At Raymond James, we approach ESG research from our core strengths as a research firm, as an industry leader in breadth and depth of stock coverage. Raymond James equity research includes more than 60 equity analysts with an average experience of 15 years on the sell side, each with their own team of research associates who cover well in excess of 1,000 companies across the US, Canada and Europe.
In 2018 the firm added macro, policy and strategy research to overlay the fundamental industry analysts’ perspectives. In early 2020 we officially launched our ESG strategy product, though we would argue that our analysts have been covering many of these issues for years without necessarily labeling them ESG.
In February 2020 we published our seminal ESG report on the Raymond James strategy for ESG investing, an 82-page summary of ESG investing, its opportunities and its pitfalls. From a strategy perspective, we publish monthly reports on key ESG-related news, fund flows, news from regulatory bodies, ratings agencies and frameworks, and a compendium of Raymond James analysts’ research on ESG topics. We host regular ESG panels and webinars that include experts on these issues from representatives of ESG-related organizations like SASB, ESG consultants, corporate ESG management and buy-side portfolio managers.
Since the beginning of 2020, we have hosted eight ESG events at Raymond James conferences and separate webinars externally, which highlight the diversity of thought on these intrinsic ESG issues and how best to disclose, target and achieve goals in each of these pillars. Internally, we also have regular monthly ESG calls to encourage sustainability conversations with our broad network of financial advisers, whose clients are increasingly interested in investing through an ESG lens.
Raymond James research has also published 140 distinct ESG reports since the beginning of last year.
As in all endeavors, our strength as a firm is centered on the experience and expertise of our analysts, who cover such a wide breadth of companies. Most industries under coverage represent the entire supply chain of that industry, and the breadth of research includes coverage of small, mid (SMID) and large-cap companies. Our SMID-cap coverage is what most sets us apart from our peers, and is crucially important for customers searching for ESG-related research.
Our analysts are able to provide sustainability insights on companies that, due to well-known bias in ESG disclosures and ratings, are often less covered or misrated by ESG ratings agencies. In our flagship year, we have seen Raymond James analysts add valuable color on SMID-cap names for ESG investors, even to the point of being able to foresee ESG-ratings upgrades coming in the future.
The S in ESG Fundamental analysis has been the basis for our ESG strategy calls, which are centered on topics most newsworthy at the time. In the fall we published a report on the S in ESG strategy – social issues – following the substantial efforts companies made to adjust the workplace to a global pandemic. Thanks to our strong analyst team, we were able to produce a list of around 75 companies that outperform their peers on the top social issues of the day, especially those laid out by the SASB framework.
Last summer/fall saw the almost complete dominance of the US elections in any discussion on sustainability. We were able to work with our Washington policy team to not only produce expectations for the different potential outcomes of the election, but also to forecast how each outcome would effect ESG policies at corporations, the federal and state governments and across public opinion.
At the end of the year, we combined all of that groundwork and analyst insight to create our ESG Top Picks List, launched in December 2020, which we update monthly. The list includes companies across every sector and all market caps, reflecting the benefits of the Raymond James coverage universe. Since inception, the list has outperformed its benchmark (the Russell 3000) by 2.6 percent.
Our goals for ESG strategy at Raymond James are to continue to provide excellent fundamental analysis around the material issues that investors and issuing companies find most interesting, and are likely to be most impactful in determining long-term shareholder value, which is ultimately the purpose of our research department.
As one of our most recent expert panelists described, ESG products and Wall Street have become much like a potluck dinner where everyone brings their best dish – and we are happy to be the team that brings the dessert.
For more information, please contact Mary Turnbull, managing director for corporate access, at Mary.Turnbull@RaymondJames.com.
