Rockefeller Asset Management and Casey Clark (MBA ‘17) Win PRI Award for ESG Incorporation Initiative of the Year

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Rockefeller Asset Management (RAM) was recently awarded the 2021 PRI Award for ESG incorporation initiative of the year. RAM’s project, “ESG Improvers - an alpha enhancing factor,” found that the market overemphasizes ESG leaders while undervaluing ESG Improvers, companies who are improving their ESG footprint. 

The ESG team at RAM, led by Stern alumnus Casey Clark, CFA (MBA ‘17), constructed the Rockefeller’s ESG Improvers Score (REIS) to calculate a firm’s ESG trajectory . According to RAM’s website, “The REIS is a proprietary score that ranks a company’s improvement in performance on material ESG issues relative to peers.” 

Using the REIS, Clark and his team found that ESG Improvers outperformed bottom-quintile ESG “Decliners” by 3.8% annualized and that improving ESG practices have the potential to increase brand value, enhance customer and employee loyalty, reduce cost, and create long-term competitive advantages.

“We believe that investors will increasingly differentiate between ESG Leaders and Improvers,” said Clark, adding that Improvers offer a greater potential for generating uncorrelated alpha over the long term.

REIS has a number of applications for investors, and the ESG team at RAM has plans on improving the methodology, including exploring the implications of combining REIS with decarbonisation and 2°-aligned strategies.