Environmental, Social & Governance (ESG) - Merrill Lynch
Environmental, Social & Governance (ESG)Women: the X-factor07 March 2018Women are driving changeTo celebrate International Women's Day, we took a closer look at the impact of womenon the investment landscape. Women have been driving change in the labor market, theworkplace, and the home—creating opportunities within investments and wealthmanagement. Companies that invest in women tend to have more favorablefundamental attributes, and with the rise in impact investing, a growing investor base.How women spend time & money and the implicationsThe changing behavior of women has deep implications. Prime-age working women arespending more time working and sleeping and less time on leisure, shopping and choresvs. a decade ago. Women are outsourcing more housework, banking and shopping moreonline and dining out more, driving change in sectors like retail and grocery.Rising female wealth creates opportunitiesOne activity women aren’t spending time on, according to a 2013-14 Center for TalentInnovation study, is financial planning. This suggests a growing opportunity for advisors:over 40% of US women don’t have an advisor, and those without advisors were found tohold a much greater proportion of their assets in cash. A lack of time spent on financialplanning comes despite that fact that women are now the sole or primary breadwinnerin a record 40% of US households with children.Unauthorized redistribution of this report is prohibited. This report is intended for gail.harlow@bankofamerica.comWomen make up just 22% of S&P 500 boardsBoard composition is an important aspect of Governance, one of the three pillars of acompany’s Environmental, Social & Governance (ESG) profile. The diversity of boardshas steadily improved (the average S&P 500 board has 22% women vs. 14% in 2008),but still has a long runway for equalization: just 11% of companies have at least onethird of board seats held by women, trailing many European countries. Analyst LorraineHutchinson has highlighted the lack of board diversity in Specialty Retail, where—in anindustry that targets mostly young women—boards are surprisingly old and male. In herview, board diversity might have saved the industry from some of its challenges. Withinthe S&P 500, Telecom, Staples and Utilities currently have the most diverse boards.Gender diversity improves ROE, lowers riskOur work indicates that ESG has seen building interest in the US from institutional andindividual investors, as well as to corporates, index providers and regulators. In thisreport, we have analyzed ESG sub-pillar data related to gender/diversity, including boarddiversity, women in management, and company policies on diversity/inclusion. We foundthat companies with high scores on these metrics generally saw lower subsequent priceand EPS volatility and higher subsequent ROEs than those with low scores. And thosewith higher scores have generally re-rated in recent years amid building awareness.Wall Street is onto this theme, but more to goAmong US-domiciled actively and passively managed funds, we estimate that the assetsof funds and ETFs focused on women, diversity or equality have grown at an 81%annualized rate over the past three years to over 600mn. Similarly, research from VerisWealth Partners indicates that global assets in “gender lens investing” have grown at a 100% annualized rate over the same period to over 900mn. With a growing focus onESG and impact investing, these assets should continue to grow, in our view.BofA Merrill Lynch does and seeks to do business with issuers covered in its research reports.As a result, investors should be aware that the firm may have a conflict of interest that couldaffect the objectivity of this report. Investors should consider this report as only a singlefactor in making their investment decision.Refer to important disclosures on page 23 to 24.11849505Timestamp: 07 March 2018 07:01AM ESTEquity and Quant StrategyUnited StatesSavita SubramanianEquity & Quant StrategistMLPF&S 1 646 855 3878savita.subramanian@baml.comJill Carey Hall, CFAEquity & Quant StrategistMLPF&S 1 646 855 3327jill.carey@baml.comJames YeoEquity & Quant StrategistMLPF&S 1 646 743 0187james.h.yeo@baml.comSee Team Page for List of Analysts
The power of womenTo celebrate International Women's Day, we took a closer look at the impact of womenon the investment landscape. Women have been driving change in the labor market, theworkplace, and the home, creating opportunities within investments and wealthmanagement. Companies that invest in women tend to have more favorablefundamental attributes, and with the rise in impact investing, a growing investor base.Women are driving change .in education, in the labor force, and at homeAccording to our Thematic Investing Strategy team (source: the World Bank), thenumber of women in the global workforce grew to 1.75bn in 2015 (vs. 1.5bn in 2006),suggesting a 50% labor force participation rate (vs. 77% for men).Women are becoming increasingly educated. Within the US, as our economists wrote inA day in the life of a working woman, since the mid-1990s, a greater share of womenaged 25-29 have a Bachelor’s degree or higher than men (Chart 1). And overall (as of2015), a higher proportion of women in aggregate have a bachelor’s degree than menfor the first time since the US Census Bureau began collecting the data.Additionally, our Thematic Investing Strategy team notes that, according to the PewResearch Center (as of 2013), women are the sole or primary breadwinner in a record40% of all US households with children as of 2011.Chart 1: Percentage of population aged 25-29 with a Bachelor’s Degree or 19952000200520102015Source: Census Bureau and creating opportunitiesManaging the rising wealth of womenAccording to a 2013-14 global research study1, conducted by Andrea Turner Moffitt,Sylvia Ann Hewett and the Center for Talent Innovation (published in Moffitt’s bookHarness the Power of the Purse2), most global female wealth is unmanaged. Several statsfrom her research highlight the untapped potential of women’s wealth: 44% of US women (and 74% of women globally) make decisions over financialassets in their households. 44% of US women surveyed do not have a financial advisor, and the proportion iseven higher in the UK and Asia. And these US women hold one-fifth of their assetsin cash, on average, vs. just 9% in cash for those with advisors. Of women with 1mn in assets, 51% of those who have an advisor feelmisunderstood.Study included an online survey of 5,924 men and women in the US, UK, China,India, Singapore and Hone Kong with at least 100,000 in personal income orinvestable assets of at least 500,000, conducted from Nov. 2013-Feb. 2014.2Andrea Turner Moffitt and Sylvia Ann Hewlett, Harness the Power of the Purse:Winning women Investors (Los Angeles: Rare Bird Books, 2015).12Environmental, Social & Governance (ESG) 07 March 2018
As discussed later in this report, women globally want to invest with impact.According to Moffitt, “This is why harnessing women’s investment power is soimportant: invested assets will not only grow advisor portfolios and wealthmanagement firms, they will also accelerate progress in education, health, genderand racial equality, environmental protection, and a host of other worth causes.”Room for improvement: the gender pay gapAccording to the Pew Research Center (2016)3, women earn only 83% of what men earnin the US when considering both full-time and part-time positions. A Census Bureaustudy (2016)4 similarly found that women earn 80% of men when considering only fulltime year-round workers from 2014-15. And as our Thematic Investing Strategy teamwrote in their Global Education Primer, although the worldwide labor force participationrate is 50% women, the World Bank estimates that it will take 170 years (to 2186) toachieve equal pay for equal work.The gender pay gap has economic implications: McKinsey estimates that global genderparity could boost world GDP by 12-28tn — i.e. as much as the total market cap of USequities — by 2025. And according to the World Economic Forum (based on a study of29 OECD countries), women work 50 additional minutes per day relative to men whenboth paid tasks and unpaid tasks (such as care giving) are taken into account, withwomen spending a much larger portion or their time than men on unpaid work (Chart 2).Chart 2: Working day for men vs. women (study of 29 OECD countries)1h30minMen 7h 47min4h47minWomen 8h 39minPaid WorkUnpaid workSource: WEFWhat women do — and the implications for industriesIn A day in the life of a working woman (28 July 2017), our US economists found thatrelative to a decade ago, prime-age working women are spending more time during thework week working and sleeping and spending less time on shopping, leisure and chores.Chart 3: Change in time spent by prime-age working women onweekdays (minutes)20151050-5-10-1518133-3-9SleepWorkTop 3 IncreaseOtherShoppingLeisure-10Chart 4: Change in time spent by prime-age working women onweekends (minutes)20151050-5-10-15HH activityTop 3 DecreaseNote: Change is calculated from the average time spent between 2014-16 and 2003-05, HHrepresents household activitySource: Bureau of Labor Statistics, BofA Merrill Lynch Global Research1186-5SleepCare for HHmbrsTop 3 IncreasePlayingSportsTravel-7-14Shopping HH activityTop 3 DecreaseNote: Change is calculated from the average time spent on 2014-16 and 2003-05, HH representshousehold activitySource: Bureau of Labor Statistics, BofA Merrill Lynch Global e-some-progress/4Bernadette D Proctor, Jessica L. Semega and Melissa A. Kollar: “Income andPoverty in the United States: 2015” (US Census Bureau, September 13, 2016).3Environmental, Social & Governance (ESG) 07 March 20183
Another activity women aren’t spending time on? Financial planning. According to Moffitt’s 2013 study cited earlier, women in the US spend just 5.4hours per month working on their finances—nearly 40% less time than men. And with increasing demands on women’s time, the study found that financialadvisors who are more efficient and focused on working around women’s timeconstraints “are 69% more likely to develop a lasting relationship with that client.”What are women doing more of? Outsourcing chores: As Chart 1 and Chart 2 above suggest, women are spendingless time on household chores both on weekdays and weekends. Data from the BLSsuggests that men are also contributing less time on household activities –suggesting that outsourcing has likely been occurring. Shopping online – Our economists note that much of the decline in hours spent bywomen shopping is due to efficiency gains from e-commerce. This can benefitcompanies with strong online presence, and is driving change in industries such asretail, who are closing stores and shifting more to online/omnichannel. Onlinegrocery shopping has also been growing rapidly in recent years. Banking online: according to our Thematic Investing team’s 2016 Millennials &Centennials Primer, the proportion of consumers who use mobile banking apps isskewed more toward women (56%) than men (52%), based on the 2016 Bank ofAmerica Consumer Mobility Report (Chart 4).Chart 5: Percentage who use mobile banking appsTotal 30%40%50%60%70%80%Source: BAC Consumer Mobility Report (2016) Dining out: according to analyst Robby Ohmes, the growing share of food spendingon restaurants likely reflects the increase in women’s workforce participation andthe rise in dual-income households in recent decades (Chart 5).Chart 6: Share of total food expenditures 12201320142015201635%Food at homeFood away from homeSource: US Census Bureau4Environmental, Social & Governance (ESG) 07 March 2018
Buying sportswear: according to UK analyst Sophie Park, the global athleisuremarket is estimated to be worth 100bn and growing, with women in their 20s and30s driving the trend. Sportswear has become a rising share of apparel purchases. Chart 7: % of sportswear apparel as a % of the total apparel market has increased over timeSports apparel as a % of total apparel market25%20%15%10%5%0%2007200820092010WorldAsia Pacific20112012North America201320142015Western EuropeSource: BofA Merrill Lynch Global ResearchGender/Diversity & ESGESG matters- and is particularly important to womenOur work suggests that Environment, Social & Governance (ESG) factors are of growingimportance to institutional and individual investors alike, as well as to corporates, indexproviders and regulators. And Moffitt’s 2013-14 global study referenced earlier foundthat impact investing may be of particular importance to women: 90% of femalessurveyed (and 84% within the US) indicated that “making a positive impact on society isimportant” and 88% (79% in the US) said they “want to invest in organizations thatpromote social well-being.” The potential is large: for example, 31% of US women in thestudy noted they want to invest in gender equality, but only 8% currently do so.Investing in companies that invest in women/diversity: an ESG deep diveWe took a granular look at several ESG factors specifically related to gender/diversitybelow, based on data from Thomson Reuters and select data from Bloomberg (seeAppendix for full details). While we did not find better price performance trends forcompanies with high ESG scores on these metrics (i.e. they do not effectively signalfuture alpha), we did find these metrics to be effective signals of future price andearnings risk, as well as a signal of future ROE—consistent with our broader findings onESG.Key finding: gender-diverse co’s have seen lower price/EPS risk & higher ROEOn all three sub-pillar scores we analyzed from Thomson Reuters (board diversity,company policies on diversity/inclusion, and women in management), companies withhigh ESG scores had lower subsequent price and earnings volatility than companies withlow ESG scores on these metrics (Chart 8-Chart 9). Additionally, companies with highscores have seen higher ROEs than companies with low scores (Chart 10), and a greaterimprovement in ROEs on several of these metrics (Chart 11). Additionally, as we show inthe subsequent sections, companies with high scores on these metrics have generallybeen re-rating in recent years.Environmental, Social & Governance (ESG) 07 March 20185
0.260.240.220.200.180.16Chart 9: Median forward 3yr EPS volatility based on ESG scores(annually, 2005-2014) for Board Diversity (Governance), Diversity &Opportunity Processes (Social), and % Women Managers (Social)Fwd. 3yr EPS volatility (median)Fwd. 1yr price volatility (median)Chart 8: Median forward 1yr price volatility based on ESG scores(annually, 2005-2016) for Board Diversity (Governance), Diversity &Opportunity Processes (Social), and % Women Managers (Social)Board DiversityDiversity &% Women Managers*Opportunity ProcessesHigh ESG ScoreLow ESG Score0.700.600.500.400.300.20Board DiversityDiversity & Opportunity % Women Managers*ProcessesHigh ESG ScoreLow ESG Score*Data from 2010 on for % Women ManagersNote: High ESG Score based on 50 score on Board Diversity, Yes on Diversity and OpportunityProcesses, and 30% women in management. Low ESG Score based on 50 score on Board Diversity,No on Diversity and Opportunity Processes and 30% women in management.Based on volatility in quarterly EPS over the subsequent three years.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant StrategyChart 10: Median forward 1yr ROE based on ESG scores (annually, 20052016) for Board Diversity (Governance), Diversity & OpportunityProcesses (Social), and % Women Managers (Social)Chart 11: Median change in 1yr median ROE based on ESG scores(annually, 2005-2016) for Board Diversity (Governance), Diversity &Opportunity Processes (Social), and % Women Managers (Social)15.014.013.012.011.010.0Board DiversityDiversity & Opportunity % Women Managers*ProcessesHigh ESG ScoreLow ESG Score*Data from 2010 on for % Women ManagersNote: High ESG Score based on 50 score on Board Diversity, Yes on Diversity and OpportunityProcesses, and 30% women in management. Low ESG Score based on 50 score on Board Diversity,No on Diversity and Opportunity Processes and 30% women in management.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant StrategyChange in 1yr ROE (median)Forward 1yr ROE (median)*Data from 2010 on for % Women ManagersNote: High ESG Score based on 50 score on Board Diversity, Yes on Diversity and OpportunityProcesses, and 30% women in management. Low ESG Score based on 50 score on Board Diversity,No on Diversity and Opportunity Processes and 30% women in management.Based on daily price volatility over the subsequent year.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant Strategy40bp20bp0bp-20bp-40bpLow ESG Score*Data from 2010 on for % Women ManagersNote: High ESG Score based on 50 score on Board Diversity, Yes on Diversity and OpportunityProcesses, and 30% women in management. Low ESG Score based on 50 score on Board Diversity,No on Diversity and Opportunity Processes and 30% women in management.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant StrategyDiversity on corporate boards mattersBoard composition is an important aspect of corporate governance, one pillar of acompany’s ESG profile. A more gender-diverse board may better represent the companyand/or identify with its customers, bring a diverse range of opinions/ideas, and betterhelp the company compete and adapt to changes in its industry.For example, BofAML analyst Lorraine Hutchinson wrote about the lack of boarddiversity in Specialty Retail and Department Stores: Who runs the Boards? Boys 01June 2017, where—in an industry that targets mostly young women—boards aresurprisingly old and male. She found that only 30% of board members across Retailwere female (with some boards having zero women), and an average age on boards of62 years old. According to Hutchinson, greater board diversity could have saved theindustry from some of its challenges, had new views of shifting retail preferencesforced boards to prioritize online spending over store expansion. (And interestingly, asEnvironmental, Social & Governance (ESG) 07 March 2018Diversity & Opportunity % Women Managers*ProcessesHigh ESG ScoreBelow, we discuss diversity on corporate boards, within the C-suite, for companymanagement, and for employees, along with other related aspects, in more detail.6Board Diversity
we find in Chart 15 later in this section, the spread in subsequent ROE betweenBofAML-covered US companies that ranked well vs. poorly on board diversity washighest within the Consumer Discretionary sector.)Relatedly, our colleague Sameer Chopra found that in Asia, companies with strongcorporate governance characteristics in relation to their boards (such as greater genderdiversity of board members and more independent chairs) have seen higher ROE, paidout more of their earnings as dividends, and have traded at premium valuations .S&P 500 corporates making strides, but still have a long runwayThe diversity of S&P500 boards has been steadily improving over the last decade, withthe average board currently 22% women, up from 14% in 2008 (Chart 4). But boarddiversity still has a long way to go: while having quadrupled since 2008, just 11% ofcompanies have at least one-third of their board seats held by women (Chart 5), and just1% (five companies) have half (or more) of their board seats held by women. 1% ofboards remain all-male, down from 15% in 2008.Chart 12: Women on board (%) – average for S&P 500 companiesChart 13: Percent of S&P 500 companies with at least one-third of boardseats held by women22%14%20%12%10%18%8%6%16%4%14%12%2%0%2008 2009 2010 2011 2012 2013 2014 2015 2016 20172008 2009 2010 2011 2012 2013 2014 2015 2016 2017% of companies with at least one-third women on boardAverage - % women on boardNote: Based on current constituents of the S&P 500. 2017 is latest year if available or else prior yearif not yet availableSource: Bloomberg, BofA Merrill Lynch US Equity & US Quant StrategyNote: Based on current constituents of the S&P 500. 2017 is latest year if available or else prior yearif not yet availableSource: Bloomberg, BofA Merrill Lynch US Equity & US Quant StrategyTelecom, Staples and Utilities lead the packWithin the S&P 500, Telecom, Staples and Utilities have the most gender-diverseboards, where notably, within Staples, nearly one-fourth of companies have at least onethird of their board seats filled by women. Meanwhile, Energy, Industrials and RealEstate have the least gender-diverse boards (Table 1).Table 1: S&P 500 sectors: women on boards (WOB), 2017 or latest disclosed yearSectorAverage: % WOB% of co’s with at least one-third WOBTelecommunication ServicesConsumer StaplesUtilitiesFinancialsConsumer DiscretionaryHealth CareMaterialsInformation TechnologyReal 19%18%0%24%14%10%19%15%0%7%0%6%6%Source: Bloomberg, BofA Merrill Lynch US Equity & US Quant StrategyEnvironmental, Social & Governance (ESG) 07 March 20187
US is behind the curve; European countries leadAccording to a recent report from MSCI (Women on Boards: Progress Report 20175),women hold just 17% of board seats globally (based on MSCI ACWI companies) and22% of board seats within the US. Progress has been slow: they project it will take adecade (until 2028) at the current rate for at least 30% of seats to be filled by women.Their data suggests that just 32% of global companies had at least three board seatsfilled by women, with European companies (particularly in France, Italy and Norway)leading. According to their report, Utilities and Financials rank best globally (where over40% of companies globally have 3 women on boards), while Tech is the most behindthe curve (where nearly 30% of companies globally have no women on boards).Board diversity signals better ROE Consistent with our prior analyses of Thomson Reuters’ ESG data, we looked atThomson Reuter’s scores on board diversity for the BofAML US coverage universe from2005-2016. We found that companies with more diverse boards (score 50) had highersubsequent 1-year ROEs than companies with less diverse boards (score 50) nearlyevery year over the past decade (Chart 14). And the spread in ROE was positive acrossseven of the 10 GICS sectors (Telecom was excluded due to the small number ofcompanies), with Discretionary and Tech companies rewarded the most (Chart 15),Chart 14: Companies with more diverse boards have seen highersubsequent ROE almost every year since 2005Chart 15: Median spread in 1yr forward ROE based on companies with 50 vs. 50 ranks on Board Structure/Diversity (2005-2016)DiscretionaryTechnologyReal EstateHealth taples2.52.01.51.0Spread in fwd. 1yr ROE: 50 vs. 50 on Board DiversityBased on BofAML-covered US companies. See Appendix for full methodology.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant 070.020060.52005Spread in fwd. 1yr ROE3.0Environmental, Social & Governance (ESG) 07 March 20182.03.0Based on BofAML-covered US companies. See Appendix for full methodology.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant StrategyMeggin Thwing Eastman, “Women on Boards: Progress Report 2017”, MSCI ESGCorporate Gender Diversity Series; December 2017.81.04.0Spread in fwd. 1yr ROE - 50 vs. 50 on Board Diversity lower price and earnings risk As noted earlier in this report, board diversity appears to be a consistent signal of futurerisk: BofAML US-covered companies with 50 scores on board diversity have seen lowerprice and EPS volatility than companies with 50 scores over our data history since ‘05.50.05.0
Chart 16: Companies with diverse boards have seen consistently lowerprice volatility 0.00-0.02-0.04-0.06-0.08-0.10-0.12Spread in forward 3-year EPS volatility for companies in BofAML US coverage universescoring 50 vs. 50 on Thomson Reuters Board Diversity metric (2005-2014)Spread in forward 3yr EPS volatility (median)Spread in fwd. 1yr price volatility (median)Spread in forward 1-year price volatility for companies in BofAML US coverage universescoring 50 vs. 50 on Thomson Reuters Board Diversity metric (2005-2016)Chart 17: along with consistently lower EPS volatility2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Spread in forward 1yr price vol - 50 vs. 50 board diversity scoreBased on daily price volatility over the subsequent year.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant 40-0.45-0.502005 2006 2007 2008 2009 2010 2011 2012 2013 2014Spread in forward 3yr EPS vol - 50 vs. 50 board diversity scoreBased on volatility in quarterly EPS over the subsequent 3 yearsSource: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant StrategyBoard Diversity scores have been an effective signal of both lower price and earningsrisks in seven out of ten sectors (Telecom excluded due to small number of companies)and particularly in Energy and Materials: companies with scores above 50 in BoardDiversity exhibited both lower future price and earnings volatility relative to their peers.Chart 18: Spread in forward 1yr price volatility between companies withabove-50 vs. below-50 scores on Board DiversityStaplesEnergyMaterialsHealth ilitiesReal Estate-0.05 -0.04 -0.03 -0.02 -0.01Chart 19: Spread in forward 3yr EPS volatility between companies withabove-50 vs. below-50 scores on Board DiversityEnergyMaterialsDiscretionaryReal EstateStaplesTechnologyIndustrialsHealth CareUtilitiesFinancials0.000.010.02Spread in fwd. 1yr Price Vol - 50 vs. 50 on Board DiversityBased on daily price volatility over the subsequent yearSource: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant Strategy-0.80-0.60-0.40-0.200.000.20Spread in fwd. 3yr EPS vol - 50 vs. 50 on Board DiversityBased on volatility in quarterly EPS over the subsequent 3 yearsSource: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant Strategy and higher multiplesWhen examining companies with strong ( 50) vs. weak ( 50) scores on board diversity,we found that non-Financials in BofAML’s US coverage universe with more diverseboards have traded at a consistent premium on Price to Book relative to other nonFinancials in this universe (Chart 11). While the relative premium has varied over time, ithas consistently risen since 2013 (Chart 17).Environmental, Social & Governance (ESG) 07 March 20189
Chart 20: Non-Financials with more diverse boards have traded at a consistent premiumRelative Price/Book for BofAML US covered companies based on Thomson Reuters’ Board Diversity score 010201120122013201420152016Relative P/B: 50 vs. 50 on Board Diversity (ex-Fins.)Based on BofAML-covered US companies. See Appendix for full methodology.Source: Thomson Reuters, BofA Merrill Lynch US Equity & US Quant StrategyFemale executives are also scarce (but growing)According to the MSCI report above, women comprise fewer than 4% of CEO jobsglobally and less than 10% of CFO jobs globally. Within the S&P 500, we find that just5% of companies have a female CEO or equivalent, up from 2% in 2010, but littlechanged over the past four years (Chart 6). And for the average S&P 500 company, just17% of total executives are female, up from 12% in 2010 (Chart 7). One-fifth ofcompanies have all-male executive committees.Chart 21: % of S&P 500 companies with female CEO or equivalent6%Chart 22: Proportion of executives who are female – average for S&P500 0112012 2013 2014 2015% female CEO or equivalent20162017Note: based on current constituents of the S&P 500. 2017 is latest year if available or else prior yearif not yet available.Source: Bloomberg, BofA Merrill Lynch US Equity & US Quant Strategy2010Environmental, Social & Governance (ESG) 07 March 2018201220132014201520162017Average - % female executivesNote: based on current constituents of the S&P 500. 2017 is latest year if available or else prior yearif not yet available.Source: Bloomberg, BofA Merrill Lynch US Equity & US Quant StrategyUtilities and Staples once again at the head of the packUtilities and Staples lead the pack with 20% and 19% female executives, respectively.Real Estate and Energy lag, with 11% and 14% female executives, respectively.102011
Chart 23: Average percentage of female executives by S&P 500 sector (2017 or latest year)20.018.016.014.012.010.0Average: % female executivesNote: based on current constituents of the S&P 500. 2017 is latest year if available or else prior year if not yet available.Source: Bloomberg, BofA Merrill Lynch US Equity & US Quant StrategyMore gender diversity among executives suggests higher ROEBased on data from Bloomberg, we analyzed the proportion of female executives withinthe S&P 500 by year from 2010-2016, based on the current constituents of the index.We found that in all of the last seven years, the subsequent one-year median ROE washigher for companies where at least 25% of their executives were female, suggestinggender diversity may drive better returns (Chart 14).Additionally, a 2015 “Diversity Matters” study by McKinsey6 found a statisticallysignificant relationship between diversity of leadership teams and financialperformance, where top quartile companies by gender diversity were 15% more likely tosee their EBIT above the industry median.Chart 24: Subsequent 1yr median ROE for S&P 500 companies based on the proportion of femaleexec
Environmental, Social & Governance (ESG) Women: the X-factor 07 March 2018 Women are driving change To celebrate International Women's Day, we took a closer look at the impact of women on the investment landscape. Women have been driving change in the labor market, the workplace, and the home—creating opportunities within investments and wealth
stated to apply to ESG ratings providers may apply to ESG data products providers, and vice versa. 1. The term ESG ratings and data products providers, as used in this report, covers providers who offer ESG ratings and/or ESG data products. Where there is a need to single out ESG data products providers who
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ESG and financial variables is interpreted as ESG being the cause and financial value the effect, however the transmission can be interchanged. COMPONENTS/CRITERIONS OF ESG: 3 key components of ESG are - Environmental, Social and (corporate) Governance aspects. Since ESG factors are often interrelated, there may be scenarios
ESG PORTFOLIO EXTENDED SUMMARY REPORT December 03, 2020 Portfolio Benchmark Weighted Avg ESG Score 6.20 6.03 Adjustment ESG Trend Positive 4.74% 15.81% LAGGARD AVERAGE LEADER Distribution of MSCI ESG Fund Ratings Universe Adjustment Total 0.81% 0.88% Score Adjustment 0.05 - ESG Trend Negative 2.02% 7.49% - ESG Laggards 1.91% 7.44% ESG Quality .
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Example ESG Switchable Glass Sound Control Data ESG Switchable - Examples of Optical Performance* Thickness Standard Construction ESG Switchable Std dB Rating (Rw) ESG Switchable Acoustic dB Rating (Rw) 10 mm 4 mm Low Iron tempered glass x 1.52 PVB 0.4 mm LCD x 4 mm Low Iron tempered glass 35 37 12 mm 5 mm Low Iron tempered glass .
ESG Report For the calendar year ended December 31, 2021 Our 2021 ESG Report highlights our perspectives on the environmental, social and governance (ESG) issues that matter most to our stakeholders including our customers, employees, and investors. This report provides a high-level overview of our views and approach to key ESG issues.
