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Ethical Investing News/Commentaries:
Jan. 2011 |
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Commentaries by Ron
Robins
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UNEP Finance Initiative Issues Study On
Passive Responsible Investing. -
[COMMENTARY] "The following
report presents eight case studies that demonstrate
how asset owners and investment manager signatories
are meeting the challenge of responsible investment
within passive management strategies for equities."
This is more useful reading for ethical investors, courtesy
of Responsible Investor.
Responsible Investment in Passive Management
Strategies: Case studies & Guidance, (PDF)
January 2011, UNEP Finance Initiative, UK.
54 Global CEOs Launching & Promoting New UN
Sustainability Programme. -
[COMMENTARY] "Chief executives
from 54 companies around the world have joined
forces with the United Nations to launch a new
program aimed at raising the bar for corporate
environmental, social and governance performance.
Members of the new platform, called Global Compact
LEAD, will work to implement the newly unveiled
Blueprint for Corporate Leadership, a roadmap
released by the UN Global Compact last year."
The growth of corporate interest in sustainability
mirrors that of the number of investors desiring to
invest sustainably too.
54 CEOs Help Launch UN Program to Ramp Up
Sustainability, January 31, 2011, GreenBiz, USA.
S&P To launch First Middle Eastern Equity Markets
ESG Index. -
[COMMENTARY] "[The index] will
rank and track the transparency, performance and
disclosure of more than 100 of the largest listed
companies in the Middle East on Environmental,
Social and Corporate Governance (ESG) issues. The
index is a joint initative of Hawkamah, the
Institute for Corporate Governance, and Standard &
Poor's, with the support of the International
Finance Corporation, part of the World Bank Group."
This index will help spur Middle Eastern companies
to integrate ESG into their operations, who until
now have lagged Europe, the US, and other parts of
the world in these activities.
Standard & Poor's to launch first ESG index covering
Middle East equity markets, press release,
January 30, 2011, appeared on AMEinfo.com, UAE.
Sustainalytics Report Links Sustainability
Performance To Shareholder Value. -
[COMMENTARY] "A new study by
Sustainalytics highlights links between
sustainability performance and shareholder value.
The report, 'Sustainability and Materiality in the
Natural Resources Sector' looked at environmental
and social practices in the forestry, mining and oil
and gas sectors and found positive correlation to
competitiveness in each sector." This type of
research is vitally needed. Congratulations to
Sustainalytics!
Sustainability Key Competitive Driver in Natural
Resources Sector, press release, January 27,
2011, Sustainalytics, Switzerland.
Finance Industry Group Calls For Greater
Transparency On Climate Change Reporting By
Financial Institutions. -
[COMMENTARY] "There has been a
call for greater transparency about the results of
financial institutions’ engagement on climate change
issues. The remarks come in the latest progress
report on the Climate Principles, the finance
industry climate change group which includes Credit
Agricole, HSBC, Standard Chartered, Swiss Re, F&C
Asset Management and BNP Paribas." In a way this
is good news as it is leading members of
international financial organizations calling for
disclosure.
Call for greater transparency on climate change
engagement, by Daniel Brooksbank, January 26,
2011, Responsible Investor, UK.
'Say On Pay'
Rules For Companies Now Official US SEC Policy. -
[COMMENTARY] "The Securities and
Exchange Commission today adopted rules concerning
shareholder approval of executive compensation and
"golden parachute" compensation arrangements as
required under the Dodd-Frank Wall Street Reform and
Consumer Protection Act." At last they are
official.
SEC Adopts Rules for Say-on-Pay and Golden Parachute
Compensation as Required Under Dodd-Frank Act,
press release, January 25, 2011, Securities &
Exchange Commission (SEC), USA.
Nine US Companies To Be Challenged On Hydraulic
Fracking. -
[COMMENTARY] "Shareholders file
resolutions with Cabot Oil & Gas, ExxonMobil,
Chevron, and other energy companies to spur more
responsible 'fracking' practices." The process
of fracking to recover oil needs much more study,
especially concerning how it affects fresh water
supplies.
Investors challenge nine oil and gas companies on
hydraulic fracturing practices, press release,
January 21, 2011, Ceres, USA.
Dow Jones Again Named Best Islamic Index Provider
At Fifth Annual Islamic Business & Finance Awards. -
[COMMENTARY] "Dow Jones Indexes, a
leading global index provider, today announced it
was named 'Best Islamic Index Provider' at the fifth
annual Islamic Business & Finance [Magazine] Awards.
Nearly 300 distinguished regional and global
industry professionals attended the monthly
magazine's ceremony in Dubai, one of the Gulf
region's most prominent financial industry events."
Congratulations to Dow Jones who obviously recognise
the global potential of Islamic finance.
Dow Jones Indexes, press release, January 21,
2011, USA.
WWF Canada Reports On Carbon Risk In Canadian
Institutional Portfolios. -
[COMMENTARY] "WWF-Canada released
a ground-breaking report highlighting climate change
as a new risk for institutional investors...The
study found that the S&P/TSX Index has the
third-largest carbon footprint among major global
indices, measured by carbon emissions per USD 1
million sales. Only the Indian and Emerging Markets
global indices have larger footprints..."
It is Canada's resource sector that primarily
accounts for the high carbon counts. The report is
important reading for anyone investing in Canadian
stocks. It also provides a carbon footprint analysis
for various Canadian funds.
WWF-Canada Report Shows High Cost of Carbon to
Investors, January 19, 2011, WWF, Mercer &
Trucost, Canada.
SHARE Canada Issues Its Q4/2010 Shareholder
Engagement Report. -
[COMMENTARY] "Inmet Mining
Corporation, Nexen Inc. and Talisman Energy Inc.
told SHARE that they will adopt a say on pay vote
within the next two years." Anyone interesting
in investing ethically in Canada should read these
reports.
Shareholder Engagement Report Q4 2010, January
2011, SHARE, Canada.
Financial Institutions Find Climate Change
Information Insufficient. -
[COMMENTARY] "Overall, less than
half of the respondents feel they are sufficiently
well-informed. Just one-third feels 'sufficiently
informed' on climate change. Even for historical
weather data, less than half (43%) feel adequately
informed." Personally, I feel what is largely
said in this study is self-evident. It makes for
interesting reading though, particularly for anyone
significantly invested in financial firms.
Advancing adaptation through climate information
services, January 2011, UNEP Finance
Initiative/Sustainable Business Institute,
Switzerland.
Michigan Court Ruling Aids
Development Of Islamic Finance In USA.
- [COMMENTARY] "Lawyers said a
U.S. court decision to dismiss a case alleging AIG's
(AIG.N) sharia-compliant businesses promoted
religious doctrine, will boost confidence in the
industry and lift sales of Islamic products in the
longer term." Islamic finance has met with many
obstacles in the US. Slowly though, the legal
challenges to it there are being resolved.
US legal win to boost Islamic finance -lawyers,
by Shaheen Pasha, January 18, 2011, Reuters, Dubai.
Shareholder Proxy Access Improves Firm's
Value, Harvard Study. -
[COMMENTARY] "We use the SEC’s
October 4, 2010 announcement that it would
significantly delay implementation of its August
2010 proxy access rule as a natural experiment.
Because firms with substantial institutional
ownership would have been most affected by the SEC’s
now-delayed changes, we use the share and
composition of institutional investors to sort firms
into those more and less affected by the October 4
news. Firms that would have been most affected by
proxy access, as measured by institutional
ownership, lost value on that day."
Continuing, "The value drop was 55 basis
points for a 10 percentage point change in activist
institution ownership. These results suggest that
financial markets placed a positive value on
shareholder access, as implemented in the SEC’s
August 2010 Rule." Ethical investors take note!
Does Shareholder Proxy Access Improve Firm Value?
Evidence from the Business Roundtable Challenge,
by Bo Becker, Daniel Bergstresser, and Guhan
Subramanian, November 22, 2010, Harvard Business
School, USA.
Report Evaluates Climate Change Reporting By
Small US Companies. - [COMMENTARY]
"Pax World Management LLC... and
Clean Air-Cool Planet (CA-CP)... released a new
report, 'Risk and Opportunity in a Low-Carbon
Business Climate: Small & Mid-Caps and Climate
Change.' The report notes that reporting on any of
several types of climate-related risk is generally
inadequate among smaller companies, and that what
reporting is done is generally limited to only
regulatory risk, while ignoring other potential
risks (e.g. physical, business interruption or
supply chain, etc.)."
This report discusses the climate change
reporting in a number of different US industry
sectors and specific companies.
Risk and Opportunity in a Low-Carbon Business
Climate: Small & Mid-Caps and Climate Change,
January 5, 2011, Pax World Management LLC and Clean
Air-Cool, USA.
First Indian Responsible Investing
Organization Launched. -
[COMMENTARY] "The New Delhi-based
Responsible Investment Research Association (RIRA)
has recently received its license to function as a
nonprofit organisation. RIRA told
www.responsible-investor.com that it will aim to
build dialogue on responsible investment and
environmental, social and governance (ESG)
mainstreaming in the region." This is extremely
welcome news. India's equity markets are growing
fast and this organization there is greatly needed.
Congratulations to RIRA!
India’s new Responsible Investment Research
Association gets OK, by Daniel Brooksbank,
January 14, 2011, Responsible Investor, UK.
Major US Pension Funds Call For Banks To
Conduct Independent Examinations Of Their Mortgage &
Foreclosure Practices. -
[COMMENTARY] "A coalition of seven
major public pension systems called on the boards of
directors of Bank of America (NYSE: BAC), Citigroup
(NYSE: C), JP Morgan Chase (NYSE: JPM), and Wells
Fargo (NYSE: WFC) to immediately undertake
independent examinations of the banks’ mortgage and
foreclosure practices."
The recent court ruling in Massachusetts against the
banks has opened-up the possibility of mammoth fraud
charges against them. Investors in the entire US
financial space remain clueless as to the potential
financial losses to the US financial system
resulting from such unethical behaviour.
$432 Billion pension fund coalition demands bank
directors immediately examine foreclosure practices,
press release, John C. Liu, New York City
Comptroller, January 6, 2011, USA.
Ontario Canada Could Lead In Shareholder
Rights. - [COMMENTARY]
"The OSC’s [Ontario Securities
Commission] staff notice states that staff is
reviewing three areas related to shareholder
democracy: slate voting and majority voting for
uncontested director elections; shareholder advisory
votes on executive compensation; [and] effectiveness
of the proxy voting system." It is good news
that the OSC is leading in these matters.
Ontario
regulator seeks input on shareholder rights,
January 11, 2011, SRI Monitor, Canada.
Greenpeace Publishes Survey Of Greenest
Electronics Manufacturers.
- [COMMENTARY] "In seven categories of
electronics, Asus led with two products at the top
of the heap, as well as the highest-scoring product
surveyed, the Asus VW-247H-HF monitor. Among the
other categories, Asus also led with the greenest
notebook computer, while HP can boast the greenest
desktop and Acer landed the greenest netbook
computer. Samsung's Blue Earth mobile phone led that
category, Sony Ericsson made the greenest
smartphone, and Sharp took the top spot in the
television category."
This is Greenpeace's third annual survey. Of
course electronics is an area where many toxic
materials are used.
Asus Sits Atop Green IT Product Survey from
Greenpeace, by Matthew Wheeland, January 7,
2011, Greener Computing, USA. Also see the
CES Sustainability Report, January 5, 2011.
LOHAS Publishes Research On 2011 Food, Health
& Wellness Trends. - [COMMENTARY]
LOHAS is Lifestyles of Health and
Sustainability. This will be useful information for
many ethical investors.
LOHAS Trends for 2011 - Health and Wellness Trends,
and
LOHAS Trends for 2011 - Food, LOHAS, USA.
Turkey's Istanbul Stock Exchange Launches
Islamic Finance Stock Index. -
[COMMENTARY] "Turkey's Istanbul
Stock Exchange on Thursday launched an index
comprised of 30 listed companies that comply with
Sharia banking principles as the country seeks to
attract interest in its burgeoning Islamic finance
sector. The Participation Index .KATLM will include
discount retailer BIM (BIMAS.IS), Turk Telekom (TTKOM.IS),
the main landline operator and builder Enka Insaat (ENKAI.IS),
said Avsar Sungurlu, deputy CEO of Bizim Securities,
which is consulting for the index."
With investor interest surging in both emerging
markets and ethical investment products, stock
exchanges all over the developing world are seeing
the possibilities for such indexes.
REFILE-Istanbul stock exchange launches
Islamic-style index, by Seda Sezer and editing
by Ayla Jean Yackley and Hans Peters, January 6,
2011, Reuters, Turkey.
New Year Wishes & Resolutions From Top Ethical
Investing Figures--Responsible Investor.
- [COMMENTARY] "To kick
off the year, Responsible Investor has put together
a review of 2010, a look forward at the year ahead
and a selection of New Year’s resolutions from
figures from the RI World: Philippe Desfossés, ERAFP
(France); Peter Chapman, SHARE (Canada); David
Russell, USS (UK); Remy Briand, MSCI (US); Erik
Breen, Robeco (Netherlands); Stephen Viederman (US);
Alexandra Tracy, ASRIA (Hong Kong); Louise
O’Halloran, RIAA (Australia); Amit Bouri, Global
Impact Investing Network (US); Matt Christensen,
Eurosif (France); Eugene Ellmen, SIO (Canada); Mindy
Lubber, Ceres (US)."
RI Review of 2010 & Resolutions for 2011,
January 2011, Responsible Investor, UK.
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