Emerging Markets…Brutal BRICs?! II/II

In the week that began with Citi [C] becoming the US government's latest shareholding, JPMorganChase [JPM] was pitching their core competency as a lender, and Goldman Sachs [GS] was looking to stretch their sustainability advantage branding their research and investment products. JPM was busy offering a full page advertisement in WSJ Eastern edition A5 Tues 25 Nov pitching to the WSJ readership on their commitment to lending [“Our Business Is Lending. And That’s Exactly What We’re Doing”], including “in a responsible way”. Yes, I can only imagine what my mate who taught me how to build a BS filter for company ESG claims, the KLD research director in Boston, will say about that one!

Goldman Sachs was taking the front foot in the FT Mon p.3 with the first above-the-line hardcopy advertisement I have seen for GS Sustain, a fair advertising budget commitment to go above-the-line. Of course GS hedged bets by burying the ESG lead in the body, the sub-title “innovative thinking finds innovative companies”, and one has to mine the paragraph further for “a unique global equity strategy that brings together ESG (environmental, social and governance) criteria, broad industry analysis and return on capital to identify long term investment opportunities”. But GS now fronts their homepage with GS Sustain. Clearly someone is taking a big bet, and perhaps with freefall markets, a good time to try something completely different.

GS Sustain has a colourful history. It's strong underpin is from the GS sell-side in London via the work dating back to 2003 of Anthony Ling in the Energy Equity Research team, and then taken forward by Sarah Forrest, Marc Fox and colleagues. Sarah is now an Executive Director for Global Investment Research. After finally establishing a coordinated framework in early 2007 – GS Sustain – which launched to plaudits from the usual UN Global Compact types and affiliates in Geneva last July, the GS Sustain brand has been slowly building. Like IBM, no presenter looks dumb when quoting GS – a false security to be sure – but expedient for now. Indeed, in my MBA865 seminar at Kenan-Flagler Business School, Sustainability in Investment Strategy at Chapel Hill last week, one of the most informed students referred to “it’s Goldman Sachs!” as the GS halo in the ESG space proves to light the way for less skeptical inquiry of how sustainability plays in. Clearly GS benefits from being one of the two last i-banks standing, [mostly!], and may push for competitive advantage on sustainability matters in the FT, the print daily which positions itself in US as more global than the WSJ or NYT Business Day as a major business daily. Companies, as they do with any positive third party assessment, but especially when it is a major i-Bank brand, are only to happy to tout their standing in any competitive assessment, such as BG Group [LON: BG] a natural gas company.

I was first alerted to the new GS Asset Management product built off the GS sell-side’s GS Sustain framework in Manhattan at the Sustainable Investing 2008, People. Plant. Profit. on September 23-24th, 2008 at The Harmonie Club, New York City. At that time the product was available offshore only, but now institutional US clients may access it. The conference was hosted by Financial Research Associates, LLC for the first time, as a new conference publisher entering the sustainability space, with assistance from SIF.

In the next two weeks I will be having a more solid look at GS Sustain GSAM product as forward planning for when it has run a year at least and we may start recommending the strategy from an informed understanding to the benefit of asset owners and multi-managers. I like that GS Sustain is in the game, for sure, but a close examination of some of the underlying criteria makes me cautious based on my past experience of ratings that are built on "box checking". The framework looks good, but underlying data, and assumptions like memberships of an initiative or international organization sending signals about sustainability, may be sub-optimal. I am cautiously positive, and our recommendation at Sinclair & Company to investors is to observe closely, and stress-test the ideas before becoming convinced. I have not reviewed the strategy in detail since hearing about it in late Sept, partly because the most impressive aspect of the Sustainable Investing 2008 event had me moving to other thinking. Other than Tim Smith’s usual excellent chairmanship [when not chairing SIF, he is in Boston as Senior Vice President at Walden Asset Management], was the compelling speech by Joe Keefe CEO of PAX over lunch, one of the best expositions on where ESG/sustainability investment is in 2008, and where it may go, an extract of which is here.

And of games, well, it just would not be right to cover emerging markets and London in the same story, and fail to mention Saturday's smashing game the Springboks played against England which CNN titled "Springboks Thrash England at Twickenham". Rugby, like life, rewards grit as well as grace, with patience a coaching watchword lately. So comprehensive, the Brits found time to boo their team. Yikes! The tackles, the tenacity and the touch South Africa showed against England in their backyard, racking up the Roses’ biggest ever loss at home, was a fresh reminder of the entrepreneurial and rugged nature of the boys from the bottom end of Africa.

Sarah is an Aussie, so she would have enjoyed it, and the headliner from The Australian "Springboks Outclass England at Twickenham". The boys from Goldman are credited with the BRIC moniker coined the term ‘BRIC’ in our Global Economics Paper, ‘Building Better Global Economic BRICs’, published on November 30, 2001. Maybe they had seen Bakkies [“bricks”] Botha make a tackle sometime before, like the try-saving one he made on Saturday? [sidenote: should every rugby player hope for a wikipaedia entry?!]. Yes, I know, South Africa has the ability to play sublimely one week [has Australia recovered from 50-odd thwack at Ellis Park, their biggest ever Test loss?] to the slack - only one Tri-Nations title in all these years. But as I pitched at the Paris UN PRI Board meeting in Nov 2007 - to the sullen looks from the Englishman directly after Springboks won in Paris [and a smile from the Frenchmen] - nice to see EM on top. A small smile for EM slips out when running through the scoreboard from Saturday: Emerging Markets 42 vs. Developed Markets 6.

The England coach called it “brutal” and “a lesson”. Pretty much sums up the financial meltdown for EM and the rest of the world too, and the bleak '09 outlook. Enough said.

SRIX.GS

A Week in Politics, a sage’s birthday week

They say a week is a long time in politics. The week of 25 August 2008 must rank as one of the longest in the US for a while. The US media moved from the Georgian crisis to the immediate spectacle of politics played out in primetime. The tension, drama and hope of the Democratic Party played out to a climax on Thursday night at the Mile High Stadium in Denver, Colorado after months of preparation, drawing the greatest numbers ever to watch a political convention since Nielsen started tracking in 1960 [also bigger than American Idol, Beijing Olympic opening and the Academy Awards - confirming Obama as celebrity?]. The Democratic Party is one of the two dominant political parties in the US, the majority party in the elected government legislature, but not in the executive office of president since Bush vs Gore in 2000. The presidential election happens on Tues 4 November, as it does every four years. For all its warts, it is hard to argue against the US as being in the top tier of democracies around the world in 2008. The past 500 days since Obama and McCain announced has seen the candidate fields whittled down to the two majors in a demonstration of democracy in action, sometimes ugly, sometimes pretty.

For the first time ever, and because one senses something of great importance in the shifting tides, I watched the entire acceptance speech by a candidate. Barack Obama spoke late Thursday night, covered live on the public television station, a great scoop for PBS. The Democratic Convention this week reinforced my reminder, since coming back from the year sojourn in Europe and travels in emerging markets, that the US remains a nation of competitive individuals where marketing remains a core competency, perhaps a birthright. Earlier this week I smiled when I drove by the iconic US marketing icon in Cambridge MA: the classic American image of young kids selling lemonade at a streetside table with hand-scribbled signs. Taught from a young age, the average American is a able to pitch ideas directly, especially to a camera. To watch the political event, with TV-scripted moments, is to watch a masterclass in events management only slightly less well-planned than the Beijing closing ceremonies. The Obama speech apparently drew the largest ever TV audience [38m] and was carried live on public service television. PBS is one of America’s great institutions, along with Prairie Home Companion! In a taste of Americana for me, I was invited over to watch with a small gathering of Democrats in a small town in New Hampshire not far from Dartmouth University, the local Ivy league university. NH is a state that the ’04 model McCain impressed. It also has the most impressive state motto: “Live Free or Die”. Mmm. No wonder this state liked the guy who the Russians most dislike!

For the generation that sees sustainability as the defining challenge and opportunity of our time, the Obama speech seemed to leave a little missing. I missed the live Al Gore speech for his party earlier, where he did offer some pithy observations, including:

...it just so happens that the climate crisis is intertwined with the other two great challenges facing our nation: reviving our economy and strengthening our national security. The solutions to all three require us to end our dependence on carbon-based fuels.

Sustainability will be best met by a government with a leadership agenda, like I have seen in Singapore or Iceland. One hopes that the government at federal and state level in the US may wield their fiscal directing power, direct investment capital, and enormous procurement and services footprint to move forward adoption of climate smart policies and improving the sustainability footprint of business as usual. Obama floated his 10 year plan, but he seemed to flip it out, not drive it in as Kennedy did for the Apollo program to the moon. Maybe Gore distracted him from the need for making his own case for sustainability as generational imperative, and in prime-time. Both the McCain and Obama campaigns have been seeking to influence impressions of how green they are, delivering on-campus debates by their advisors and visiting salon-type situations in major cities like New York in the past months, none of which bumped the US$20/month bike commuter credit through Congress and Senate this summer. On the grandest stage opportunities exist for “green” stories next to stories of economic, educational and discrimination stories. Floating into view was this journalistic pearl of eccentric Brits driving restaurant-by-restaurant across Europe in their bio-diesels!

The tone was substantive. The image was poignant. Obama is a celebrity, the next big thing from 2004 now the most interesting prime time phenomenon. The orator did seem to authentically present the American experience, the itinerant lifestyle, the making it happen in spite of challenges, of the step up from education made possible by scholarships and loans. As an outsider, he does seem to represent the American brand, and the opportunity in this country of all countries where the story is possible. Being different remains a challenge for humans, as even the fascinating BBC show reveals in describing socialization of growing kids bbc.co.uk/childofourtime. Diversity is a reality and a strength for those who understand how to encourage it in their lives, and their experience. Both major Democratic candidates seemed to offer diversity this year, on race or gender basis.

The week ended with a striking counter-move from the other major party. The Republican candidate John McCain selected a female running mate in part to pick up disaffected female voters in a bold move, with unclear risk/return payoff for his campaign. If nothing else it swept away the analysis of the Obama speech from the Friday morning talking heads, and recovered the attention lost for the week’s drama in Denver. The long week has a snappy ending. All candidates are striving to be the “change”. Like definitions of “sustainability” by some fine greenwashing marketing types, the follow-on questions haunt the statement: change from what to where by whom?

So my week’s tutorial in the US political marketing game ended pointedly. I left the US in 2007 before Fox had launched their long-awaited business channel, FBN. When I flipped over to FBN on this Friday morning, I was greeted by a familiar face from CNN International I watched for international news during my law school days, Richard Varney. His smooth British accent has more sharp American intonations that makes him sound New York. But it was what he said that illustrated the direct political action that Fox is renowned for in the US: strong right-wing, Republican support. Varney invited comment from some suited talking head after the announcement of Palin by trying a long-winded, roundabout hook by using language like “since the news was announced and she spoke it seems to me that the market may have responded positively and the market has responded”. Politics certainly moves markets, as the response to the Russian tank adventures illustrated [see SRI Extra 23 Aug 08] and the WSJ reports the Russians major firms seeking debt financing in September as usual will face increased costs from skittish foreign investors. I had just flipped over from CNBC [certainly not a Democratic mouthpiece] where the on-air anchors reflected no great movement attributable, and reflecting that the impending Hurricane Gustav held greatest market-moving potential for closing business especially oil & gas in the Gulf of Mexico. While maybe one should not be surprised, I was. Maybe I was hoping for business news from FBN, and maybe it exists in other 3 minute segments between advertisements. FBN seemed handily placed to cover the VP pick, re-running an FBN 25 June interview with Palin where she espoused opening ANWR [note how industry nailed the winning URL, anwr.org. But the blatant put was more than even Kudlow on CNBC may be expected to give. But not on Friday. The week ends with space for more news on the sustainability theme as tackled by the Republican platform this coming week [although the official Republican policy position discredits “global warming”], and with a larger dump of salt needed for any FBN coverage.

Less sound-bite like, but the new focus of all campaigns, is the economy. In the tiny village of Woodstock VT the major business owners are nervous of a slump, and over-stretched by borrowings in the good times. The US Treasury Secretary Hank Paulson continues to struggle with major financial system components: the Freddie Mac and Freddie Mae challenges. One may reasonably argue this challenge is the perhaps greater challenge than becoming most popular person voted for by more Americans. Integrity Bancshares of Alpharetta Georgia became the 10^th bank failure of this risky season this week, the FDIC picking up the pieces again. They will not be the last. A renowned value fund manager at a solid SRI shop Ariel Funds in Chicago has let go of Citi, even choosing to book the loss the portfolio rode down with C 42% since the fund first purchased the stock. More spicy, was it’s dropping of Moody’s, saying “it lost confidence in some of the company’s ratings”. Late, but frank. No word on how the ESG ratings shops like Innovest, KLD or ISS [the latter the only listed entity through Riskmetrics] have suffered the same loss of confidence. Warren Buffett discussing financial services firms impressed with the wisdom of his circumspection on CNBC last Friday.

QUICK: When people start looking around to find the next potential Bear Stearns, Lehman Brothers is the name that comes up again and again. Should people be concerned about what's happening at Lehman?

BUFFETT: I don't think it's appropriate, really, to talk about financials.

QUICK: Financials, in particular, banks.

BUFFETT: No. I think that--I really think that's inappropriate to talk about them.

Banks run a juggling operation, and have limits for minimum capitalization of 5%, incredible leverage, meaning more than 9 of ten balls is in the air at any time in the borrowing/lending cycles. The FDIC has increased to 117 the banks they identify as in danger of failing, largest since 2003. Saturday 30 August is the birthday of Warren Buffet, born in Omaha, Nebraska (1930). In February 2008, he was ranked by Forbes as the richest person in the world, worth about $62 billion. I like his frugal living style and the fact that he lives in his old house and drives his old car, squeezing by on an annual salary from his investment company of about $100,000. His wealth will transfer to the Bill & Melinda Gates Foundation, which he announced in 2006.

In 1988, Buffett said:

"I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GNP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die."

After the recent dusting off of histories of China, Russia, Malaysia and Brazil to update my reading of the major moving parts in geopolitics, I find myself looking forward to a bit more time with a business librarian soon, the unsung hero of many MBAs. Though the future may be as different as Obama text-messaging his VP pick versus McCain using the old media-leak standard, I prefer to know more about the history of business to interpret the future of business, especially dramatic changes intercepting ESG factors like asbestos or clean water. Machiavelli’s “Il Principe” remains a standard for a reason. The interpretation of business past to the future is the art with the science. And as Buffet is credited as saying, "If past history was all there was to the game, the richest people would be librarians."

Citi From Leader to Laggard in One Olympic Cycle, keeping the spotlight on

Citi’s [NYSE: C] current saga captured pithily by WSJ on Friday [Citi's Status With Environmental Groups Takes Hit By CLINT RILEY February 9, 2007; Page C3] reminds me of the yawning gulf between being an Olympic or World Cup winner one year, and an also-ran four years later. Rainforest Action Network has majored on Citi’s role as a leading financial institution, potentially tipping the scale from business-as-usual to sustainability, by giving Citi slacker rating despite Citi doing some reasonably good things like ranking on the Environmental Protection Agency's Climate Leaders Program , although interesting to note neither as a charter member nor with GHG limits. RAN's executive director will meet Mr Prince on Valentine's Day for more.

Either RAN has majored on a minor, or Citi has lost its way even while the awards and recognitions based upon Citi's words and early actions still cast a warm glow. No more easy points from NGOs?

The modern Olympics and most World Cups rotate on four-year cycles. It makes the prize incredibly more meaningful, although at the risk of creating a news gap: Lance Armstrong never won Olympic Gold.

WSJ reports that Citi took three years to move from first to last, at least in the estimation of one active NGO.

Rainforest Action Network [RAN] and other environmental groups say they now consider Citigroup a laggard, compared with other big banks, such as Bank of America Corp. and those in Europe. That thinking comes despite the firm's adoption of lending and disclosure policies for environmentally sensitive projects that meet or exceed goals in international agreements such as the Equator Principles, voluntary guidelines based on World Bank and International Finance Corp. policies that are considered a financial-industry benchmark.

RAN is best known in my world for the sharp-witted Victoria’s Dirty Secret campaign that a gifted creative friend in Pennsylvania I met through the Environmental Leadership Network, Libby Kleine Modern, helped to turn to eye-catching graphics. Nothing like juxtaposing some kind of thong with a chainsaw! RAN has a reputation as an outspoken NGO with young talent willing to risk all – even allegedly defecating in the shrubs outside a shareholder meeting [a stunt which crossed them from “stakeholder to engage” to “other”, according to a friend in the SRI community].

I have often used RAN as a reality check for corporates, along the line of my ongoing thesis question - which are you more afraid of: the activist consumer, or the activist shareholder? A simplifying question that clarifies the issue for insulated company types high up on air-conditioned buildings with soft seats is “would you like to engage in dialogue with investors with ESG considerations now, or when RAN comes abseiling past your CEO’s window with a pail of green paint?”.

Backdraft
I never under-estimate the real-life challenges of educating and sensitizing large corporates to how small and seemingly fragmented issues can have major impact when championed by a motivated NGO. As the largest financial services firm in the world by market-cap - depending on where BAC is on the day - Citi will have all the political dynamics of a UN security council resolution, especially when dealing with such "light" issues as climate change. Citi has had some good people on the investments side dealing with ESG, including Mary Jane McQuillen in NYC and Mike Tyrell in London. MJ has been a stalwart for developing SRI competency at Citi and NYSSA, before Citi AM was spun off to Legg Mason in Q1 2006 [she’s now “Director of Social Awareness Investment at ClearBridge Advisors (formerly known as Citigroup Asset Management), a unit of Legg Mason”]. The non-ESG types at Citi In London suddenly found Mike’s team useful when Citi’s utilities analysts were puzzled by gyrating Utilities sector market prices around May 2006 when the ETS mis-pricing played out and the value of carbon credits plummeted from mid-EU20’s to low EU-teens, upending prices factoring in the easy money. Mike and his team have recently updated [January 2007] the seminal “Crossing The River” paper I referenced on SRI-Extra in 2005.

One can only wonder what it was to be a fly on the wall at Citi when the TXU issue blew onto the front page of the WSJ last July As Emission Restrictions Loom, Texas Utility Bets Big on Coal - Planned TXU Plants Raise Global-Warming Concerns; Rivals Try New Technology, Rebecca Smith, Wall Street Journal 21 Jul 2006. Probably not a banner day for their PR, IR or ESG teams, never mind the CSR unit.

Another CFA caught in Citi’s backdraft somewhere between leader and laggard is Fred Wellington at WRI. WRI teamed with Citi in June 2006 on a report entitled “Investing in Solutions to Climate Change” that identified twelve companies set to benefit from global warming by offering products and services in four areas of climate change mitigation. I hope to catch up with Fred soon, but I imagine he must be equally disappointed, whatever his opinion of RAN. Fred was quoted by Bill Baue of SocialFunds.com as saying "Citigroup is clearly a leader on a number of environmental issues. This report represents another area where they see competitive advantage in integrating environmental issues into their business while meeting a demand from their clients". A good thing Fred couched the endorsement with "on a number". Must be his wily experience both inside and outside large money management firms.

Such is Citi’s challenge of being a large institution. Those to whom much is given, much is expected. With people and capital deployed in different investment teams, across different asset classes, in different time zones, now being made to re-engineer toward a sustainability mindset even while making a dollar within today’s rules of the game. Direction must come from the leadership [as even McKinsey will suggest], and the CIO is critical. Citi has not been a happy place to engineeer change: against the backdrop of a share price that over five years has trailed the S&P500 by over 500 bps [C: +17.39% vs SP500: +23.51%], BAC has topped C for market capitalization, and aided by BAC's acquisitions, blown away five year price appreciation [BAC: +74.87% vs C: +17.39%] - although January was a stunner for C. All-in-all, not a pretty atmosphere to engage in re-engineering the internal plumbing.

My work as ESG architect and SRI strategist is substantially easier when dealing with asset manager boutiques, versus large, conglomerated money management firms. Valerie Cook Smith, Citigroup Vice President, Environmental Affairs acknowledged how difficult it is dealing with a sprawling international firm’s corporate citizenship footprint when we shared a cab ride last October. Valerie was a fellow Net Impact panel member at the Net Impact Annual Conference in Chicago.

One may anticipate the enormous challenge of advising a Wall Street firm with operations on all continents – executing ESG criteria consistently down the investment value chain will require a top-notch effort over a 18-36 month timeframe. Valerie is a Net Impact Board member so she is attuned to NGOs, and especially the San Francisco activist community. Her MBA is from a top 10 B-school [UNC-Chapel Hill’s Kenan-Flagler] which has a respected Center for Sustainable Enterprise [a top 10 Beyondgreypinstripes.org school] where I enjoyed leading a seminar on responsible investment and ESG analysis to 40-odd MBAs last weekend.

But I wonder how influential Valerie or Mike or MJ were able to be when the corporate finance team floated the TXU deal, the red flag to environmental activists in this instance? Ahhh, to join the Valentine's discussion...


A Pachyderm's Memory
NGOs will keep the Citigroup sustainability investing initiative - and the Citi corporate effort - honest over time. This is something I noticed time and again in the SRI research business at KLD: companies being caught in the spotlight when determined research analyst asked the simple but tough questions like "have you executed on your promises?" and then scored the company accordingly. One can argue both directions on why the Exxon Valdez 1989 oil spill should still be captured in a research note. But it is only the company that benefits. A bored reader may always skip over an analyst’s paragraph on what the reader considers historical [XOM of course has helped to keep the disaster more material than necessary: it is still fighting against some of the damages awarded, fully 18 years after the event, and the oil is still causing problems Study says Exxon Valdez oil lingering in Sound].

Organizations, especially matured businesses with long and/or loose internal EHS [environmental, health & safety] policies and performance, benefit from short attention spans. Experts and analysts do not. NGOs may be under-resourced, but they develop a truffle-sniffer's nose for spin, and their mission focus generates a fair dose of doggedness. I submit that nothing and no-one is more tenacious than a mission-driven person, with a beef and a laptop. Throw in the Internet, international relationships fostered at college, some rudimentary networking ability, basic research skills, and broadband, and you may or may not have a corporate reputation threat for very little money and a long time.

This is exactly why the one-year anniversary date for the PRI [27 April 2007] is important. I reasonably expect that the PRI [www.unpri.org] will generate some coverage, and I have encouraged James and the PRI team to use that tailwind. Of course, it is unclear whether the NYSE is as interested as April last year, although their engagement with Euronext may suggest sensitivty to Euro-sensitive issues like carbon. I noted with interest that Wall St hosted President Bush a few days back. Aside from graciously attributing the fair economic condition to his policies, President Bush offered the mixed signal of cheering corporate America while indicating the need for trimmed executive compensation. I am not sure how much applause that one got on the street with median $600k bonuses in 2006.

With a PRI anniversary, so too will come a re-examination of the whole issue of ESG in investment, along with the "who's who" that have already signed on. There has been talk of ejecting more names from the PRI - at least one organization has been "downgraded" to date, and UNEP is keen to keep the appearance of running a credible program with meaningful standards. Frankly, I am all for dropping the passengers, making sure the cohort stays near the sharp end of the field, stretching for improvement, not just hanging on.

Bottom line for Citi and other majors: with many not-for-profit, for-profit and thought leaders using NGOs as early warning systems, it is important to always maintain the initiative by staying proactive in engagement. Citi must have some substantive internal messaging ready by mid-April, even if it decides not to be external. The authenticity will be available, invaluable if a respected NGO requires some material representation. If the ongoing imbroglio with the Bartiromo and HNW unit, or the shuffle of Ms Krawcheck, proves to be distracting, Citi may at least lean on some hoped-for forthcoming positive commentary on their ESG effort.

Using External Rhythms to Drive Internal Disciplines
In working with money mangers on their ESG architecture, I strongly recommend the ESG project remain clear on the annual anniversaries of stakeholder initiatives and high-profile events by influential NGO's and SRI networks [CERES, INCR, PRI, IGCC, ICCR]. ICCR's annual shareholder advocacy agenda is a particularly useful resource, see [www.iccr.org/shareholder/proxy_book07/07statuschart.php]]. In my experience, NGO’s are willing to offer points for material efforts. A proactive approach for Citi may be to shadow the quarterly information flows around investor conference calls or reporting to SEC. With minimal internal changes, the ESG initiative may map internally to regular investor reporting.

For the money manager and its corporate parent, a regular reporting tempo with a simulated audience helps to generate the internal disciplines from behind the security of an internal process. It also teams the ESG approach with colleagues' regular processes, reducing the peculiarity factor. But if/when Citi needs to adopt a more market-facing, investor- and NGO-friendly approach, the corporate behavior and reporting pattern will already be imbued in the firm's DNA.

The actions and activities of each business unit and each asset class need to map to the overall sustainability and ESG approach. Citi is finding out the hard way. Champion status [in the minds of all NGOs] can slip away effortlessly in the course of an Olympic, four-year cycle.

As a sobering reminder to Citi and their measures of greatness - whatever RAN's opinion - an anecdote from the peleton: while Lance Armstrong is respected for his seven straight Tours de France victories, in his only Olympic podium, Lance shared it grimly with his self-professed arch-rival Jan Ullrich [Sydney 2000] BUT from one step lower on the Time Trial podium than Jan. Jan had also won the Road Race Gold. No Olympic Gold, together with Lance's lack of victories in Spring Classics cycling races, means he ranks as a great bike rider, but in a cohort with others, and below a consensus all-time legend like Eddy Merckx.


Afterword
Talk of World Cups reminds me: this summer in France I hope to enjoy some fine Rugby Union at the sixth Rugby World Cup. The Springboks may or may not show up [such is the sad state the Boks ended last season, despite the gritty win at Twickenham]. It will also be the fifth iteration of the All Blacks ongoing saga of being the tournament favorites who manage to self-destruct before they can lift the Webb Ellis trophy. A knowing wince by Hamish, a Kiwi at the Boston Sports Club [BSC] South Station Spinning class the other Wednesday, reminded me of the New Zealanders’ national torment each fourth year brings...