Page 40 - Investment Advisor April/May 2022

ESG HORIZONS

By Michael Fischer

10 Best Women-Run Companies to Invest In: Morningstar

Also: Advisors aren’t serving women well on sustainable investments.

omen lead some of the top 3. GENERAL DYNAMICS (GD) 7. YUM CHINA HOLDINGS (YUMC)
companies in an array of U.S. CEO: Phebe N. Novakovic CEO: Joey Wat
W industries, but their ranks Morningstar capital allocation Morningstar capital allocation
remain disappointingly small. Only rating: Standard rating: Standard
8% of the companies on Morningstar’s
inaugural list of the best companies to 4. CANADIAN NATIONAL RAILWAY (CNI) 8. CLOROX (CLX)
own are led by female chief executives, CEO: Tracy Robinson CEO: Linda Rendle
Susan Dziubinski, director of content Morningstar capital allocation Morningstar capital allocation
for Morningstar.com, wrote in a recent rating: Standard rating: Exemplary
blog post.
She hastened to add that “buying a 5. GLAXOSMITHKLINE (GSK) 9. ACCENTURE (ACN)
stock simply because the company’s CEO: Emma Walmsley CEO: Julie Sweet
CEO is a woman doesn’t make any more Morningstar capital allocation Morningstar capital allocation
investment sense than buying a stock rating: Standard rating: Exemplary
simply because the company’s CEO is a
man.” Rather, she wrote, it’s important 6. NORTHROP GRUMMAN (NOC) 10. ZOETIS (ZTS)
for investors to examine fundamentals, CEO: Kathy J. Warden CEO: Kristin Peck
consider valuation and apply whatever Morningstar capital allocation Morningstar capital allocation
other investment metrics that matter to rating: Standard rating: Exemplary
them before buying.
Moreover, CEOs come and go, she
said. “That woman-led company may be Advisors Leave Women in Lurch on
managed by a man — and vice versa —
soon enough.” Sustainable Investing
That said Dziubinski highlighted
companies with female CEOs that made recent survey by FlexShares Sixty-nine percent said they want to align
Morningstar’s list of the best companies A Exchange Traded Funds found their investments with their values; 59%
to own in 2022. that 72% of investors are interested in want to address priorities such as climate
These companies earned their spot environmental, social and governance change or diversity, equity and inclusion;
on the list by having carved out wide focused investment strategies. Women and 45% want to capture growth potential
Morningstar economic moat ratings and and young investors are most likely to be from sustainable business practices.
received a standard or exemplary stock interested in these investments. Investors still have a limited under-
capital allocation rating, which empha- Yet 87% of respondents said their standing of sustainable investing. Forty-
sizes the firm’s balance sheet, invest- advisor had not suggested sustainable or six percent of respondents said they had
ments and shareholder distributions. ESG investments. Instead, investors said heard the term but were not quite sure
their primary sources of information are about it, and 20% did not understand it.
1. HERSHEY (HSY) the media and their own research. Still, they are willing to be persuaded.
CEO: Michele Buck FlexShares ETFs fielded the survey Fifty-two percent said they would con-
Morningstar capital allocation in November to 285 consumers work- sider investing sustainably if their advi-
rating: Standard ing with an advisor, each of whom had sor recommended it, and 57% said they
a minimum of $100,000 in investable would do so if an advisor explained how
2. OTIS WORLDWIDE (OTIS) assets and a minimum annual household it would help their portfolio.
CEO: Judy Marks income of $100,000. Seventy-nine percent of women in
Morningstar capital allocation Those surveyed reported several rea- the survey said they are interested in
rating: Standard sons for their interest in these investments. sustainable or ESG investing.

38 INVESTMENT ADVISOR APRIL/MAY 2022 | ThinkAdvisor.com