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Ethical Investing News/Commentaries:
June 2011 |
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Commentaries by Ron
Robins
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Russian Stock Exchange Working On A
Sustainability Index. -
[COMMENTARY] "On June 27, 2011 a
visiting meeting of representatives from the
Committee on Corporate Social Responsibility of the
Russian Union of Industrialists and Entrepreneurs,
Moscow School of Management SKOLKOVO and RTS Stock
Exchange took place. As a result of the meeting RTS
and SKOLKOVO have started working on a joint project
for establishing and calculating the first Russian
Sustainability Index. The Index constituents list
will include shares of Russian issuers traded on the
organized stock market and selected on the basis of
regularly published corporate and social
responsibility reports (CSR)." Russia, among the
world's larger countries, has been a laggard
concerning sustainability issues. This is a great
sign that they are finally moving forward in this
area.
RTS and
Moscow School of Management SKOLKOVO will establish
the Sustainability Index, June 28, 2011, RTS
Exchange, Russia.
Singapore Stock Exchange Issues Sustainability
Guide For Listed Companies. -
[COMMENTARY] "The Singapore
Stock Exchange (SGX) has issued a sustainability
reporting guide for listed companies, following
calls from global investors and stakeholders for
companies to report on sustainability issues. The
aim of the guide is to promote a more complete
annual report, with companies integrating their
financial information with environmental and social
risks and strengths." As I have long predicted,
stock exchanges everywhere will gradually enforce
much greater disclosure on sustainability and ESG
issues.
SGX publishes sustainability reporting guide,
June 28, 2011, The Accountant, Asia/Pacific.
Shell, Tesco, EDF, Unilever & Many Other
Companies Call On UK Government For More Action To
Reduce Carbon Emissions. -
[COMMENTARY] "Some of the
biggest names in British business will today join
together to reiterate their call for the government
to take more concrete action to cut carbon emissions
and accelerate the development of low carbon
technologies and business models." Now we know
that big business is getting the message when some
of the world's largest companies begin to call on
governments to enact policies to lower carbon
emissions! Also, see my post,
Sustainability Profits Companies.
Business giants call on government to show more
green ambition, June 29, 2011, BusinessGreen,
UK.
Eurosif Reports On Aerospace & Defence
Industries. -
[COMMENTARY] "One of the most
secretive sectors in which corruption and bribery
issues are likely, the defence sector deals with
flattening military budgets and controversial weapon
international legislation to take effect in 2012...
Research was provided by Sustainalytics, and the
project was supervised by a steering committee of
representatives from CM-CIC Asset Management, ECPI
and Edmond de Rothschild Asset Management... With
the EU Emission Trading Scheme taking effect on
January 1, 2012, the report finds that the demand
for alternative fuels is expected to grow in the
coming years."
Yes, I have met ethical investors who invest in
the defence industry! And many ethical investors do
invest in the aerospace sector. Eurosif produces
another very useful report for those interested in
these industries.
Aerospace and defence industries to encounter heavy
obstacles with new pressures mounting, June 28,
2011, press release, Eurosif, France.
Mercer Reports On ESG Research Differences
Between North America & Europe. -
[COMMENTARY] "It is often stated
within the investment industry that the European
market is more advanced in the area of sustainable
investing1 relative to its North American
counterpart. This is evident in broad indicators
such as the differences in policy debate and
regulatory frameworks, as well as more
straightforward measures such as the number of
signatories to the Principles for Responsible
Investment initiative where there are much fewer
signatories from North America than in Europe/UK."
This report provides some useful insights.
Differences between North American and European ESG
Research, by Sarika Goel, June 28, 2011, Mercer,
USA.
Stronger CSR Reports Lead To Better Companies. -
[COMMENTARY] "We [CSRHUB]
recently compared the perceived CSR performance of
630 corporations who have committed to the Global
Reporting Initiative (GRI) reporting standard with
the perceived CSR performance of more than 4,000
corporations who have not, based on scores from
CSRHUB's CSR ratings system. Not only did we find
that GRI-committed companies have higher overall
ratings in the CSRHUB system, but they also receive
more attention from socially responsible investment
(SRI) firms and receive more awards from NGOs and
activist groups." Of course what ethical
investors would want to know is what affect on stock
prices does CSR reporting have?
Do Better CSR Reports Lead to Better Corporate
Citizens? By Bahar Gidwani, June 28, 2011,
GreenBiz, USA.
Swiss Bank Pictet Finds SRI Not A Shield
Against Stock Market Downturns. -
[COMMENTARY] "During the crisis,
SRI equity portfolios performed in line with the
broad market. The fact that the SRI community warned
against some of the methods that caused havoc, such
as dysfunctional incentives, unethical business
conduct and bad governance, did not make its
portfolios less risky, says the firm. The study
found that for this type of investment to thrive it
needs to look into the sustainability of companies’
financial fundamentals."
The finding of Pictet's
research is not new to me--though many ethical
investors might be surprised and perhaps concerned by its findings.
They should not be. Investing according to our own
ethical or personal values also allows us to feel that we
are doing the right thing while it also benefits our
personal and spiritual development.
SRI Is Not Less Risky Than Average, Says Pictet,
by Max Skjönsberg, June 27, 2011, Wealth Briefing,
UK.
MSCI Launches New ESG Tool For Asset Managers. -
[COMMENTARY] "The ESG Impact
Monitor, according to the company, 'allows users to
monitor a company's significant social and
environmental impacts and its ability to manage
those impacts.' At present, the ESG Impact Monitor
covers companies listed on the MSCI World index, but
will be expanded to include all companies in the
MSCI Emerging Markets Index in September. Coverage
of small-cap companies in several regions of the
world will follow."
Continuing, "[The] Business Involvement Screening
Research 'allows investors to identify all global
publicly-traded companies involved in activities
such as the production of alcohol or tobacco
products, or those that violate religious screening
mandates,' MSCI stated. 'It also allows investors to
divest from companies that violate legislative
mandates that prohibit investment in companies that
manufacture controversial weapons such as cluster
bombs and landmines or operate in countries such as
Sudan and Iran.'" These appear to be exciting
new tools for asset managers/brokers etc.
MSCI ESG Manager, June 23, 2011, MSCI, USA.
Informative Articles On
Declining Carbon Prices,
Wealthy US Families Backing Cleantech, &
Problems In
A Climate Change Investment Survey. June 23,
2011, Environmental Finance, UK.
UK's Financial Times & IFC Name Bank Sarasin
2011's Cross-Regional Sustainable Bank. -
[COMMENTARY] "The FT/IFC
Sustainable Finance Awards have been established as
leaders in recognising the achievements of banks and
other institutions focused on sustainable
development. The 2011 awards attracted a record 187
entries from 161 institutions in 61 countries. The
awards were presented at a gala event on 16 June
2011 in London attended by some 200 senior
decision-makers from the world of finance and
sustainability." I've been aware of Bank
Sarasin's commitment to sustainable investing and
banking for many years. They well deserve this
honour.
Bank Sarasin named Cross-Regional Sustainable Bank
of the Year 2011, June 20, 2011, press release,
Switzerland.
'Play' At Being An Ethical Investor! -
[COMMENTARY] "A new
environmentally educational board game called Ethica
lets players assume the role of an investment banker
or venture capitalist and see how well their green
intentions stand up in the world of international
finance. The game represents part of the developing
trend of environmental education through play."
Though I haven't played or even seen this game yet,
it might be an intriguing way to introduce friends
and family to ethical investing.
Play at being an ethical investor - new board game
readies for launch, June 20, 2011, The
Independent, UK.
Google, BT, Ikea Urge EU To Set Tougher Carbon
Goals. -
[COMMENTARY] "More than 70
companies, including big names like BT, Ikea,
Google, National Grid, Philips, Puma, Swiss Re and
Unilever, signed a joint declaration (PDF) urging
the European Union to reduce its CO2 emissions by 30
percent below 1990 levels by 2020. That's a much
higher target than the 27-nation bloc's existing
goal of a 20 percent reduction. The companies claim
such an aggressive target would spur investment,
jump start the transition to a low-carbon economy
and improve energy security, creating millions of
new jobs in the process." Finally, big companies
are seeing the opportunity for profits and
sustainability that carbon reductions offer.
Google, BT, Ikea Urge EU to Set Tougher Carbon
Goals, June 15, 2010, by Tilde Herrera,
ClimateBiz, USA.
Corporate Sustainability Reporting Rises In
China. -
[COMMENTARY] "More Chinese
companies are producing sustainability reports,
according to standard-setter the Global Reporting
Initiative (GRI), driven largely by regulation and
stock exchange listing requirements. Marjolein
Bajhuis, Amsterdam-based director of communications
and network relations for the GRI, said the number
of sustainability reports produced in China has
risen from 600 in 2009 to about 700 in 2010. Of
these, around 60 applied the GRI’s guidelines.
Chinese firms are increasingly required to produce
such reports by regulation – including the listing
requirements of the Shanghai Stock Exchange."
It is wonderful that Chinese companies are
finally getting on board with regards to
sustainability reporting. Since so few use the GRI
though, I'm wondrous about their quality.
Sustainability reporting on rise in China, June
14, 2011, by Jess McCabe, Environmental Finance, UK.
Social Investment Forum Changes Name to US SIF. -
[COMMENTARY] "US SIF CEO Lisa
Woll said: 'Our new name -- US SIF: The Forum for
Sustainable and Responsible Investment – reflects an
important evolution. The socially responsible and
sustainable investing space has shifted considerably
over the past 20 plus years since the organization
was founded...' Michael Lent, US SIF Board Chair and
CIO of Veris Wealth Partners, added: 'US SIF is the
umbrella organization for responsible, sustainable,
socially responsible, ethical, values based,
mission, green, impact and other double- and
triple-bottom line investors. We believe our new
name is a better fit for a rapidly evolving and
growing field that has changed considerably since
the days when the Social Investment Forum was first
named.'"
The US SIF is probably the largest such
organization in the world. You can also read what Al
Gore has to say at the organization's DC conference.
Al Gore Opens SIF National Conference As
Organization Changes Name to "US SIF: The Forum for
Sustainable & Responsible Investment," June 13, 2011, US SIF
press release, USA.
Ceres, Tellus Unveil Global Initiative for a
Standardized, Comprehensive Corporate Sustainability
Rating. -
[COMMENTARY] "Founding partners
of the new coalition, the Global Initiative for
Sustainability Ratings, include leading investors
and businesses like TIAA-CREF, the Calvert Group and
Bloomberg. The initiative will be modeled on a
successful Ceres/Tellus-launched program, the Global
Reporting Initiative, that has become the de facto
global standard used by 2,000 companies worldwide
for corporate reporting on environmental, social and
economic performance." Many in the SRI-ethical
investing industry have long advocated for such a
uniform measure. I believe it would be good to
achieve, particularly to see if such a comprehensive
rating is really viable, but I am unsure of its value
from an analyst's perspective.
A Single Measure, Unbiased Results: Ceres, Tellus
Unveil Global Initiative for a Standardized,
Comprehensive Corporate Sustainability Rating,
June 9, 2011, media release, Ceres/Tellus, USA.
Canada's Maclean's Magazine &
Jantzi-Sustainalytics Rank Canada's Top 50 Socially
Responsible Companies. -
[COMMENTARY] "Each of the
companies featured is either Canadian-listed or a
wholly owned subsidiary of a foreign-listed company
with significant operations or brand presence in
Canada. Each of the companies has a significant
market capitalization or brand presence in Canada
and is featured on at least one of the following
lists: the ROB Top 1000, the ROB Top 350, or
Interbrand’s Best Canadian or Best Global Brands
lists. Given that Canadian subsidiaries of foreign
companies are inextricably linked to their parent
companies, the evaluation is based on the
performance of the foreign corporate entities."
This is another highly valuable analysis and ranking
of Canadian companies leading in socially
responsibility.
Top 50 socially responsible corporations, June
9, 2011, Maclean's Magazine, Canada.
Most Firms Failing In Water Management. -
[COMMENTARY] "A vanishingly
small proportion of large companies are adequately
managing risks posed by water shortages, drought and
pollution, according to research by EIRIS. The
London-based research house specialising in
environmental, social and governance (ESG) issues
surveyed 3,000 large companies globally identified
as exposed to water risks. Only 0.22% were
adequately managing these risks – all of which were
in the chemicals and pharmaceuticals sectors."
The news contained in this report is shocking.
Ethical investors might want to encourage the companies they invest in to take a
more proactive stance on water management. They can
stress possible benefits to the company's bottom
line--as well as investor appeal--that monitoring
and reducing water usage may have.
Most firms failing on water risk management –
report, by Jess McCabe, June 9, 2011,
Environmental Finance, UK.
Large Investors Controlling $1trn In Assets
Request Russell 1000 Companies To Integrate
Sustainability. -
[COMMENTARY] "Citing global
climate change, resource constraints and growing
population pressures, more than two dozen major
institutional investors, collectively managing $1
trillion in assets, have asked the Russell 1000
companies in a jointly-signed letter to actively
embrace the 'new reality' of so-called ESG risks –
environmental, social and governance – in both their
actions and required investor disclosures." As
we see here and from all that we know about the
benefits of integrating sustainability into
corporate activities, it is time that major asset
managers demanded companies integrate
sustainability into their strategic plans.
Investors Controlling $1 Trillion in Assets Call on
Russell 1000 Companies to Integrate Sustainability
Into Business Models, June 8, 2011, press
release, Ceres, USA.
UBS, Citi Outperform Their Reputations, Study
Finds. -
[COMMENTARY] "Google, Apple and
Honda have earned reputations that far exceed their
actual environmental, social and governance (ESG)
performance, while UBS and Citi don’t get enough
credit for their sustainability initiatives,
according to a report by Brandlogic and CRD
Analytics." In regard to brand reputation,
it seems that producing useful and attractive high
demand products overrides ESG efforts. To be real
winners, companies have to do both effectively! For
ethical investors, it is always useful to look at
brand reputations. They can be helpful in
determining your investment holdings.
UBS, Citi Outperform Their Reputations, Study Finds,
June 8, 2011, Environmental Leader, USA.
The 2011 Best 50 Corporate Citizens in Canada. -
[COMMENTARY] "The prize of clean
capitalism is the space race of the next decade.
With Canada’s unparalleled combination of per-capita
natural capital assets and stable pots of rock-solid
big money institutions—and the 2011 Best 50
Corporate Citizens leading the way—we are uniquely
poised to pioneer prosperous models that will enable
us and our civilization to win this race against the
clock. We have nothing to lose but our chains to a
fairy tale whose time is up." This report by
Corporate Knights is worth reading for anyone
interested in investing in Canada.
The 2011 Best 50 Corporate Citizens in Canada,
June 2, 2011, Corporate Knights, Canada.
Bloomberg Launches Malaysian Foreign Currency
Sukuk Index. -
[COMMENTARY] "Bloomberg
executives today announced the launch of the
Bloomberg Malaysian Foreign Currency Sukuk [Islamic
bond] Index (BMSSUTR), a non-ringgit denominated
index developed in conjunction with Bank Negara
Malaysia. The new Bloomberg index provides a global
benchmark for the performance of sukuk bonds and the
ability to track movements of foreign currency
issues." This index of Islamic of non-ringgit
(Malaysian currency) currency bonds illustrates the
growth and potential for Islamic bond issuance. This
might be of interest to some ethical investors.
Bloomberg Launches Malaysian Foreign Currency Sukuk
Index, June 7, 2011, press release, Bloomberg,
Malaysia/Singapore.
$1.2trn Investor Group Asking For Alberta Oil
Sands Monitoring. -
[COMMENTARY] "A group of 26
leading global institutional investors with a
combined heft of $1.2trn (€820m) in assets have
entered the debate about a new oil sands
environmental monitoring scheme in Alberta, Canada.
The group, led by NEI Investments, has written to
the co-chairs of the new Alberta Environmental
Monitoring Panel, Howard Tennant and Hal Kvisle.
They say the system should be 'beyond reproach.'”
What they are calling for is right and should have
been done years ago.
$1.2trn investor group in plea over Alberta oil
sands monitoring, by Daniel Brooksbank, June 6,
2011, Responsible Investor, UK.
FaithShares Closing 4 Of Its 5 Faith-Based
ETFs. -
[COMMENTARY] "'After careful
consideration, the Board of Trustees of the
FaithShares Trust has determined to close and
liquidate the FaithShares Baptist Values Fund, the
FaithShares Catholic Values Fund, the FaithShares
Lutheran Values Fund and the FaithShares Methodist
Values Fund...'"
This is unfortunate, as these were pioneer
faith-based ETFs and seemed to be well marketed. To
me, it indicates that even most religious Americans
probably 'do not practice what they preach'--when it
comes to investing!
FaithShares To Close Doors On Four ETFs, by ETF
Database, June 6, 2011, reported by Business
Insider, USA.
Environmental Investment Organisation (EIO)
Launches Environmental Tracking Index Series. -
[COMMENTARY] "The Environmental
Tracking Index Series is a hybrid between
traditional 'socially responsible investment' and
passive index models... [it ranks companies by
carbon emissions] intensity and transparency."
One mustn't be misled here to think that the
companies ranked most highly have necessarily the
lowest relative carbon footprints. A company might
have a very low carbon footprint, but not report it,
and thus be ranked lower. Nonetheless, it is an
interesting idea and could encourage companies to
both reduce and report on their carbon outputs.
EIO index to reveal greenest companies, by Anuj
Gangahar, June 5, 2011, Financial Times, UK.
SOP's Judyth Piazza Chats With Ron Robins,
June 1, 2011. I discuss the importance of
personal values, ethics and spiritual development,
for a successful career and life. To listen,
click here.
'Fracking' Becoming Big Issue At Oil & Gas
Annual General Meetings. -
[COMMENTARY] "Resolutions
addressing hydraulic fracturing won substantial
shareowner support at the annual meetings of major
oil and gas companies last week. The resolutions,
which call for increased transparency and risk
management in an increasingly widespread drilling
practice that has raised serious environmental
concerns, gained 41 percent of the votes of
shareowners at Chevron and 28 percent at
ExxonMobil."
Fracking and understanding its
associated environmental problems have to be dealt
with. Aside from the health risks, I'm increasingly
concerned about disturbing the rock formations and
the possibility fracking might cause earthquakes, as
a recent report from the UK could indicate.
Shareholders Step Up Pressure on Fracking at
Chevron, ExxonMobil, June 2, 2011, Robert Kropp,
SocialFunds, USA.
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