3. Use to build a sustainable equity portfolio for the long-term.” _
Content requirements:
1) The memo should reflect an understanding of the ESG data the Company is already reporting
2) The memo should identify an issue where the Company is not meeting your view of being qualified for the ESG investment fund. Examples:
a. Not compliant with existing ESG regulatory requirements in Europe or the US
b. ESG risk areas you identify in your background research of the Company
i. Existing ESG controversies surrounding the Company
ii. I suggest you use twitter (search the ticker with a $ sign in front of it, e.g. $AAPL, is often a great source of news and opinions about public companies), news articles, Company disclosure (on SEC or Company IR/sustainability websites) as starting points
c. You can also source your issue from the MSCI ratings dataset, but just having a poor MSCI score is not sufficient. You need to provide specific context on where the Company is missing the mark with respect to its ESG practices.
3) Propose a tangible remedy for your criticism(s).
4) Provide a data visualization to support anything from parts 1-3 using any data of your choosing (can be new data or data we have looked at in any of our classes – including data you or others used in previous assignments). However, the visual must be new/different from previous assignments.
Notes:
• Focus on one or two issues maximum.
• The point of this exercise is not to suggest companies need to be perfect.
• This exercise is simply intended to help build professional skepticism.