Events

Global Ethical Investing News & Commentary

Archives

Commentaries by Ron Robins  E-mail us your feedback

        Links may only be valid for a limited time                                                    May 21, 2013

                                             ***List your event on our Events Page***

Shareholders Press Companies To Disclose More About Political Spending. - [COMMENTARY] "As regulators wrestle with whether to force companies to disclose more about their political spending, an increasing number of shareholders are taking matters into their own hands, thrusting the issue before boards of directors at companies across the country. The number of shareholder proposals demanding more transparency in political spending has more than doubled since 2010, jumping from 61 to 128 this proxy season, according to the Sustainable Investments Institute, a research group that tracks the issue."

It seems obvious to me and most ethical investors that companies should disclose all political contributions. Transparency of all spending should be available to shareholders. Company boards and officers should not be allowed to secretly support their political favourites with company funds.
Shareholders press companies to disclose more about political spending, by Dina ElBoghdady, May 17, 2013, Washington Post, USA.

European Responsible Investment Grown 19% Since 2010. - [COMMENTARY] "Assets under management in European responsible investment funds now total €237.9 billion (£201 billion) – a 19% increase since 2010 – according to a survey by the Association of the Luxembourg Fund Industry (ALFI). The European Responsible Investment Fund Survey, published by accountancy giant KPMG on behalf of ALFI, found that the proportion of responsible investment assets compared to the total had increased by 1.6%." In time, most of the conventional fund industry will also move towards a responsible-ethical investing approach. They will realize that evaluating investments on an ESG basis simply makes more money.
European responsible investment grown 19% since 2010, by Emma Websdale, May 16, 2013, Blue & Green Tomorrow, UK.

Investor Group Proposes ESG Disclosure Rules. - [COMMENTARY] "The Ceres-led Investor Network on Climate Risk has proposed that companies listed on US and global stock exchanges be required to include a series of environmental, social and governance sustainability disclosures in their annual financial filings." It's good that CSR/SRI groups maintain their pressure on regulatory authorities on this issue, as regulators are less likely to make such changes without it.
Investor Group Proposes ESG Disclosure Rules, press release, May 13, 2013, Ceres, USA.

Has Sustainability Become A Risky Business? - [COMMENTARY] "A new report released by Ernst & Young presents a disconcerting paradox when it comes to corporate sustainability efforts. While more companies are concerned about increased risk and proximity of natural resource shortages, corporate risk response appears to be inadequate to address the scope and scale of some of these challenges."

As in most human activities, it's only when a crises hits that remedial and proactive action to mitigate future problems are enacted. So, it's not surprising to find companies poorly prepared to address future material sustainability issues.
Has sustainability become a risky business? By John Davies, May 7, 2013, GreenBiz, USA.

Five ESG Standards Will Awaken Capital Markets. - [COMMENTARY] "Five concurrent ESG standards initiatives that are in play in capital markets ... will lead to an ESG mindset in lenders and investors. Following the axiom that 'what interests capital markets fascinates executives,' this will precipitate an ESG mindset in company executives." Mr. Willard's blog post from a few days ago is well worth reading for all investors.
Five ESG Standards Will Awaken Capital Markets, by Bob Willard, May 7, 2013, sustainabilityadvantage.com, Canada.

Report: Half of U.S. Fracking Wells Are Drilled In Highly Water-Stressed Regions. - [COMMENTARY] "A report released last week maps the relationship between water stress and the unconventional oil and gas reserves that have pushed the boom, while outlining actions energy companies can take to improve resource management. Nearly half of the wells drilled in the U.S. in recent years, 47 percent, are located in river basins with high or extremely high risk of water stress, according to the report from Ceres, a nonprofit that works with investors, businesses and credit rating agencies to identify environmental risks in business models."

Will the fracking boom be cut dry due to water scarcities? It could happen.
Report: Half of U.S. Fracking Wells Are Drilled in Highly Water-Stressed Regions, by Brett Walton, May 10, 2013, Circle of Blue, USA.

Investor Attitudes, Investment Screen Use, And Socially Responsible Investment Behavior. - [COMMENTARY] "We find that four out of five components of the New Ecological Paradigm (NEP) scale, a measure of basic environmental attitudes, are associated with specific attitudes towards environmentally responsible investment. These specific attitudes in turn are positively associated with SRI screen use, and SRI screen use is positively associated with the percentage of investors’ portfolio held in SRIs. There is also a significant direct relationship between specific environmentally responsible investment attitudes and SRI holdings. Our results suggest that there are complex, multi-dimensional relationships between investor attitudes, SRI screen use, and investment behavior."

Though these are unsurprising findings I do believe this type of research is useful.
Investor Attitudes, Investment Screen Use, and Socially Responsible Investment Behavior, by William N. Dilla and Diane Joyce Janvrin (both of Iowa State University - Department of Accounting and Finance), Jon D. Perkins (Iowa State University), and Robyn Raschke (University of Nevada, Las Vegas), May 2, 2013, USA.

Phil Angelides Wins Joan Bavaria Award For Promoting Sustainable Markets. - [COMMENTARY] "Phil Angelides has been awarded the fifth-annual Joan Bavaria Award for Building Sustainability into the Capital Markets. The announcement was made today, the first day of the annual Ceres Conference, which is running May 1-2 at The Fairmont in San Francisco, CA." Awards such as these help spur interest in sustainable and ethical investing. That's why I like to mention them.
Phil Angelides, a Leader in Shareholder Activism and Green Investment, Wins the Joan Bavaria Award, press release, May 3, 2013, Ceres, USA.

Global Women's Equity Fund A First For Canada. - [COMMENTARY] "In a first for the Canadian investment landscape, the Global Women’s Equity Fund announced today that it is almost ready to launch.'This fund is great for society, great for women and a unique concept that didn’t exist here in Canada' said Chief Marketing Officer Alexis Klein. The fund will invest primarily in equity securities of companies that have demonstrated their support of women’s causes and are leaders in promoting gender equality in the workplace." This fund will serve an interesting niche. It's already known that where women are well represented on company boards, the boards function better and the companies have relatively higher earnings. I wish the find sincere best wishes.
Global Womens Equity Fund a first for Canada, by Sucheta Rajagopal, May 2, 2013, SRI Monitor, Canada.

Most Firms Don’t Report GHG Emissions, Report Says. - [COMMENTARY] "Only 37 percent of the world’s largest companies report their greenhouse gas emissions fully and correctly, according to research from the Environmental Investment Organisation." Again, not an unsurprising outcome. It's interesting to see who does report though.
Most Firms Don’t Report GHG Emissions, Report Says, press release, May 2, 2013, Environmental Leader, USA.

FTSE Launches New Environmental Index. - [COMMENTARY] "FTSE has unveiled the Environmental Technologies Index (ET 100), which will assess companies operating within environmental markets.
The ET 100 is the 21st index in the FTSE Environmental Markets series and will include firms involved in environmental technologies such as renewable energy, water, energy efficiency, waste management and pollution control." With yet another new ESG related index, it's obvious that the creators of these indices see a good market for them--and therefore, investor interest.
FTSE launches new environmental index, by Ilaria Bertini, May 2, 2013, Blue & Green Tomorrow, UK.

CSR Just PR Spin - Report. - [COMMENTARY] "According to the 2013 UHNW Investor Changing Attitudes and Behaviors study, these wealthy individuals appear to be increasingly unlikely to become socially responsible and instead invest primarily for financial gain and not to make the world a better place, according to new research from the Spectrem Group."

The results of this survey--when you read them in the linked article below--aren't unsurprising really, when you consider how the questions and responses are framed.

Again, I'm sure that if a question was framed, such as, "Knowing that companies who are highly rated on environmental, social and governance (ESG) factors are more profitable and with relatively higher stock prices, how likely are you to invest in them?" The points in this question are factual and would no doubt elicit a very high 'yes' score. How questions are framed often determines the answer!
CSR Just PR Spin - Report, May 1, 2013, Pro Bono News, Australia.

India's BSE Launches Broad-Based Islamic Index. - [COMMENTARY] "May 1 (Reuters) - Mumbai's stock exchange (BSE) has launched an Islamic equity index based on the wide-measure S&P BSE 500 index, providing a new benchmark for Islamic investors in one of the world's largest stock exchanges." This index could a real winner, especially in India's huge Muslim population.
India's BSE launches broad-based Islamic index, by Bernardo Vizcaino, May 1, 2013, Reuters, India.

GISR Launches Principles For Rating The Raters. - [COMMENTARY] "The nearly two years, a nonprofit called GISR — the Global Initiative for Sustainability Ratings — has been working to create a standard for company-level sustainability ratings. It is doing this, it says, 'to accelerate the integration of environmental, social and governance (ESG) issues and indicators in investment decision-making' by 'building a new standard that equips investors, companies and other stakeholders with the tools to recognize true excellence in corporate sustainability.' That is, to get Wall Street and its counterparts around the world singing from the same hymnal on sustainability."

This is a great step forward. With this new standard investors will be able to compare 'apples with apples.' Let's hope it's adopted soon!
GISR launches principles for rating the raters, by Joel Makower, April 19, 2013, GreenBiz, USA.

Only 1.4% of S&P Companies Have Fully Integrated Reporting. - [COMMENTARY] "American Electric Power, Clorox, Dow Chemical, Eaton, Ingersoll Rand, Pfizer and Southwest Airlines are the only companies in the S&P 500 — just 1.4 percent of the total — with fully integrated annual financial and sustainability reports, according to a study from the IRRC Institute and the Sustainable Investments Institute (Si2)." These are early days yet for integrated reporting--the combining of financial/management/CSR/ESG reports--in one annual report. However, it probably won't be too long before many more companies adopt it.
Only 1.4% of S&P Companies Have Fully Integrated Reporting, April 29, 2013, Environmental Leader, USA.

Infy, HCL Tech, Wipro Among The Greenest In BRICS. - [COMMENTARY] "Sixty-one per cent of the companies in the five BRICS countries - Brazil, Russia, India, China and South Africa - do not publicly disclose their carbon emission details, according to a survey by Environmental Investment Organisation (EIO), a UK-based climate change and finance think tank. In the EIO survey, three Indian companies - Infosys (fourth), HCL Technologies (fifth) and Wipro (sixth) - have emerged among the top 10 companies with least emissions. This is part of a ranking of the 300 largest companies in the BRICS region, taking into account greenhouse gas emissions and transparency factors."

This article describes how companies are doing in the BRICS countries with regard to sustainability. It's a useful read of ethical investors desiring to invest in emerging markets.
Infy, HCL Tech, Wipro among the greenest in BRICS, by Shine Jacob, April 29, 2013, Business Standard, India.

Thomson Reuters Launches Corporate Responsibility Indices. - [COMMENTARY] "Thomson Reuters, the world's leading source of intelligent information for businesses and professionals, today announced the launch of a new family of environmental, social and corporate governance (ESG) indices. The Thomson Reuters Corporate Responsibility Indices were developed jointly with S-Network Global Indexes, a New York based specialist index design firm, as an objective and transparent, rules-based benchmarking solution for measuring ESG performance. The announcement of the launch of the indices was made today at the CSR Investing Summit in New York." Obviously, the proliferation of these indices must indicate to the wider investing public that ESG factors do matter and that money can be made with them.
Thomson Reuters Launches Corporate Responsibility Indices, press release, April 24, 2013, Thomson Reuters, USA.

Two US polls Contradict Independent Research On Sustainable Investment. - [COMMENTARY] "Both articles appear under headlines that perhaps reflect the bias of the publisher, with results that may contain sample bias, based on who was contacted and who responded. Blue & Green Tomorrow probed Spectrem’s Millionaire Corner on this. When contacted, Spectrem’s Millionaire Corner didn’t respond to an email asking for the wording of the question that brought about the social responsibility results. A representative did offer to create a chart about one aspect of their survey, but added that the raw data was not available."

Readers of this site might note my earlier comments about Millionaire Corner's survey. That comment stated, "How questions are framed plays a great role in how they're answered. Had the questions been framed around ESG rather than social responsibility, I'm sure we would've seen a very different--and more positive--response." I'm glad to see that Blue & Green Tomorrow actually contacted Millionaire Corner--but I'm saddened by the lack of cooperation they got from them. It makes one wonder how ethical Millionaire Corner is.
Two US polls contradict independent research on sustainable investment, by Alex Blackburne, April 18, 2013, Blue & Green Tomorrow, UK.

Top Industries Unprofitable If They Had To Pay For Consumption Of Natural Capital. - [COMMENTARY] "The total unpriced natural capital consumed by the more than 1,000 'global primary production and primary processing region-sectors' amounts to $7.3 trillion dollars a year — 13 percent of 2009 global GDP... Of the top 20 region-sectors ranked by environmental impacts, none would be profitable if environmental costs were fully integrated."

I've suspected this for sometime. It's good to finally get some real research on this topic. It really provides us with some concrete idea as to the real costs of our consumer society that one day will have to be met! This report might provide some ethical investors with a perspective of where they might want to invest.
None of the world’s top industries would be profitable if they paid for the natural capital they use, by David Roberts, April 17, 2013, grist, USA.

Q1 Global Green Investment Hits 4-Year Low Of $40.6B. - [COMMENTARY] "Global economics, regulatory uncertainty and falling PV and wind power costs are playing a role in declining greentech investment figures." Government policy uncertainty relating to green investment support in the US and Germany play a significant role influencing these lower numbers.
Q1 Global Green Investment Hits 4-Year Low of $40.6B, by Jeff St. John, April 15, 2013, Greentechmedia.com, USA.

Online Course On The Fundamentals Of Sustainable And Responsible Investment Launched By The US SIF Foundation. - [COMMENTARY] "Today, the US SIF Foundation launched the Center for Sustainable Investment Education and the Center’s inaugural online course, Fundamentals of Sustainable and Responsible Investment. This is the first online course on sustainable investment for financial advisors and other investment professionals to be launched in the United States." This is a good step forward to encourage more investment/financial advisors to offer socially responsible/ethical investments.
Online course on the Fundamentals of Sustainable and Responsible Investment launched by the US SIF Foundation, press release, April 9, 2013, US SIF Foundation, USA.

A New Breed Of Mutual Funds: The Activist Fund. - [COMMENTARY] "In what mutual fund manager IA Clarington Investments is calling the first of its kind in Canada, retail investors are being offered a product that “will invest in companies where an activist investor has disclosed an intention to change or influence the management or control of a company. But the fund, which is just being launched and will be managed by Larry Sarbit, a veteran of the investment world who also manages the IA Clarington Sarbit U.S. Equity Fund, will not itself be an activist investor. Instead it will invest in those companies that an activist investor has targeted.”

Though such funds aren't really ethical funds, they do bear some relationship to them. Often, unethical or badly governed companies are targeted by others who believe they can do better. It'll be interesting to see how such a fund performs.
IA Clarington Investments launches fund to invest in activist investor targeted companies, by Barry Critchley, Financial Post, Canada. (This article, dated a month ago, just came to my attention, courtesy of Ken Kivenko.)

New Research Report Reveals Corporate Social Responsibility Trends In Mid-sized Companies. - [COMMENTARY] "Two-thirds of mid-sized companies are seeking to either enhance or establish their CSR programs to do business with a purpose. About 60 percent of mid-sized companies focus their CSR efforts on education, demonstrating companies' dedication to people-focused initiatives that cater to young people and the development of the workforce of the future." The great thing about mid-sized companies is that they grow out of their communities and hence have a deeper attachment to those communities.
New Research Report Reveals Corporate Social Responsibility Trends in Mid-sized Companies, press release, April 10, 2013, Business4Better Movement, USA.

For UK Ethical Investors, Blue&Green Tomorrow Has Created A Guide to Ethical Financial Advice 2013. - [COMMENTARY] "Welcome to Blue & Green Tomorrow’s Guide to Ethical Financial Advice 2013. Here, you’ll find all the information you need on where to find a specialist ethical financial adviser near you. Profiling members of the Ethical Investment Association (EIA), as well as looking into the history of financial advice more generally, after reading the guide you will be able to make a more informed decision about whether such an ethical adviser is most appropriate for you." It's a great guide, particularly for novice UK investors, interested in looking into ethical investing.
Introducing: The Guide to Ethical Financial Advice 2013, by  Alex Blackburne, April 10, 2013, Blue&Green Tomorrow, UK.

Survey Says American High Net Worth Investors Not Big On SRI. - [COMMENTARY] "Social responsibility doesn’t factor into the investment decisions of a large majority of high net worth investors, who say they invest purely to make money, according to a newly published report from Spectrem’s Millionaire Corner. High net worth investors give great weight to investment fundamentals: Close to 95 percent considers the risk associated with an investment. Nearly 90 percent are concerned with diversification of investment products and 81 percent worry about tax implications, according to our new study, 2013 UHNW Investor Changing Investor Attitudes and Behaviors. Less than 20 percent factor in social responsibility."

How questions are framed plays a great role in how they're answered. Had the questions been framed around ESG rather than social responsibility, I'm sure we would've seen a very different--and more positive--response.
High net worth not big socially responsible investments, by Adriana Reyneri, April 9, 2013, Spectrem's Millionaire Corner, USA.

Crisis Has Hit Companies’ Social Responsibility, Poll Suggests. - [COMMENTARY] "Some 74% of Brazilians, 65% of Chinese, 62% of Indians, and 44% of Americans believe their companies have taken corporate social responsibility (CSR) more seriously over the past decade... 39% of Europeans believe that companies pay less attention to their influence on society than they did 10 years ago, with 40% saying they pay more attention, putting Europe at the bottom of the international league table." This probably also reflects the fact that developed country consumers are rating most of their institutions very poorly these days.
Crisis has hit companies’ social responsibility, poll suggests, by Marc Hall, April 5, 2013, EurActive, Belgium.

Transparent Investment Policies Can Boost Charity Donations. - [COMMENTARY] "Charity behaviour and investment transparency can positively influence potential and current donors, according to research by microfinance provider Oikocredit. Its study found that 48% of people donating to charity were more likely to donate to ones that made their investment goals clear. It also showed that members of the public were influenced stronger by a charity’s investment practices than its advertising." It has always amazed me how many charities allow their fund managers to invest in companies whose activities run afoul of the charities' own goals.
Transparent investment policies can boost charity donations, by Emma Websdale, April 5, 2013, Blue & Green, UK.

Twenty Years On, Corporate Sustainability Still Lacking. - [COMMENTARY] "After 20 years of rating corporate sustainability efforts, German-based oekom research has found that global giants have not been doing nearly enough in their commitments to sustainability. In its most recent annual report, oekom found that only one in six -- 16.7 percent -- of the companies rated has a "good" level of commitment."

It's not surprising that most companies are 'minimalists' when it comes to encompassing sustainability. However, how much longer they can remain lazy about sustainability remains a question as stock markets, stakeholders and governments become increasingly involved in promoting it.
Twenty years on, corporate sustainability still lacking, by Robert Kropp, April 3, 2013, GreenBiz, USA.

If you are a spiritual investor, or believe in ethical investing and socially responsible investing, get the latest relevant news in your inbox. Sign-up now for our free e-newsletter, The Soul Investor.

Special note on news intermediaries.