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"64% of those polled were interested in investing, or
investing more money, in SRI fund options; and 22%
said they were very interested."
--
TIAA-CREF Asset
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    November 2014

"92% of Canadians say that it's important to choose investments that are aligned with their values. By contrast, only 14% of advisors raised the topic of RI [responsible investing] with their clients."
--
Deb Abbey referring
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    Investment
    Executive
   
(Canada) April 2015

"78 per cent of UK investors are more likely to invest in a company with ethical practices, and 64 per cent are planning to invest in ethical funds in the next few years."
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Links may only be valid for a limited time    May 24, 2015

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Climate change threat demands reform to financial system – UNEP. "'Blowback' from climate change could wreck the financial system unless regulators rewire it to ditch fossil fuels. So says Nick Robins, former head of HSBC’s climate change unit and author of a UNEP report published today, which urges sweeping reforms to shift multi-trillion flows of international finance to insulate countries from global warming."

[COMMENTARY] This UNEP report is the strongest warning yet to the global financial system concerning how it needs to adjust in the face of stranded and marked down fossil fuel assets. Also, the report serves as a wake-up call to all fund managers and investors that losses on their fossil fuel holdings could be massive were there to be real global action to hold the world to the 2° C rise that scientists and governments say is necessary to avert catastrophic climate change.
Climate change threat demands reform to financial system – UNEP, by Alex Pashley, RTCC, UK.

CorporateRegister.com has released its CR Reporting Awards for best CSR reports. "You can download the full CRRA'15 report, which includes the latest statistics and trends, from the banner on our home page at www.corporateregister.com (Free registration/Sign in required to download)."

[COMMENTARY] Their report is well worth reviewing to see how the best corporate reports handle carbon disclosure, materiality issues, etc. Click here to register/download it.

Socially Responsible Investors Focus Most on the Environment. "Investors who wish to promote social responsibility are most focused on the environment and invest accordingly."

[COMMENTARY] Millionaire Corner is doing a great job with their surveys revealing how the affluent invest (or not) in SR-ethical investing.
Socially Responsible Investors Focus Most on the Environment, by Donald Liebension, May 21, 2015, Millionaire Corner, USA.

In What Companies are Socially Responsible Investors Likely to Invest? "Baby Boomers and seniors ages 65 and up are the strongest proponents of socially responsible investing and the investors most likely to support companies whose policies support causes in which they are passionate."

[COMMENTARY] It seems older investors want a better world for their kids and grandchildren. And that's a great reason for them to invest in SR-ethical investments!
In What Companies are Socially Responsible Investors Likely to Invest? By Donald Liebenson, May 19, 2015, Millionaire Corner, USA.

Oxford Joins Cambridge With Ethical Move on Investments. "Oxford University, one of the world’s oldest schools, has joined the ranks of British universities shunning investments in carbon-intensive energy projects... This follows a decision by Oxford’s arch-rival, Cambridge University, to appoint a new committee to beef up its 'socially responsible' investment policy."

[COMMENTARY] With such prestigious academic institutions taking an ethical stand against fossil fuel investments, the fossil free divestment movement gains additional momentum. It seems these great universities are also applying ethical criteria to other investments as well. SR-ethical investing -- which when I started familiarizing myself with it over forty years ago -- has come a long way!
Oxford Joins Cambridge With Ethical Move on Investments, by Juliet Samuel, May 18, 2015, The Wall Street Journal, USA.

Shareholders’ Votes Have Done Little to Curb Lavish Executive Pay. "It’s been five years since the Dodd-Frank law required that companies let investors vote on their executive pay practices. The idea, lawmakers said, was to give shareholders a chance to sound off when compensation plans are not in their best interests.

But has putting these matters to a vote done anything to rein in executive pay? Not a chance. Since these votes started being tallied, C.E.O. pay has risen on average 12 percent annually."

[COMMENTARY] We have what is akin to the 'tulip mania' in executive compensation -- everyone pushing the compensation envelope as far it will go. As is noted in the article, unless such shareholder resolutions are binding on companies, not much will change.

Furthermore, executive compensation committees -- themselves usually executives at other companies -- recommend management compensation packages that try to outdo their competitors. Also, shareholders largely believe that the companies they invest in should offer the biggest pay packets to attract the best talent. Hence, the say on pay laws and resolutions, though nice in theory, have proved useless in halting the compensation frenzy.
Shareholders’ Votes Have Done Little to Curb Lavish Executive Pay, by Gretchen Morgenson, May 16, 2015, The New York Times, USA.

RepRisk and CSRHub study finds link between perceived Corporate Social Responsibility (CSR) performance and reputational risk. "In addition, the data indicates that companies that have strong CSR programs as measured by CSRHub, in the areas of Human Rights and Supply Chain, Leadership Ethics, and Resource Management, seem to have lower risk exposure, whereas those companies who have strong programs in Community Development and Philanthropy, Environment Policy and Reporting, or Compensation and Benefits seem to have higher risk exposure."

[COMMENTARY] I think that most ethical investors assumed such a link, but it's good to get the hard data to support it and the detail as to what are the most important linkages.
RepRisk and CSRHub study finds link between perceived Corporate Social Responsibility (CSR) performance and reputational risk, press release, May 14, 2015, CSRHub/RepRisk, Switzerland/USA.

Does "Socially Responsible Investing" Mean Anything to You? "In general, the younger the investor, the more familiarity he has with socially responsible investing. Among investors under the age of 36, familiarity with 'socially responsible investing' was at 47.42, and familiarity with 'Impact investing' was at 35.76.

There was also a trend shown that the wealthier the investor, the more familiarity he has with socially responsible investing. Ultra High Net Worth investors with a net worth between $5 million and $25 million reported familiarity with 'socially responsible investing' at 55.11, well above the average, while Mass Affluent investors with a net worth between $100,000 and $1 million were at 42.24."

[COMMENTARY] The data are from the same survey as the item immediately below. I find the most interesting aspect here is that the very rich are more aware of SRI than the 'poorer' rich.
Does "Socially Responsible Investing" Mean Anything to You? By Kent Mcdill, May 12, 2015, Millionaire Corner, USA.

Socially Responsible Investing: Who Cares? "More than one quarter of all investors under the age of 45 have at least 25 percent of their investable assets invested in socially responsible companies. Conversely, more than 45 percent of all investors over the age of 45 do not invest in socially responsible companies."

[COMMENTARY] This survey finds what other similar surveys found: younger investors, particularly female, favour SRI.
Socially Responsible Investing: Who Cares? Press release, May 13, 2015, Spectrum Group, USA.

How to Avoid the Next Sovereign Debt Crisis. "Applying environmental, social, and governance (ESG) criteria to government bonds can help investors steer clear of the most indebted nations, according to Standard & Poor’s Dow Jones Indices (S&P DJI)."

[COMMENTARY] This coming from S&P-DJ is a tremendous endorsement for bond ratings utilizing ESG factors! Since, the build-up in sovereign debt has been so extraordinary in recent years, additional sovereign debt catastrophes are inevitable. All investors might want to review their bond holdings in the light of ESG criteria.
How to Avoid the Next Sovereign Debt Crisis, by Nick Reeve, May 5, 2015, Chief Financial Officer magazine, UK.

Canada's 2nd Annual RI Week June 1-5. "Responsible Investment Week is a week dedicated to education and awareness about responsible investment (RI). The Responsible Investment Association (RIA) is coordinating a week of events across Canada to promote learning about environmental, social, and corporate governance (ESG) issues that affect investments."

[COMMENTARY] Every country should have such weeks as they provide a focus for promoting ethical-responsible investing. The UK, Belgium, France, Australia and Canada, are among the countries that presently offer them.

I encourage everyone associated with ethical-responsible investing in Canada to participate in whatever way they can. A series of events are already arranged across Canada.
Canada’s 2nd annual RI Week: June 1-5, Responsible Investment Association (RIA), Canada.

Survey: Adoption of ESG Criteria Growing Among Hedge Fund & Private Asset Managers. "Although the results revealed that 60% of hedge fund managers were still reluctant to introduce ESG criteria into their investment approach, this is a big improvement over the results from the company’s last survey in 2011, when 75% of managers were reluctant. Meanwhile, the percentage of managers that do incorporate ESG criteria has increased significantly from 25% to 40% over the same time span."

[COMMENTARY] Surveys showing greatly increased adoption of ESG criteria in stock/portfolio selection by fund managers are everywhere these days. And for good reason as anyone who follows these studies/surveys knows that they repeatedly show the use of ESG criteria produces better returns.
Survey: Adoption of ESG Criteria Growing Among Hedge Fund & Private Asset Managers, May 5, 2015, FIN Alternatives, USA.

Fifth Annual Impact Investor Survey Reflects on Industry Growth, Past and Projected. "146 of the world’s largest impact investors, including fund managers, banks, development finance institutions, foundations, and pension funds report having committed $10.6 billion to impact investments in 2014, with plans to commit 16% more in 2015. The surveyed sample, which manages $60 billion in impact investment assets, indicates satisfaction with both financial returns and social/environmental impact performance, compared to expectations."

[COMMENTARY] J.P. Morgan Social Finance and Global Impact Investing Network (GINN) are providing a valuable service in surveying the impact investing market. As many of us know, the possibilities for impact investing are huge with immense potential benefits for society with prospective market returns for investors.
Fifth Annual Impact Investor Survey Reflects on Industry Growth, Past and Projected, press release, May 4, 2015, J.P. Morgan Social Finance/Global Impact Investing Network (GINN), USA.

(1) Risky management. "85 per cent of the world’s largest global asset owners are climate 'laggards' that have taken little to no action to insulate themselves from the growing risks presented by climate change, says a new report by the Asset Owners Disclosure Project (AODP)."
Risky management, April 29, 2015, Corporate Knights, Canada.

(2) G20: fossil fuel fears could hammer global financial system. "Top energy watchdog says two thirds of all assets booked by coal, oil and gas companies may be worthless under the 'two degree' climate deal... World leaders are increasingly concerned that a $6 trillion wave of investment into the nexus of oil, gas, and coal since 2007 is based on false assumptions, leaving companies with an overhang of debt and "stranded assets" that cannot easily be burned under CO2 emission limits...

The G20 has asked the Financial Stability Board in Basel to convene a public-private inquiry into the fall-out faced by the financial sector as climate rules become much stricter. All member countries have agreed to co-operate or carry out internal probes, including the United States, China, India, Russia, Australia, and Saudi Arabia.
G20: fossil fuel fears could hammer global financial system, by Ambrose Evans-Pritchard, April 29, 2015, The Telegraph, UK.

[COMMENTARY for (1) & (2)] We all know how most money managers -- particularly those in North America -- are fossil fuel diehards. Yet, as the world awakens to the fact that the burning of fossil fuels has to be significantly reduced the portfolio losses could be immense. And the wake-up call could come in December from the 2015 United Nations Climate Change Conference in Paris.

Research Documents Positive Link Between Corporate Human Resources Policies & Investment Outcomes. "Of the many studies of human capital policies, the new paper examines 92 that focus on the links to corporate financial performance. The authors find that a large majority of the studies - conducted over several decades and encompassing dozens of countries and industries - reported positive correlations...

However, investors face significant challenges in attempting to incorporate human capital metrics into investment analyses. For example, there are no standard metrics or definitions and there is no clear consensus about which HR policies in what combinations have the most impact on financial outcomes."

[COMMENTARY] Intuitively, we know that properly managed human resources and their development are significant to a company's progress. This report is the first to correlate human resources policies to investment outcomes. What this report could do is to encourage investors/fund managers to ask companies for much more detail about their human resource policies, training etc., to try to understand the potential links between good and bad human resource policies with respect to corporate financial performance.

The report also opens-up a new field of academic enquiry into these linkages.
Research Documents Positive Link Between Corporate Human Resources Policies & Investment Outcomes, press release, April 23, 2015, Investor Responsibility Research Center Institute & Harvard Law Labor & Worklife Program, USA.

Canada’s greenest employers help the Earth – and their bottom lines. "As environmental leaders, they’ve put their strategy into action through multiple initiatives, both formal and informal, both corporate and employee-led. For many organizations, building sustainability isn’t a trendy thing to do, but has evolved to become a part of how they operate, notes Richard Yerema, managing editor of Mediacorp Canada."

[COMMENTARY] We know that corporate sustainability has a long way to go, so it's good that attention -- and awards -- is creating a competitive atmosphere to encourage it while raising its profile corporately. Many of the initiatives cited could clearly demonstrate a corporate financial benefit. It would have been great if such benefits could've been ascertained and made public.
Canada’s greenest employers help the Earth – and their bottom lines, by Diane Jermyn, April 22, 2015, The Globe and Mail, Canada.

Malaysia and Saudi facing Iran’s rising finance power -- Iran's entire banking system is Shariah-compliant with $482bn (2014) in assets, the largest in the world by far. "[Iran's Shariah compliant banking assets are] almost a quarter of total global Islamic finance assets, more than Malaysia’s, Saudi Arabia’s and the UAE’s Islamic assets combined."

[COMMENTARY] Should an agreement transpire between the Iran and the rest of the world concerning it's nuclear programme and Iran re-enter the global finance industry, it'll have an enormous influence in global Islamic finance. It might also influence global banking, generally. This is one area that ethical investors will want to particularly watch.
Malaysia and Saudi facing Iran’s rising finance power, by Arno Maierbrugger, April 22, 2015, Gulf Times, Qatar.

Meet the Best for the World (of Certified B Corporations) Overall Honorees for 2015. "The Best for the World Honorees are recognized for creating the most positive social and environmental impact. These companies have earned an overall score in the top 10% of all Certified B Corporations on the B Impact Assessment, a rigorous and comprehensive assessment of a company's impact on its workers, community, and the environment."

[COMMENTARY] This is a fascinating list to review when considering the first major B corp. listing on the NASDAQ last week, that of Etsy, an online and offline marketplaces to buy and sell handmade items, vintage goods, and craft supplies.
Best for the World Overall Honorees for 2015, April 21, 2015, B Lab, USA.

The World's Most Reputable Companies In 2015. "The Global RepTrak list stands out from other corporate lists... because it aims to quantify the way companies are perceived by consumers... rather than looking at how companies manage their internal affairs... According to RI’s data, 83% of consumers say they would definitely buy products sold by companies with top reputations while only 9% want to buy from companies with poor reputations... Google scores No. 2 on the list, just behind BMW and above Daimler."

[COMMENTARY] The Forbes article covering the Global RepTrack 100 list is highly informative. It refers to Google's problems with anti-competition regulators in Europe and why they're having zero effect on its reputation and that no oil and gas producers are on the list as they're perceived as being polluting and unethical!
The World's Most Reputable Companies In 2015, by Susan Adams, April 21, 2015, Forbes, USA.

Why Gender Matters to Investors. "A 2014 Credit Suisse study of 3,000 companies assessing the level of women in senior management found that more diversity in management coincides with better corporate performance and higher stock-market valuations."

[COMMENTARY] The writer also cites several other studies that include those by Thomsen Reuters and McKinsey, which all find that women on boards leads to greater financial performance and increased stock values! With results like this it behoves ethical investors to consider gender/diversity screening in stock evaluations if they do not already do so.
Why Gender Matters to Investors, by Joseph F. Keefe and Sallie L. Krawcheck, April 21, 2015. (This article originally appeared in the April 2015 issue of Green Money Journal on “Women and Investing”), TriplePundit, USA.

Fossil-Free Portfolios Outperform Those With Coal, Gas, Oil. "MSCI Inc. calculates that portfolios without coal, gas and oil earned 1.2 percent more since 2010. Average fossil-free returns have been 13 percent a year, as opposed to 11.8 percent for conventional investors, reports The Guardian. Sure, during this period the price of oil tanked, driving down shares of companies, but fossil-free indexes outperformed before this happened, said MSCI. And the volatility of oil shares is another reason to get out of these stocks."

[COMMENTARY] These results should be a wake-up call to all those fund managers who say their returns will suffer going fossil fuel-free. With such data and today's oil and gas prices -- plus renewables becoming increasingly competitive -- we might finally be witnessing the beginning of the relative decline of the entire fossil fuel industry. Many ethical investors have longed for this moment.
Fossil-Free Portfolios Outperform Those With Coal, Gas, Oil, April 13, 2015, SustainableBusiness.com News, USA.

The Type of Socially Responsible Investments That Make Firms More Profitable, Harvard Business Review. "We find that firms making investments and improving their performance on environmental, social, and governance (ESG) issues exhibit better stock market performance and profitability in the future...

However, not all such initiatives are equally beneficial. My research, with Mozaffar Khan and Aaron Yoon, suggests companies should stick to social and environmental issues that are strategically important for their business if they want such efforts to contribute to the valuation."

[COMMENTARY] The points made in this article are important for both company managers and investors. The article is written by one of the most well respected researchers in this field.
The Type of Socially Responsible Investments That Make Firms More Profitable, by George Serafeim, April 14, 2015, Harvard Business Review, USA.

Clean Energy Investment Dips 15% In First Quarter As Large Wind And Solar Projects Stall. "About $50.5 billion was invested in the first three months of this year, compared to $59.3 billion a year earlier, the London research firm said. The last period to show weaker investment was the first quarter of 2013, when clean energy spending totaled $43.1 billion.

Even so, last quarter’s results should resolve investors’ questions over whether low oil prices, down 50 percent from last year, would harm global interest in wind, solar, biomass and other renewable energy projects. 'These figures indicate the answer is not so much,' Michael Liebreich, chairman of BNEF’s advisory board, said in a statement."

[COMMENTARY] There's no-doubt that cheap oil will have some effect on renewable energy development. However, at the utility level, renewables are becoming cost competitive with gas or nuclear. Also -- as most of us expect -- fossil fuel production will be increasingly curbed by governments due to the dictates of climate change.
Clean Energy Investment Dips 15% In First Quarter As Large Wind And Solar Projects Stall, by Maria Gallucci, April 10, 2015, International Business Times, USA.

2015 Proxy Preview of 433 resolutions. "Corporate political activity of all sorts and environmental matters—predominantly climate change—continue to vie for top billing with 26 percent and 27 percent of the total, respectively; increasingly these are linked by investors who seek corporate action to bypass some of the vitriol that stymies government solutions. All told, environmental and sustainable governance resolutions combined represent 39 percent of the total so far, as in 2014, while political activity accounts for just over one-quarter of the total—down 4 percentage points from last year’s mid-February share."

[COMMENTARY] The survey is a compilation of three data sources: As You Sow, Sustainable Investments Institute (Si2), and Proxy Impact. As many ethical investors take a keen interest in proxy voting, so I'm providing a link to this survey here.

Sweden tops in the EU in ESG ranking (for government bonds). "Bond investors looking to remain true to their environmental, social and governance principles have a new tool: a ranking of European Union member countries. The study, 'EU Member States under the Spotlight,' ranked the 28 countries based on 67 human rights and 17 environmental indicators, including gender equality, labor rights, freedom of expression, and protection of the environment."

[COMMENTARY] Such rankings for government bonds are becoming more common. Incidentally, though not directly ranking countries' bonds, EIRIS Country Sustainability Ratings and RobecoSAM's Country Sustainability Ranking both offer useful insights for judging government issued bonds on ESG issues.
Sweden tops in the EU in ESG ranking, by Sophie Baker, April 6, 2015, Pension&Investments, USA.

Japan's 137 trillion yen ($1.1 trillion) GPIF may consider ESG factors in stock investments. "In a mid-term plan announced on Thursday, GPIF said it would consider taking account of 'environmental, social and governance' (ESG) factors in equity-investment decisions, while pursuing profits."

[COMMENTARY] When the world's largest pension fund says it's considering integrating ESG factors into its stock selection process, we know that ESG has truly arrived! This fund -- which traditionally mostly invested in Japanese government bonds -- is now gearing up to be heavily invested in stocks. Should they go ahead with the ESG focus, it could further promote outperformance for global stocks with high ESG ratings.
Japan's GPIF may consider governance in stock investments, by Takashi Umekawa, April 2, 2015, Reuters, Japan.

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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 spiritual investing, 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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