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Nearing Expulsion

208 companies face exclusion from the FTSE4Good.

It ain't easy being Green - Stock index provider FTSE Russell threatened to expel 208 companies from its FTSE4Good index this week, for failing to meet tightening climate reporting requirements. If it happens, the companies would see their shares sold off by many global pensions that use the index. These types of penalties are the only way regulators and exchanges can work to bust greenwashing. Good to see them being used. . . .

DEI is gaining importance and pushing the middle market to change - Recent analysis by Pinebridge Investments has shed light on the lagging performance of most middle market PE managers around diversity, equity and inclusion. Less than half of managers track diversity on the boards of their companies, just over a third incorporate DEI in their investment diligence, and 28% haven't done anything related to DEI. 

Dare to Dream - With the increasing focus on authenticity of ESG, real estate companies are feeling a similar push to up their game. Dream is one of the leaders in this field, with a focus on attainable, inclusive and resource efficient buildings. One its current projects is the first in Canada to achieve One Planet Living qualification. 

The Summa of impact - Beyond Dream, another private manager that has recently released their annual impact report is Summa Equity, from Sweden. They are among the first managers to highlight the Principal Adverse Impact indicators in looking at their portfolio. This not only looks at the positive metrics, but also considers that every investment also has negative externalities. This full impact analysis is among the first to be publicly disclosed. Also of note, 75% of the board members of their portfolio are women. Which leads us to..... 

The Facts. Although diverse candidates are increasingly being added to Fortune 500 boards, the numbers aren't entirely rosy. According to the Alliance for Board Diversity, from 2012 to 2020, the percentage of female board members increased from 16.6% to 26.5%.   Minority membership increased from 12.8% to 17.5% in 2020. However, female and minority board members were on multiple Fortune 500 boards 35% more than white men, meaning the same women and minorities are being chosen multiple times for board positions. Additionally only 13% of board chairperson seats are held by women and minorities, so DEI still has a ways to go to reflect the general population.  

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About Impact Delta

A secular shift towards a more responsible capitalism is underway. Impact Delta is a specialist consultancy founded to help investment firms capitalize on this shift. We believe good environmental and social thinking helps investment firms raise capital and earn better returns. More about us here.

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