This paper investigates the divergence of environmental, social, and governance (ESG) ratings.

At this point in the cycle, investors should consider focusing on risk management and mitigating downside risk in investment markets, a process inherent in active management.

In our view, society has started to shift away from the shareholder primacy model. The COVID-19 pandemic is likely to accelerate this shift, requiring investors to understand the value companies have been creating for and extracting from all stakeholders.

While the future of traditional fixed income investing may look gloomy, we believe private debt can help investors meet their income needs at a time when it is harder than ever to find real returns.

Lionstone expects migration of people and firms to the “Hockey Stick” of America will be a primary characteristic of the 2020s. Millennials are facing many of the same challenges and opportunities their parents, the baby boomers, did, and are expected to make similar quality of life choices.

Using newly-available materiality classifications of sustainability topics, we develop a novel dataset by hand-mapping sustainability investments classified as material for each industry into firm-specific sustainability ratings. This allows us to present new evidence on the value implications of sustainability investments.

Emerging markets are home to the world’s fastest-growing economies and their long-term equity returns have
attracted investment flows. In the past several years, however, many investors may have been disappointed by
lacklustre results from their emerging markets allocations.

Is there a relationship between companies’ stock return performance and their ESG performance (“ESG” hereafter)? A key challenge in examining the return predictability of ESG is how to measure it.

In this paper, we provide an overview of our engagement approach; expanding on the rationale of our climate engagement program – the reasons why we engage on climate and how we select those companies we are engaging with.

Solving today’s global environmental and social problems demands a combination of money, long term thinking and innovation. We believe that the United Nations’ 17 Sustainable Development Goals provide a great framework for addressing these problems. However, the aim is to meet the SDGs in less than ten years the deadline is 2030.

The risks of climate change are an integral element of the duty of care that financial institutions have toward their clients and beneficiaries. That’s why this year’s paper focuses on one of the four global challenges to be discussed at Davos: ”How to address the urgent climate and environmental challenges that are harming our ecology and economy”.