Investing for the Soul
- Wall Street Journal
- BNN (Business News Network)
- The Financial Post
- Rogers Television's Money Line
- CBC One's Metro Morning
- 680 News Radio
- Environmental News Network
- The Catholic Register
"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
-- Cerulli Associates
"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."
"70% of people [in UK] want to invest
ethically but the financial services industry is failing
to respond." Referencing research by Abundance.
(UK) June 2015
Ethical Investing News/Commentaries:
Commentaries by Ron
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Over Half Of 1,000 Largest US
Companies Have An Environmental Policy, But Lack
Internal Environmental Management Structures, Says
"This report, entitled "The Road Not Yet Taken:
The State of U.S. Corporate Environmental Policy and
Management," presents a detailed review of the
publicly disclosed environmental policies,
management structures, systems, measurement and
reporting activities, and disclosures of the 1,000
largest publicly traded U.S. corporations."
This is an important report concerning US companies'
environmental policies and actions. However, also
needed are similar comparative studies with
companies in Europe, Asia and other regions.
The Road Not Yet Taken: The State of U.S.
Corporate Environmental Policy and Management,
August 2009, Sustainable Enterprise Institute, Inc.,
Study Shows Higher Returns On
Companies Listed In FTSE KLD 400 Social Index.
"Our study considers whether ethical investments
are also good investments. We utilize long-run event
study methodology to study abnormal returns
associated with firms being included in, and dropped
from, KLD Research and Analytics’ (KLD) Domini 400
SocialTM Index (DS400). There are positive and
statistically significant long-run abnormal returns
for firms being included in the DS400. The market
also appears to anticipate decisions to include
firms in the DS400; short-run abnormal returns
associated with firms being included in the DS400
are consistent with the market correcting high
abnormal returns before the date the firm is added
to the index."
This study supports my view that ethical stocks may
well provide premium returns over the long-term.
Are Ethical Investments Good?
By Gariet Chow, Robert B. Durand, and SzeKee Koh,
August 2009, University of Western Australia,
Carbon Efficiency Is Key To
Gaining Market Share: Report.
"Companies need to understand how looming carbon
costs will impact their future profitability
compared to their competitors in order to gauge how
much can be passed on to customers, according to a
new report from research firm Trucost Plc and
standards nonprofit NSF International." How
companies deal with their carbon emissions will help
determine their future market shares and
profitability. This report clearly illustrates the
Report Identifies 'Carbon Efficiency' as a Key to
Growing Market Share, August 20, 2009, GreenBiz,
Americans Spending Big On
Complimentary And Alternative Medicine.
"Americans spent $33.9 billion out-of-pocket on
complementary and alternative medicine (CAM) over
the previous 12 months, according to a 2007
government survey. CAM is a group of diverse medical
and health care systems, practices, and products
such as herbal supplements, meditation,
chiropractic, and acupuncture that are not generally
considered to be part of conventional medicine. CAM
accounts for approximately 1.5 percent of total
health care expenditures ($2.2 trillion2) and 11.2
percent of total out-of-pocket expenditures
(conventional out-of-pocket: $286.6 billionand
CAM out-of-pocket: $33.9 billion) on health care
in the United States."
Many ethical investors are interested in investing
in companies providing products and services in this
area. It obviously has significant appeal to them.
However, investors have to be particularly careful
as many of these products and services 'come and
go.' Investors need to look for hard, independently
verifiable data on the products/services of
companies in this space before investing in them.
Americans Spent $33.9 Billion Out-of-Pocket on
Complementary and Alternative Medicine, Healthy
News Service, USA.
The €276bn Norwegian Government
Pension Fund Set To Pressure 1,100 Companies On
"Norges Bank Investment Management (NBIM), which
runs the Norwegian fund’s assets, said it had
holdings in about 1100 companies with a combined
market value of €33bn where it believes good water
risk management could be critical to future
performance. During the third quarter of this year,
the fund said it will publish a list of water
reporting and risk management 'expectations' it has
for portfolio companies."
With increasing scarcity of fresh clean water
worldwide and its implications for society and for
corporate profits, NBIM is to be congratulated on
this move. As Europe's largest single investor, they
have the clout to get companies to respond. It will
be fascinating to see how companies respond and as
to what they report. Ethical investors will also be
most interested to see how the results of their
survey affect this funds portfolio!
Giant Norway fund launches campaign to pressure 1100
companies on water risks, by Hugh Wheelan,
August 20, 2009, Responsible Investor, UK.
UNPRI Ejects Five Signatories For
"The ejected groups are DESBAN, the Brazilian
social security foundation, the Christopher Reynolds
Foundation in the US, Foresters Community Finance,
an Australian social investment company, Oasis Group
Holdings, the South African fund manager and Trinity
Holdings, the South African resources investor. It
is the first time the PRI has toughened its
membership criteria to exclude firms that show no
signs of adopting the standards despite signing up.
In addition, three institutions have voluntarily
left the PRI, notably the $48bn New York State
Teachers’ Retirement System (NYSTRS) – one of the
top 10 largest US pension funds. Other voluntary
leavers were Mennonite Mutual Aid (MMA), the
Anabaptist financial group, and Rapaki Property
Group in New Zealand."
It is good that UNPRI is not letting signatories
get-away with not complying with its rules. However,
it seems puzzling as to why NYSTERS and MMA are
leaving UNPRI. MMA, especially, is dedicated to
UNPRI names five ejected signatories and starts
transparency reporting talks, by Hugh Wheelan,
August 20, 2009, Responsible Investor, UK.
Study Highlights Links Between
Government Green Spending, Jobs, Economy &
"We find that green programs facilitate economic
growth and job creation. Government investments in
these programs stimulate economic growth and job
creation as well as providing various other economic
and environmental benefits. We thus conclude that
there is a strong positive relationship between
clean energy/energy efficiency/environmental
investments and economic prosperity and job growth."
This is a highly informative analysis of the
situation put together by a UN sponsored group. I
find one chart particularly interesting and that is
how US government incentives for different types of
energy producers overwhelmingly favour the oil
industry. My perspective is that either government
incentives be equal for all types of producers or
that they should not exist at all.
Why Clean Energy Public Investment Makes Economic
Sense -- The Evidence Base, August 2009, UNEP
SEF Alliance, Switzerland.
Dow Jones Sustainability Japan 40
"SAM, the investment boutique focused exclusively
on Sustainability Investing, and Dow Jones Indexes,
a leading global index provider, today announce the
launch of the Dow Jones Sustainability Japan 40
Index (DJSI Japan 40). The index measures the
performance of the largest 40 sustainability leaders
in Japan and provides market participants with a
highly liquid and tradable sustainability benchmark
for Japanese equities. The Dow Jones Sustainability
Japan 40 Index is selected and weighted based on the
SAM sustainability scores." Here is another step
in the right direction. Japan being ahead in many
ways in orienting its society towards sustainability
and healthy lifestyles should be ripe for the
introduction of this index.
SAM and Dow Jones Indexes Launch Dow Jones
Sustainability Japan 40 Index,
Dow Jones Indexes Press Room, Switzerland.
EIRIS Analyses 300 Of World's
Largest Companies For Their Actions On Climate
"Some improvements, but further
momentum needed: 33% of companies have unmitigated
climate change risk (down from 34% in 2008); 55%
have short-term targets on climate change (48% in
2008); 91% of high and very high impact companies
disclose absolute CO2 or GHG emissions data (73% in
2008)." EIRIS is doing some great work here. It
is well worth the trouble for ethical investors to
read this report and their
Investors Climate Change Toolkit, which helps
investors integrate climate change factors into
their investing decisions.
Climate Change Compass: The road to Copenhagen,
August 2009, EIRIS, UK.
Over Half Of Large UK Charities
Now Have An Ethical Investment Policy.
"The areas most avoided when investing were
tobacco (pictured), by 85 per cent, followed by
pornography (50 per cent), military involvement (48
per cent), alcohol (36 per cent) and gambling (33
per cent). The survey of 164 CFDG members found that
60 per cent of charities with investments over £1m
had an ethical investment policy. Meanwhile, only 25
per cent of smaller charities with investments of
under £1m invest ethically."
Though I am not aware of any prior years research on
this subject, from what I know I believe that UK
charities are making a leap forward with so many now
having an ethical investment policy. Again, it is
likely that for many years to come, ethical stocks
and bonds may well have an edge over investments not
deemed to be in that category.
Tobacco tops list of most unethical investments,
by Vibeka Mair, August 5, 2009. Survey conducted by
Charity Finance Directors’ Group (CFDG) and EIRIS
Foundation. Appeared in Charity Finance, UK.
Environmental Issues Dominate
Canadian Shareholder Engagement Activity In 2Q/09
Says SHARE Canada.
"This quarter, SHARE engaged with a total of 65
companies on nine issues: disclosure & transparency,
human rights, child labour, precarious employment,
fair trade coffee, carbon disclosure project, oil
sands land reclamation, toxic chemicals and
sustainable forest management." Ethical
investors investing in Canadian companies may want
to read this report as it details shareholder
resolutions and discussions SHARE is having with
many companies on ESG related issues.
Shareholder Engagement Activity Report 2Q/09,
August 2009, SHARE, Canada.
French Private Equity Firms
Incorporating ESG Factors Into Investment Decisions:
"Results showed that 66 per cent of respondents
take ESG considerations into account when making
financial decisions. Although this figure confirms
their concern for the topic, it fails to match the
practices of the different private equity businesses
that invest in unlisted companies where it remains a
nascent approach. When respondents were asked why
financial tools remain undeveloped, 64 per cent
attributed it to the lack of ESG expertise within
companies, while 52 per cent believed it was due to
private equity managers’ lack of special assessment
tools." Investment managers are increasingly
using environmental, social and governance factors
(ESG) in their research because it simply makes
sense to do so. And many studies of ESG in the
investing arena point to this.
French private equity firms integrate environmental
criteria, research shows, August 4, 2009,
Over Thirty SRI Research Papers
Submitted For Moskowitz Prize.
"The Center for Responsible Business at UC
Berkeley's Haas School of Business has concluded the
submission process for the 14th Annual 2009
Moskowitz Prize, the only global award recognizing
outstanding quantitative research in the field of
socially responsible investing (SRI). According to
First Affirmative Financial Network, co-sponsor of
SRI in the Rockies, over 30 research entries were
accepted by this year's submission deadline."
Apparently, this is a record number of submissions
and the quality of the research continues to improve
2009 Moskowitz Prize Draws Record Number of Studies,
August 4, 2009, press release, First Affirmative
Financial Network/Social Investment Forum, USA.
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