by Hank Boerner – Chair & Chief Strategist, G&A Institute

For many years, our references to “generation” usually meant that we were speaking about the people living (and able to act) at the time. 

For example, President Franklin Delano Roosevelt in 1936 on accepting his party’s nomination to a campaign for second term (in the depths of the Great Depression), ended his remarks with this: “There is a mysterious cycle in human events.  To some generations much is given.  Of other generations much is expected.  This generation of Americans has a rendezvous with destiny…” 

President Roosevelt was a progressive and liberal leader who worked to save our democracy and in fact, capitalism. He was cautioning the nation about the need to be on guard to protect our freedoms as European fascist leaders such as Hitler and Mussolini came to power (and addressed internal U.S. terrorist threats as well).

The “generation” hearing his words would go on to fight for the nation and the free democracies of the “united nations” standing with the U.S.A., England, France and other countries in World War Two.

Some 28 years later, actor-politician Ronald Reagan (who would soon become Governor of California and then President of the United States) in “The Speech” in October 1964 in a call-to-action for political conservatives to move away from Roosevelt’s New Deal policies of the 1930s and 1940s told listeners:  You and I have a rendezvous with destiny.

Again, speaking across the spectrum of the audience to “the generation” of the time. And especially to voters in all age cohorts.

But with the coming of the “Baby Boomers” — those men and women born in the postwar, 1946 to 1964 and 77 million strong in total number — came a departure in the use of the general term and the characterizing of a specific cohort of men and women with defining tastes and cultural leanings (it is presumed).  They got a name — Baby Boomers. (The birth rates were high 3 million to 4 million during their 18 years’ of coming into the world.)

And so they were two-and-a-half again in total number in size than their parents’ generation — those to be known later as the “Silent Generation” and also as “the Greatest Generation” of WW II, as profiled by author Tom Brokaw (the former NBC-TV Network news anchor).

In the years after WW II each age and demographic cohort has been characterized and given a catchy title in this way.  Baby Bust (the children of the early wave of Boomers).  Gen X (born 1965-1980), Gen Y, the Millennials (coming of age in the 21st Century/Third Millennia).  Gen Z is a current fascination – they are the next wave of 21st Century leaders.

Generally, today’s Millennials were considered to be born after 1980/81 to 1996 — they are thus 23 to 38 years of age.  Larger than the GenXers, (today ages 38 to 53/54), the Millennials now outnumber the trendsetting Baby Boomers (especially the Boomers still in the workforce) and are busily shaping political, financial, business, cultural, investing, and other spheres of our society.

The buzz about Millennials goes along the lines of (what Morgan Stanley describes): Millennials and their younger cohort (teens and younger) will re-shape the financial industry (especially banking) in their tech-savvy, mobile-first image, which has ramifications for all consumers, companies and investors.  (GenX presented the last opportunistic “pocket of growth” coming of age during the 2008 crisis.)

Each week our team led by Editor-in-Chief Ken Cynar captures the essence of sustainability / responsibility news, perspectives and research results that we think you might be interested in. 

This week’s Top Story is by Junaid Wahedna, founder and CEO of Wahed Investments via MENAFN, providers of Middle East and North Africa tech networks and related services (the comments were published in its newsletter).

Topic: The impact of the Millennials on the tech industry — and on investing.  The members of the “M generation”, the author tells us, are focused on ethical issues, making a difference, and steadily shifting to sustainable & responsible investing approaches. 

They are making careful, conscious decisions and achieving results through positive impacts and bringing about real change.

Author Wahedna cites Morgan Stanley and Ernst & Young research of late (focused on the Millennials) and adds his own experience (his firm has State of Delaware and Amman, Jordan offices).  He concludes:  As long as young investors continue to express a need for social good, and the idea gains traction and familiarity, these ethical investment options remain entirely sustainable alternatives to the traditional confines of the wealth management landscape.

What are your views on the Millennial Generation – are you a member of “the cohort” that will be managing businesses, government and social sector organizations in the years ahead, or running your own business? 

If you would like to share your thoughts as a guest writer in how Millennials are shaping today’s society, do send us a note (to hboerner@ga-institute.com).

Meantime, for all our readers, everywhere (and of all ages and generations!), tune in to our Top Story this week, with focus on the wondrous generation that will run things in the 21st Century.

Top Stories

Millennials are changing the investing landscape, one ethical choice at a time   
Source: MENAFN – With the growing consciousness regarding ethical and sustainable investment choices, particularly from the millennial generation, we expect this sector to continue to grow in the coming years

For more on this fascinating topic, take a look at some of Morgan Stanley’s research at:

• How Millennials and Gen Z Could Reinvest Banking
• Is U.S. Housing Headed for A Major Renovation?
• Millennials, Gen Z and the Coming “Youth Boom” Economy
• The M Word Blog: Money and Millennials

by Hank Boerner – Chair & Chief Strategist – G&A Institute

Topline
60% of the Russell 1000 Published Sustainability reports in 2018, however of the smaller set of the 1000 (500 companies) by market cap only 34% are reporting, compared to 86% of the largest 500. Click here for more details.

Question — How many times today do you think you looked at or mentioned a stock index to colleagues?

Some days investor and corporate conversations are all about stock index performance (up, down and sideways!). 

Stock indexes, explains Investopedia, are our powerful indicators for specific economies (such as that of the U.S.A.) and we are of course familiar with the bold face names whose “performance” many media report on constantly  – the “Dow” (the DJIA), Nasdaq Composite and S&P 500(r).

There are literally thousands more indexes/benchmarks used by investors for the analysis of their own performance (“against the benchmark”). Investable products are created using the benchmarks (the intellectual property of their owners (such as the Dow and various S&P indexes, like those for Real Estate, Energy, Consumer Staples, etc.).

The familiar S&P 500® (launched in 1957) has 500 of the largest U.S. companies by market cap and other factors and represents about 80 percent of the total value of the U.S. stock market (it is market-weighted, or capitalization weighted). This is owned by S&P Global Inc. and its S&P Dow Jones Indices units provide a wide range of indexes/benchmarks for global investors.

The 500 and other large-caps are represented as well in another large index universe — the Russell 1000 Index, owned by LSE (the London Stock Exchange). This benchmark for large-cap companies is used by investors to go beyond the S&P 500 to include up to 1,000 of the large-cap U.S. equities, including the S&P 500 companies.

The S&P 500 Index companies are the largest companies with US$8 billion or more in market cap, 50% float, certain liquidity and positive earnings. 

The Russell 1000 Index is a subset of the broad Russell 3000 Index® and represents the largest 1,000 companies in the U.S. equity market (the largest is Microsoft).  About 90% of the total market cap of all U.S. listed stocks are represented by this important bellwether index, says Investopedia.

Each year since 2011 the analyst team at G&A Institute has tracked the S&P 500 companies’ ESG reporting activities.  That first year we found just about 20 percent of the companies publishing “sustainability, responsibility, citizenship” et al reports. 

(These reports have titles such as Corporate Citizenship Report, Corporate Responsibility Reporting, Environmental Progress Report, and so on.)

In 2012 that number rose dramatically to more than half of the companies publishing such reports (53%).  Then each year after the number steadily rose (to 72% in 2013 and up to 86% in 2017).  We share the research results – you can see the latest “Flash Report” here.

The Russell 1000® Research Results
This year we expanded our research to include the “next 500” – the U.S. large-cap companies not included in the S&P 500 Index.  The top-line results:

• 60% of the 1,000 companies are publishing sustainability reports in 2018.
• The top half of the companies align with the S&P 500 universe and comprise 72% of the Russell 1000 universe that does publish a report.
• Of the reporting companies, only 28% were from the bottom 500 of the Russell 1000 Index.
• Of the 40% of that do not report, 83% were those smaller in market-cap, and only 17% were S&P 500 Index companies (reflecting the results of our annual S&P 500 research).

Takeaway: The larger companies by market cap are by a wide margin the publicly-traded firms that publish sustainability and responsibility reports, and it’s clear that their smaller peers in the Russell 1000 have a ways to go to catch up.

Those non-reporters are or will be hearing from their institutional investors that an annual sustainability or similarly-titled report is expected to be published by the firm, following the example of their larger peer companies in the Russell 1000.  Many of the large caps are already being asked questions about their ESG performance by investors, major customers and other stakeholders. 

Within their sector and specific industry categories, the reporting & disclosure pace is set by larger-cap peers.  The laggards (the large-cap companies in the Russell 1000 that are not reporting) will have ever-rising challenges ahead as the larger pacesetters expand their reporting efforts (usually competing with other large peers) and raising the bar for those companies not yet reporting in the respective industry category or categories for diversified firms.

Note the Russell 1000 was launched in 1984 by the Frank Russell Company and is part of a family of indexes that are market-weighted; today the benchmarks are owned by FTSE Russell, a subsidiary of the London Stock Exchange (LSE).

Governance & Accountability Institute team members help companies publish sustainability and responsibility reports and in various ways disclose data and information about their ESG strategies, performance and results (outcomes of the sustainability journey efforts). 

For more information please see our web site at www.ga-institute.com.

Information about our Russell 1000 Index analysis regarding public company ESG publishing is in the Flash Report, our Top Story this week.

Top Stories

FLASH REPORT: 60% of Russell 1000® Are Publishing Sustainability Reports, G&A Institute’s 2018 Inaugural Benchmark Study Shows   
Source: Governance & Accountability Institute, Inc. – In this inaugural benchmark study, G&A found that 60% of the [total] Russell 1000® published sustainability reports in 2018. Of importance to consider is roughly the top half (by market cap) of companies in the Russell 1000® are…

by Hank Boerner – Chair and Chief Strategist, G&A Institute

A decade ago, two large institutional investors — PGGM Investments and APG Asset Management –and Maastricht University (The Netherlands) launched “GRESB” to try to develop more efficient access to comparable and reliable data related to the ESG performance of their investments.  (GRESB=Global Real Estate Sustainability Benchmark.) 

The initial research for the approach was done by Dr. Nils Kok and Sander Paul van Tongeren.

As the 10-year anniversary is observed in 2019, consider that GRESB data now covers US$4 trillion in real estate and infrastructure value, and the small group of pioneers (there were 10 founding members) is part of a considerable global network of institutional investors, asset owners / managers, and stakeholders including industry partners, ESG service providers and media platforms.

GRESB – Important Benchmark for Real Assets

The GRESB mission is to assess and benchmark the ESG performance of “real assets” (think: real estate and infrastructure) and move toward standardization and validation of such ESG data for consideration by capital market players.

Through the GRESB proces;s, real estate and infrastructure industry players can have vital business intelligence to compare where they stand against peers and develop strategies and action plans to catch up or surpass peers — along with a reliable means of sharing their ESG data with investors.

To give you an idea of how far the concept of the GRESB approach has come, today there are more than 1,000 entities participating in the 2019 real estate assessment and 17 funds and 393 assets participating in the 2019 infrastructure assessment. 

GRESB covers 100,000 assets in total (of which 66,000 are reported at the asset level for the real estate market).

The GRESB annual survey for asset owners can be challenging — but worth doing for the company.  The annual surveys are organized in (7) specific categories with 50 or more questions for responders’ consideration…the results are scores assigned by GRESB. 

A Guidance Document helps responders (such as asset owners / managers) organize their effort to strive for a higher score (“100” is tops; downward scores from there represent percentages).

GRESB real estate assessment is a reporting framework for listed property companies, private property funds, developers and investors that invest directly in real estate.

The GRESB developer assessment focuses on development activities.

GRESB bold name members today include CalPERS, Credit Suisse, BlackRock and Aviva on the investing side; and, CBRE, Brookfield, Centerpoint and Manulife Real Estate on the real estate management roster. (Click here for the Member list)

GRESB is reviewing its 2019 results on a global basis with briefing in world capitals.  There’ll be shared insights on trends and best practices and reflection on “lessons learned” in the first decade of GRESB.

For the meeting near to you, check GRESB events.

Governance & Accountability Institute teamed with GRESB management to produce an introductory webinar – “GRESB in 60 Days:  Tech, Tools & Best Practices to Respond…” 

Here you can find out why these reports matter, and how to get started on the GRESB journey.  Guest speakers include Matt Ellis, Founder of Measurabl (a G&A partner organization); Mark Delisis, at Avalon Bay Communities; Ulrich Scharf of GRESB; and Hank and Lou from G&A Institute. You can tune in here.

Here is information from Measurabl on GRESB.

The G&A Institute team advises and supports several real estate management client organizations.  For more information about our services to the industry, please email info@ga-institute.com.

The Top Story

GRESB expands its ESG coverage of the real assets industry 
Source: GRESB – The Benchmark for Real Assets