During 2019 we developed our proprietary tool for ESG analysis, CF THOR. The tool was developed based on the active participation and input from portfolio managers and analysts.
The tool evaluates companies on:
- Talk – Awareness: What is communicated? Policies and processes?
- Walk – Targets/Actions: Does the company have tangible targets and does it disclose the results?
- Quantitative assessment: What is our overall assessment for each area? Takes “soft” factors that are difficult to quantify into consideration
- The goals are insight and understanding - not a perfect or objective analysi
Questions that CF THOR can answer:
- Is it possible to invest in the company?
- How do we believe ESG aspects will affect companies’ future operating profit, balance sheet and cash flow - and thus valuation?
- Are there ESG aspects where we can/should try to exert shareholder influence that could benefit future valuation?
- Does my ESG analysis, along with the financial analysis, affect how much exposure I want to have?
- What follow-up questions/loose ends should I bring up at company meetings?