Lazard, Inc. · NYSE:LAZ
Lazard — ESG Presentation (December 2021)
19 slides from Lazard's sustainability presentation, December 2021
Slide 1: Lazard Climate Center
DECEMBER 2021 L A Z A R D C L I M AT E C E N T E R Copyright 2021 Lazard
Slide 2: Executive Summary
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Executive Summary Lazard’s Climate Center examines the corporate finance effects of climate change; it brings together finance practitioners and leading academics to provide cutting-edge analysis with actionable implications for firms and investor
Slide 3: Motivation for the Lazard Climate Center
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Motivation for the Lazard Climate Center As the private sector accelerates efforts regarding climate change and the energy transition, the Lazard Climate Center seeks to address knowledge gaps and serve as a partner to corporates and investors looki
Slide 4: The Lazard Climate Center — Key Individuals
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS The Lazard Climate Center — Key Individuals “Climate change affects all sectors of our global economy and creates new, evolving risks for companies as well as for investors. Lazard looks forward to being a driving force <4 in data-driven insights as
Slide 5: The Lazard Climate Center Framework
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS The Lazard Climate Center Framework By combining academics at the cutting edge of climate finance research and Lazard’s industry expertise, the Lazard Climate Center is developing differentiated insight on how climate change affects corporate financ
Slide 6: Key Findings: Most Comprehensive Analysis of Equity and Debt Implications Yet
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Key Findings: Most Comprehensive Analysis of Equity and Debt Implications Yet Widespread P/E discount based on carbon emissions Extent of P/E discount varies significantly by sector Larger companies experience a larger discount Areas of similarity b
Slide 7: Global Impact of Carbon Dioxide Emissions on Valuation Measures
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Global Impact of Carbon Dioxide Emissions on Valuation Measures Discounts found globally across multiple financial valuation metrics due to emissions e The analysis was conducted on a sample of over 16,000 global firms over an evaluation period of 2
Slide 8: Illustrative Change in P/E By Sector
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Illustrative Change in P/E By Sector Sensitivity to changes in emissions vary across sectors, but is broadly consistent with the finding that sectors with higher emissions experience a greater discount / potential for appreciation Average P/E Apprec
Slide 9: Illustrative Change in P/E by Market Cap
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Illustrative Change in P/E by Market Cap Large cap companies experience far greater valuation discounts than small cap companies — Results for companies with <$1bn in market cap may be affected by lower voluntary disclosure rates relative to mandato
Slide 10: Large Cap Emissions Impacts Are Sensitive to Regulatory Developments
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Large Cap Emissions Impacts Are Sensitive to Regulatory Developments The results suggest that large cap emissions premiums across both the U.S. and Europe are responsive to changes in the regulatory environment Average P/E Appreciation for Large Cap
Slide 11: What this Means for Corporations
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS What this Means for Corporations Key F Ie] Implications for Corporations Widespread P/E discount based on carbon emissions Investors are actively pricing in risk from emissions profile, though the effect is often currently small Changes in emissions
Slide 12: Future Directions
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Future Directions The Climate Center has curated an agenda to deliver more cutting-edge insights Evaluating the Carbon Impact in M&A Transactions The Evolving Role of Carbon Offsets Climate Sentiment Analysis Hedging Carbon Investor Environmental Ta
Slide 13: Appendix
CONFIDENTIAL OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS Appendix Copyright 2021 Lazard
Slide 14: Background Details: The Fine Print
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS APPENDIX Background Details: The Fine Print Sample of 16,995 global firms between 2016 and 2020; firms included in the analysis have either disclosed emissions through the Carbon Disclosure Project (CDP) or have provided emission data in publicly
Slide 15: Illustrative Change in P/E By Market Cap in Energy Sector (U.S. and Europe)
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS APPENDIX Illustrative Change in P/E By Market Cap in Energy Sector (U.S. and Europe) Energy companies in the U.S. and Europe receive some of the highest valuation discounts, especially large cap companies Average P/E Appreciation Based on a 10% Redu
Slide 16: Illustrative Change in P/E By Emissions Quartile
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS APPENDIX Illustrative Change in P/E By Emissions Quartile High-emitting firms are rewarded with bigger valuation lifts from emissions reduction Average P/E Appreciation Based on a 10% Reduction in Emissions 0.61% 0.51% 0.43% 0.17% Emissions Bottom 2
Slide 17: Findings on Other Greenhouse Gases
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS APPENDIX Findings on Other Greenhouse Gases Methane and Hydrofluorocarbons (HFCs) have statistically significant, though small, effects on valuation Average P/E Appreciation Based on a 10% Reduction in Emissions1 Observations Estimated impacts for
Slide 18: Findings on Emissions and CDS Spreads
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS APPENDIX Findings on Emissions and CDS Spreads Carbon emissions also have an effect on CDS spreads, with a statistically significant result most pronounced for small cap companies Average CDS Spread % Increase for | Caps‘ Based on a 10% Rise in Emis
Slide 19: Disclaimer
OVERVIEW OF INITIAL LAZARD CLIMATE CENTER FINDINGS APPENDIX Disclaimer These materials have been prepared by Lazard for general informational purposes only and they are not intended to be, and should not be construed as, financial, legal or other advice. In preparing these materials, Lazard has assu