Content area
Full Text
The public company's intangibles (or non-financials) are, for a growing number of investment institutions, directly tied to the tangibles (the traditional financials in corporate reporting).
Investopedia defines intangible assets as "not physical in nature," and they can include a wide range of issues, topics, and categories of assets that are not an integral part of the traditional financial reports. Consider a wide range of intellectual property, goodwill, and important brand recognitions - "while intangible assets don't have the obvious physical value of a factory or equipment, [they] can prove very valuable for a firm and critical to its long-term success or failure..."1
For more than a decade, we have been commenting on certain types of intangibles in the pages of this magazine. The intangibles in focus have been factors in determining corporate reputation, defining risk management practices, and influencing share valuation.
Our shared perspectives have included examination of developments in effective corporate governance policies and practices; companies' expanded disclosure regimes and structured reporting on sustainability and responsibility strategies, programs, and achievements; and the corporate and investment communities' views on environmental, social, and corporate governance (ESG) performance.
Capital market players are increasingly considering the company's ESG in their investment decision-making. (The approach is to consider a company's performance in environmental management, including energy issues, social or societal issues, and corporate governance practices and policies.)
We began our comments in these pages well beyond a decade ago as Sarbanes-Oxley legislation was being signed into law in summer 2002. The expanded considerations of governance for companies in portfolio (or for consideration) were accelerated and accompanied by a rapid adopt ion of ESG investment approaches. Progress was steady and then accelerated after the 2008 market crisis. Over the past decade, asset owners, their internal and external managers, and financial analysts have been expanding the body of work that affects corporate reputations and valuations, including opinions, rankings, scores, and ratings for public company performance.
We've provided numerous examples of this in prior commentaries in magazine issues back to March 2002. To demonstrate the breadth and depth of what is happening as the trend toward adopt ion of ESG investing approaches accelerates, we present the following scan of the sustainable investment landscape.
Putting the size of sustainable investing in context
...