Business Pants – 2022-11-30

Should have coffee for this. Hello. Yeah, live. From your ESG 2.0 version D subsection minus 4. It's a woke data Wednesday. Woo. Butler. I love woke Wednesdays. here at the ESG stuffing Farm That's old. That's old. That's old. That's last. Join is always by our BS course, burnout. Miss cardi I am. Doesn't matter who I am. And today's ESG line. One point five percent for profit Netflix. Watching throw blanket called November 30th 2022. A lot. I make fun of stuff through nuts. So clever ESG, listicles. I love that. I mean, let's be real. I'm good at making fun of stuff, but I'm not really good at being clever. That's why I don't get any calls from glasses. As soon as gloss, Lewis calls me. I'm leaving the company. But still they've never called they're not, they're not only if they never called you, they have zero interest in the things that come out of our mouths. It's not true. We have a visit from our very own Cuckoo tickle Town. Well, I don't know what's going on there. The car Carlson apparently Tucker, Tulsa. She took her name. He's just he's, yeah, he's getting. He's getting a little bit more absurd. This was terrifying. Sponsor. Oh, that's like a golf club for user doing that. Today's episode is sponsored by skde, your ESG data solution. Which is the perfect segue to this and Matt. Yeah. I love Segways. I'm gonna, I'm gonna tell everyone listening. This one's not on map this section. Matt actually interacts with people in the ESG world and I'm proud of him for that. So this is all me. so, if if you happen to work at one of these companies, Don't blame Matt. Yeah, and I don't even really work here. I'm a contracter. I look at ourselves. If we can't laugh at ourselves. And what's the point? So yeah, we'll start at the top actually. Okay, so let's start with us. Matt. The this, this these companies come from something called the TBL, I better World prize. Yeah, we're up for that baby. Go go vote, go vote for free flow and board saber metrics for the TV lie. Better World prize, just look at those Choice Award for best ESG measurement system. Yeah, this is a real thing. This is a real thing. And we are really up for it, we really did this morning. This is true. This is true. This is all true. There are a lot of people up for this prize so we need votes. And I think what you're going to do is talk about some of the people who are up for this prize. So Matt sent me a list of all the companies involved and I selected, I only wrote down the ones that made me laugh. and you see, These are like, what are we even called these? Did you like, this is like the indie film of the ESG world, right? This is like Kevin Smith. This is like clerks the old reference, but That's really old. Well, these are all that way because reprisk presented, that's true. ESG book, which is arabesque. And first let's just make fun of us. How about this? How about free flow? What the hell's free flowed? Well board, saber metrics does sound boring. It's what is all what is that? It's really, I don't know who in our marketing department was like that's what you should go with. We appeal to like seven guys named Larry who live at the parents house and watch baseball. A first name that made me laugh. Doesn't make me laugh. This is the name covalence. It's like this you know is that like a trigonometry thing? The covalent. What are we doing here, covalent? All Right, Moving On. Paragon plus impact. Oh, the Paragon. What is that? I don't get that one either. Is that like you add plus impact to your? Can you add a plus impact to anything that you do then? Can you just do you like Yes, I think that's. I think we all detergent plus impact. Yeah, whatever company you Endeavor to run. I hope it has some level of impact even if it's just feeding your family. I think that's a positive impact. Yeah. Yeah, sure. Okay. Do we have to put the plus impact on her on it. So to make speaking plus next one, this is one it's called a future plus but the t is spelled is the plus sign future Plus in the t is a, how come we didn't think of that kind of nonsense. We did not use any like, mathematical things in Boardman we could have done boards. They were metrics board with a zero we could have made the a like a percent sign or something. We didn't do it though. Well I I gotta tell that's one of the reasons why I did pick covalence because the the a looks like an upside down V. I thought that was clever. Anyway. Next one. ESG par. that's, Not, that's not what you cars. Average cars. Like we like you went from Paragon plus impact, which is the top the Paragon. Yeah. To Par like each, you're leaning into we are average. I mean, look, someone's got to be it and they got ESG in the name. And that's the point that this is why I love our sponsor s gauge because when the Great Paul Hartson told me it's not ESG gauge. It's not just guess gauge. I was like yeah. Wow. That's brilliant. Yeah. The first company ever heard of it used to those letters like that. Phonetically. Yeah. They actually saw them out because ESG spells, that's good. How about this one ESG, playbooks simplified sustainability reporting. I think when it's that long, it's you've already, you're jumped the shark on Sunday bus just called The Playbook, right? Like, but that does make me think of like Bill Belichick on the sidelines, calling a play, right? So is that maybe that's a good one? Yeah. But yes you book, what's that ESG book? How does that strike you that one their big firm and I don't get that I don't know why they went with that because it's just a book you just read. It's just read all day long. It's we just read stuff. That's what we do stuff. How about this is a good one. Responsible Alpha ESG integration. That sounds serious. That does sound serious. It's very adult, very pretty. We're not that adult. That's that's where children, compared to, whatever that I did notice though. That their, their logo, I think is like a wolf, like a silhouette of, is it a wolf eating a smaller wolf? That would have been better. Then I would have been even more scared. How about green Arc? Any color for that about? Oh, I like this one total impact Capital, that's sounds Very male, very aggressive. Oh, it sounds like everything should be blue. Like a navy blue? Yeah. In fact, play that transition sound effect, you use. Which one do I use? I use all of them. The one that you always do. Perfect. Not that one. How about this one? Or this one? Yeah. That's total impact Capital, baby. I like that. You need an echo on your voice too. All right. ESG Tech. Is that a trade school? What is that? I don't know what that is. She Tech. I don't get that one. It's Southern Georgia, it's easy, Southern Georgia Tech. We're getting into some good ones. So packed Oh, like I'm guessing the pack is from Impact. The so is like from. So what I guess, what social it's going to be so packed. Know because social package sounds gross. So this is so packed. I imagine like a social pact, teddy bear. I mean, look, if you're listening to this segment, consider this free advertising because no one knew how these ferns and we are, we want to partner with all of you. We want answers will bring you on the show just to talk really like, we're just as stupid as you are. Don't worry about it, don't worry about it, here we go. Now, we're getting some good ones. Bark impact. But the K in spark is a c. Now, help me out with this one. Spark impact. Yeah. So I know, Mark too late who started spark impact actually and that's supposed to be an acronym and I think the C is for Collective for California. What is cauliflower, where we're going with this? I don't, I don't remember. Marks is super nice guy and I don't remember, I remember feeling confused by the acronym, and again, I remind to you and Matt to Matt and audience, what the hell is free flows? So, you know, we're no genius. I wouldn't be cool if to see in spark impact, stood for the sea and impact. Like it was like a self-referential post-modern. Yeah, it's like that. That feels like not a natural seed, a really land on next company is just impact except again, there's a the sea, an impact is a k and there are two A's I mean they have to be Scandinavian, right? Or like, I'm thinking like a Mumble something like a Mumble core rapper from something like that. That would be amazing. Yeah. Elevate Elevate. That's just pompous know, elevate. Is it the number eight is no, just a straight word. Although Free flow Elevate. That's kind of the same idea. Maybe we are the same that we are pump is jerks. This is what we are. How about this one? True Alpha, true Alpha. Oh they almost stole our our company name true Novation investor lytics that's what we were going with. Well, that describe that since you sang. So they were sponsor of ours. Yeah. For a little while and that, that was like a company that came to us in apparently they make ESG listicles. Oh, what we do, So but true Alphas kind of stepping on true Innovation. Investor Linux is a lot of true out there. That's true. But this one all one word, your steak s t a k e your stake. It does make me hungry for s t. E a k, you're my state. Yeah. Okay, another variation of impact, this one's impact with just a k impact, no tea, no tea, no tea pack. That made me think of pack mules. I'm not gonna lie like like a like an African breed of a pack mule. Too clever ones. One accountability that the a in the ability is capitalized accountability. Yeah. That's like a pond like a hair, salon pun. Someone who's very able with accounts and your favorite. Materiality. But the real, the real part of materiality is spelled r e a l. Yeah. Like that. I like that. That's a lot. It's one letter change and it made me think really hard about how to spell it and say it. Like that one? Yes. Three G. Is that like is that a take on 3D? Or are you think there are three parts of G like what do you think? The three is a nice. I said that one to Ari this morning and she was like, we're aren't we on five G right now? Like what are they like behind? And I said my response was the es. L t e g was already taken. I think it's just sell sell reception. All right, let's wrap up this horrible segment by this is the worst thing we've ever done. One more company to make fun of in the ESG space, ESG Dow. Now, I don't even know it's funny or not, it's Dao. I don't really get it but I was tickled and pleased to learn when I went to their website that two of the three co-founders were wearing, cowboy hats and I gotta tell you, Matt, I don't know any other Cowboy hat-wearing people in the business world are the other than Kimball musk. The brother of Elon Musk. He's a cowboy hat, wearing Brooklyn trustafarian, but I just thought this is exciting. I I think that people think ESG is just like a East Coast Elites kind of game. but no, they this ESG Dow has cowboy hat wearing founders Wait, you know, but isn't a Dao, a decentralized autonomous organization. Isn't it like a crypto thing? Yes, actually that's part of what they're doing. Over. I thought it was over incredibly neutral ESG scoring system. I don't know what that means. I thought it might be Dao like Dead on Arrival, but or do away rather. But um, but but I think that's wrong. I think it's crypto. All right. Why do you Want to play our visit from cawker. All right, let me I want to introduce this first. So, we're gonna play her now. So, what you're about to hear that? So, first of all, Again, it sounds a lot like me. It's not me. No, it's not. You this is somebody else. Technically. No, it's another different recorded person. Yeah I mean it could be you but you're saying it's not you. That's what you're saying. I'm saying that it's recorded separately from me talking now. So yeah, not me saying this right now, right. I think what you're saying is that ESG book is not the same thing as ESG Playbook. I think that's what you're that's right. They're different, it's a different thing. So at this one actually was legitimately terrifying. Okay. Are you ready? I haven't heard it. here's a headline that crossed my desk today, maala Earth's largest active volcano, just woke up after 38 years, Does that strike you as a curious choice of words? Not? Ah, not awakens, not even spews know it. Whoa, It would indeed be curious if you aren't paying attention to how even the scientific Community is run by cabal of woke billionaires and secret Nazis. And if you think I'm kidding, you're not listening closely enough. I'm cuckoo tickle town and this is, are you? I am terrified already named change. The headline about Mauna Loa comes from Scientific American, the widely read peer-reviewed Journal of science available to the public. It's notable because it's one of very few scientific journals. The public actually reads with over, 3.5 million readers and more than 5 million online views annually. Look a lot, it's also notable not because of what it is, but who it is, the whole spring publishing group was founded by gay org, Von Holtz Brink, in the 1940s and gay org, got his career, start, as a publisher for the Nazi party, Distributing propaganda and going so far as to acquire previously, Jewish owned Publishers as part of Hitler's. Purge of Jews in Germany. Just so we're clear. You didn't miss hear me. I said naught C. Naught C, naught C naught C really family went on to become billionaires as a result and the companies now in the hands of the grandkids Stefan Von holdt spring and Monica Schueller since shedding their Nazi badges. Not see the whole Springs. Have been busy, but in pushing not see propaganda. They're now the voice of climate change propaganda globally. How you're wondering. Well, in 1986 the whole spring group acquired, you guessed it Scientific American but they weren't done. in 1995 Cold Spring also acquired the MacMillan group, one of the largest Publishers of American textbooks today, And in 2015, they acquired nature magazine, which is the only quote unquote scientific magazine to endorse an American presidential candidate in. Barack Obama in 2008 How invested in climate change is Stefan the CEO of hold spring. Now you wonder Well Holt Springs Venture, Capital arm HV Capitol is the largest investor in a firm called climate Labs out of Germany that sells carbon credits through a program called the Klima app. If you don't know what a carbon credit is, it's a way for a woke Corporation to publish a report that says, sure we released a lot of carbon emissions into the air, but we offset those with these credits over here. So we're all good, let's consider this. Now, a major Global German publishing company with ties to Nazis has spent decades devoted to stories on how climate change is destroying the planet publishing it. Not only in scientific magazines, but also in the textbooks are children read. Then they go on to sell fake solutions, for climate change, in the form of a climate offset through a company. They invest in. And do you know where you can get the Klima app? Of course, the woke Apple Store led by gay, CEO, Tim Cook so I'll read the headline again. Monologue. Earth's largest active volcano, just woke up after 38 years. And now, I'll ask you. Terrified yet. Exhausting once again. Whoever's creating these is just really just too good at that. I find disturbing. I mean, It's a little on the nose, isn't it? Yeah. It's I don't even know how to talk about that one. Well, I'm going to say to whoever whoever's writing these Cocker cuckoo whoever you are. They're actually very easy to make their it turns out you don't need any real thought. It's interesting to what he dropped at the end there that. Yes it's true. It does sound like apples unbelievably now was gonna become a the new poster child of a woke Corporation white because Elon Musk is started a fight with them and that's it. It's all really takes. Its wacko starts a fight with you like DeSantis with Disney. Or musk with apple then you suddenly become you just say what Corporation, you're woke. Yeah, but this was the same corporation that are very are very own beloved Emma lurking. Hated. She didn't like apple and it gets. So, this is how confusing the world we live in now is what, what becomes a woke Corporation and what doesn't is a very confusing to me. I mean, it is the, the Elon Musk fight Elon. Also just said that, ESG is the devil. Yes, any accused, he accused Apple that if they don't advertise with Twitter, it means they do not believe in free speech. That's his. Yeah. Yeah. I mean this is what's happening. It's like if you don't we would say we were. Yeah, we don't advertise on Twitter but we'll walk Devils. So that makes sense. No one cares about what we're saying. Like, we just spent 10 minutes talking about the names of small ESG data providers, that have funny names, who's listening to this? Who cares. Oh no, you're the president. Well, I'll tell you who's listening, it's over, it's our, our great sponsor, skager, all their friends and family. They listen. They do better, they better. Yeah, they better. That's all of our. That's all of our downloads. Let's let before we get out of here and play Paul hodgson's piece today from our sponsor SQ. What is he talking about? He's talking about in like ESG metric, some static, the stat of the week. He's talking about, yes of the week. This is relevant information for all you hardcore ESG nerds out there. Yes, yeah. I we wouldn't play it, if it wasn't relevant. Yeah, we would play it because their sponsors and they tell us that's why we would. And before we get out of here man, anything else we want to say? Cause I'm done up, I'm gonna let Paul take us out of here. Yeah, let's let Paul take us out Paul, where are you spin the wheel on Paul, the silky voice of Paul Hodgson. Here it is. Hello, it's Paul Hudson here with skhs statistic of the week. And in honor of woke Wednesday, we are looking at the prevalence of ESG metrics in executive compensation, plans incentive plans. Now, we've spent it up into the S&P. 100 S P, 500 and the whole Russell 3000. And it will not surprise you that the greatest prevalence of the use of ESG metrics in executive incentive plans is highest in the S&P 100. It's actually at 81% for. Whoa, what did he wait? I gotta pause. Did he say 81%? Are we allowed to pause our sponsors? I don't even know. I just did actually, I don't even know. I just sent 81% of the athletes 81 companies. Yeah, the largest write 100. We found this for years that the biggest corporations are actually, the ones that tend to adopt a lot of these ESG practices first. Sure the practices but he's talking about linking it to CEO pay, right? But what's the, how much we don't know how much the linkage is? It could be point. Oh, one percent, we don't really know. Do we don't know? And I don't know that anybody knows. So let's find out what Paul says. Paul knows Paul knows everything, but he might not tell us today. He's just string us along for the the general ESG metrics that drop. 73%, in the S&P 500 and then down to 40% in the Russell 3000. Now when we break them down into es and G, we're actually breaking the S part of it into social metrics, excluding human, Capital Management, metrics HCM and then HCM metrics on their own. And in fact, if you look at just the HCM metrics on their own, that's where most of the use of ESG metrics is coming from, because that's at 72% in the S&P, 100 64% in the S&P 5 and then 31%, it's much lower. In the result 3000, but the other metrics are far rare in that index as well. So when we're talking about HCM, we're talking about health and safety diversity equity and inclusion, pay parity, those kinds of things. If we just looking at Social metrics, which is just above half of the S&P 100 uses, those incentive plans, Which we're talking about things like supply chain products, safety, and then governance metrics again, just above half and the S&P 100 and over a third in the S&P 500, we're talking about things like ethics compliance board diversity, that kind of thing. The lowest prevalence. Of ESG metrics actually focuses on environmental metrics. Those can be anything from ghg emission targets to Hazard reductions spills and other disasters. Keeping those at a low level Etc. So those are actually a 39% in the sp1 25% in the SB 500 and down to 9% in the Russell 3000 now, shareholders tend to get hot under the collar about, Companies setting overall corporate targets for you know, ghg emissions, greenhouse gas emissions, reductions, those kinds of things in terms of environmental as a lot of greenwashing going around. There's a lot of companies saying they're going to do something and then not doing it. Setting on realistic targets or just not disclosing targets at all and just saying that they're going to You know, bring down their ghd emissions to 2005 levels, for example, by 2030. But not explaining how they're doing. So shareholders, are not particularly impressed by those kinds of things. They also get a little hot under the collar, not as much because it's not seen as quite as important about the use of ESG metrics in incentive, compensation plans, while they welcome them, generally, they're all. So, a little concerned that They're not. Hard enough. They're not targeted enough. They don't Govern enough of the bonus for it to really make it worth their while. Sometimes they're a little difficult to measure as well. Although the prevalence of HCM metrics, you know, like health and safety. It's easy to measure, you know, lost time incidents, etc, etc. On pay parity, those kinds of things are hard targets. That are easy to measure. There are some other targets that are a little softer and a little more difficult to prove, you know whether there's child labor in the supply chain. For example, those kinds of things. So there's a little suspicion about about their use. In terms of, you know, how much bonus do they govern? You know, is it a Gateway? So you have to pass this? Target before you get any kind of bonus at all, those kinds of things. But nevertheless we are making progress because all of these percentages even just a few years ago. Would have been 0. So that's Paul Hodgson with escaped statistic of the week signing off. Happy woke wins day. Paul needs theme music, but and can I think, can I think Paul the for saying something optimistic for once we don't do that. Why would we used to be all? It's everything used to be at zero and now there's at least something happening. You know, the thing that struck me about what he said, I actually was Isn't he describing things that are their job to do? Yeah, yes. Like that just seems like what happened is that we're finding out that for years. They did not make that part of their job, like they were do it. As Paul would say, it's it's easier to game like e. Earnings per share targets, right? It's just easier to mess with that. Well that's why that's my biggest complaint. We complain about ESG. Constantly and you do, I like like, how greenwashing how we can game the system? All that stuff, but we've been gaming the system for as long as there's been a system, like we've been managing our earnings and earnings per share. We decide like when something is considered a capital expense and when something's considered a long-term Improvement, like we, we make up the rules as we go along this. What we do is humans and we're really shocked when they do it. In ESG, we get outraged. But we have what? Ignored the fact that it's been happening for years, in fact, well, we covered on Mondays nerd alert. That if you are a CEO and do tax avoidance, it's good for your career. Look. We're they found like we literally are celebrating when you greenwash your taxes, but we Whole DST to a higher standard tells it was worth pointing out. The ESG is often lumped into this soft Sciences. Category. Yeah, but all these targets that Paul is referring to, they're all hard targets, as opposed to these wishy-washy, TSR EPS targets that we don't even know. If the executives have any hand in controlling. It could just be the market. It could be the industry. What's the worst that right? You actually see like hard targets things. Yeah. These like targets at the executives and actually affect at the company. Think about what an executive at a company can actually do. Right. They sit down, they have a pot of money that the company has and they make choices about how to spend their money. And so, one of the things they're going to do is make choice is make bets on how the best spend their money. Like fix that. You know, that plant over there or we spend it on a new fangled plant, somewhere else. So we, how do we move our money around? And the only other thing they really do. Is they make sure that the people involved in working at the company don't hate their lives die or go somewhere else, right? Yeah. Something because you need every dollar you spend to be maximized. So every time someone comes into work with their lunch pail, you need them to work as hard as they can, to make you more money. And I guess the third thing they would do then is managed up. They go talk to their shareholders and their investors and like the board and talk about how great they are. So they have to sell up, they have to make bets and they have to make sure the people at the company don't suck and the best that they're making inherently are tied to things like environmental issues. Yeah. What do you teach us with this with this last? I'm just saying these are these are this is only ever been the job description. There's no other job description like 40 years ago. Wasn't this the same job description. It was different essentially. But we're we call like what they come out with a hard science like they come out with a bunch of numbers on a piece of paper and we say it's like Finance is a hard science. The bets that they make right is a hard science but managing the people is a soft squishy. We don't know. We don't know anything, maybe they're good at me know, the numbers that come out of it, they don't tell us anything, they're not good enough. The ESG is the whole thing, it's the whole thing. That's my point. That's that's all I have to say. I'm I'm tired of hearing about how there's traditional Finance that's hard science and there's ESG which is an unaudited soft science when the whole thing is the same thing. It's just like your, your feathers are bristled by Elon Musk saying that. Yes, she is the devil. I think you. I don't care. That guy says everything. That's he says, he's a blowhard in the in the ultimate traditional blowhard. Speaking of blowhards, that's the end of this show. Yeah, that was, we are free flows. Feel free to contact us on social or LinkedIn, or send us an email. Telling us how stupid our name is Fort sabermetrics and free float. I wish you would on us lie. It would be great to get some feedback and if you are one of the companies that we gently laughed at, we want you on the show. Not because the name can be funny and you can be professional smart and doing amazing things. Come join us. Wait and according to met Matt data, we were number 19 on Apple, business news podcast list for so much someone somewhere is So I can't do this, get the wire, be you selling to them. I'm looking at you. So packed and ESG Tech and green Arc. Come on. Join us. Join us. Spark impact. I'll call you Mark. I actually know you come back tomorrow for more of whatever we do just here, but still then goodbye.