How HIP Investor’s Methodology Relates to Today’s Issues
The five pillars of HIP Methodology, Health, Wealth, Earth, Equality and Trust -- relate to key issue areas in society.
Food and Water
As an outgrowth of climate change and pollution, food production, soil health, and water availability are intertwined and all face pressures.
Overpaid CEOs
The gap between CEO pay and the pay of the average employee in the USA in particular correlates negatively with CEO performance. Since 2014, HIP Investor has partnered with As You Sow to create the Overpaid CEO report.
As large funds become more active, they are challenging proposals during proxy votes on CEO pay packages.
Read 100 Most Overpaid CEOs 2021 Report
Read 100 Most Overpaid CEOs 2020 Report
Climate Action
In mid-2021, a “red flag” warning was issued for climate change by the Intergovernmental Panel on Climate Change ( IPCC) which is a UN body for assessing the science related to climate change.
HIP Investor provides climate threat resilience ratings for municipal bonds, as well as climate action toolkits for municipalities who are looking for ways to fund and implement their programs.
Racial Equity & Gender Equality
While 92% of S&P500 companies have diversity policies, only 19% of them have targets. Even though employees are often touted as “our most important assets,” they’re not accounted for on the balance sheet, but instead tracked as expenses.
HIP Investor tracks EEO-1 data as well as other indicators of racial and gender equity. The investment strategy “Great Places to Work” incorporates these and other metrics.
Transparency
So long as there are no requirements for reporting, some companies will not release data, even when investors demand to know the metric across their portfolios. Because avoiding reporting the data that is requested typically means that the company may be concerned about the quality of their results, or that they don’t monitor that variable at all so collecting the information would be onerous, that data is not missing at random, but instead missing in a biased state.
While other analytics vendors impute a value for missing data that puts these non-transparent companies at the average for their industry, HIP Investor believes these overstate -- potentially drastically -- the results, and scores missing data as “0.”
