As part of this author’s research on the Principles for Responsible Investment , the concept of ESG consideration has been analysed in relation to its importance to development of more forward-looking and sustainable investment practices. In this post, we will look at whether Environmental, Social, and Governance’ (ESG) principles are followed in full, or whether there is still some resistance to incorporating all of the concept. There is a suggestion that only certain elements are ‘material’, but recent news suggests that it is sometimes, or even often, unwise to separate the three components. In reviewing the two particular reports generated by the PRI concerning the impact of ESG on credit analysis (the first one is available here , and the second here ), it quickly becomes apparent that, for the Credit rating agencies (CRAs), the concept of ‘G’overnance is the most material aspect. Yet, the CRAs make a point of the Volkswagen emissions scandal to demonstrate where the diff...

Today’s post reacts to the news that PricewaterhouseCoopers (PwC) has been fined a record amount by a US Court in Alabama over its role in the collapse of Colonial Bank. The reaction to the news, and what it may mean for other regulators (who are currently in the limelight for their soft-touch approach) will be discussed in this post, with the sentiment being that this action is just a step in the right direction, but nothing more (for a number of reasons). Colonial Bank collapsed in 2009 , after buying over $1 billion’s worth of fraudulent mortgages from Taylor, Bean & Whitaker, the former Mortgage-originator which also collapsed in 2009 and saw a number of its executives jailed for fraud . The collapse of Colonial, which is one of the largest in the state of Alabama , has been the subject of a number of trials and investigations, with the most recent concerning the performance of auditors who were tasked with assessing the workings of the bank. Yet, in the overarching sto...