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Ethical Investing News/Commentaries:
Nov. 2009 |
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Commentaries by Ron
Robins
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Thomson Reuters Buys ASSET4, The
Swiss Based ESG Research Powerhouse. -
[COMMENTARY]
"The global credit crisis, climate change, new
regulation and other issues have highlighted the
need for financial firms to assess the
environmental, social responsibility, governance and
reputational risks attached to the firms in which
they invest. Through the acquisition of ASSET4′s
leading ESG information and tools, Thomson Reuters
clients worldwide will benefit from having direct
access to this increasingly important information as
part of their investment process." It is
fascinating to watch the consolidation of the
SRI/ESG research industry. It is even more
fascinating to see giants in the financial media
industry get in the takeover game. Generally, I
believe this is good news in that it will further
thrust ESG analysis into the mainstream financial
media.
Thomson Reuters Invests in Environmental, Social
Responsibility and Governance Content Through the
Acquisition of ASSET4, press release, November
30, 2009, Thomson Reuters, Switzerland.
EIRIS Reviews Stock Exchanges’
Role In Adopting & Promoting Corporate ESG
Disclosure. -
[COMMENTARY]
"This briefing explores the evolving role of
stock exchanges, giving an insight into both their
current and future role in responsible investment.
In addition, this briefing analyses the current
positioning of exchanges and the business drivers
for promoting greater ESG disclosure in the market."
EIRIS is one of the foremost organizations to
conduct such a review. Worth reading for ethical
investors and anyone interested in ESG matters.
Taking stock: how leading stock exchanges are
addressing ESG issues and the role they can play in
enhancing ESG disclosure, November 2009, EIRIS,
UK.
Major Institutional Investors
Call On SEC To Require Companies To Disclose Their
Risks & Opportunities Concerning Climate Change. -
[COMMENTARY]
"It’s impossible for investors to adequately
assess the risk to their investment money if
companies don’t tell them how much climate change
and its impacts might affect their financial
performance... The 20 signatories to the petition
include leading U.S. and Canadian institutional
investors managing more than $1 trillion in assets,
including the California Public Employees’
Retirement System (CalPERS), British Columbia
Investment Management Corporation of Canada, Pax
World Management Corporation, state treasurers from
Oregon, North Carolina, Connecticut, Maryland and
Vermont and Florida’s Chief Financial Officer."
Though this will be difficult for
many companies to do, it is something they should be
doing anyway. And it is absolutely necessary for
them to inform their stakeholders about! If the SEC
values its credibility, it has to act on this. Only
when such information is given can ethical investors
really know the stocks that are good to invest in
for the longer term.
Major Investors Call for SEC to Require Disclosure
of Companies′ Climate Risks and Opportunities,
press release, November 25, 2009, by Ceres & The
Environmental Defense Fund, USA.
Investors Not Focusing On
Incremental Climate Costs. -
[COMMENTARY]
"Companies and their investors are missing the
potential impact of climate change on share prices
by focusing on the risks of extreme weather events
rather than examining more relevant incremental
costs and opportunities, according to research by
four of the UK′s largest institutional investors."
These reports are timely, especially in the light of
just released research indicating that global warming
by the end of this century could be
up by 6C --at the very high--end of the UN
Intergovernmental Panel on Climate Change’s
projections.
Investors failing to see incremental climate change
costs because of ‘extreme′ event focus,
by Hugh Wheelan, November 23, 2009, Responsible
Investor, UK.
Guide To Canadian Mutual Fund
Companies Produced By The Social Investment
Organization (SIO). -
[COMMENTARY]
A very helpful new guide for Canadian ethical
investors.
Your Guide to Socially Responsible Mutual Fund
Companies in Canada, November 2009, Social
Investment Organization, Canada.
Boston College Report Examines
Stakeholder Influences Concerning Corporate Social
Responsibility (CSR). -
[COMMENTARY]
"The research reflects dynamics such as the
spread of market capitalism, increasing wealth and
power of business, the mounting pressure for
companies to take on greater social and
environmental responsibilities and the growing
public distrust of business... The U.K. government
appears to be the most supportive of CSR, while the
U.S. government is much less involved." Though
not directly related to ethical investing, the
report does offer some insight into the way
governments and other stakeholders view or support
CSR.
Global Stakeholder Influence Examined in New Boston
College Report, press release, November 19,
2009, Boston College Center for Corporate
Citizenship, USA.
Mercer: Specific Environmental,
Social, & Governance (ESG) Factors Can Positively
Impact Investment Performance. -
[COMMENTARY]
"Academic research continues to support the
hypothesis that specific environmental, social and
corporate governance (ESG) factors can make a
positive contribution to investment performance.
This report summarizes and comments on sixteen
academic studies—ten of which show a positive
relationship between ESG factors and financial
performance." Mercer has done great work here in
compiling the data of sixteen new studies on ESG
measures and their relationship to investment
performance. A positive relationship was found in
ten of the studies, two were found to have a
negative-neutral effect and four a neutral
association.
Shedding light on
responsible investment: Approaches, returns and
impacts, November 17, 2009, Mercer, UK.
EIRIS UK Survey Finds British
Investors Wanting To Invest Ethically. -
[COMMENTARY]
"The survey finds that three-quarters of those
interested in finding out more about the ethical
credentials of a financial product or service said
they are likely to take this into consideration when
next buying a financial product or service... Only
15% of those surveyed agree that ethical products
and services ’are less likely to perform as well as
similar standard products’." Britain, in many
ways, seems to be leading the global thrust into
ethical investing. This survey is a pioneering work
in understanding how British investors view green
and ethical products, services, and investments.
Ethical Finance: Does Britain Care? November
28, 2009, Ipsos MORI /EIRIS, UK.
UK Climate Funds Outperforming
Market: Holden & Partners. -
[COMMENTARY]
"Holden & Partners, the ethical financial
advisers, published data this week showing that
climate change funds have outperformed the MSCI
world index over two and three years, with some –
such as Schroders Global Climate Change and F&C
Climate Opportunities – outperforming over one year
as well." One idea for finding environmental
stocks that are good to invest in is to review what
the leading climate change funds have in their
portfolios. Then discuss your findings with your
advisor.
Changing climate shifts ethical investors, by
Alice Ross, November 13, 2009, Financial Times,
UK.
Studies Aim To Guide & Promote
Responsible Investing Among Canada’s Pension Funds,
Foundations, & Endowments. Important Reading For
Those In Other Countries Too. -
[COMMENTARY]
"Two seminal reports commissioned by the Social
Investment Organization (SIO) and funded by
Environment Canada set the stage for enhanced
adoption of responsible investment practices in the
Canadian foundations and pensions sectors."
Congratulations to the SIO on sponsoring these
strategic reports.
Best Practices in Responsible Investment for
Canadian Pension Funds, and
Education and Training on Responsible Investing for
Canadian Foundations and Endowments: An Inventory
and Needs Analysis, November 2009, Social
Investment Organization, Canada.
Barclay’s Global Investors Developing Genocide Free ETF. -
[COMMENTARY]
"Barclays Global Investors, a leader in the
exchange-traded fund industry, said investors’
appetite for socially responsible investments is
growing and it plans to develop a genocide-free ETF."
It was only a question of time before some
investment manager did this. Again this is another
boost for ethical stocks and bonds.
BGI to develop genocide-free ETF, by Svea
Herbst-Bayliss; editing by John Wallace, November
13, 2009, Reuters, USA.
US Faith Based Investor Group
Presses Companies On Health Care Reform. -
[COMMENTARY]
"As the health care reform debate in Congress
shifts to the U.S. Senate, leading faith-based
institutional investors are pressuring 36 major
companies – including Merck, Wal-Mart, McDonald′s,
AT&T, IBM and General Electric -- to state publicly
if the U.S. Chamber speaks for them in its
aggressive campaign to kill efforts to overhaul the
U.S. health care system. Significantly, all of the
companies had previously agreed at the urging of
shareholders to embrace health care principles that
are now inconsistent with the anti-reform stance of
the U.S. Chamber of Commerce on health care
legislation."
The US Chamber of Commerce found
itself at odds with many of its members by opposing
the new climate bill. Now a similar story seems to
be unfolding with regard to the Chamber’s stand in
opposing health care reform. It seems to me that
perhaps the Chamber may need to split itself into
two groups, since it obviously cannot find a common
stand among its members.
Faith-Based Investors Press Dozens of Top Companies
to Say if U.S. Chamber of Commerce Speaks for Them
in Opposing Health Care Reform,
press release, November 10, 2009, Interfaith
Center on Corporate Responsibility, USA.
Canada’s SHARE Publishes Its
3Q/09 Corporate Engagement Report. Governance Issues
Top Its Agenda. -
[COMMENTARY]
"This quarter, SHARE engaged with a total of 34
companies on ten ESG issues: child labour,
precarious employment, the Carbon Disclosure
Project, sustainability reporting, oil sands land
reclamation, toxic chemicals, riverine tailings
disposal, sustainable forestry, oil tanker traffic
and the advisory vote on executive compensation
(‘say on pay′)." SHARE continues its great work
in Canada.
Shareholder Engagement Activity Report Q3/09,
SHARE, Canada.
UN Encouraging Stock Exchanges In
Promoting ESG Practices. -
[COMMENTARY]
"The potential role of stock exchanges in
promoting corporate transparency on environmental,
social, and governance (ESG) issues gained overdue
prominence in recent days, when a meeting was held
at the UN on November 2 in which institutional
investors and CEOs of stock exchanges explored how
they might work together with regulators and
business to encourage responsible long-term
approaches to investment. The meeting at the UN was
co-hosted by the Principles for Responsible
Investment (PRI), the UN Global Compact, and the
United Nations Conference on Trade and Development (UNCTAD)."
The above quote by Robert Kropp
from his article (link below) reviews the behind the
scenes activities among global stock exchanges at
promoting ESG practices. It is worthwhile
reading for everyone interested in ethical
investing.
Role of Stock Exchanges on Corporate ESG Disclosure
Gains Traction, by Robert Kropp, November 4,
2009, SocialFunds, USA.
RiskMetrics Formerly Announces KLD
Acquisition. -
[COMMENTARY]
"Traditionally a provider of risk management and
corporate governance services to the global
financial community, RiskMetrics has, through its
purchase of KLD, gained access to one of the most
prominent names in the ESG research arena. Founded
in 1988, KLD published the first research designed
to evaluate the risks and opportunities associated
with corporate social and environmental performance,
according to the press release announcing the
acquisition. Currently, more than 400 clients,
including 31 of the 50 largest institutional
investment managers globally, use KLD’s research to
inform their investment decisions based on ESG
considerations."
Apparently, when RiskMetrics
acquired Innovest Strategic Value Advisors earlier
this year, they decimated Innovest’s research staff.
One wonders exactly what the game-plan of
RiskMetrics might be?
RiskMetrics Acquires KLD, by Robert Kropp,
November 3, 2009, SocialFunds, USA.
Press release by RiskMetrics.
Breakthrough: SEC Will Allow
Shareholder Resolutions Looking At Companies
Environmental And Social Risks! -
[COMMENTARY]
"A major policy reversal by the Securities and
Exchange Commission (SEC) to allow shareholder
resolutions looking at companies′ environmental and
social risks has been welcomed by SRI investors.
Similar resolutions had previously been blocked
under policies dating back to the Bush
administration. The re-interpretation is timely for
the 2010 proxy season, given that most resolutions
are filed in November. The move was unveiled in new
guidance by the SEC′s Division of Corporation
Finance under new director Meredith Cross." A
slew of good news for ethical investors is out
today. This particular piece of news is liable to
spur ESG policies and activities at numerous
companies.
SEC reverses position on environmental and social
shareholder resolutions, by Daniel Brooksbank,
November 1, 2009, Responsible Investor, UK.
BMW & Toyota Create Most
’Sustainable Value,’ Says Study. -
[COMMENTARY]
"Toyota and BMW use their
economic, environmental and social resources more
efficiently than other worldwide automakers, a new
study has found, while General Motors and Fiat
significantly lagged behind their industry peers.
The study, from Belfast’s Queen’s University
Management School, the Euromed Management School
Marseille and Berlin’s Institute for Futures Studies
and Technology Assessment (IZT), measures the
sustainable performance of worldwide auto
manufacturers from 1999 to 2007, comparing resource
use efficiency of production for factors such as
emissions, work accidents, waste generation and
water use."
If you are looking for automobile company stocks
that are good to invest in, you will want to read
this study. It is likely one of the most
authoritative studies on automobile manufacturers’
sustainability practices.
BMW and Toyota Create Most ’Sustainable Value,’
Report Finds; GM, Fiat Among Laggers, November
2, 2009,
GreenBiz,
Ireland.
UN Backed Principles For
Responsible Investment Continues To Sign-Up New
Members. New Member Bloomberg Launches Dedicated ESG
Coverage For Trading Screens. -
[COMMENTARY]
"The $19 trillion United Nations-backed
Principles for Responsible Investment has signed up
55 new institutional members since the end of
August, including a number of financial markets
heavy-hitters such as Bloomberg, the information
provider and APG Asset Management, which runs the
money for the giant €180bn Dutch ABP civil servants
pension fund. The rapidly growing number of
signatories suggests that appetite for responsible
investment has not been hit by the financial crisis
and is increasingly becoming a mainstream financial
consideration."
This shows that the financial world is continuing to
see that ESG matters. And Bloomberg’s dedicated ESG
coverage will bring greater interest to ethical
investing.
PRI sign-ups buck financial crisis - Bloomberg joins
and launches ESG data on screens, by Hugh
Wheelan, November 1, 2009, Responsible Investor,
UK.
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