In this article, the authors explore six quantitative environmental (E), social (S), and governance (G) strategies to provide insights into best practices for ESG portfolio construction. These strategies offer different approaches to the trade-off between desired ESG attributes and investment performance. They conclude that fully understanding the dynamics of these trade-offs will allow investors to select the strategy that best matches their ethical and financial views.
Highfliers Drive Market Returns. Losers Drive Tax Alpha.
by Lisa GoldbergThe S&P 500 Index return was up 18.4% in 2020, even though 95% of its constituents experienced a drawdown of more than 10%. This is not, however, just another crazy thing that happened in 2020...
Free Is a Dangerous Word (Especially during a Pandemic)
by Patrick Geddes & Dan SpierIn the past 18 months, we’ve witnessed some extraordinary changes in how retail stock investors trade, from the broad shift for many brokerage firms toward zero commissions to the jump in trading by individuals in 2020, presumably a result of the pandemic...
As many of you likely have seen on our website, Aperio is Latin for "to make clear, to reveal the truth." We looked in Google translate and found a definition we like even better: "disclose to view." Aperio has always been a proponent of transparency. We believe in the marketplace and its ability to measure value; that’s why we are indexers. We also believe that the market’s ability to accurately measure value is dependent on information. We favor much more disclosure by companies than has been the normal practice for too many companies, including on ESG (environmental, social, and governance) issues.
Aperio feels strongly that we must lead by example. Today, Aperio is publicly posting its EEO-1 data on workplace diversity. This is an additional piece of our overall response to racial injustice that our CEO, Patrick Geddes, wrote about in June 2020. We have long been in favor of companies disclosing this information, in part because we use this information to manage ESG portfolios for our clients interested in diversity issues. Until we crossed the 100-employee threshold, we were not subject to filing an EEO-1 form with the Department of Labor.
By posting this information, we affirm the following:
All companies subject to filing this diversity information with the federal government should release their EEO-1 forms publicly. We do not believe that this information is proprietary. We believe that if society is going to make improvements on racial, ethnic, and gender diversity, society needs access to information on what kind of progress companies are making in specific instances. We believe that people may disagree on appropriate policy solutions but that acknowledging the problem can only be accomplished by expanding access to information.
The financial services industry has been particularly behind in generating equal opportunities for communities of color and for women. We acknowledge that Aperio has more work to do in promoting the kind of diverse workforce to which we aspire. We are working to address these issues and expect to be held accountable by our partners, clients, and employees. Disclosing this information now is part of that accountability process.
Disclosure by itself doesn’t change behavior.
Compiling and releasing this information is an opportunity for us to look in the mirror at our performance. We live in our company every day, we know who our colleagues are, and we like them. In the back of our minds, we also understand every day who our colleagues are not. But as we go about our daily work, when we aren’t specifically thinking about diversity, we forget to be working on this issue—out of sight, out of mind. Compiling the information is an opportunity to put diversity squarely within our sightline and, therefore, within our mindful thought.
At Aperio, we did not make a series of conscious decisions to discriminate, but as we’ve all started to understand, we subconsciously failed to make the extra effort necessary to achieve diversity. We are a relatively small, privately held company, so we hope that our example can demonstrate that publishing this information doesn’t have to be difficult. The hard work is the commitment to get better. We make that commitment.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of publication and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and non-proprietary sources deemed by BlackRock [Aperio] to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.
Aperio is providing this link to a third-party website that displays a research report, article, webcast, video, or other content that we believe may be informational or educational for you. This linked content is presented by a source that we believe to be reliable, but we do not guarantee its accuracy or completeness, including any associated disclosures. Aperio has no control over the nature of the content on, or the availability of, this third-party website.
The inclusion of this link on our website also does not imply a recommendation or endorsement of any views expressed in such linked content and should not be considered: investment, tax, or legal advice; a solicitation; a recommendation of Aperio or any third-party’s services; or an offer to buy or sell any securities or related financial instruments in any jurisdiction.
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Mark Bateman
Director of ESG/SRI Research (Salem, OR)
What are your key responsibilities? I work on the ESG/SRI team, performing two main functions: First, I collaborate with clients to develop a customized values policy document. This document serves as the road map for aligning their portfolios with their values on environmental, social, and governance (ESG) issues. Second, I stay on top of developments in the ESG research industry to understand what data are available to use in client portfolios.
Describe your key previous work experience. I have been in the ESG industry for more than 25 years. I started at the Investor Responsibility Research Center (IRRC) and held various roles—research analyst on military and political issues, director of the Environmental Information Service, and Vice President of Research and Operations. During that time, I served on the original steering committee of the Global Reporting Initiative (GRI), helping to develop standards for sustainability disclosure. More recently, I served as the Director of Research for IW Financial.
What is the most interesting aspect of the job to you? I enjoy working with our clients—to understand their values and worldviews and help create criteria that reflect those values in their investment portfolios. No two clients have exactly the same values, so every conversation is different.
Describe some noteworthy projects you have worked on that directly impact Aperio’s clients. I helped create the original SRI offerings available on the Aperio SRI/ESG Menu. These offerings can be an off-the-shelf solution for a client or the starting point for a more detailed conversation. I also helped create the online survey that we often use with clients to help identify the issues that matter most to them.
What do you like most about working at Aperio? I like talking with our clients about what matters most to them. These conversations can be incredibly personal. I often hear a cross section of world views that gives me a better understanding of humanity.
List any committees or organizations you are a member of outside Aperio. I serve on the board of directors for the Sustainable Investments Institute (Si2), a proxy research firm. I also serve in a number of church governance roles at the local, state, and regional levels.
What are some non-work-related things we should know about you? I’m a photographer, mostly nature and my kids’ sporting events. I also like to play—and create—board games.
What postsecondary degrees and/or professional certifications do you possess? BA from Johns Hopkins University; MA from George Washington University.
Until January 20, 2021, Condoleezza Rice will have been the highest-ranking African American woman to serve in the executive branch of the US government, having served as secretary of state from 2005 to 2009. With Kamala Harris’ assumption of the vice presidency...
As many of you likely have seen on our website, Aperio is Latin for “to make clear, to reveal the truth.” We looked in Google translate and found a definition we like even better: “disclose to view.” Aperio has always been a proponent of transparency...
Dear ESG Vendor: Having recently completed a comprehensive review of the ESG data offerings from most of the prominent ESG vendors, we want to share some of what we learned about the state of ESG research and data...
Nancy Malik
Chief of Staff
What are your key responsibilities? I am responsible for all things people! My day-to-day activities involve culture keeping, recruiting, training, record keeping, compensation, payroll, benefits, employee relations, performance, policies, and compliance.
Describe your key previous work experience. In my 20-plus-year career, I facilitated a financial services company’s growth from startup into a national enterprise with more than 1,000 employees. My final role there was Senior Vice President, Human Resources. Over the course of that journey, I built a broad and deep expertise in human resources strategy and people operations, with an additional skill set in financial management. Additionally, I have provided human resources consulting services for a broad array of companies, from high tech startups to financial services and nonprofits.
What is the most interesting aspect of the job to you? The best part of my job is developing relationships in the organization to truly understand and build trust with colleagues so that I can add value. I enjoy identifying and growing those with potential through coaching and leadership development, one-to-one mentoring, and training. My proudest moments are when those whom I have helped guide along the way come back and share with me that I’ve made a difference not only in their careers but also in their lives.
List any committees or organizations you are a member of outside Aperio. I volunteer in my community (Marin Food Bank, Glide, many Parent Association roles) and belong to the Society for Human Resource Management.
What are some non-work-related things we should know about you? I enjoy traveling, cooking, hiking, being outdoors (especially at the beach), and participating in all that Marin has to offer with family and friends. Much of my spare time is spent on the sidelines watching my son play basketball and lacrosse!
What postsecondary degrees and/or professional certifications do you possess? BS, with high honors, in Managerial Economics from the University of California, Davis.