Hawley and Lukomnik on Portfolio Theory

There is no one we respect more than Jon Lukomnik, especially when it comes to portfolio theory. Every fiduciary fund manager should read his new article with James P. Hawley. An excerpt: Two recent statements, one by the world’s largest pension fund and the other by the largest asset manager, are harbingers of future corporate…

The World’s Most-Profitable Hedge Fund Is Now a Climate Radical – Bloomberg

The hedge fund industry has no shortage of aggressive, in-your-face players, but few are as tough as Chris Hohn. The British billionaire takes the typical playbook to new levels—scuttling deals, pushing to remove bosses, and battering companies with litigation and threats. One opponent was so peeved after losing a boardroom battle with Hohn that he…

A Sense of Climate Urgency Takes Hold in Davos – Bloomberg

Davos is cloaked in white, but its agenda is green. Environmentalism—fighting climate change in particular—has emerged as one of the biggest priorities of the World Economic Forum annual meeting…The biggest obstacle to fixing the planet’s climate is free-riding—shirking efforts to fight climate change while benefiting from the efforts others make. The repeated interaction with fellow…

Measuring What Matters

There is a groundswell of interest in metrics that go beyond our traditional financial view of companies. Many organizations have done extensive work on frameworks for ESG metrics, non-financial metrics, or integrated reporting, each targeted at a range of stakeholders including customers, employees, policymakers and investors. The challenge we often hear is that companies work…

Blackrock’s Larry Fink: Letter to CEOs

Blackrock’s Larry Fink wrote to the portfolio company CEOs to tell them that investors insist on more from them when it comes to climate change, from disclosure to strategy. Bottom line (literally): “Climate risk is investment risk.” Here is the letter: Dear CEO, As an asset manager, BlackRock invests on behalf of others, and I…

Diversity Confirmed To Boost Innovation And Financial Results

“Diverse and inclusive cultures are providing companies with a competitive edge over their peers.” This quote summarizes conclusions from The Wall Street Journal’s first corporate ranking that examined diversity and inclusion among S&P 500 companies. The Journal’s researchers’ work joins an ever-growing list of studies by economists, demographers, and research firms confirming that socially diverse…

Want a Bigger Say on Corporate Behavior? Move Your Money – The New York Times

My conclusion is that C.E.O.s have performed an artful head fake with their high-sounding promises, deflecting public attention from the Roundtable’s decades-long advocacy of measures to weaken regulations and reduce the already attenuated power of shareholders. What you won’t find in the Roundtable’s statement is this: For-profit companies exist to serve their owners, not their…