Being Intentional
Motive RealScore Updates (07/03/21)
Welcome, everyone! Thanks for reading Being Intentional. If you’re celebrating Independence Day this weekend we hope you have a safe and happy holiday.
We’d like to start off this newsletter with something interesting that happened this week in the ESG and Sustainability world. There are many interesting things happening in this space right now but this piece of news stood out to us.
Neiman Marcus announced that they were going fur-free in a June 30th, 2021 press release titled, “Neiman Marcus Group Goes Fur-Free as Part of Its Forthcoming ESG Strategy. This is great news for people who care about animal welfare issues, but this one announcement, and its title, manages to encapsulate the powerful forces at work today in the Sustainability and ESG world and it’s worth taking a minute to break it apart.
It’s clear that this decision was made because consumer demand for fur products has plummeted almost 300% in the past 10 years in the United States. The Dallas-based retailer no longer sees fur sales as a fruitful source of income so it is shuttering the practice. People have voted with their wallets and fur sales are out at Neiman Marcus!
Neiman Marcus released the news within a broader announcement of their “forthcoming ESG strategy.” In the release, Neiman Marcus states, “Neiman Marcus recently created a team to identify, improve, and disclose performance on material ESG issues across its business, including topics like animal welfare.” This is part of a much larger macro trend of companies investing in ESG and Sustainability programs and reporting. In this particular case, Neiman Marcus is also using their ESG strategy as a marketing strategy which is clever and will increasingly become the norm.
But wait, Neiman Marcus isn’t public. Why are they investing in ESG and sustainability? That’s right, Neiman Marcus is owned in equal parts by Ares Management (RS: -37) and the Canada Pension Plan Investment Board, and therefore not public (Motive does not have a RealScore for Neiman Marcus because of this). However, these two owners are public and so accountability is being pushed down the value chain. If you dig a little deeper you’ll see in the CPP Board’s “Report on Sustainability Investing - 2020” they have introduced a new section specifically detailing their expectations for their portfolio companies regarding ESG.
Shifting consumer behavior within the retail sector and shifting investor sentiment have motivated Neiman Marcus to take action. This is a cycle that’s being repeated across the industry so expect to hear a lot more stories just like this. Also, expect to see ESG and Sustainability increasingly used as a marketing tool—but trust that Motive will always be there to cut the spin from the truth. This is the new world that brands find themselves in and we think it will only help make the world a better place.
Exxon has been in the news this week for all the wrong reasons. In a secretly recorded video, a lobbyist for the company spoke candidly about Exxon’s approach to climate change, which came as no surprise to many. However, since gas-powered vehicles still dominate U.S. roads (89%), and with most July 4th travel plans already underway, we wanted to see how the oil & gas companies actually faired. Are some gas companies better than others? Is it a lost cause or can you vote with your wallet at the pump? It turns out the answers are yes, and yes.
In this article, Financial Services firm MorningStar details some of the gas companies at the top of the pack. As the article points out a vast majority of the emissions from integrated oil come from scope 3 emissions (upstream and downstream emissions that are difficult for a company to control) but the firms seem to understand the business value of trying to address scope 3 emissions.
According to our data, the industry as a whole has an average RealScore of 11.18 with Amplify Energy (RS: -43) Falcon Minerals (RS: -43) tied for the worst of the bunch putting both in the bottom 99th percentile. Conversely, Portugal-based Galp Energia comes in at the top with a RealScore of 39 (RS: 39) putting it in the top 99th percentile. As we said, it’s a wide range.
Our RealScore values for the top integrated oil firms range drastically from extremely poor to good (top 10 sorted below from high to low)
Petro-Canada (RS: 20)
Suncor (RS: 20)
Repsol (RS: 16)
BP (RS: 9)
Amoco (RS: 9)
Castrol (RS: 9)
Exxonmobil (RS: 8)
Texaco (RS: 3)
Chevron (RS: 3)
Shell (RS: 3)
When we take a look at the numbers by issues you can see that almost all of them have low Climate Action scores. This isn’t surprising…but it’s worth noting that even within this theme there are winners and losers. However, when we look at the other issues, such as Employment Standards and Human Rights, we see really wide swings showing that some of these companies are prioritizing these issues while others are dropping the ball. Dependent upon the issues you care about, there may very well be a ‘better’ oil and gas company for you.
These past 2 weeks have been spent addressing a number of behind-the-scenes issues. While these things aren’t nearly as exciting as customer-facing updates they lay the groundwork for new features and products that are in the works, such as:
Our first crack at personalization. Meaning, the ability to have the scores tailored to the things you care about.
Category search. Currently, we only support brand name search. In the very near term, we will be enabling the ability to search by category.
Additional result page elements include contextual information about brands, including yearly revenue, and key employment figures.
As always we’d love your feedback about things you’d like to see on www.askmotive.com. Leave us a note in the feedback form found on any page at askmotive.com or DM us on Twitter @askmotive.com.
Our Blog:
We Are Not Powerless (click here to read )
It’s easy to feel powerless when you think of your individual actions versus large companies, or bureaucratic government agencies. What power do you really have, anyway? Taylor has a great line that is worth repeating, “We forget that we are the companies and the governments. It is all just us, we are everything.”
When 'Better' is Better than 'Best' (click here to read )
Strive to make incremental progress. Don’t stress about not being perfect. Too often we apply “purity tests” to ourselves and then get frustrated when we fail to meet our own false expectations. Better is progress, and that’s what we’re all after.
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Green Mutual Funds?