Regnan’s highly qualified, multi-disciplinary research team has a deep understanding of ESG issues, especially those that are material to long term value.
We conduct ‘bottom up’ ESG stock-specific analysis with a financial materiality-lens, making it akin to fundamental stock research. We focus our main efforts on in-depth company analysis rather than the compilation of data.
Our analysts understand that rigorous ESG assessment requires consideration of value drivers at the individual stock level. To assume that ESG risks and opportunities are uniform, even within the same sector, is to ignore individual company settings.
Cutting through ESG 'noise'
Our rigorous and systematic application of a materiality lens allows us to cut through ESG ‘noise’ and focus on what matters to financial performance.
Our proprietary research methodology starts with analysis of a stock’s fundamental value drivers and identifies points of intersection with E, S and G issues. We then assess a company’s approach to managing material ESG risks, to compile our ratings and narrative research products – we do not apply tick boxes.
That means we remain unconvinced that investors are served by an assumption that there is one 'right' way to remunerate executives; that higher than average employee turnover is always a bad sign; or that a GHG emissions profile can meaningfully indicate how a company might be exposed to energy transition risks. Our research reflects the complexity of ESG issues in diverse company settings.
Regnan believes that ESG risks and opportunities are not yet efficiently priced by the market. However, we don't think all ESG research is equally capable of bridging that gap. ESG research that emphasises a normative approach often sheds little light on how these attributes might be usefully integrated into investment decisions - and can be counterproductive for value if it causes corporate resources to be directed toward areas that are not material.
Our core research product covers the S&P/ASX200, comprising environmental, social and corporate governance criteria, with scores and narrative commentary against each criteria as well as overall commentary. We can provide additional coverage for S&P/ASX300 and individual or international stocks, and other asset classes such as property, as part of a tailored solution.
Regnan also offers tailored research products on thematic issues as well as ad hoc assessments, for example of climate risk within a portfolio.
Regnan’s 10+ years of proprietary data has been tested against ASX200 stocks’ share prices, demonstrating a clear link between performance against various ESG metrics and share price performance. Read more →
Regnan also offers research products to support values-based investing, including positive/negative screening for S&P/ASX300 and ‘best of sector’ screens.