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Ethical Investing News/Commentaries:
Feb. 2011 |
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Commentaries by Ron
Robins
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Deutsche Bank Releases Climate Change Investing
Report. -
[COMMENTARY] "A DB Climate
Change Advisors (DBCCA) report released today,
'Investing in Climate Change 2011', examines the
risks associated with climate change investing
across different asset classes and provides a
framework to understand how asset managers can
manage these risks. In the report, DBCCA argues that
a major shift in investor attitudes is taking place:
leading institutional investors around the world to
undertake this analysis because of a growing
realization of the potentially profound impact
climate change may have on their existing
portfolios." More good reading for ethical
investors on the subject of climate change
investing.
Investing in Climate Change 2011: The Mega-Trend
Continues - Exploring Risk & Return, February
2011, Deutsche Bank, UK.
US Green Chamber Of Commerce Launched.
- [COMMENTARY] "The U.S. Green
Chamber, launched last weekend, is the evolution of
the Green Chamber of San Diego, a spinoff of a
Chamber of Commerce chapter in San Diego County.
Now, with a national focus and an ever-expanding
membership roster, the group hopes to take its
successes, and its membership of about 250 companies
-- mostly in Southern California, but with some
members across the country -- and scale them up to
the national level." I think the idea of such an
organization on the national and even international
level is long overdue. Ethical investors might want
to pay attention to the membership of this
organization. It might just offer clues as to whom
they favour for their investments.
US Green Chamber Launches as a Complement to Chamber
of Commerce, by Matthew Wheeland, February 24,
2011, GreenBiz, USA.
Ceres Critical Of Weak Corporate Climate
Reporting Suggests How Such Reporting Should Be
Done. -
[COMMENTARY] "The Ceres report,
developed with input from its 90-plus member
Investor Network on Climate Risk, outlines generally
weak climate disclosure to date by businesses and
steps for improving such disclosure, especially in
annual 10-K financial filings that are next due from
companies by March 31, 2011. It comes just a week
after the consulting firm Mercer issued a new study
warning that climate change could increase
investment portfolio risk by 10 percent over the
next 20 years."
This type of positive commentary
and encouragement for better climate change
reporting is greatly needed. Unless climate change
reporting is of a high standard, how can ethical investors
and other stakeholders understand what companies are
really doing? Well done Ceres.
New report outlines what companies should be
disclosing on climate change risks and
opportunities, press release, February 25, 2011,
Ceres, USA.
Shareholders In US Companies Have Lodged 360
Resolutions. -
[COMMENTARY] "... the As You Sow
foundation [reports] nearly 290 proposals are still
pending meaning that they will usually go to an
AGM vote. Of the total
filed resolutions, 131 are either on environmental
issues or requests for sustainability reports. A
further 84 cover political contributions. Two other
major issues —each with about 45 resolutions—are
calls for workplace and corporate board diversity
reforms and labour and human rights actions."
Shareholder activism is growing and companies have
to be more responsive to their demands.
Shareholders in US companies have lodged 360
resolutions, February 25, 2011, Responsible
Investor, UK.
The State of Engagement Between
U.S. Corporations And Shareholders. -
[COMMENTARY] "There’s both
'consensus and dissonance' between investors and
companies in the US, according to a new study for
the Investor Responsibility Research Center
Institute conducted by ISS." This is a useful
report for ethical investors interested in engaging
with companies.
The State of Engagement between U.S. Corporations
and Shareholders, February 25, 2011, Responsible
Investor, UK.
Investors Maintain Support For Annual Pay
Votes. -
[COMMENTARY] "Investors continue
to support annual advisory votes on executive
compensation by a 2-to-1 margin over a triennial
frequency, according to ISS data as of Feb. 23,
which includes vote results from 13 S&P 500 and 40
Russell 3000 companies." Personally, I agree
with the annual review.
Investors Maintain Support for Annual Pay Votes,
by Edward Kamonjoh, February 24, 2011, ISS, USA.
Bloomberg Announces Its Islamic Finance Platform
(ISLM) & Malaysian Ringgit (MYR) Sukuk (Bond) Index. -
[COMMENTARY] "Today, Bloomberg‘s
Professional division announced the launch of a
Bloomberg Islamic Finance Platform (ISLM), which
will provide tools and services for investors who
want to be compliant with Shariah law. It also
announced the launch of a Malaysian Ringgit (MYR)
sukuk index to provide a benchmark for MYR sovereign
sukuk investments, in conjunction with the
Association of Islamic Banking Institutions Malaysia
(AIBIM)."
I have written in
The Rise of Islamic Finance about how Bloomberg
has aimed to be no. 1 in Islamic finance reporting.
Well, this proves it!
Bloomberg Introduces Shariah-Compliant Investment
Products, by Teresa Rivasry February 22, 2011,
Barron's, USA.
Dow Jones Islamic Market Global Finance &
Takaful Index To Be Launched. -
[COMMENTARY] "Dow Jones Indexes,
a leading global index provider, today announced it
will expand its Dow Jones Islamic Market Indexes
series by launching the Dow Jones Islamic Market
Global Finance & Takaful Index, which measures the
performance of financial services stocks that pass
rules-based screens for Shari’ah compliance.
(Insurance stocks that pass such screens are known
as Takaful.)" This is continuing evidence of the
growth and rising importance of Islamic finance in
the world today. It is another sign of investors
desiring more ethical investing products.
Dow Jones Indexes to Launch Dow Jones Islamic Market
Global Finance & Takaful Index, press release,
February 22, 2011, Dow Jones Indexes, UK.Resource Companies Concerned About New US SEC
Anti-Corruption Rules. -
[COMMENTARY] "Western energy and
mining companies are under increasing pressure to
ensure their projects in developing countries do not
become cesspools of corruption and bribery – the
so-called resource curse. But those companies are
also facing new competition from aggressive
state-owned corporations, many of which do not have
the same pressure for reporting overseas activity."
Perhaps SRI-ethical rating organizations and ethical
investors will favour those resource
companies that do stop paying bribes. Thus, their
stock prices might benefit!
Resource curse puts miners, oil companies in
crosshairs, by Shawn McCarthy, February 21,
2011, The Globe & Mail, Canada.
Almost
40% Of Novartis Shareholders Vote Down Board Pay
Package. -
[COMMENTARY] "Almost 40% of
shareholders at Novartis, the giant Swiss pharma
company, today (February 22) voted against the
company’s board pay after a vocal investor campaign
against the CHF25m (€19.4m) market value of the
package handed last year to board chairman, Daniel
Vasella, and the CHF13 million paid to CEO, Joe
Jimenez. This year is the first time that investors
have been able to vote on the pay of many Swiss
companies, including Novartis, after Swiss investors
campaigned to have an advisory say-on-pay vote at
the annual general meeting (AGM)."
Such a high negative vote against this pay
package acts as a warning shot to all companies
about compensation packages to boards and
management, generally. This is good news for ethical
investors who have long been concerned about the
difference between the pay scales of boards and executives
relative to their employees.
Almost 40% of shareholders vote down Novartis board
package at AGM after first ever say-on-pay, by
Hugh Wheelan, February 22, 2011, Responsible
Investor, UK.
66+ Climate & Environmental Issue Based Proxies
Against 40 US Energy Companies Planned For 2011. -
[COMMENTARY] "This is a new high
for such resolutions aimed at the energy sector, and
a 50 percent increase over the number filed last
year, according to the Ceres investor network, whose
more than 90 members manage some $9 trillion in
assets." It will be interesting to watch as the
corporate annual general meeting season heats up!
Shareholders Offer a Spate of Climate and
Environmental Resolutions, by Tom Zeller Jr.,
February 18, 2011, The New York Times, USA.
LOHAS (Lifestyles Of Health And Sustainability)
Spending In Asia Tops $300 Billion. -
[COMMENTARY] "In January 2010
LOHAS Asia partnered with The Natural Marketing
Institute in pioneering LOHAS Consumer Research in
Asia-Pacific, conducting an online survey across 10
countries. More than 18,000 consumers were surveyed,
to provide in-depth research on the LOHAS consumer
and marketplace across the following countries:
Australia, China, Hong Kong, India, Indonesia,
Malaysia, Philippines, Singapore, South Korea and
Thailand. Some of the highlights show very real
desire for sustainably-made products in Asia, with
Indonesia, China and India leading the way."
It seems that developing countries are very keen
to have healthy and sustainable lifestyles which
translate into extraordinary marketing
opportunities for green companies there. Perhaps
ethical investors might want to see if their
favourite green companies are also adequately
tapping Asian markets?
How LOHAS is changing business in Asia, press
release, February 17, 2011, LOHAS Asia, Singapore.
Swiss bank Sarasin Wins Important
Sustainability Awards. -
[COMMENTARY] " -
[COMMENTARY] "Bank Sarasin & Co.
Ltd has been awarded two prizes at the Sustainable
City Awards in London. The Farsight Award recognized
a sustainability study, 'The world in dilemma
between prosperity and resource protection –
Sustainability rating of sovereign bonds 2010',
published in March 2010. Bank Sarasin was also voted
'Sustainable City Awards 2010/2011 Overall Winner',
reinforcing Bank Sarasin’s pioneering role in the
field of sustainable investment." Not many
ethical investors know about Bank Sarasin's work.
They should, as the bank is a leader in ESG
corporate analysis.
Bank Sarasin wins two Sustainable City Awards:
Farsight Award and Overall Winner 2010/11, press
release, February 16, 2011, Bank Sarasin,
Switzerland.
New Report Shows Private Investments In Green
Sectors Top $2 Trillion. -
[COMMENTARY] "Ethical Markets
Media (USA and Brazil) released their February 2011
GREEN TRANSITION SCOREBOARD® tracking private
investments since 2007 in green companies and
technologies globally, now totaling more than $2
trillion... Hazel Henderson, D.Sc.Hon., FRSA, former
US government technology advisor and president of
Ethical Markets Media said, 'this new total is
remarkable in spite of economic uncertainty. It
indicates that the global transition away from the
300-year fossil-fueled Industrial Era is
accelerating toward the cleaner, greener,
information-rich economies of the 21st century.'”
Hazel Henderson, a real pioneer in alternative
energy and ethical investing, deserves great
commendation in her efforts to help move us into a
sustainable future.
New Report Shows Private Investments In Green
Sectors Top $2 Trillion, press release, February
17, 2011, Ethical Markets, USA.
US Chemical Companies' Credit Ratings Face
Possible Downgrade As EPA Evaluates Their Carbon
Outputs. -
[COMMENTARY] "The credit ratings
of companies in the US chemicals sector could be
affected if the country’s Environmental Protection
Agency tightens up on greenhouse gas (GHG) emissions
regulations, according to a significant report by
the Washington D.C.-based World Resources Institute
(WRI) and credit rating agency, Standard & Poor’s,
with financial backing from APG, the Dutch asset
manager that runs the investments of the €237bn ABP
pension fund." Lower credit ratings would lead
to higher cost of capital. As I have repeatedly
said, companies who perform best on ESG criteria
will outperform others.
Credit ratings of US chemical firms could be hit by
EPA emissions moves: WRI/S&P/APG report, by Hugh
Wheelan, February 16, 2011, Responsible Investor,
UK.
NYC Pension Funds Calls On Four Companies
To Rein In Executive 'Golden Parachutes.' -
[COMMENTARY] "Comptroller John C.
Liu and the New York City Pension Funds called on
four corporations to rein in excessive payments to
executives resulting from corporate mergers and
acquisitions... Comptroller Liu said, 'The
shareholders suffer when these parachutes get out of
control. It's adding insult to injury when taxpayers
are ultimately forced to foot the bill for these
bloated executive payouts and then cover the
executives’ tax bill...' The request was made in
shareholder proposals submitted to Anadarko
Petroleum Corp. (NYSE: APC), NewAlliance Bancshares,
Inc. (NYSE: NAL), R.R. Donnelly & Sons Co. (NASDAQ:
RRD), and WellPoint, Inc. (NYSE: WLP)." Well
done comptroller Liu for taking this stand.
LIU, NYC PENSION FUNDS CALL FOR END TO GOLDEN
PARACHUTES, press release, February 10, 2011,
New York City Comptroller, USA.
Environment Investment Organization (EIO)
Publishes Carbon Rankings On Top 100 UK Companies. -
[COMMENTARY] "Topping the ET UK
100 Carbon Ranking are insurers Amlin, followed
closely by financial services giant Aviva, with
respective carbon intensities of 1.21 and 1.36
(MtCO2e/$M turnover). Investment managers Man Group
rank third, with an intensity of 6.29, followed by
British broadcasting giants BSkyB with an intensity
of 6.69. Energy consultancy company AMEC come in
fifth with an intensity of 8.31."
More interesting and insightful reading on carbon
rankings--and the difficulties associated with it.
It is a thorough study on the subject and the
companies it covers.
ET UK 100 Carbon Rankings 2011 Report, (PDF) February
16, 2011, Environment Investment Organization, UK.
Mercer Provides Climate Change Report & Proposes
New Asset Allocation Model. -
[COMMENTARY] "On 15 February 2011
Mercer's Responsible Investment (RI) team launched
Climate Change Scenarios - Implications for
Strategic Asset Allocation, a free public report.
Mercer, together with 14 leading institutional
investors and industry thought leaders around the
world, has been working for over a year on this
market-leading research into the implications of
climate change for markets and investors." This
is a fascinating report. Useful reading for ethical
investors.
The
Climate Change Report, February 15, 2011,
Mercer, USA.
Ontario Teachers’ Pension Plan Prefers 'Say On
Pay' Advisory Votes Every Three Years. -
[COMMENTARY] "Ontario Teachers’
Pension Plan has told companies it would prefer them
to hold a say-on-pay vote every three years because
annual votes could lead to more short-termism."
It is a good point. The last thing we want is for
companies to have another reason for looking only at
short term considerations concerning their plans and
activities.
Annual say-on-pay votes could lead to short-termism
- Ontario Teachers, by Daniel Brooksbank,
February 14, 2011, Responsible Investor, UK.
Proposed California Law Makes Sustainability
'Legal.' -
[COMMENTARY] "Under current law in
California and most other states, companies can be
sued by their shareholders or investors for taking
environmental or social measures that negatively
affect shareholders’ financial returns. The proposed
bill would enable a new form of for-profit
corporation, encouraging and expressly permitting
companies to pursue other things besides simply
making money." How many Americans knew about
such state laws? Little wonder that many US
companies are laggards compared to European firms
concerning sustainability issues.
California’s Bold Move to Legitimize Sustainable
Business, by Joel Makower, February 14, 2011,
GreenBiz, USA.
Fortune 1000 CEOs Say Sustainability Is A
Moral Imperative. -
[COMMENTARY] "... in a recent
survey of senior leadership at Fortune 1000 firms
commissioned by Schneider Electric, almost 90
percent admit to feeling a 'moral responsibility' to
addressing sustainability at their companies... 61
percent of those executives said that the single
biggest driver for energy efficiency and other
sustainability projects is the potential cost
savings from increased efficiency." What a
turnaround this is from say ten, or even five years
ago!
Top Execs Feel 'Moral Duty' to Sustainability, ROI
Still Main Driver, February 9, 2011, GreenBiz,
USA.
See also,
Study Reveals Gap Between Sustainability Leaders,
Laggers, February 10, 2011, GreenBiz, USA.
MSCI To Consult On New SRI indices. -
[COMMENTARY] "The proposed indices
aim to support the benchmarking and other index
related needs of investors who seek to invest in
accordance with their values such as religious
beliefs, moral standards or ethical views,” MSCI
said in a statement. “The proposed indices will
exclude companies that are inconsistent with
specific values based criteria and will target
companies with high ESG ratings relative to their
sector peers.”
A few years ago there were just a handful of
SRI-ethical indexes. Now there are too many to
count. To me it indicates the full mainstreaming of
ethical investing in the investment industry.
MSCI to consult on new SRI indices, February 10,
2011, SRI Monitor, Canada.
Total, The Huge French Oil Company Facing Proxy
Resolution On Tar Sands Investment. -
[COMMENTARY] "French activist
investor PhiTrust Active Investors is to quiz Total
SA on the tar sands issue at the oil major’s
forthcoming annual shareholder meeting. PhiTrust
says it will table a resolution on the risks
involved in its tar sands operations in Alberta,
Canada. Fellow oil firms BP and Shell have faced
similar shareholder resolutions on the tar sands
issue in the past, but PhiTrust claims it is the
first such resolution in France. Total is set to
hold its Annual Shareholders’ Meeting in Paris on
May 13." It will be interesting to see how French
investors react!
French oil giant Total facing investor resolution on
tar sands, by Daniel Brooksbank, February 9,
2011, Responsible Investor, UK.
More Than 45 US Companies To Face Proxy
Initiatives On Disclosure & Accounting For Political
Donations. -
[COMMENTARY] "Since such
resolutions were first filed in 2004, shareholders
are increasingly inclined to support them. Last year
saw an average 30 percent vote in favor of 28
resolutions on contribution disclosure resolutions;
votes above 40 percent were reached at Coventry
Health Care, CVS Caremark and Sprint Nextel. Proxy
advisers, public pension funds and mainstream mutual
funds are getting on the bandwagon. Even business
leaders oppose secretive political spending,
according to a recent poll."
No companies should be able to make political
donations unless approved by stockholders. And
whatever donations they make--and the reasons for
them--should be available for full public scrutiny.
Corporations
Make Political Donations At The Risk Of
Shareholders' Wrath, by Jeff Cossette, February
4, 2011, Business Insider, USA.
GRI Opens US Office To Help American Companies
Catch Up On CSR. -
[COMMENTARY] "While companies
around the globe have embraced CSR reports as a way
to demonstrate transparency and articulate their
effects on environmental, social, and governance
issues, American companies generally lag behind. GRI
estimates that 45% of the companies that use its
reporting framework are from Europe. But with
American companies only 12% of the organizations
that have adopted GRI guidelines, the organization
crossed the pond and set up shop in Lower Manhattan,
the capital of American finance and commerce."
What more needs to be said!
With America Behind in CSR Reporting, GRI Opens Wall
Street Office, by Leon Kaye, February 2, 2011,
TriplePundit, USA.
Norway, New Zealand &
Sweden, Most 'Shariah-Compliant' Nations! -
[COMMENTARY] "Think of two of the
most common problems highlighted in today's
news: the state of the global
economy and violence at the hands of Islamists.
Here's a possible remedy to both: a sovereign sukuk
[Islamic bond] rating system."
This is not a news item, but it provides an
insight into, and understanding of, Islamic finance
principles and how they could be applied to rating
sovereign debt. This is a useful piece for all
ethical investors as shariah-compliant investing
becomes more common.
Is your economy sharia compliant? By Imaduddin
Ahmed, February 2, 2011, The Guardian, UK.
Eurosif Says EU Close To Making CSR Reporting
Mandatory. -
[COMMENTARY] "The European
Commission (EC), the executive arm of the European
Union (EU), is edging closer to making
environmental, social and governance (ESG)
disclosures mandatory for companies, according to
the head of the European Sustainable Investment
Forum (Eurosif), the SRI lobby group."
Mandatory CSR reporting is something I have long
advocated. It is all about transparency and honesty
in reporting what is really happening in companies.
See my posts:
We Need Mandatory Corporate Social Responsibility
(CSR) Reporting, and
A Call for Mandatory Corporate Social Responsibility
Reporting.
EU “close” to making corporate ESG disclosure
mandatory – Eurosif, by Daniel Brooksbank,
February 2, 2011, Responsible Investor, UK.
US Companies Making Bigger Investments In
Sustainability. -
[COMMENTARY] "In 2010, U.S.
corporations continued to enhance their sustainable
business efforts by making bigger, bolder,
longer-term sustainability commitments. Today,
GreenBiz issued its 4th annual State of Green
Business report. The free, downloadable report
measures the progress of U.S. business and the
economy from an environmental perspective, and
highlights key trends in corporate culture in regard
to the environment." Not only is this good news
for the corporate America, but it is good news for
ethical investors too.
Companies Made Bigger, Bolder Commitments to Green
in 2010, February 1, 2011, GreenBiz, USA.
Powerful Japanese Union Federation Issues Formal ESG
Guidance To Money Managers. -
[COMMENTARY] "RENGO, the powerful
Japanese trades union confederation whose members
influence a significant part of the country’s
institutional retirement savings, has issued one of
the most far-reaching ‘guidelines’ by any union in
the world outlining how domestic pension plans
should incorporate ESG factors into their investment
decisions. RENGO-linked pension plans account for
almost half of the schemes in Japan’s corporate
pensions sector, which as a whole manages more than
JPY50 trillion (€450bn). The influence of RENGO in
Japanese pensions could make the new guidelines a
game-changer in the take up of ESG by retirement
funds in the country."
This is big news for ESG in Asia, and
correspondingly, Asian interest in ethical
investing.
Powerful Japanese union, RENGO, issues formal
guidelines to pension funds and managers to adopt
ESG, by Hugh Wheelan, February, 1, 2011,
Responsible Investor, UK.
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