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Shareholder Values

"Forty-five percent of U.S. households prefer an environmental, social and governance (ESG) approach to investing… Among those between the ages of 30 and 39, this increases to 64%, and for those younger than 30, it is 67%."
-- Cerulli Associates
    October 2018

"The vast majority of Canadian investors are interested in responsible investments (RI) that incorporate environmental, social and governance (ESG) issues, and they would be more likely to choose responsible investments if their financial advisor suggested suitable RI options for them."
-- Responsible
    Association (RIA)
    June 2017

"70% of people [in UK] want to invest ethically but the financial services industry is failing to respond." Referencing research by Abundance.
-- Acquisition
(UK) June 2015




Global Ethical Investing News & Commentary

Commentaries by Ron Robins  E-mail us your feedback

Links may only be valid for a limited time   June 25, 2019

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How To Read The European Union's New Guidelines On Sustainable Investing. "Under the proposed taxonomy regulation, institutional investors marketing environmentally sustainable investment products would be required to explain whether, and how, they used the taxonomy criteria.

Alternatively, investors could disclose their own preferred approach to determine that their investment is environmentally sustainable. These proposed rules would apply to a range of products, from European mutual funds (UCITS funds) to alternative investment funds and from securitization funds to index funds."

COMMENTARY] For fund managers engaged in the European markets these could be important rules that'll govern their activities in those markets.
How To Read The European Union's New Guidelines On Sustainable Investing, by Bhakti Mirchandani, June 20, 2019, Forbes, USA.


How to Build Your Own ESG Portfolio. "By putting your savings in funds that assess how a company is addressing (or worsening) environmental, social, and governance, or ESG, factors, you hitch your investments to good corporate citizens, and may earn above-average returns. But turning the concept into a practical investment portfolio without compromising on investing mandates such as diversification and due diligence comes with a unique set of challenges."

COMMENTARY] Some great points are made in this post but looking at their portfolio looks overly diversified. Also, no-doubt it'll include sectors that won't please many ethical and sustainable investors. I suggest those DIY investors first take my one-hour DIY Ethical-Sustainable Investing Pays Tutorial and then review what said in this article.
How to Build Your Own ESG Portfolio, by Karen Hube, June 21, 2019, Barron's, USA.


ESG: green bonds have a chicken and egg problem. "Everyone wants to buy green bonds but many issuers, concerned about cost and complexity, don't want to sell them. Non-green issuers could be all too ready to fill the void."

COMMENTARY] A comprehensive article on the subject. Worthwhile reading for all ethical and sustainable investors.
ESG: green bonds have a chicken and egg problem, by Louise Bowman, June 19, 2019, Euromoney, UK.


Impact investing doesn't require sacrificing returns, GIIN survey shows. "More than 90% of impact investors -- those that seek to combine financial returns with positive social and environmental outcomes -- said their deals have met or exceeded their expected financial and impact performance so far, according to the 2019 survey of data and insights collected by the Global Impact Investing Network and released on Wednesday."

[COMMENTARY] Great news -- and will help power impact investing to new heights.
Impact investing doesn't require sacrificing returns, GIIN survey shows, by Luis Garcia, June 19, 2019, Private Equity News, UK.


Pot Firms Seek to Transition From Sin Stocks to Ethical Darlings. "A group of 45 companies operating in the cannabis industry has crafted a set of standards that they hope could one day transform them from sin stocks into ESG darlings."

[COMMENTARY] This will be fascinating to watch! Can pot companies be sold as health producing ESG focused entities to institutional investors?
Pot Firms Seek to Transition From Sin Stocks to Ethical Darlings, Kristine Owram, June 18, 2019, Bloomberg, USA.


Fund Managers Are More Moral Than You'd Think. "A new survey of ESG adoption rates, from UBS Group AG's asset management unit and Responsible Investor Research, covers more than 600 asset owners in 46 countries, responsible for more than 19 trillion euros ($21 trillion) of assets."

[COMMENTARY] The survey shows impressive numbers of asset managers incorporating ESG. Some say that the numbers in the US lag the rest of the world due to fiduciary regulations there that ESG can't be a major criterion for investing.
Fund Managers Are More Moral Than You'd Think, by Mark Gilbert, June 17, 2019, Bloomberg Opinion, USA.


[UK] Savers favour ethical investments in pensions. "Seven in ten (72 per cent) defined contribution pension members want their scheme to include ethical investments in its default fund."

[COMMENTARY] They also asked if savers would still invest ethically if their returns were lower. 42% said yes. This question always annoys me as it suggests to the savers that ethical investing implies lower returns -- which is generally not the case of course.
Savers favour ethical investments in pensions, by Amy Austin, June 10, 2019, FT Advisor, UK.


ESG integration delivers returns with lower volatility. "Integrating environmental, social and governance (ESG) factors into the investment process can significantly lower volatility without sacrificing the desired returns, leading to a better overall result for long-term investors such as insurers, said Pascal Zbinden, co-head of SAA & market at Swiss Re."

[COMMENTARY] Such findings have been found before, but it's great to see Swiss Re -- one of the world's biggest reinsurers and insurers -- come to this conclusion in their own ESG research.
ESG integration delivers returns with lower volatility, by Adam Leach, June 6, 2019, Insurance Asset Risk, UK.


The 2019 proxy season: How investors are stepping up on ESG. "While 2018 was a record year for investor support of environmental and social shareholder proposals, 2019 promises to become the year environmental and social issues take center stage."

[COMMENTARY] At last ESG issues are not only coming to the fore but also getting real action.
The 2019 proxy season: How investors are stepping up on ESG, by Sara Dal Lago and Sara Dal Lago, June 3, 2019, GreenBiz, USA.


Corporate Knights' 2019 list of Canada's best 50 and 50 best non-Canadian corporate citizens.

[COMMENTARY] Always a good list to review -- especially for Canadians. However, non-Canadians might find some useful investment ideas among the winners too.
Corporate Knights' 2019 list of Canada's best 50 corporate citizens and Top non-Canadian foreign corporate citizens of 2019, June 4, 2019, Corporate Knights, Canada.


Britain aims high with launch of Impact Investing Institute. "The government-backed Impact Investing Institute will be steered by Elizabeth Corley, former chief executive and vice-chair at Allianz Global Investors, and Harvey McGrath, former chairman of Man Group, the alternative asset manager. 'We see an enormous opportunity to collect money and direct it to some of the biggest social challenges we have,' Ms Corley told the Financial Times."

[COMMENTARY] Governments are realizing that they might be able to employ significant private funds to advance public and social development. Expect to see such government- backed institutes in numerous countries in the years ahead.
Britain aims high with launch of Impact Investing Institute, by Jennifer Thompson, June 3, 2019, Financial Times, UK.


Unintended Consequences of Investing According to Environmental, Social and Governance Principles. "The implementation of ESG criteria should be undertaken with care, however, as their use can have unintended consequences depending on the specific criteria that underlie an institution's approach to ESG investing.

For example, U.S. institutions and even non-U.S. institutions that have U.S. public clients (e.g., state pension funds) that are considering leveraging well-known ESG criteria used by European institutions should be aware of potential issues under U.S. federal and state antiboycott measures that penalize entities that refuse to transact with or invest in Israel and Israeli companies."

[COMMENTARY] This is a further elaboration of something I've previously discussed that for fiduciary reasons, particularly in the US, fiduciaries cannot simply make investment decisions based on SRI without possibly incurring legal problems. This article illustrates two cases where issues became problematic.
Unintended Consequences of Investing According to Environmental, Social and Governance Principles, by staff, June 3, 2019, Dechert LLP, USA.


Many Institutional Investors Confuse ESG with Socially Responsible Investing. "Institutional investors must be careful when navigating the legal issues relating to environmental, social, and governance (ESG) factor integration, or they may risk running afoul of their fiduciary duties, according to a white paper from Randy Bauslaugh, a partner in the Canadian law firm McCarthy Tétrault, and Hendrik Garz of Sustainalytics, a provider of ESG research."

[COMMENTARY] It's clear that many fiduciaries must make investments on that which promotes profits and not on ethical grounds, hence this warning. However, I suspect that most fiduciaries aware of this. Nonetheless, for many smaller pension funds and non-profits managing internally, might need to be reminded of this.
Many Institutional Investors Confuse ESG with Socially Responsible Investing, by Michael Katz, May 29, 2019, Chief Investment Officer, USA.


Are investors willing to pay a "greenium" for sustainable stocks?  "New study, by David Larcker and Edward Watts at Stanford Graduate School of Business, finds that municipal bond investors demanded exactly the same returns for green municipal bonds as for virtually identical non-green bonds issued on the same day by the same municipality."

[COMMENTARY] Perhaps it's because investors view much municipal investment -- which is frequently infrastructure related -- as green?
Are investors willing to pay a "greenium" for sustainable stocks? By Edmund L. Andrews, May 29, 2019, Fast Company, USA.


Green bond black hole leaves investors exposed. "According to the Climate Bonds Initiative, a body financed mainly by the finance industry, only two-thirds of issuers provide investors with regular updates on the use of proceeds. Even among those that do, the quality of data varies wildly, with some issuers unwilling to provide specific project data due to confidentiality issues."

[COMMENTARY] When you buy a green bond, how do you know that the proceeds of that bond will go towards real green issues? For instance, proceeds of the recent RBC green bond, according to Bloomberg, could be used for environmental projects of tar sands companies. That might be alright with some investors, but not all.

This article makes clear that some sustainable investors are getting into difficulty investing in some green bonds as the proceeds from the bonds are investing in projects that are contrary to their covenants. The article outlines some ways that green bond issuers and investors can come together on these problems.
Green bond black hole leaves investors exposed, by Gareth Gore, May 24, 2019, Reuters, USA.


How Investors Apply ESG Priorities. "Across a list of 16 ESG-related topics, a majority of people said each issue was important in their decision to invest in a company, yet when asked if they have ever intentionally made an investment decision based on those same issues, a large discrepancy exists, with fewer than half saying they have taken action in many cases."

[COMMENTARY] I think the finding that a little less than half of investors have taken investment actions based on their values is misleading. It's probably a lot less than that. Consider that in the US, Canada, and Europe, retail ethical and sustainable funds represent only about 2-4% of all retail fund assets.

Investors are increasingly showing the right attitude and ethical and sustainable investing is growing though (mostly at the institutional level)--but they're a long way from actually applying their values to their investments.
How Investors Apply ESG Priorities, by Kelly LaVigne, May 17, 2019, US News, USA.


Investors worldwide support ESG investing, but still want performance. "Worldwide investor demand for environmental, social and governance (ESG) investing is strong, according to a survey conducted by Natixis Investment Management, with 76% of individual investors globally and 71% of U.S. investors saying it is important to have the ability to invest according to personal values and ethical requirements."

[COMMENTARY] Reading the survey question in the above quote suggests it might be difficult for someone to answer 'no'. Such survey questions need to be more specific to get useful answers. Nonetheless, the sheer number of such surveys with similar results does indicate mass acceptance of ESG analysis.
Investors worldwide support ESG investing, but still want performance, May 16, 2019, InvestmentNews, USA.


Announcing CR Magazine's 100 Best Corporate Citizens of 2019! "Owens Corning, Intel and General Mills top 20th annual cross-industry, U.S. ranking. Corporate Responsibility Magazine (CR Magazine) announced today its 20th annual 100 Best Corporate Citizens ranking, recognizing outstanding environmental, social and governance (ESG) transparency and performance amongst the 1,000 largest U.S. public companies."

[COMMENTARY] CR Magazine always produces an interesting list. At the bottom of the PDF listing the companies is information pertaining to how their rankings are obtained. It's worth reading so that you know how their rankings were arrived at and whether you believe they're important to you.
Announcing CR Magazine's 100 Best Corporate Citizens of 2019! by Robbie Lock, 3BL Association, May 15, 2019, USA.


Morningstar Launches ESG Asset Allocation Managed Portfolios. "Morningstar on Thursday announced the launch of the Morningstar ESG Asset Allocation Managed Portfolios, a series of five funds of ETFs and mutual funds, for advisors whose clients are concerned about environmental, social and governance issues... analysis of 56 Morningstar ESG screen indexes found that since 2009 41 outperformed their non-ESG counterparts, according to Dan Lefkovitz, Morningstar index strategist."

[COMMENTARY] This is new territory for Morningstar. It'll be fascinating to see how they perform. I presume that Sustainalytics is engaged with them on this.
Morningstar Launches ESG Asset Allocation Managed Portfolios, by Bernice Napach, May 10, ThinkAdvisor, USA.


Tim Nash's sustainable stock showdown: battle of the burger chains. "Burger King set to join A&W in serving up new plant burger, but does that make its parent co, RBI, a sustainable investment?"

[COMMENTARY] With so much interest by investors in Beyond Meat -- the recent vegan burger IPO -- it's a good time for a responsible review of how such interest might influence ethical and sustainable investors investment views on the fast food industry. Tim's review is of Burger King's and A&W's Canadian companies.

I tried a Beyond Burger yesterday and noticed it was near twice the price of regular burgers. Yet, sales are so good that it's lifting A&W's sales significantly.
Tim Nash's sustainable stock showdown: battle of the burger chains, by Tim Nash, May 6, 2019, Corporate Knights, Canada.


Wahed Becomes the First Globally-Accessible Halal Robo-Advisor. "The first halal robo advisor in the United States today announces it is expanding its operations globally. The platform, which was previously available only to US and UK communities, now provides access to Islamic value-based investing to residents of over 130 countries including key markets across Nigeria, India, Pakistan and the MENA region."

[COMMENTARY] The potential for such a robo advisor is huge, considering the growing wealth of the world's 1.8 billion Muslims. If they aren't careful, it's possible that many American and European investment advisors, particularly, could lose out to Muslim advisors such as this. Also, halal investing could be considered another branch of ethical investing. Hence, it helps spur ethical investing generally.
Wahed Becomes the First Globally-Accessible Halal Robo-Advisor, press release, May 7, 2019, Wahed Inc., USA.


Money Management Institute and Morningstar Launch Sustainable Investing Curriculum To Prepare Financial Advisors for the Growing ESG Market. "The eight-course online curriculum provides financial advisors with an introduction to the fundamentals, principles, and practices of sustainable and environmental, social, and governance (ESG) investing, enabling them to start client conversations and integrate sustainable investing into their practices. Sustainable investing refers to the incorporation of ESG factors and their impact into investment decisions."

[COMMENTARY] The Money Management Institute first launched an ESG training product for advisors in 2017. From what I see, this is a substantial upgrading of that product.
Money Management Institute and Morningstar Launch Sustainable Investing CurriculumTo Prepare Financial Advisors for the Growing ESG Market, press release, Money Management Institute and Morningstar, May 4, 2019, USA.


Beyond Meat goes public with a bang: 5 things to know about the plant-based meat maker. "The maker of the Beyond Burger, which is sold at Whole Foods and restaurant chain TGIF, among others, priced its initial public offering at $25 a share Wednesday evening, raising at least $240 million at a valuation slightly shy of $1.5 billion."

[COMMENTARY] I'm delighted to see not only did this offering happen at all -- but that there is so much interest in it that it nearly tripled in price in its first days of trading. Most of the interest probably comes from younger investors. The underwriters probably significantly underestimated demand for the shares but did hold another 1.44 million shares in reserve.

It's an exciting short term play but with so many competitors to its products over the medium to long-term, it's not obvious it will be a winner yet.
Beyond Meat goes public with a bang: 5 things to know about the plant-based meat maker, by Ciara Linnane, May 4, 2019, MarketWatch, USA.


ETF vs. SMA: Which Is Better for Sustainable Investing? "SMAs are ideal for values-based investing as they allow investors to actively screen for certain product areas (e.g. oil, tobacco), or 'bad actors' that they deem antithetical to their values. They also allow for more specificity, e.g. designating a certain percentage of revenue from carbon emissions to be included in one’s portfolio.

Furthermore, because SMA investors directly own the underlying securities, they can opt to play an active shareholder role, working to impact corporate behavior through voting proxies or shareholder resolutions."

[COMMENTARY] An SMA is a separately managed account available at many financial institutions. The author of the article suggests that -- from a US perspective -- they can be better for ethical and sustainable investors than ETFs. This is a worthwhile read for all investors.
ETF vs. SMA: Which Is Better for Sustainable Investing? By Johny Mair, April 30, 2019, ThinkAdvisor, USA.


Fund managers worth $10.2tr urge oil firms to align with Paris Agreement goals. "Oil companies will cease to be attractive investments unless they quickly adopt low carbon business models that support the Paris Agreement's climate targets, new findings from a major survey of 39 fund managers responsible for $10.2tr of assets worldwide suggest...

Only 18 per cent said they believed oil companies would remain good investments if their businesses are still focused on fossil fuels in five years' time... "

[COMMENTARY] President Trump can play the oil card but it's the fund managers that have the aces. And they're getting fearful of oil.
Fund managers worth $10.2tr urge oil firms to align with Paris Agreement goals, by Michael Holder, April 29, 2019, BusinessGreen, UK.


Fund buyers to increase ESG exposure. "Two thirds of fund buyers plan to increase their allocation to environmental, social and governance (ESG) funds in 2019, according to data compiled by Natixis."

[COMMENTARY] Over 200 fund managers, insurers and wealth managers were surveyed. Again, the wisdom of ESG-based investing is being acknowledged.
Fund buyers to increase ESG exposure, by David Thorpe, April 29, 2019, FT Advisor, UK.


Opinion: Here's how to check the animal-friendliness of your investments. "It's easy to check which individual stocks are 'cruelty-free,' but you can't yet invest in a vegan investment index."

[COMMENTARY] This article provides a good overview for not only animal-friendly investing but also for vegetarian and vegan investing styles.
Opinion: Here's how to check the animal-friendliness of your investments, by Meredith Jones, April 25, 2019, MarketWatch, USA.


Largest 10 Socially Responsible Fixed Income ETFs. "Fixed income ETFs are increasingly tapping into socially responsible investing themes. A good example of that trend is the iShares Global Green Bond ETF (NasdaqGM: BGRN), which debuted last November."

[COMMENTARY] This article has a good review of some green bond ETFs. However, a cursory look at the ten funds tagged as being SRI might make it difficult for the avid ethical investor to invest in them.
Largest 10 Socially Responsible Fixed Income ETFs, by Todd Shriber, April 24, 2019, ETF Trends, USA.


How Wellington Is Reshaping Its ESG Investing. "Call it spatial finance, says Chris Goolgasian, Wellington’s director of climate research. Spatial finance is essentially building a three-dimensional map that layers climate-science data on top of stock fundamentals and macroeconomic indicators, he explains. The mapping initiative, in turn, helped garner a dozen research initiatives at Wellington, and the shop is now paying very close attention to a factor that most asset managers might not have considered—geographic location."

[COMMENTARY] Incorporating climate science data into stock analysis is a new twist that just might catch on in the years ahead. We'll have to see what the results are like.
How Wellington Is Reshaping Its ESG Investing, by Crystal Kim, April 19, 2019, Barron's, USA.


3 Ways to Make Your Portfolio More Climate-Aware. "Grantham and his colleagues at GMO looked at what happens when you remove a single sector from an S&P 500-based portfolio. They created S&P 500 portfolios ex energy, ex healthcare, and ex the other eight sectors in the index, going back to 1989, 1957, and 1925.

They found that the range of returns for the ex portfolios was only 50-60 basis points annualized, distributed above and below the S&P 500's return. In the case of the ex energy portfolio, it underperformed the S&P 500 by just 5 basis points annualized from 1925 to 2017, underperformed by 7 basis points annualized from 1957 to 2017, and outperformed by 3 basis points annualized from 1989 to 2017.

Grantham's conclusion: 'You can divest from oil--or about anything else--without much consequence for performance.'"

[COMMENTARY] For decades I've heard -- and you too I'm sure -- that if you narrow your investment universe you will get lower returns. Well, look at the evidence here that refutes that argument. Nonetheless, I would be happier if this research was written-up and published in an appropriate peer-reviewed journal and critiqued. Also, Grantham says that the fossil fuel sector is way overpriced considering its risks.
3 Ways to Make Your Portfolio More Climate-Aware, by Jon Hale, April 18, 2019, Morningstar, USA.


How to Reduce Investment Risk From Climate Change and Other ESG Woes. "If no counter action is taken, such as reducing fossil fuel use, close to 60% of U.S. metro areas will lose 1% of more of gross domestic product, which will not be offset by comparable growth in other metro areas."

[COMMENTARY] In the article, it's noted that municipal bonds could lose badly if municipalities don't adapt to climate change.
How to Reduce Investment Risk From Climate Change and Other ESG Woes, by Bernice Napach, April 18, 2019, ThinkAdvisor, USA.


Official ESG Evaluations from S&P Coming to Insurance Sector in Near Future. "'The ratings giant on April 11 announced the roll out of its ESG Evaluation, describing it as 'a new benchmark that provides a cross-sector, relative analysis of an entity's capacity to operate successfully in the future.'"

[COMMENTARY] S&P's new ESG product sounds great. However, I see a big snag with it: companies probably have to request they be rated! So, this means companies will have to pay to be rated. Is this yet another conflict of interest similar to the one that got these credit rating agencies into hot water back in 2008/9? Can you trust such ratings then?
Official ESG Evaluations from S&P Coming to Insurance Sector in Near Future, by Don Jergler, April 18, 2019, Insurance Journal, USA.


New Survey Finds Most Americans Unaware of ESG Investing. "In a survey of 1,000 American investors in late 2018, about 55% of people don’t know what social investing is... The findings suggest that people who learn about social investing are highly interested in it."

[COMMENTARY] I don’t think this is surprising since most advisors still don’t talk about nor, at the retail level, do most banks and financial institutions. On the positive side, this survey does show 45% of investors do know about it.
New Survey Finds Most Americans Unaware of ESG Investing, by Brendan Coffey, April 15, 2019, Forbes, USA.


Climate-risk disclosure takes investors by storm. "in the short time since July 2017, following the release of the TCFD guidelines, more than 500 large businesses, investors and industry groups have signed on to provide this type of forward-looking financial disclosure. Companies in the financial services industry are leading the way in their support of the TCFD recommendations, including BlackRock, State Street and S&P Global, along with the Association of Chartered Certified Accountants."

[COMMENTARY] Ethical and sustainable investors will benefit from increased and improved climate-related disclosure. It’ll enable them to better asses related corporate and investment risks. I just wonder how President Trump will view this since he’s trying to do whatever he can to restrain ESG-based investment growth in the US.
Climate-risk disclosure takes investors by storm, by Libby Bernick, April 15, 2019, GreenBiz, USA.


ESG in Investment Management: New Age or Just Noise? "Our recent ESG survey results show some interesting shifts. This survey was conducted with Principles for Responsible Investment (PRI) with 1,100 financial professionals and 23 workshops in 17 investment centers around the world."

[COMMENTARY] The survey by the CFA Institute and Principles for Responsible Investment (PRI), shows the real state of ESG in investment analysis. Governance is important but Environment and Social factors much less so. This confirms other surveys that have tried to determine the relative importance of each of the three variables that make-up ESG. In part, information concerning the materiality of environmental and social factors to profits is often unclear and not easy to ascertain.
ESG in Investment Management: New Age or Just Noise? By Kurt Schacht, April 12, 2019, Nasdaq, USA.


The S&P 500 Gets an ESG Makeover — but It May Not Go Far Enough. "Some longtime ESG investors are less than impressed with the news. ’The biggest thing about this is it shows how far the concept of sustainable investing has penetrated into the mainstream market,’ says Jon Hale, global head of sustainability research at Morningstar. ’The trouble is that even as investors become more concerned about the social and environmental impact of their investments, they’re forced to invest in everything, including companies that make weapons or treat the environment poorly.’"

[COMMENTARY] As Jon Hale says, though the new S&P 500 ESG index offers great diversification -- it’s that very diversification that in itself is a huige issue for many ethical and sustainable investors. Again, that’s why I encourage investors to take my DIY Ethical-Sustainable Pays Tutorial to learn how to get diversification that also reflects your personal values. This article provides a good explanation of the pros and cons of the new index.
The S&P 500 Gets an ESG Makeover -- but It May Not Go Far Enough, by Leslie P. Norton, April 11, 2019, Barron’s, USA.


[US] Workers want those hard-to-find socially responsible investments in their 401(k) plans: Survey. "A new survey finds that 61% of workers would increase their retirement savings if they could put their money in socially conscious investments. The same survey also found that just 13% of workers have access to those kinds of impact investments."

[COMMENTARY] There appear to be several reasons why employers are reluctant to offer SRI/ESG investments in US 401(k) plans. Chief among them, according to the Nataxis survey, is that employers don’t feel it’s right for them to "impose their morals on their employees′ investment choices." Personally, I think that answer is absurd since they’re also offering many other options too, which when considered, are also ’moral choices!’

The second principal reason is due to the US Department of Labor making it clear that ESG couldn’t be used as the main criteria for selecting investments. This, of course, reflects President’s Trump’s campaign to promote old and dirty industries -- which usually score low on ESG measures.
[US] Workers want those hard-to-find socially responsible investments in their 401(k) plans: Survey, by Lorie Konish, April 9, 2019, CNBC, USA.


A regulatory lens when assessing ESG risks. "internally we look at sustainability through an ESG-R lens, which includes regulation alongside environmental, social and governance factors. Many of our investment companies have held leading industry positions and, as a result, regulation is one of the greatest risks they face."

[COMMENTARY] A regulatory lens makes sense. Most ESG portfolios are top heavy with tech and social media companies. These groups face extraordinary regulatory pressures and the effects on their stock prices are undetermined.
A regulatory lens when assessing ESG risks, by Sudhir Roc-Sennet, April 8, 2019, Investment Europe, UK.


S&P unveils ESG version of ’iconic’ 500 index. "S&P Dow Jones Indices has launched an ESG-centric version of its long-running S&P 500 index as part of plans to launch a wider family of responsibility-focused indices... The index has been developed to serve not only as a performance tracking tool but also as a building block for creating new ESG index-based investment products such as ETFs."

[COMMENTARY] This is exciting news for ethical and sustainable investing. The S&P 500 index and financial products based on it, are among the most popular financial products to have ever been conceived. RobecoSAM will be creating the index. They also are responsible for the FTSE4Good index.
S&P unveils ESG version of ’iconic’ 500 index, Chris Sloley, April 8, 2019, CityWire Selector, UK.


More Funds Are Formally Considering ESG in Their Investment Processes. "The number of actively managed funds that are adding environmental, social, and governance criteria to their prospectuses is exploding. I first noticed this phenomenon two years ago when several funds run by J.P. Morgan, Morgan Stanley, and RBC did so. Then last year, another 51 funds added ESG criteria to their prospectuses, including all 21 funds run by Aberdeen.

But in this year’s first quarter alone, an astounding 73 funds added ESG criteria, including funds run by AllianzGI, Calamos, ClearBridge, MainStay, Neuberger Berman, Schroders, TCW, and Transamerica."

[COMMENTARY] If this doesn’t prove ESG has arrived -- what will? However, we’ll have to see if advisors are inspired to recommend them! They have always been the hurdle for ESG product adoption.
More Funds Are Formally Considering ESG in Their Investment Processes, by Jon Hale, April 4, 2019, Morningstar, USA.


Ethics & Trust in Finance Prize. "Promotes greater awareness among young people throughout the world concerning the benefits of ethics in finance. It aims to encourage high-quality management of banking, insurance and financial services based on trust and integrity. Launched in 2006..."

[COMMENTARY] I’ve been helping to promote this terrific prize since 2006. Now, it has the support of institutions such as the CFA Institute, Euroclear, and the OECD. They’re looking for more entries for the prize. If you know of anyone who might like to submit for the prize, they have until May 31 to do so!
Ethics & Trust in Finance Prize, press release, April 4, 2019.


Investing with equal pay in mind may be more difficult than you think. "Investors who are concerned about equal pay may want to consider certain gender and diversity funds that are making this issue a priority."

[COMMENTARY] Research by Morningstar shows -- among other things -- that stockholder voting by funds focused on gender issues is not always what you’d expect.
Investing with equal pay in mind may be more difficult than you think, by Lorie Konish, April 2, 2019, CNBC, USA.


Winners of Environmental Finance Bond Awards 2019 honoured by market. "The hotly contested awards, which cover the 2018 calendar year, aim to recognise best practice, or issues that were significant for the development of the market. The awards are particularly prestigious because the winners were decided by an independent panel of juInvesting with equal pay in mind may be more difficult than you think,dges made up of some of the biggest investors in the green, social and sustainability bond market."

[COMMENTARY] These awards aren’t about which green bonds made investors the most money, but, rather, included characteristics such as quality, innovativeness, best practices, etc. Nonetheless, if you’re wanting to invest in, or add to your present green bond holdings, you might find some ideas among the winning green bonds here.
Winners of Environmental Finance Bond Awards 2019 honoured by market, April 2, 2019, Environmental Finance, UK.


Global Sustainable Investments Rise 34 Percent to $30.7 Trillion, by Emily Chasan, April 1, 2019, Bloomberg, USA.
Greenwashing purge sees sustainable funds lose share in Europe, by Siobhan Riding, April 1, 2019, FT, UK.

[COMMENTARY] Both the above stories reveal data from the same Global Sustainable Investment Alliance study released April 1. However, they each have rather different messages. It might be that institutional sustainable investing in Europe is maturing while still growing in other geographic regions. Even at the retail level though, Europe -- as in most regions -- still has a lot of room to grow.


Ignore the Myths: Factor and ESG Investing Work Together. "One firm looked inside ’conventional wisdom’ of socially responsible investing and found the real story."

[COMMENTARY] MSCI has done some interesting original research here trying to decipher the pure role of ESG in returns. I’m sure MSCI did careful work, however, unless a study gets published in a peer-reviewed journal or is similarly verified by other studies, I always have some skepticism as to its reliability.
Ignore the Myths: Factor and ESG Investing Work Together, by Ginger Szala, March 27, 2019, ThinkAdvisor, USA.


British investors more worried about the planet than Brexit. "The UK’s leading peer-to-peer ethical investment platform, Abundance Investment, today publishes the results of its sixth Great British Money Survey revealing the key ethical and environmental issues people care about and which motivate investors.

Reducing plastic waste’ is the issue of greatest concern, with 81% saying they are extremely or somewhat concerned about this, followed by ’levels of waste’ at 78%. Brexit came fourth (73.5%) after air pollution (74.5%)."

[COMMENTARY] Fascinating! I wonder if such findings can be corroborated? Abundance is known for doing a good job with their surveys. Anyhow, read the article as there are other interesting numbers -- particularly for advisors.
British investors more worried about the planet than Brexit, by Stuart Fieldhouse, March 28, 2019, The Armchair Trader, UK.


Why ESG Is Too Nuanced for Index Investing. "Active management brings deeper analysis and nimbler choices into building socially responsible portfolios."

[COMMENTARY] The article makes a strong case for active management!
Why ESG Is Too Nuanced for Index Investing, Frances E. Tuite, March 26, 2019, ThinkAdvisor, USA.


What Are Green Bonds and How ’Green’ Is Green? "Because investors face the challenge of judging whether a note is truly green, regulators are working on standards to help guard against greenwashing, or misleading claims about just how good a friend to the environment an issuer is."

[COMMENTARY] A great review article on green bonds for ethical investors.
What Are Green Bonds and How ’Green’ Is Green? By Lyubov Pronina, March 24, 2019, Bloomberg Businessweek, USA.


The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership. "The authors reviewed eight rankings by evaluating the methodologies that these systems have published online and that are available to the public. They assessed whether companies′ policy engagement activities were considered in the rankings, and how, if considered, they were tabulated as part of the companies′ overall rankings or scores...

Most corporate sustainability rankings do little to encourage companies to engage in climate policy, as they neither recognize support for nor penalize opposition to climate policy."

[COMMENTARY] Only two of the eight  corporate sustainability rankings in this study qualify under in this regard: Corporate Knights’ Global 100 and InfluenceMap. The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership, March 2019, Environmental Defense Fund, USA.


Ethical Funds Have Never Been Cheaper As Vanguard Spurs Fee War. "The price war has come to socially conscious investing. BlackRock (BLK), Vanguard Group and Deutsche Bank’s (DB) DWS Group have slashed fees for exchange traded funds that track companies performing well on environmental, social and governance criteria."

[COMMENTARY] Finally, ethical fund fees are coming way down with the advent of new players.
Ethical Funds Have Never Been Cheaper As Vanguard Spurs Fee War, by Bloomberg News, March 21, 2019, USA.
Also, an insightful writeup on Vanguard’s new Global ESG Select Stock fund by Morningstar’s Jon Hale is worthy of a read.


How to Evaluate Funds that Invest in Women. "Because data around gender was so thin, Andrew Behar, CEO of As You Sow, a California-based nonprofit shareholder advocacy group focused on ESG, says his group worked with Equileap to compile more information about corporate gender policies, including policies like training, career development, safety at work, human rights and other issues...

His group recently created a gender-equality funds tool that analyzes mutual funds and ETFs, taking into account these different gender attributes and giving each fund a score."

[COMMENTARY] Good article on this subject. Behar and colleagues’ work sounds most interesting. It’ll be fascinating to watch how they’re able to execute their findings and the returns they achieve.
How to Evaluate Funds that Invest in Women, by Debbie Carlson, March 21, 2019, US News, USA.


Large fund firms’ support for combating climate change is all talk, as proxy voting record shows bottom performance. "A data analysis released by Ceres in early March shows that when BlackRock and Vanguard are measured on their up-or-down votes on climate change resolutions at stockholder annual meetings, they have among the worst voting records in the fund industry."

[COMMENTARY] The data would appear irrefutable that the largest American fund companies don’t ’walk the talk.’ However, I tend to believe -- and hope -- that senior manager’s prognostications of incorporating ESG analysis throughout their organizations perhaps hadn’t yet filtered down to the managers making the proxy decisions who are likely engaged with other concerns. I expect that the 2019 and 2020 proxy seasons will show much-improved results.
Large fund firms’ support for combating climate change is all talk, as proxy voting record shows bottom performance, by Eric Rosenbaum, March 19, 2019, CNBC, USA.


Investors Lose a Major Justification for Holding Tobacco Stocks. "In recent years, a flurry of European pension funds and insurers have begun divesting their holdings, putting pressure on the share prices. BAT had its worst year on record last year, slumping 50 percent, as the U.S. Food and Drug Administration toughened its stance toward the tobacco industry. Philip Morris slumped 37 percent."

[COMMENTARY] I’ve been arguing for many, many years, that the days were numbered for big tobacco. In July 2010, I wrote an editorial, Sin or Ethical Investing: Which Pays Best? There, I said, "Over the next five to ten years, and with the effects of the sovereign debt crises upon us, I suspect that ethical stock portfolios could outperform both the sin and conventional variety."
Investors Lose a Major Justification for Holding Tobacco Stocks, by Lisa Pham, March 13, 2019, Bloomberg, USA.


Who runs the world? The global status of women in leadership. "Regardless of progress at the board level, the glaring reality is that the world′s largest corporations are stalled in second gear when it comes to hiring women in C-suite leadership roles. Top senior executive officers with the letter C in their title (CEO, CFO, CIO, COO, CSO) lag behind on gender in all markets."

[COMMENTARY] Although several reputable studies have shown that having women and diversities on boards and in management generally leads to superior financial performance, corporations generally have been slow to include them. The study published by Corporate Knights provides terrific insight into this reality.
Who runs the world? The global status of women in leadership, by Sophie L’Helias & Adria Vasil, March 9, 2019, Corporate Knights, Canada.


EU agrees on new rules to counter investment ’greenwashing’. "The European Union agreed on Thursday on a new law that forces asset managers, insurers and pension funds to disclose environmental risks in their investments. The law is meant to spur green investment and to curb ’greenwashing’, a practice whereby companies claim to be more environmentally friendly than they really are."

[COMMENTARY] Europe again is at the forefront of what inevitably will be followed by other jurisdictions. Companies and asset managers are now warned to be truthful in their environmental assessments and risks posed. Since many of those affected are global in nature, they’re likely to extend these guidelines to their activities well beyond Europe.
EU agrees on new rules to counter investment ’greenwashing’, by Francesco Guarascio, March 7, 2019, Reuters, Belgium.


Is your ethical investing app upselling greenwash? "Animal welfare′ funds heavy in animal testing? Low-carbon funds dripping in oil? Your BS-free green guide to 9 SRI apps."

[COMMENTARY] Corporate Knights have produced one of the few really good analytical studies on ethical investing apps for North Americans. They believe there are some good robo apps for Americans, but not so for Canadians. Anyone interested in such apps should also enroll in my 1-hour DIY Ethical-Sustainable Investing Pays Tutorial.
Is your ethical investing app upselling greenwash? by Adria Vasil, March 5, 2019, Corporate Knights, Canada.


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