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ESG-Part 1, October 14 Conference Information
September 18, 2022
David R. Kotok
Chairman & Chief Investment Officer
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This is the beginning of a multipart series on ESG. ESG is loosely defined as environmental, social, and governance factors in investing. There is an evolving rating system, with multiple factors. It is applied to different types of organizations, and it is becoming a worldwide standard. In the multipart series to come, you will see numerous citations to support the description I’ve just offered. You will also see numerous citations of anti-ESG activity — it’s a hot-button topic, as you may have noticed. 
The anti-ESG activity originates in our dysfunctional political system. There is some reluctance to embrace ESG in the business community, and there are now anti-ESG financial products. During the course of this multi-part series, we will talk about all sides of this issue. 
Let me begin with a comment that came to me from a reader and fellow professional. She said, “The first cranial nerve is smell,” and she seemed to be suggesting that the recent anti-ESG brouhaha is giving off a suspect odor. Her remark inspired me to review the 12 cranial nerves. Below is the list, with definitions, from the Cleveland Clinic.
Your 12 cranial nerves each have a specific function. Experts categorize the cranial nerves based on number and function:

01 - Olfactory nerve: Sense of smell
02 - Optic nerve: Ability to see
03 - Oculomotor nerve: Ability to move and blink your eyes
04 - Trochlear nerve: Ability to move your eyes up and down or back and forth
05 - Trigeminal nerve: Sensations in your face and cheeks, taste and jaw movements
06 - Abducens nerve: Ability to move your eyes
07 - Facial nerve: Facial expressions and sense of taste
08 - Auditory/vestibular nerve: Sense of hearing and balance
09 - Glossopharyngeal nerve: Ability to taste and swallow
10 - Vagus nerve: Digestion and heart rate
11 - Accessory nerve (or spinal accessory nerve): Shoulder and neck muscle movement
12 - Hypoglossal nerve: Ability to move your tongue
(“Cranial Nerves,”
I thought to myself, smell is the way we protect ourselves as infants with our first recognition of friends (our mother) and foes (risk or enemy). Smell is conveyed by the first cranial nerve. It is well established that an infant recognizes his or her mother first through the olfactory nerve.
The last two cranial nerves in the list are the accessory nerve and the hypoglossal nerve. The 11th, the accessory nerve, controls the mechanics by which we shrug our shoulders to say we don’t care what the outcome is, or we’re not interested, or it’s not important because the outcomes of actions and events that take place today (or don’t take place) will happen in the future rather than the present; and therefore what we do with today, we can get away with, even if it’s misleading or disruptive or destructive. 
The 12th cranial nerve is the one that controls speech — our tongue, our mouths, and how we articulate things. That, too, is used both wisely and maliciously by various people who either speak with care after looking for citations, support, evidence, and data — or else misuse whatever they can to mislead victims and the vulnerable. 
The 11th and 12th cranial nerves are the tools of politicians and those who are involved in failed corporate governance. The G in ESG is about the prudent application — or the misapplication — of the 11th and 12th cranial nerves. You might think of ESG as, metaphorically speaking, the hidden, 13th cranial nerve. We don’t even get to think about it until we are mature (whatever that word means) adults (whatever that word means). So our multi-part series is going to discuss the hidden 13th cranial nerve known as ESG.

Let’s start this series by alerting readers to a conference, “Environmental, Social, and Corporate Governance,” that will take place at Rowan University on October 14, 2022 (
Environmental, Social, and Corporate Governance (ESG) Conference at Rowan University October 14, 2022

The conference welcomes participants for in-person attendance; there will also be virtual sessions; there will be replays and YouTube recordings. We would invite anyone to view, listen, criticize or commend — after they take time to digest the presentations, which are made by serious folks involved in finance, economics, law, corporate governance, and politics.
Readers can quickly review the entire conference agenda at this link: The program has been expanded since the original program last February was postponed. Two of my colleagues — Patty Healy, Cumberland’s Senior Vice President of Research and Portfolio Manager, who directs municipal credit research in our firm, and John Mousseau, our President, CEO, and Director of Fixed Income — are both discussants on a panel in this conference. 
My role at the end of the conference will include a conversation with two prestigious professionals. One is Michael Zezas, whose senior management role at Morgan Stanley has earned him worldwide recognition for his skills and experience. He is currently Managing Director and Head of US Public Policy Research & Municipal Credit Strategy. The other is Jaynee LaVecchia, who recently retired after over 20 years as an associate justice of the New Jersey Supreme Court and who is presently a partner at the McCarter & English law firm ( My job is to moderate a discussion at the end of this conference in which we will focus on issues surrounding decision-making by those who are responsible for governance, how they deal with the ESG multi-factor area in making those decisions, and how to evaluate governance using ESG standards.
Here, again, is the registration link:
For Cumberland’s current clients, prospective clients, referring consultants, and others involved in this ESG dialog, you can see that Cumberland favors the use of ESG ratings and factors as part of its analytical process. Cumberland uses ESG on behalf of its clients in their investment decision-making process and on behalf of our economic analysis as we evaluate business opportunities, the impact of governance, and negative and positive outcomes. Like many others among financial, business, and economic agents, we find that ESG in its proper usage is a powerful tool. We will demonstrate that with specific examples as we go through this multi-part series.
This is the introduction Part 1 of the ESG series. Along the way, we’re going to probe specific examples. The first example in the realm of ESG — recent news in Jackson, Mississippi — will be the focus of Part 2. We’ll see you on October 14, and we hope you will find Part 2 of interest.
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