US-based investment firm Engine No. 1 has created its Total Value Framework which ties environmental, social, and governance impacts directly to financial value creation.

Engine No. 1 has a track record of activism, and despite owning 0.02 per cent of ExxonMobil, the company managed to get two of its nominees elected to the ExxonMobil’s board to encourage ESG progress.

The new Total Value Framework is a data-driven approach that integrates non-traditional but financially material ESG data, methods, and systems into traditional analysis, avoiding common ESG scores and ranks in favour of quantifying corporate stakeholder impact in actual dollar amounts.

“We developed our Total Value Framework to address the current deficiencies in ESG data and to help investors generate lasting impact on corporate behaviour and robust long-term financial returns—not just the warm glow of a ‘pure’ portfolio,” stated the company.

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