The Journey Ahead
I’m currently working on approximately 20 drafts. Some of them are new and many are leftovers from the past several years that I’m reheating. Some of this stuff has been sitting on the back of my desk for a long time; I don’t want content I produce to become the proverbial “fish in the microwave in the employee kitchen.”
I want to provide value and a venue to discuss issues that matter most to people looking at how compliance, ethics, science and policy intersects with capital markets. As such, I’ve narrowed down 4 genres of posts that I intend to produce.
I’m introducing my “official” branding and vision for the weeks and months ahead. First off, the logo:
The logo, I think, projects inquisitiveness and curiosity. My background is as an auditor, on both the corporate and government agency side. Green is obviously the internationally recognized color of sustainability. The smokestack is an homage to my graduate thesis in pollution dispersion modeling as well as an obvious surrogate for the environmental externalities of, well, commerce and capitalism.
“What is my Value?”
This is a question all of us should ask ourselves. Not in the dollars per hour sense, but rather: what is it that you really know that others may not? It should be something that people reach out, unprompted, to ask you about.
I have many opinions and thoughts and ideas and I’m not shy about expressing them. Over the years, however, the one constant is that people, from students and hobbyists to journalists and hedge fund managers will send me DMs and emails and texts about a few topics. I think they break down into 3 categories, and as such they’ll represent the majority of article types I hope to produce.
“1. How in the world did you find that?”
Being an auditor requires leveraging resources you have at your fingertips, extrapolating data and being able to cut through BS. But more importantly, it’s knowing where to look.
Of the research and stories I’ve digested over the years, FOIA seems to be the start and end of “getting data from government sources” (FOIA stands for Freedom of Information Act, a US federal law requiring disclosure). Now don’t get me wrong, FOIA is a great tool. But most states have their own laws requiring disclosure of State records, and sometimes an email as simple as “please provide me with document xxx” to the correct agency will get you what you need without dealing with the official FOIA process.
There is so much data out there, though, that is just free and nearly instantly downloadable. Lots of it is from environmental requirements (EPA and related state entities), but there is so much information that is far more revealing than anything gleamed from and 8-k or 10-Q published by public companies. From FDA to USDA to local fire departments and state water use records. There is a whole world of data out there that is sadly used.
“Reading data submitted to Government agencies is the 21st century channel check” - ESG Hound (me), 2021
I intend to publish at least one article per month on a specific technique that can provide value to those burgeoning due diligence investigators out there. These techniques will focus on how to look for, and interpret data to satisfy a specific need.
I got pulled into this twitter thread just this week:
I realized this was specific, actionable and provides someone something of value. They’re begging someone to write about this topic.
I’m working on a post covering this exact topic, out soon.
This is a task I may monetize in the future. Any further requests? Comment below or email me at esg.hound@gmail.com
“2. Is this company out of/in compliance?”
I swore I would avoid activist short selling adjacent behavior. And I intend to keep this promise. No individual trades are made by me these days. I have my money in mutual funds and US Treasuries and I intend to keep it this way.
However, the amount of misrepresentation seen in markets these days, from manufacturing capabilities to the “Greenness” or “Sustainability” of a product or service provides an avenue to take a closer look at these topics. I intend to provide research on specific companies on a sporadic basis. This topic will likely remain free, however, I am always open to private requests to do research. Think of it as a risk assessment, not a short selling thesis.
“3. How in the world would you even benchmark an ESG company?”
Or more specifically “How would someone determine if this (policy, company, product) is good or bad?”
I’m announcing a long term project.
There is much much more to come, but I intend to build a model to benchmark companies in the most ESG contentious field: Oil and Gas. Avoiding all energy investments might be ok for some ESG-slanted managers an allocators, but I don’t think that’s intellectually honest as a broad policy. Fossil fuels are here to stay for the next several decades, and perhaps until the heat death of the universe. Society cannot continue to function if they just get turned off. If we’re going to allocate capital to this activity, and we want to see ESG as something actionable and real, instead of cynical marketing, we need better methods.
All commercially available methods to benchmark, say, Chevron vs Exxon from an ESG perspective are (and let’s stay mature and sober here) woefully lacking. There’s a better way to do this. And I’m going to blog my way through the process.
Heck, S&P may just buy my model when I’m done. This will be free content until the end.
Thanks for reading
I’ve already gotten such warm and helpful feedback so far. Keep it coming. Feedback indicates people like reading about the philosophy behind “ethical capitalism” so I’ll also continue to muse on these topic. At least once week.
As always, hugs and kisses,
Eric