We explore smaller companies, applying our ESG analytics to uncover value that is often overshadowed by larger companies grabbing the majority of headlines. While comparing scores over the last 30 days, some interesting developments surfaced for smaller companies making strides in ESG
This week, we take a look at smaller cap companies on Amenity ESG Safeguard. By looking at companies with a market cap of $20 B and lower, we capture both small- and mid-cap companies, as well as the lower range of large-cap companies. While comparing scores over the last 30 days, some interesting developments surfaced for smaller companies making strides in ESG.
The Indian automaker recently formed a partnership with their sister company Tata Power. The partnership between the two corporate siblings started back in August of 2020, with Tata Motor’s power purchase agreement from Tata Power. This week, they unveiled a massive solar-powered carport at Tata Motors’ car plant in Pune. The carport features a 6.2 MW solar array that voids 7,000 tons of annual carbon emissions. Its development is part of Tata Motors’ commitment towards net zero carbon by 2039.
Over 50% of the cars sold by Tata in Q4 were electric vehicles and that ratio is only growing. This month, the company released the Tata Nexon EV with a starting MSRP of $18,000, a price point that is intended not only to drive sales, but also help increase the rate of EV adoption on the sub-continent. Over the past month, Tata Motors stock has been up 5.6% and 225% in a 12-month span. With the PPA from Tata Power in place, Tata Motors’ ability to innovate and drive costs down in a market that is still largely dominated by traditional ICE vehicles, demonstrates its status as an attractive player in the EV market.
JLEN is an asset manager focused on renewable infrastructure development and investments. In their earnings call two weeks ago, JLEN discussed the addition of several renewable energy assets to their portfolio; including battery storage and energy from food waste. Founded in 2013, the portfolio includes 36 projects with a 310 MW capacity. The company sees increased commitment from the British government in renewable energy, especially offshore wind as a boon for further development. The company is also involved in solar-integrated and traditional anaerobic digestion, which creates fuel for energy grids from food waste. They specifically mention that their Codford food waste AD asset has a strong contracted revenue stream. Just last week, the company acquired a new biomass plant in Northumberland. JLEN’s share price is down 13.7% in the past 6 months, down from recent highs, although recent actions from their earnings call and government interest in renewables development, suggests a potential upside.
As climate change continues to impact our planet, one industry that is especially vulnerable to the whims of mother nature is ski tourism and lodging. Starting in 2016, Vail Resorts made commitments to reduce emissions significantly by 2025. The company announced it achieved its goal to reduce waste by 50%, and by 2023 will source 93% of its energy needs from renewable sources. The resort group also announced it would raise wages. This week, in an effort to collaborate with others in the sector, Vail became part of the first climate charter for the ski industry along with Alterra, Boyne, and Powdr. The popular mountain resort group is up 18% in the past 3 months.
By using Amenity ESG Safeguard to look at companies that are relatively smaller than the typical juggernauts that dominate the news cycle, we were able to glean overlooked insights in ESG development from a diverse group of companies in different sectors and markets. By using our NLP data to focus on smaller companies, we were able to find information from news and earnings calls that can help analysts make more informed decisions. While not a recipe for short-term success, these developments provide meaningful insights on companies who are setting themselves up for long-term wins by focusing on ESG issues.
Watch a recording of our special guests Jean Rogers, Founder of the Sustainability Accounting Standards Board (SASB) and one of the world’s leading ESG experts, alongside Bruno Bertocci, Managing Director of the Sustainable Equity Investors Team at UBS Asset Management. They discussed why it’s crucial for the analyst community to include next generation ESG data and second-order information as part of an effective investment strategy.
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This communication does not represent investment advice. Transcript text provided by FACTSET and S&P Global Market Intelligence.
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