Historically, evaluating investments focused solely on financial returns. However, with the growing significance of climate change, the concept of “triple bottom line” or financial, environmental, and social impact has been gaining traction. This push to look at investment decisions more holistically has given rise to ESG (Environmental, Social, and Governance) practices and policy.
ESG measures the societal and sustainability impact of every business activity. Investors are now looking to responsibly invest in companies that manage their impact on the environment and society at large. To serve this need of investors.
ESG rating agencies use analysts to measure the performance of various companies and compare them through ratings and rankings, this does not always show the full picture as the rankings can sometimes be as old as 6-12 months.
ESG Analytics is a platform that uses artificial intelligence and alternative data (data outside of corporate disclosures) to benchmark company ESG performance, this allows for more company coverage, real time insights and the ability to look beyond a score to determine whether a company meets the ESG criteria you are looking for.
We took a look at the Financials industry, to understand the best performers. Read on to learn how industry leaders like The J. M. Smucker Company, Walgreens Boots Alliance, Hormel Foods Corporation, The Estee Lauder Companies Inc, Sysco Corporation demonstrate a well managed company, with low ESG controversy risk.
How were these companies selected?
Each day, ESG Analytics processes millions of documents to identify and manage ESG risk using our proprietary Natural Language Processing (NLP) algorithms. Once we identify a material event, we classify it according to the industry leading SASB framework (26 different ESG topics) and then run sentiment analysis to determine how positive of negative the event is. This chart below shows the ESG Pulse of companies in the Health Care sector. For accuracy, we excluded companies that did not meet a minimum threshold of events.
Here is the full list :
1. The J. M. Smucker Company
The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in four segments: U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International and Away From Home. The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, shortening and oils, and frozen sandwiches; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking ingredient.
The J. M. Smucker Company has an ESG Pulse of 1 out of 1, indicating a well managed public profile, free of ESG controversy.
There is virtually no identifiable controversy risk for the company, and this is echoed by other external providers with a score of 27 from Sustainalytics and a BBB from MSCI.
2. Walgreens Boots Alliance
Walgreens Boots Alliance, Inc. operates as a pharmacy-led health and wellbeing company. It operates through three segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. The Retail Pharmacy USA segment sells prescription drugs and an assortment of retail products, including health, wellness, beauty, personal care, consumable, and general merchandise products through its retail drugstores and convenient care clinics. It also provides specialty pharmacy services and mail services; and manages in-store clinics.
Walgreens Boots Alliance has an ESG Pulse of 1 out of 1, a standout performer using ESG Analytics AI based methodology.
They generally have low risk from external ESG providers, and their executive compensation is well within the acceptable ranges of their peer group.
3. Hormel Foods Corporation
Hormel Foods Corporation produces and markets various meat and food products to retail, foodservice, deli, and commercial customers in the United States and internationally. The company operates through four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other. It offers various perishable meat products, including fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products, such as canned luncheon meats, peanut butters, chilies, shelf-stable microwaveable meals, hashes, stews, meat spreads, flour and corn tortillas, salsas, tortilla chips, and other products.
Hormel Foods Corporation has a ESG Pulse of 0.99 out of 1, and has no material ESG controversies of note.
Some initiatives they have launched include:
- Hormel Foods Announces Construction of Solar Energy Project at its Swiss American Sausage Company Facility in California
- Hormel Foods Announces Hormel Heroes Scholarship Recipients
4. The Estee Lauder Companies Inc
The Estée Lauder Companies Inc. manufactures and markets skin care, makeup, fragrance, and hair care products. The company offers a range of skin care products, including moisturizers, serums, cleansers, toners, body care, exfoliators, acne care and oil correctors, facial masks, cleansing devices, and sun care products; and makeup products, such as lipsticks, lip glosses, mascaras, foundations, eyeshadows, nail polishes, and powders, as well as compacts, brushes, and other makeup tools.
The Estee Lauder Companies Inc has an ESG Pulse of 0.95 out of 1, and is not included in any negative screens.
There is virtually no identifiable controversy risk for the company, and this is echoed by other external providers with a score of 24 from Sustainalytics and a BBB from MSCI.
5. Sysco Corporation
Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through three segments: U.S. Foodservice Operations, International Foodservice Operations, and SYGMA.
Sysco Corporation lands an ESG Pulse of 0.94 out of 1, and has a low amount of contraversies.