What happens when governance goes bad?

On 19 November, it emerged that Carlos Ghosn – chairman and CEO of the Renault-Nissan-Mitsubishi consortium – had been arrested under suspicion of financial misconduct relating to the under-reporting of his compensation and his personal use of company money. Long perceived as a successful and charismatic business leader – a man instrumental in the turnaround of Renault and Nissan in the 1990s and early 2000s – it came as a huge shock to the business community. “Corporate governance and the dangers of leaving too much power unchecked in too few hands are once again in the spotlight,” says François Millet, Lyxor’s Head of ETF and Index Product Development.

自他被捕的消息以来，盖恩被摧毁了日产和三菱汽车董事长。目前，他仍然担任雷诺的董事长兼首席执行官等待更多的清晰度。盖恩否认收费，没有任何证明是对他的。无论如何，日产股票，雷诺SA和三菱电机的股票分别下降了3.4％，4.5％和3.4％，并尚未恢复亏损。¹

这些事件都是意想不到的,但不是完全大学que given they echo the excesses of the Enron era – so what can you do to try to get a more rigorous grip on governance in your portfolio?

Putting the “G” in ESG

随着气候变化的毁灭性影响每天填充媒体网点的新闻，ESG中的“E”往往是最紧密的审查。然而，投资者也要注意治理，这是一个重要的例子。

“If you hold a fund with hundreds – if not thousands – of stocks, you’d be forgiven for not having the time or expertise to carry out a thorough due diligence of each and every one of them based on their ESG metrics,” says Millet. “The good news is that there are experts who have that kind of know-how.” When choosing the strategy underlying its broad ESG ETFs, Lyxor chose to partner with index provider and ESG research specialist, MSCI.

MSCI在收集，清洁和标准化数据上有超过40年的经验。在建立最持续的ESG领导者基准系列中，MSCI的目标是在每个部门中包含具有最高ESG评级的公司，50％的部门代表与广泛的父指数。

At this level already, neither Nissan nor Mitsubishi Motors make the cut for the ESG Leaders indices. They both have an MSCI ESG Rating of CCC – the worst possible ranking. In Nissan’s case, this mainly has to do with weak governance practices, safety, and emission falsifications. Mitsubishi Motors’ score relates to similar issues around poor business ethics, fraud, and a fuel test manipulation controversy.²

Why it’s worth going the extra mile

Here’s where things get interesting. Renault, according to MSCI, scores well in areas like safety and clean tech. So, while not securing the top AAA rating, it still fares relatively well with an A – which is enough for it to feature in European MSCI ESG Leaders indices.²

It is possible to take it further however, and adopt MSCI’s ESGTrendLeaders series. Not only do these benchmarks require a high ESG score, they also take that score’s trend into account. “If a company has improved its ESG score over a one-year period, it is more likely to be included in one of these indices but a downward trend reduces that likelihood,” says Millet.

如上所述，雷诺有一个体面的ESG得分，并在一个阶段被评为AA，但由于“担心主席，卡洛斯·盖恩先生举行的角色潜在利益冲突”，以及与涉及治理做法的其他担忧。其复杂的所有权结构，MSCIdowngraded它在丑闻的新闻之前的评级实际上破裂。²

The key single risk factor identified by MSCI’s ESG research was corporate governance. The downward trend reduced Renault’s overall score, meaning it wasnotpresent in the MSCI ESG Trend Leaders benchmarks tracked by Lyxor’sWorldandEMU ESGETFS。“那不是说使用趋势是一种完美的方法来避免治理不良问题 - 并且总是有一些东西可以穿过网的风险，”小米说。““它可以让你一开始。”

Why choose Lyxor for ESG?

MSCI ESG趋势领导者基准旨在识别今天有强大的ESG型材的公司，以及改善它的能力。这一额外的步骤可以通过考虑其ESG趋势来帮助检测和消除有争议的公司。因此，那些公司致力于改善他们周围的世界，因此更有可能包括在内。MSCI数据显示，奖励ESG势头可能会提高公司性能，而不是排除或只是倾斜加权，以便独自享受高患者的公司。

Lyxor’s MSCI ESG Trend Leaders range is:

• Far reaching: World, EMU, USA and Emerging Markets exposures available¹
• 创新：通过考虑ESG势头以及ESG评级进一步进一步
• Unique: the first and only ETFs in Europe tracking these benchmarks¹

这些策略排除我的公司nvolved in weapons, alcohol, tobacco, gambling, and nuclear power.

Find out how you can stay ahead of the curve with our MSCI ESG Trend Leaders ETFs

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