FINANCE
27Debuts LookAhead
THE BOTTOM LINE Many companies don’t report enough
information on their social and environmental impact. But there may
be clues in how their stocks behave.
more of a PR marketing story,” says George Mussalli,
chief investment officer and head of research for
equities at PanAgora Asset Management, which
describes its approach as fundamental quantita-
tive investing. “You don’t just want to buy compa-
nies that have the highest ESG rating, you want to
find the firms that are improving the most.” To try
and dig deeper, PanAgora says it uses natural lan-
guage processing tools to analyze how companies
talk publicly about their ESG performance and get
a sense of whether they’re backing up their claims
with action. For example, a company that uses more
negative-sounding words such as “spill” or “pollu-
tion” may be more honest about its problems and
more diligent about addressing them.
Arabesque Group, a Frankfurt- and London-
based asset manager, is focused on running ESG
quant portfolios. It says it runs artificial intelligence
models across 6,000 machines in 11 different data
centers to read and digest information sources rang-
ing from company data to news reports. “We don’t
have a single sustainability analyst at Arabesque
that goes through and says this company is good or
bad on ESG—everything we do is based on big data
and systematic,” says Yasin Rosowsky, co-CEO at
Arabesque’s AI unit in London.
Boston-based Acadian Asset Management has
used data on issues such as local corruption or car-
bon pricing from companies that provide them to
estimate similar information for all of the 40,000
companies it tracks globally. It also uses ideas drawn
from ESG data to improve its investment decisions.
For example, Acadian has found that polluting com-
panies trade at lower valuations than nonpolluters in
places where there’s a carbon tax. That makes sense:
The market figures a company should be worth less
if it has to bear a cost for high emissions.
But Acadian also noticed the market seems to be
pricing in the effect of a carbon tax even in coun-
tries that don’t have one yet. Perhaps traders are
assuming a carbon tax or similar regulation is likely
in the future. So Acadian now assumes carbon taxes
should be part of a company’s investment assump-
tions, no matter where it’s located. That’s helped
it avoid some investments in high-emitting compa-
nies that might otherwise appear to be a bargain,
says Asha Mehta, a portfolio manager and director
of responsible investing at Acadian. As the amount
of sustainability information expands, the hope is
that more such insights will emerge. “ESG data is
becoming relevant faster in our portfolios today,”
Mehta says. —Emily Chasan
Last year was a wild one for companies
going public. Ride-hailing stars Uber
Technologies Inc. and Lyft Inc. are trading
well below their debut prices, and the
collapse of its initial public offering
plunged WeWork into crisis. Here’s some
of what’s on tap for 2020:The Big One
Home rental service Airbnb Inc.
could be the highest-profile
debut. It’s considering a direct
listing, meaning it won’t be
selling new shares to raise
capital. Instead, existing private
shares will become tradable
on an exchange, giving early
investors a chance to profit.
The company was valued at
$31 billion in a 2017 private
funding round.Chasing Food Delivery
Postmates Inc. has been sitting
on its confidential IPO filing since
February. Olo, which provides back-
end software for delivery services,
reached out to potential advisers late
last year for an IPO that could value it
at about $1 billion. And DoorDash Inc.
is considering a direct listing.Even More Go Direct
Direct listings were almost
unheard of until Spotify Ltd.
did one in 2018. Now venture
capital firms and investment
banks are promoting them.
Other companies that may
be weighing the direct route
include GitLab Inc., a platform
for tech developers, and
Asana Inc., which makes work
management tools.Testing the Influencer EconomyThe “bed-in-a-box” mattress
retailer Casper Sleep Inc. filed
this month for an IPO. It warned
investors that it relies heavily on
marketing via people with large
online followings. —Crystal TseSwinging Hard
Topgolf International
Inc., a chain of
driving ranges with
restaurants, is said to
be aiming for a market
value of $4 billion.Everyday Business
Reynolds Consumer Products Inc.—famous for
aluminum foil and Hefty trash bags—is seeking
a $5.7 billion valuation. And private equity-
backed supermarket chain Albertsons Cos. has
confidentially filed for an IPO that could be one
of the year’s biggest.