ESG Investing: Skepticism and Cutting Through the Noise
The Investing News Network caught up with analysts and experts to get more insight on ESG investing today and how to cut through the noise.
The post ESG Investing: Skepticism and Cutting Through the Noise appeared first on Investing News Network.
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Investing using an environmental, social and governance (ESG) approach is becoming increasingly popular among investors.
ESG risk ratings can be helpful when selecting companies to invest in, but it can be difficult to assess how well companies are actually doing at meeting ESG standards.
To find out how investors can cut through the noise when looking at ESG credentials and what steps to take when starting to use this strategy, the Investing News Network (INN) spoke to analysts and experts to get more insight on ESG investing today.
Using an ESG approach when investing
Even though it might seem like the term ESG is everywhere these days, it was coined back in 2004 and its roots can be traced back to the 1960s.
“ESG is not something new,” Federico Gay of Refinitv told INN.
“It’s been around for about 20 years, at least on the mining front, but there’s been a lot of pressure, especially lately, for trying to understand what’s the real effect on mining,” he said. “And within that learning process, companies have been changing their reporting style as well, and how they report metrics.”
In the past year, Mark Hays, director of sustainable and impact investing at Glenmede, has seen COVID-19 and social justice movements amplify the level of interest and focus on social factors in investment analysis.
“This focus has increased investor focus on company disclosures on areas such as dependent care, workforce safety and diversity and inclusion policies,” he said.
Glenmede, which has been formally building portfolios with an ESG lens since 2001, focuses on ESG issues it believes are financially material and can drive sustainability or impact outcomes.
“The most critical aspects for an individual company vary by a company’s sector and business focus, based on what we believe are the most financially material to corporate financial performance and outcome orientation going forward,” Hays said.
While Glenmede sees both strong and weak ESG actors across sectors, on average technology companies have tended to lead the charge, particularly on environmental and social issues.
“Industrials companies have historically tended to lag from an ESG standpoint, although we’ve seen significant improvements and strides, with many bringing a greater focus to these issues going forward,” Hays said.
On the mining front, Gay said investors are demanding more details every year, and companies are responding well to this requirement.
“Although plenty of metrics are currently available, in my view we are still very ’emission-centric,’ while there are several other important metrics that should be also considered,” he said. “We should amplify our scope on what ESG is. ESG is not only carbon emissions, there are a lot of other metrics and pillars that we need to focus on.”
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Skepticism about ESG investing still around
While ESG is a concept that is relatively new to many, the issues addressed by the variables it covers are well known to investors. However, some still cast doubts about how an ESG strategy can improve portfolio performance.
Generally speaking, Hays said, skepticism remains rooted in a perception that there is an element of sacrificing returns. That’s due to the fact that for much of the 20th century, the utilization of ESG in portfolios was built around excluding specific sectors ― such as fossil fuel or weapons, for example ― from an investor’s portfolio.
“However, over the past decade, this space has evolved due to an explosion of ESG data availability, giving investors a wider set of approaches to utilize, and yielding an increasing amount of academic studies that point to not giving up, or a positive effect on returns from doing so,” he added.
Speaking with INN about ESG investing, Leslie Samuelrich, president of Green Century Capital Management, said some of the skepticism that remains is inertia ― the fact that investments have always been done in a certain way.
“Some of it is also outdated notions (from financial advisors — they just don’t know the current data, both about how ESG ratings may help performance, but also about what their clients want,” she said.
For his part, Gay said confusion around ESG from investors and stakeholders could come from trying to compare different metrics for different companies.
“One tends to compare direct metrics,” he said. “So if last year I produced X amount of carbon emissions, and this year I produce X plus one, (investors should also look at) maybe my production increased from 7 percent to 10 percent and I actually proved to be more efficient.”
Another misconception when it comes to ESG metrics is to compare different processes, Gay said, giving the example of how within base metals the mining process for copper is different to nickel.
“So I think the best way to compare the industry is metal by metal,” Gay added.
That said, for the analyst, currently, some metrics lack a “common ground.”
“When looking at raw data, the differences between the different commodities are noticeable at plain sight,” he said. “The biggest challenge is, probably, to adapt to the year-on-year changes in the reporting style and metrics availability.”
Suggestions for investors new to ESG
Looking ahead, Glenmede’s Hays sees significant growth for sustainable and impact investing, given two converging trends.
“One, we see pronounced interest, particularly from Millennials and Generation X, to align their capital with strong ESG companies. Both generations (are) set to inherit significant wealth going forward,” he said. “Second, we see continued strong evidence academically and in practice that aligning ESG with values does not necessitate a sacrifice of returns, and in some cases can result in outperformance.”
Giving his best suggestion to investors new to using this strategy, Hays said to focus on intentionality and outcomes.
“Investment strategies should be assessed based not only on the point-in-time ESG quality of their holdings, but also on the intentionality of their process,” he said. “Investing with a strategy with DNA built into the core of their process will result in a more consistent and repeatable set of ESG and impact outcomes over time.”
For Samuelrich, ESG is just one part of how people can invest responsibly ― and it’s usually the first step.
“The way that best aligns with people’s values is if they also screen out certain sectors or certain industries,” she added.
Boston-based Green Century Capital Management uses ESG ratings as one part of how it selects companies for its three mutual funds. Since 1991, the firm has used ESG to invest in companies leading their sector.
“ESG is one tool,” Samuelrich said. “It does not mean that your portfolio is making a demonstrable impact in the world. It’s more about the performance of your portfolio.”
If investors are looking to have a moral alignment in their portfolios, they need to do screening, and to have an impact, investors need to do shareholder engagement, which are layers on top of ESG ratings, she added.
Samuelrich suggested that those new to using this approach should figure out what issues they care about the most.
“Then I would have them look for a mutual fund that excludes those kinds of companies they are most worried about, and also uses ESG ratings for the rest of the companies that are held,” she said. “I would always steer people into mutual funds or exchange-traded funds, rather than individual stock picking, because that takes more time and expertise.”
For investors interested in using this approach, INN looked at ETFs and mining stocks with high ESG ratings to consider.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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The post ESG Investing: Skepticism and Cutting Through the Noise appeared first on Investing News Network.
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Government
Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records
Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records
Federal police in Brazil have indicted former President Jair…
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Federal police in Brazil have indicted former President Jair Bolsonaro for falsifying his Covid-19 vaccine card in order to travel to the United States and elsewhere during the pandemic.
Federal prosecutors will review the indictment and decide whether to pursue the case - which would be the first time the former president has faced criminal charges.
According to the indictment, Bolsonaro ordered a top deputy to obtain falsified Covid-19 vaccine records of himself and his 13-year-old daughter in late 2022, right before he flew to Florida for a three-month stay following his election loss.
Brazilian police are also waiting to hear back from the US DOJ on whether Bolsonaro used said cards to enter the United States, which would open him up to further criminal charges, the NY Times reports.
Bolsonaro has repeatedly claimed not to have received the Covid-19 vaccine, but denies any involvement in a plan to falsify his vaccination records. A previous investigation by Brazil's comptroller general concluded that Bolsonaro's vaccination records were false.
The records show that Bolsonaro, a COVID-19 skeptic who publicly opposed the vaccine, received a dose of the immunizer in a public healthcare center in Sao Paulo in July 2021. [ZH: hilarious, Reuters calling the vaccine an 'immunizer.']
The investigation concluded, however, that the former president had left the city the previous day and didn't leave Brasilia until three days later, according to a statement.
The nurse listed in the records as having applied the vaccine on Bolsonaro denied doing so and was no longer working at the center. The listed vaccine lot was also not available on that date, the comptroller general's office said. -Reuters
"It's a selective investigation. I'm calm, I don't owe anything," Bolsonaro told Reuters. "The world knows that I didn't take the vaccine."
During the pandemic, Bolsonaro panned the vaccine - and instead insisted on alternative treatments such as Ivermectin, which has antiviral properties against Covid-19. For this, he was investigated by Brazil's congress, which recommended that the former president be charged with "crimes against humanity," among other things, for his actions during the pandemic.
In May, Brazilian police raided Bolsonaro's home, confiscating his cell phone and arresting one of his closest aides and two of his security cards in connection to the vaccine record investigation.
Brazil's electoral court ruled that Bolsonaro can't run for public office until 2030 after he suggested that the country's voting system was rigged. For that, he has to sit out the 2026 election.
Spread & Containment
TJ Maxx and Marshalls follow Costco and Target on upcoming closures
Many of these stores have information customers need to know.
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U.S. consumers have come to increasingly rely on the near ubiquity of convenience stores and big-box retailers.
Many of us depend on these stores being open practically all day, every day, even during some of the biggest holidays. After all, Black Friday beckons retail stores to open just hours after a Thanksgiving Day dinner in hopes of attracting huge crowds of shoppers in search of early holiday sales.
Related: Walmart announces more store closures for 2024
And it's largely true that before the covid pandemic most of our favorite stores were open all the time. Practically nothing — from inclement weather to bad news to holidays — could shut down a major operation like Walmart (WMT) or Target (TGT) .
Then the pandemic hit, and it turned everything we thought we knew about retail operations upside down.
Everything from grocery stores to shopping malls shut down in an effort to contain potential spread. And when they finally reopened to the public, different stores took different precautionary measures. Some monitored how many shoppers were inside at once, while others implemented foot-traffic rules dictating where one could enter and exit an aisle. And almost every one of them mandated wearing masks at one point or another.
Though these safety measures seem like a distant memory, one relic from the early 2020s remains firmly a part of our new American retail life.
Store closures announced for spring 2024
Many retailers have learned to adapt after a volatile start to this third decade, and in many ways this requires serving customers better and treating employees better to retain a workforce.
In some cases, the changes also reflect a change in shopping behavior, as more customers order online and leave more breathing room for brick-and-mortar operations. This also means more time for employees.
Thanks to this, big retailers have recently changed how they operate, especially during holiday hours, with Walmart recently saying it would close during Thanksgiving to give employees more time to spend with loved ones.
"I am delighted to share that once again, we'll be closing our doors for Thanksgiving this year," Walmart U.S. CEO John Furner told associates in a video posted to Twitter in November. "Thanksgiving is such a special day during a very busy season. We want you to spend that day at home with family and loved ones."
Other retailers have now followed suit, with Costco (COST) , Aldi, and Target all saying they would close their doors for 24 hours on Easter Sunday, March 31.
Now, the stores that operate under TJX Cos. (TJX) will also shut down during the holiday, including HomeGoods, TJ Maxx and Marshalls.
Though it closed on Thanksgiving, Walmart says it will remain open for shoppers on Easter.
Here's a list of stores that are closing for Easter 2024:
- Target
- Costco
- Aldi
- TJ Maxx
- Marshalls
- HomeGoods
- Publix
- Macy's
- Best Buy
- Apple
- ACE Hardware
Others are expected to remain open, including:
- Walmart
- Ikea
- Petco
- Home Depot
Most of the stores closing on Sunday will reopen for regular business hours on Monday.
spread pandemicInternational
This gambling tech stock is future-proofing the world’s casinos
Supported by the universal thrill of a quick payout and the need for leisure, gambling stocks make a compelling case for long-term returns.
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Supported by the universal human thrill of a quick payout, and the need for leisure and entertainment to bring enjoyment to adult life, casinos will remain essential spaces for people to dream and play for the foreseeable future, making gambling stocks a prospective space to look for long-term returns.
According to Research and Markets, the global casino industry was valued at US$157.5 billion in 2022, and it will grow to US$224.1 billion by 2030 at a compound annual growth rate of 4.5 per cent. This trend includes:
Approximately 100 million gamblers in the United States, who generated US$66.5 billion in revenue in 2023, a 10 per cent gain from 2022, which itself was a record year A little fewer than 20 million gamblers in Canada, who generated about C$15 billion in revenue in 2023 A global addressable market of thousands of casinos, and more than 4.2 billion people who gamble at least once every year, according to a 2016 study by Casino.orgThe main challenge with attracting these billions through casino doors is they sway heavily toward middle age. The mean age of U.S. casino visitors has hovered around 50 for the past decade, with a similar trend across the world, forcing casinos to attract younger, tech-savvy customers, many with less gambling experience, to continue growing profits for their stakeholders over the long term.
Investors seeking exposure to a leadership position in building the bridge between casinos and the next generation of gamblers should evaluate Jackpot Digital (TSXV:JJ). The Vancouver-based company is a manufacturer of dealerless electronic table games that deliver immersive experiences tailored to the digital age, while earning casinos attractive returns on investment.
The gambling technology stock benefits from no direct competition in the dealerless poker space, with orders spanning North America, Europe, Asia, Africa and the Caribbean, a long-established presence with major cruise ship brands, such as Carnival, Princess Cruises and Holland America, and a growing land-based presence with orders or ongoing installations across 12 U.S. states. Its highlight partnership to date is a master services agreement with Penn Entertainment, the country’s largest regional gaming operator with 43 properties across 20 states.
Jackpot Digital’s differentiated technology and well-rounded management team are at the heart of its success in landing several blue-chip casino gaming companies as customers.
Jackpot BlitzThe gambling technology stock’s flagship product, Jackpot Blitz, is a dealerless poker table featuring three of the world’s most popular variations – Texas Hold’ em, Omaha, and Five-Card-Omaha – brought to life through slick 4k graphics on a 75-inch touchscreen, and offered in three formats – pot-limit, no-limit and fixed-limit – designed to attract a diversity of revenue from casual to experienced players.
Spokesperson and NFL championship-winning coach Jimmy Johnson explains the benefits of the Jackpot Blitz. Source: Jackpot Digital.The table also comes equipped with house-banked mini-games, including blackjack, baccarat and video poker, as well as side bets on the main poker game, such as Bet the Flop, all of which keep players engaged and entertained between, and even during, poker hands. The stunning Jackpot Blitz machine also offers multi-venue “Bad Beat” jackpot functionality, allowing casinos to offer a “Poker Powerball” with massive Jackpots, further enhancing the attractiveness of Jackpot Blitz to new players.
It’s by striking a balance between the needs of the modern gambler, and efficiency and profitability that in-person operators couldn’t hope to match – unless they ordered the machine for themselves – that Jackpot Digital has earned itself the top spot in dealerless poker.
Player benefitsWhen a veteran or novice gambler takes a seat at the Jackpot Blitz, his or her experience begins with an easy-to-use interface, laid out in a modern and stylish design, programmed to respond to hand gestures that bring real casino play into the digital age, including card bending and chip jingling.
Source: Jackpot Digital.The table’s intuitive controls, combined with instant payouts and its dealerless nature, translate into faster game play, which maximizes playing time and player excitement, while minimizing human error and the intimidation new gamblers might feel about approaching an analog poker table. The gambling technology stock’s in-house development team is also constantly working on new games to keep content fresh, with a special focus on bringing international games and regional versions of poker to casino audiences in Asia, South America and the Indian subcontinent.
As hands are laid down and pots pile up, players can also track game stats in real time, which inform future strategy and enhance the thrill of the moment with an added element of competition.
Operator benefitsFrom an operator’s perspective, a floor of automated gaming tables can meaningfully and instantly reduce casino staff expenditures and management pain points, while avoiding wage inflation, labour shortages and supply costs.
The Blitz is no slouch on revenue either, dealing more hands per hour, resulting in higher revenue and higher profitability, which is further enhanced by onboard side bets and mini-games that can be played while players are engaged in a poker hand.
The Jackpot Blitz’s economics are attractive to operators thanks to its ability to accommodate non-stop play, while monetizing downtime through side games and bets. While a human dealer must spend time shuffling, interacting with players, and consulting with colleagues, the Jackpot Blitz can accept wagers 100 per cent of the time, making sure gamblers get the action they came for and operators see a return on their investment.
Source: Jackpot Digital.
Beyond gaming revenue, casinos are further incentivized to onboard the Jackpot Blitz because of its fully customizable advertising functions, including logos, card backs, chips and felt colors, all of which bolster casino culture and enable the pursuit of revenue from third-party advertising partners.
The Blitz ties its value proposition together by generating automatic reports – including demographics and consumer behaviour through a rewards card system – and plugging directly into most back-end management systems, saving casinos the hassle of manual tracking, while also minimizing tampering, money-laundering and theft through the use of isolated servers.
Whether it’s streamlining the player experience or putting automation at the service of operators’ bottom lines, Jackpot Digital’s flagship product is positioned to create value, and plenty of it.
Jackpot Digital’s path to profitabilityAfter existing as an exclusively cruise-ship-based operation since 2015, Jackpot Digital suffered a steep decline in revenue during the COVID pandemic, falling from C$2.18 million in 2019 to C$0.42 million in 2021.
Management quickly pivoted in the face of uncertainty, redesigning the Blitz to execute on a land-based expansion strategy – backed by Gaming Labs International certification in fall 2023 – which is bringing about a successful turnaround after the re-emergence of the casino business. Revenue more than tripled to C$1.43 million in 2022, and reached C$1.57 million through three quarters of 2023, with the company expecting to ramp up significant recurring revenue after it installs several dozen machines currently in its backlog.
The Jackpot Blitz electronic gaming table in action. Source: Jackpot Digital.
The first installation of land-ready Jackpot Blitz machines is now completed at the Jackson Rancheria Casino in California, as the company announced today. The three-machine installation marks a new era of growth for the company, having announced 25 Blitz deals since November 2021 (slide 12), with many more across Canada and the United States in the works, in addition to a strong pipeline in Asia and Europe.
“Jackpot Digital could be a profitable company right now if it only focused on care and maintenance of the revenues it currently generates. But that’s not why we’re here,” Mathieu McDonald, Vice President of Corporate Development at Jackpot Digital, said in a recent interview with Stockhouse. “We intend to scale up to many multiples of the tables we have out right now, with the potential for up to 2,000 tables over the next three to five years.”
According to McDonald, the company is fielding three to five inquiries per week about the Blitz from casinos around the world that recognize the machines’ first-mover advantage in dealerless poker and potential expansion into other games in need of automation.
Jackpot Digital’s ambitious plan of action is supported by a management team of proven gambling, finance, advertising and legal professionals, many of which have been serving Jackpot stakeholders for more than two decades.
A long-tenured management teamThe management team behind Jackpot Digital is led by Jake Kalpakian, who has served as president and chief executive officer since 1999, including under the gambling technology stock’s former incarnation as Las Vegas From Home.com Entertainment Inc. Kalpakian brings more than 30 years of experience managing small-cap publicly listed companies, granting him a steady hand when it comes to maneuvering through the volatility of the economic cycle.
Kalpakian’s efforts are supported by three directors whose well-rounded expertise positions Jackpot Digital for long-term sustainable growth:
Gregory T. McFarlane, a director at Jackpot Digital since 1999, previously ran an independent advertising firm and holds a degree in mathematics from the University of Toronto. McFarlane is also a co-founder of the popular Control Your Cash personal finance website. Chief financial officer Neil Spellman, a director at the company since 2002, boasts an almost two-decade track record as vice president at Wall Street firm Smith Barney, where he developed a multi-industry understanding of the journey to profitability. Finally, Alan Artunian, a director since 2017, currently serves as CEO of Nice Guy Holdings, a corporate and legal consulting company advising clients across a diversity of sectors.Guided by a strategic management team, and benefiting from a macro-trend toward casino automation, Jackpot Digital is on course to ride a wave of millions of gamblers looking for an elegant, tech-informed alternative to traditional in-person play.
A multi-bagger opportunityThe Jackpot Digital opportunity sets up savvy investors who recognize the soundness of the company’s value proposition. The tremendous risk/reward value of Jackpot Digital gives investors the opportunity to ride the macro-trend toward casino automation, as deals for the Blitz keep pouring in, the company adds games to its portfolio, and the global casino industry adds hundreds of billions in revenue through this decade.
Join the discussion: Find out what everybody’s saying about this gambling technology stock on the Jackpot Digital Bullboard.
This is sponsored content issued on behalf of Jackpot Digital, please see full disclaimer here.
The post This gambling tech stock is future-proofing the world’s casinos appeared first on The Market Online Canada.
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