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        Robins
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Shareholder Values

 
"Forty-five percent of U.S. households prefer an environmental, social and governance (ESG) approach to investing… Among those between the ages of 30 and 39, this increases to 64%, and for those younger than 30, it is 67%."
-- Cerulli Associates
 
 (USA)
    October 2018

"The vast majority of Canadian investors are interested in responsible investments (RI) that incorporate environmental, social and governance (ESG) issues, and they would be more likely to choose responsible investments if their financial advisor suggested suitable RI options for them."
-- Responsible
    Investment
    Association (RIA)
 
  (Canada)
    June 2017

"70% of people [in UK] want to invest ethically but the financial services industry is failing to respond." Referencing research by Abundance.
-- Acquisition
    International
   
(UK) June 2015

 

Events

 

Global Ethical Investing News & Commentary

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Links may only be valid for a limited time   April 19, 2019

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3 Ways to Make Your Portfolio More Climate-Aware. "Grantham and his colleagues at GMO looked at what happens when you remove a single sector from an S&P 500-based portfolio. They created S&P 500 portfolios ex energy, ex healthcare, and ex the other eight sectors in the index, going back to 1989, 1957, and 1925.

They found that the range of returns for the ex portfolios was only 50-60 basis points annualized, distributed above and below the S&P 500's return. In the case of the ex energy portfolio, it underperformed the S&P 500 by just 5 basis points annualized from 1925 to 2017, underperformed by 7 basis points annualized from 1957 to 2017, and outperformed by 3 basis points annualized from 1989 to 2017.

Grantham's conclusion: 'You can divest from oil--or about anything else--without much consequence for performance.'"

[COMMENTARY] For decades I've heard -- and you too I'm sure -- that if you narrow your investment universe you will get lower returns. Well, look at the evidence here that refutes that argument. Nonetheless, I would be happier if this research was written-up and published in an appropriate peer-reviewed journal and critiqued. Also, Grantham says that the fossil fuel sector is way overpriced considering its risks.
3 Ways to Make Your Portfolio More Climate-Aware, by Jon Hale, April 18, 2019, Morningstar, USA.

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How to Reduce Investment Risk From Climate Change and Other ESG Woes. "If no counter action is taken, such as reducing fossil fuel use, close to 60% of U.S. metro areas will lose 1% of more of gross domestic product, which will not be offset by comparable growth in other metro areas."

[COMMENTARY] In the article, it's noted that municipal bonds could lose badly if municipalities don't adapt to climate change.
How to Reduce Investment Risk From Climate Change and Other ESG Woes, by Bernice Napach, April 18, 2019, ThinkAdvisor, USA.

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Official ESG Evaluations from S&P Coming to Insurance Sector in Near Future. "'The ratings giant on April 11 announced the roll out of its ESG Evaluation, describing it as 'a new benchmark that provides a cross-sector, relative analysis of an entity's capacity to operate successfully in the future.'"

[COMMENTARY] S&P's new ESG product sounds great. However, I see a big snag with it: companies probably have to request they be rated! So, this means companies will have to pay to be rated. Is this yet another conflict of interest similar to the one that got these credit rating agencies into hot water back in 2008/9? Can you trust such ratings then?
Official ESG Evaluations from S&P Coming to Insurance Sector in Near Future, by Don Jergler, April 18, 2019, Insurance Journal, USA.

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New Survey Finds Most Americans Unaware of ESG Investing. "In a survey of 1,000 American investors in late 2018, about 55% of people don’t know what social investing is... The findings suggest that people who learn about social investing are highly interested in it."

[COMMENTARY] I don’t think this is surprising since most advisors still don’t talk about nor, at the retail level, do most banks and financial institutions. On the positive side, this survey does show 45% of investors do know about it.
New Survey Finds Most Americans Unaware of ESG Investing, by Brendan Coffey, April 15, 2019, Forbes, USA.

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Climate-risk disclosure takes investors by storm. "in the short time since July 2017, following the release of the TCFD guidelines, more than 500 large businesses, investors and industry groups have signed on to provide this type of forward-looking financial disclosure. Companies in the financial services industry are leading the way in their support of the TCFD recommendations, including BlackRock, State Street and S&P Global, along with the Association of Chartered Certified Accountants."

[COMMENTARY] Ethical and sustainable investors will benefit from increased and improved climate-related disclosure. It’ll enable them to better asses related corporate and investment risks. I just wonder how President Trump will view this since he’s trying to do whatever he can to restrain ESG-based investment growth in the US.
Climate-risk disclosure takes investors by storm, by Libby Bernick, April 15, 2019, GreenBiz, USA.

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ESG in Investment Management: New Age or Just Noise? "Our recent ESG survey results show some interesting shifts. This survey was conducted with Principles for Responsible Investment (PRI) with 1,100 financial professionals and 23 workshops in 17 investment centers around the world."

[COMMENTARY] The survey by the CFA Institute and Principles for Responsible Investment (PRI), shows the real state of ESG in investment analysis. Governance is important but Environment and Social factors much less so. This confirms other surveys that have tried to determine the relative importance of each of the three variables that make-up ESG. In part, information concerning the materiality of environmental and social factors to profits is often unclear and not easy to ascertain.
ESG in Investment Management: New Age or Just Noise? By Kurt Schacht, April 12, 2019, Nasdaq, USA.

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The S&P 500 Gets an ESG Makeover — but It May Not Go Far Enough. "Some longtime ESG investors are less than impressed with the news. ’The biggest thing about this is it shows how far the concept of sustainable investing has penetrated into the mainstream market,’ says Jon Hale, global head of sustainability research at Morningstar. ’The trouble is that even as investors become more concerned about the social and environmental impact of their investments, they’re forced to invest in everything, including companies that make weapons or treat the environment poorly.’"

[COMMENTARY] As Jon Hale says, though the new S&P 500 ESG index offers great diversification -- it’s that very diversification that in itself is a huige issue for many ethical and sustainable investors. Again, that’s why I encourage investors to take my DIY Ethical-Sustainable Pays Tutorial to learn how to get diversification that also reflects your personal values. This article provides a good explanation of the pros and cons of the new index.
The S&P 500 Gets an ESG Makeover -- but It May Not Go Far Enough, by Leslie P. Norton, April 11, 2019, Barron’s, USA.

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[US] Workers want those hard-to-find socially responsible investments in their 401(k) plans: Survey. "A new survey finds that 61% of workers would increase their retirement savings if they could put their money in socially conscious investments. The same survey also found that just 13% of workers have access to those kinds of impact investments."

[COMMENTARY] There appear to be several reasons why employers are reluctant to offer SRI/ESG investments in US 401(k) plans. Chief among them, according to the Nataxis survey, is that employers don’t feel it’s right for them to "impose their morals on their employees′ investment choices." Personally, I think that answer is absurd since they’re also offering many other options too, which when considered, are also ’moral choices!’

The second principal reason is due to the US Department of Labor making it clear that ESG couldn’t be used as the main criteria for selecting investments. This, of course, reflects President’s Trump’s campaign to promote old and dirty industries -- which usually score low on ESG measures.
[US] Workers want those hard-to-find socially responsible investments in their 401(k) plans: Survey, by Lorie Konish, April 9, 2019, CNBC, USA.

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A regulatory lens when assessing ESG risks. "internally we look at sustainability through an ESG-R lens, which includes regulation alongside environmental, social and governance factors. Many of our investment companies have held leading industry positions and, as a result, regulation is one of the greatest risks they face."

[COMMENTARY] A regulatory lens makes sense. Most ESG portfolios are top heavy with tech and social media companies. These groups face extraordinary regulatory pressures and the effects on their stock prices are undetermined.
A regulatory lens when assessing ESG risks, by Sudhir Roc-Sennet, April 8, 2019, Investment Europe, UK.

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S&P unveils ESG version of ’iconic’ 500 index. "S&P Dow Jones Indices has launched an ESG-centric version of its long-running S&P 500 index as part of plans to launch a wider family of responsibility-focused indices... The index has been developed to serve not only as a performance tracking tool but also as a building block for creating new ESG index-based investment products such as ETFs."

[COMMENTARY] This is exciting news for ethical and sustainable investing. The S&P 500 index and financial products based on it, are among the most popular financial products to have ever been conceived. RobecoSAM will be creating the index. They also are responsible for the FTSE4Good index.
S&P unveils ESG version of ’iconic’ 500 index, Chris Sloley, April 8, 2019, CityWire Selector, UK.

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More Funds Are Formally Considering ESG in Their Investment Processes. "The number of actively managed funds that are adding environmental, social, and governance criteria to their prospectuses is exploding. I first noticed this phenomenon two years ago when several funds run by J.P. Morgan, Morgan Stanley, and RBC did so. Then last year, another 51 funds added ESG criteria to their prospectuses, including all 21 funds run by Aberdeen.

But in this year’s first quarter alone, an astounding 73 funds added ESG criteria, including funds run by AllianzGI, Calamos, ClearBridge, MainStay, Neuberger Berman, Schroders, TCW, and Transamerica."

[COMMENTARY] If this doesn’t prove ESG has arrived -- what will? However, we’ll have to see if advisors are inspired to recommend them! They have always been the hurdle for ESG product adoption.
More Funds Are Formally Considering ESG in Their Investment Processes, by Jon Hale, April 4, 2019, Morningstar, USA.

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Ethics & Trust in Finance Prize. "Promotes greater awareness among young people throughout the world concerning the benefits of ethics in finance. It aims to encourage high-quality management of banking, insurance and financial services based on trust and integrity. Launched in 2006..."

[COMMENTARY] I’ve been helping to promote this terrific prize since 2006. Now, it has the support of institutions such as the CFA Institute, Euroclear, and the OECD. They’re looking for more entries for the prize. If you know of anyone who might like to submit for the prize, they have until May 31 to do so!
Ethics & Trust in Finance Prize, press release, April 4, 2019.

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Investing with equal pay in mind may be more difficult than you think. "Investors who are concerned about equal pay may want to consider certain gender and diversity funds that are making this issue a priority."

[COMMENTARY] Research by Morningstar shows -- among other things -- that stockholder voting by funds focused on gender issues is not always what you’d expect.
Investing with equal pay in mind may be more difficult than you think, by Lorie Konish, April 2, 2019, CNBC, USA.

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Winners of Environmental Finance Bond Awards 2019 honoured by market. "The hotly contested awards, which cover the 2018 calendar year, aim to recognise best practice, or issues that were significant for the development of the market. The awards are particularly prestigious because the winners were decided by an independent panel of juInvesting with equal pay in mind may be more difficult than you think,dges made up of some of the biggest investors in the green, social and sustainability bond market."

[COMMENTARY] These awards aren’t about which green bonds made investors the most money, but, rather, included characteristics such as quality, innovativeness, best practices, etc. Nonetheless, if you’re wanting to invest in, or add to your present green bond holdings, you might find some ideas among the winning green bonds here.
Winners of Environmental Finance Bond Awards 2019 honoured by market, April 2, 2019, Environmental Finance, UK.

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Global Sustainable Investments Rise 34 Percent to $30.7 Trillion, by Emily Chasan, April 1, 2019, Bloomberg, USA.
Greenwashing purge sees sustainable funds lose share in Europe, by Siobhan Riding, April 1, 2019, FT, UK.

[COMMENTARY] Both the above stories reveal data from the same Global Sustainable Investment Alliance study released April 1. However, they each have rather different messages. It might be that institutional sustainable investing in Europe is maturing while still growing in other geographic regions. Even at the retail level though, Europe -- as in most regions -- still has a lot of room to grow.

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Ignore the Myths: Factor and ESG Investing Work Together. "One firm looked inside ’conventional wisdom’ of socially responsible investing and found the real story."

[COMMENTARY] MSCI has done some interesting original research here trying to decipher the pure role of ESG in returns. I’m sure MSCI did careful work, however, unless a study gets published in a peer-reviewed journal or is similarly verified by other studies, I always have some skepticism as to its reliability.
Ignore the Myths: Factor and ESG Investing Work Together, by Ginger Szala, March 27, 2019, ThinkAdvisor, USA.

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British investors more worried about the planet than Brexit. "The UK’s leading peer-to-peer ethical investment platform, Abundance Investment, today publishes the results of its sixth Great British Money Survey revealing the key ethical and environmental issues people care about and which motivate investors.

Reducing plastic waste’ is the issue of greatest concern, with 81% saying they are extremely or somewhat concerned about this, followed by ’levels of waste’ at 78%. Brexit came fourth (73.5%) after air pollution (74.5%)."

[COMMENTARY] Fascinating! I wonder if such findings can be corroborated? Abundance is known for doing a good job with their surveys. Anyhow, read the article as there are other interesting numbers -- particularly for advisors.
British investors more worried about the planet than Brexit, by Stuart Fieldhouse, March 28, 2019, The Armchair Trader, UK.
 

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Why ESG Is Too Nuanced for Index Investing. "Active management brings deeper analysis and nimbler choices into building socially responsible portfolios."

[COMMENTARY] The article makes a strong case for active management!
Why ESG Is Too Nuanced for Index Investing, Frances E. Tuite, March 26, 2019, ThinkAdvisor, USA.

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What Are Green Bonds and How ’Green’ Is Green? "Because investors face the challenge of judging whether a note is truly green, regulators are working on standards to help guard against greenwashing, or misleading claims about just how good a friend to the environment an issuer is."

[COMMENTARY] A great review article on green bonds for ethical investors.
What Are Green Bonds and How ’Green’ Is Green? By Lyubov Pronina, March 24, 2019, Bloomberg Businessweek, USA.

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The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership. "The authors reviewed eight rankings by evaluating the methodologies that these systems have published online and that are available to the public. They assessed whether companies′ policy engagement activities were considered in the rankings, and how, if considered, they were tabulated as part of the companies′ overall rankings or scores...

Most corporate sustainability rankings do little to encourage companies to engage in climate policy, as they neither recognize support for nor penalize opposition to climate policy."

[COMMENTARY] Only two of the eight  corporate sustainability rankings in this study qualify under in this regard: Corporate Knights’ Global 100 and InfluenceMap. The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership, March 2019, Environmental Defense Fund, USA.

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Ethical Funds Have Never Been Cheaper As Vanguard Spurs Fee War. "The price war has come to socially conscious investing. BlackRock (BLK), Vanguard Group and Deutsche Bank’s (DB) DWS Group have slashed fees for exchange traded funds that track companies performing well on environmental, social and governance criteria."

[COMMENTARY] Finally, ethical fund fees are coming way down with the advent of new players.
Ethical Funds Have Never Been Cheaper As Vanguard Spurs Fee War, by Bloomberg News, March 21, 2019, USA.
Also, an insightful writeup on Vanguard’s new Global ESG Select Stock fund by Morningstar’s Jon Hale is worthy of a read.

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How to Evaluate Funds that Invest in Women. "Because data around gender was so thin, Andrew Behar, CEO of As You Sow, a California-based nonprofit shareholder advocacy group focused on ESG, says his group worked with Equileap to compile more information about corporate gender policies, including policies like training, career development, safety at work, human rights and other issues...

His group recently created a gender-equality funds tool that analyzes mutual funds and ETFs, taking into account these different gender attributes and giving each fund a score."

[COMMENTARY] Good article on this subject. Behar and colleagues’ work sounds most interesting. It’ll be fascinating to watch how they’re able to execute their findings and the returns they achieve.
How to Evaluate Funds that Invest in Women, by Debbie Carlson, March 21, 2019, US News, USA.

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Large fund firms’ support for combating climate change is all talk, as proxy voting record shows bottom performance. "A data analysis released by Ceres in early March shows that when BlackRock and Vanguard are measured on their up-or-down votes on climate change resolutions at stockholder annual meetings, they have among the worst voting records in the fund industry."

[COMMENTARY] The data would appear irrefutable that the largest American fund companies don’t ’walk the talk.’ However, I tend to believe -- and hope -- that senior manager’s prognostications of incorporating ESG analysis throughout their organizations perhaps hadn’t yet filtered down to the managers making the proxy decisions who are likely engaged with other concerns. I expect that the 2019 and 2020 proxy seasons will show much-improved results.
Large fund firms’ support for combating climate change is all talk, as proxy voting record shows bottom performance, by Eric Rosenbaum, March 19, 2019, CNBC, USA.

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Investors Lose a Major Justification for Holding Tobacco Stocks. "In recent years, a flurry of European pension funds and insurers have begun divesting their holdings, putting pressure on the share prices. BAT had its worst year on record last year, slumping 50 percent, as the U.S. Food and Drug Administration toughened its stance toward the tobacco industry. Philip Morris slumped 37 percent."

[COMMENTARY] I’ve been arguing for many, many years, that the days were numbered for big tobacco. In July 2010, I wrote an editorial, Sin or Ethical Investing: Which Pays Best? There, I said, "Over the next five to ten years, and with the effects of the sovereign debt crises upon us, I suspect that ethical stock portfolios could outperform both the sin and conventional variety."
Investors Lose a Major Justification for Holding Tobacco Stocks, by Lisa Pham, March 13, 2019, Bloomberg, USA.

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Who runs the world? The global status of women in leadership. "Regardless of progress at the board level, the glaring reality is that the world′s largest corporations are stalled in second gear when it comes to hiring women in C-suite leadership roles. Top senior executive officers with the letter C in their title (CEO, CFO, CIO, COO, CSO) lag behind on gender in all markets."

[COMMENTARY] Although several reputable studies have shown that having women and diversities on boards and in management generally leads to superior financial performance, corporations generally have been slow to include them. The study published by Corporate Knights provides terrific insight into this reality.
Who runs the world? The global status of women in leadership, by Sophie L’Helias & Adria Vasil, March 9, 2019, Corporate Knights, Canada.

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EU agrees on new rules to counter investment ’greenwashing’. "The European Union agreed on Thursday on a new law that forces asset managers, insurers and pension funds to disclose environmental risks in their investments. The law is meant to spur green investment and to curb ’greenwashing’, a practice whereby companies claim to be more environmentally friendly than they really are."

[COMMENTARY] Europe again is at the forefront of what inevitably will be followed by other jurisdictions. Companies and asset managers are now warned to be truthful in their environmental assessments and risks posed. Since many of those affected are global in nature, they’re likely to extend these guidelines to their activities well beyond Europe.
EU agrees on new rules to counter investment ’greenwashing’, by Francesco Guarascio, March 7, 2019, Reuters, Belgium.

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Is your ethical investing app upselling greenwash? "Animal welfare′ funds heavy in animal testing? Low-carbon funds dripping in oil? Your BS-free green guide to 9 SRI apps."

[COMMENTARY] Corporate Knights have produced one of the few really good analytical studies on ethical investing apps for North Americans. They believe there are some good robo apps for Americans, but not so for Canadians. Anyone interested in such apps should also enroll in my 1-hour DIY Ethical-Sustainable Investing Pays Tutorial.
Is your ethical investing app upselling greenwash? by Adria Vasil, March 5, 2019, Corporate Knights, Canada.

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Disclaimer: This website does not make investment recommendations. Nothing in this site should be interpreted as a recommendation or solicitation to buy/sell any securities or investments. Investing for the Soul is a source of general information and resources for ethical investing and socially responsible investing (SRI). Investors should consider their actions thoroughly and consult their financial advisers and other professionals, prior to taking any investment action. This website does not necessarily agree with the opinions expressed in articles on its pages or offered on the web pages to which it might be linked. Such opinions are the responsibility of the writers themselves. Furthermore, this site does not offer or provide any warranties, representations, guarantees, implied or otherwise, as to the accuracy, legality, copyright compliance, timeliness or usefulness of the information, materials or services on this, or other sites, to which it is linked. Also, Mr. Ron Robins is not an investment advisor, nor is he licensed with any professional investment related body, and thus is not able to, nor does he make, any investment recommendations.

 

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