In the ESG performance chart above for Monsanto, the timely ESG pulse score from Truvalue Labs, the dotted line, precedes stock downturns, illustrated with the solid dark purple line.
Investment professionals who consider ESG factors shouldn’t be surprised by this week’s sharp drop in Bayer AG stock after news of an unfavorable early finding in a U.S. trial in which plaintiffs are suing, alleging that the weedkiller Roundup gave them cancer.
The above chart with timely ESG data shows the growing importance of lawsuits, which has become an important factor for Bayer following its merger with Roundup-manufacturer Monsanto in June 2018.
An ESG Research Brief from late 2018 by Truvalue Labs’ Andre Shepley explored the topic in depth.
The brief delved into why after the merger with Monsanto and a verdict in a legacy lawsuit, Bayer stock was already at that time at a multi-year low. That included:
- ESG issues that are now woven into Bayer’s fundamental outlook
- Other potential risks within Bayer‘s agriculture business