The Financial Accountability & Impact Ratio Valuation Model (FAIR VM) is a means of quantifying the environmental, social, and governance (ESG) practices of corporations so that we can determine their social capital and their adjusted, 'FAIR' stock price. It allows investors to quickly and reliably determine which companies will use their money for good as opposed to merely profit.
Social capital is exactly what it sounds like. It's capital that allocated toward social efforts. In this case, we use the term broadly to refer to the financial value of a company's environmental, social, and governance activities.
We adjust the stock price of companies based on their ESG activities. A positive adjustment (i.e., undervalued) indicates that a company contributes a significant amount of social capital compared to their peers, while a negative adjustment (overvalued) indicates that a company could be doing much more.
We currently assess approximately 150 activies across environmental, social, and governance concerns. A detailed list of these points will be available through our website soon. Additionally, we want our model to be comprehensive and adaptable, so we will also be providing an online form so that consumers can submit new ESG measures for consideration.
First, we want our product to be accessible. Numerous large financial institutions have their own ESG assessments; however, they are often priced far out of reach of everyday, retail investors. Much of the information that we provide, however, is free to access from our website. Second, our model goes one step further by quantifying ESG practices. In other words, we are able to assess the financial value of typically qualitative efforts. This gives investors an additional means of gauging where their money is going and how it is being used.
We only source our corporate ESG data from reputable sources to ensure objectivity and accuracy, and all of the companies in our model are assessed using the same ESG criteria and scoring system.
Not yet, but we hope to soon! We would like to offer a plug-in that would provide users with ESG information (e.g., adjusted 'FAIR' price and social capital) alongside the exchange-fed financial data that these platforms provide. This is one of the next phases in our development.
We are currently in the process of expanding our ESG dataset to include additional industries and companies. On top of plug-in development, we also plan to use artificial intelligence to automate the data collection process for public companies, scraping company websites, news articles, and financial reports to update our ESG database with minimal human intervention. We would also like to pursue additional partnerships and explore an opt-in feature for companies to self-submit ESG information, followed by the necessary verification procedures.