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Nossa Data

200,000 March tweets scraped to understand public sentiment to ESG

Issue #26: A weekly update on responsible investment and business doing good.

As the COVID-19 crisis continues, each of us is adjusting to a new ‘Stay at Home’ reality. To help the Environmental, Social, Governance (ESG) world make sense of it all, together with Irina Dumitrescu, during March we scraped nearly 200,000 tweets and mapped them to ESG topics. Our map links 33 key ESG topics found on Twitter and shows how they link back to the terms coronavirus and pandemic.

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We would love to hear feedback from Nossa Capital subscribers about what we built and ideas for future data projects. If anyone is willing to share feedback via a call, you can book a slot in my calendar. You can read this article to learn more about our methodology and we will be producing an article about how we built the visualization in the future.

Other unique coronavirus datasets:

Top stories:

Cyber-security is now an ESG issue
Cyber-security is emerging as an increasingly significant ESG risk factor for investors to consider. The pace and scale of new technologies across different industries is expanding the cyber-attack surface that malicious actors can exploit, which will only increase as the trials and pilots for 5G accelerate. Put starkly, the immense business opportunities brought on by digitisation can come with a multi trillion-pound price tag if corporates do not prepare adequately for cyber-attacks. Portfolio Advisor.

Are ESG and sustainability the new alpha mantra?
When fund managers will start to think again about alpha-seeking strategies, as opposed to simply surviving the coronavirus, my bet is that more than a few will tell investors that sustainability and ESG-based screening will top their list for performance enhancement. A better understanding of the impacts of the energy transition, environmental constraints, and social inequality allows us to better manage risk, and in the long term we believe more sustainable performance will follow from it.
Financial Times.

Meet Investors Halfway With Better ESG Reporting
Many investors lament the lack of standardization across the multitude of reporting frameworks available. For example, a majority of companies use GRI reporting, but SASB is often the preferred framework for investors because it provides greater transparency and better risk management, and it is better suited to help “identify, manage, and report on sustainability topics.”

Investors listed the most critical issues plaguing the reports they see:

  • Poor coverage across the portfolio.
  • Immaterial or generic language, rather than robust quantitative KPIs.
  • Inconsistent third-party evaluation.

A View From Where We Stand
Amid high market volatility and unprecedented peacetime pressures on businesses and the economy, some voices are asking how these developments reconcile with ESG. We see ESG in the actions of businesses and other organizations in thinking how best to provide for — and more than that, drive — the long-term sustainability of their specific communities. Because these communities help to underpin the foundation of society, the economy and the global capital markets.
Nasdaq.

How businesses could emerge better after COVID-19, according to B Lab
This crisis creates an opportunity because it makes it clear that we haven’t built a resilient economic system. This is an opportunity for us to focus on both how business and government play a role in building a more resilient economic system for the next crisis, and there’ll be more of these. It’s possible that more companies will choose to make changes to benefit workers. While many businesses are obviously struggling now, when the economy improves, some may decide to pay living wages and offer better benefits rather than adding to oversized CEO pay or making other investments.
Fast Company.

Credit Suisse sets up investment banking sustainability advisory
“The group is tasked with capturing future investment banking opportunities and share of wallet, either through the identification of new high-growth clients that are solving global ESG challenges, or in advising existing clients on sustainable growth and finance opportunities,” David Miller, Credit Suisse’s head of Investment Banking and Capital Markets, said in the memo to staff.
Reuters.

Paper Highlight of the Week:

Corporate Environmental Impact: Measurement, Data and Information:
Harvard Business School

As an organization’s environmental impact has become an increasingly important societal consideration often affecting industry and organizational competitiveness. Because of this, interest in measuring and analyzing environmental impact has increased.

This paper has developed a methodology to understand the cost of environmental impact across companies. Looking at environmental outputs, including carbon emissions and water use.

Findings:

  • The median environmental impact as a percentage of revenues is close to 2% and above 10% in 11 out of 68 industries.
  • Close to 60% of the variation in environmental intensity is driven by which industry a company is in. ~30% is related to firm specific factors. The rest of the variation is driven by country and more granular industry classifications.
  • Environmental impact is moderately priced in equity valuation multiples. consistent with investors viewing environmental impacts as financially material and pricing them in some but not all industries

Read Full Paper.

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