Minneapolis, MN, February 3, 2018 – With the publication last week of Larry Fink’s annual letter to CEOs, Magni is heartened to share specific passages that we believe endorse the very essence of our mission and investment philosophy. According to Fink, whose firm manages $6 trillion in assets, “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
Fink’s powerful message is further evidence of the importance of good governance. In Magni’s research, we evaluate both the governance and the social aspects of ESG investing. Our approach is more insightful than a traditional “check-the-box” approach to governance and social issues. In the current ESG environment, most measurement focuses on information that companies are willing to disclose. This rewards companies for generating policies and procedures that relate to governance and social issues, but not their behavior or actual impact. Fink’s comment, “This responsibility goes beyond casting proxy votes at annual meetings – it means investing the time and resources necessary to foster long-term value,” is all about a company’s intent vs behavior.
This is one of the pillars of our investment research – to establish intent vs actual behavior – and that is what differentiates Magni from other research organizations. Transforming this valuable and intuitive insight into a rigorous, repeatable process requires a fresh approach. The fresh approach needs to be holistic and durable, while accomplishing a shift away from disclosures based on company decisions to assessing company impact in the real world. Magni believes good governance enables sustainability. As the letter reads, “…a company’s ability to manage environmental, social, and governance matters demonstrates the leadership and good governance that is so essential to sustainable growth…”. Read the complete letter here.
About Magni Global Asset Management
Magni Global Asset Management LLC is the leader in country-level research on corporate governance. Magni developed the Sustainable Wealth Creation principles, based on widely accepted economic concepts, by assessing the accounting, legal, regulatory, adjudicative, and economic infrastructures of countries to determine if they provide an environment conducive to effective corporate governance. Its extensive database covering more than 17 years contains research on countries across 280 qualitative factors.
Magni’s Corporate Governance Assessment takes the research methods used on good country-level governance and applies that to a best practices model for corporate governance, thus creating the Sustainable Value Creation principles. These principles analyze 316 qualitative factors on each company. Magni goes beyond assessing each company’s relationship with its shareholders and employees; we also assess the relationship with customers, suppliers, competitors, and communities in which the company operates. This approach provides a more complete and holistic analysis of governance that includes the social aspects of ESG investing. The Company Governance products are also available with the addition of religious guidance in the Corporate Governance model, Catholic Values Portfolio and Islamic Stewardship Portfolio.
For more information, please visit www.magniglobal.com or indexes.magni.com, and follow us on Twitter @MagniGlobal.
Brad Hanson, Managing Director
Laura Gideon, Managing Director
Magni Global Asset Management