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Ethical Investing News/Commentaries:
Sept. 2010 |
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Commentaries by Ron
Robins
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Nokia, Sony & Philips Ranked
Greenest By Greenpeace. Apple Falls to 9th; HP
Rises to 4th.
-
[COMMENTARY]
No doubt these rankings will come as a shock to
Apple lovers. Nonetheless, Greenpeace does a good
research job.
Apple Falls, HP Rises in Latest Greenpeace Toxic
Tech Scores, by Danny Bradbury, October 27,
2010, BusinessGreen, USA.
68% Of UK’s Independent Financial
Advisors (IFAs) Ask Clients If Interested In Ethical
Investing.
-
[COMMENTARY]
"The research [conducted for Ecclesiastical
Investment Management] found that 68 per cent of IFAs ask
if a client has an interest in ethical investments
during their client fact-finding process, while 71
per cent of Isas and unit trust specialists put the
same ethical question to clients." This is good
news. However, I believe that the advisors should
ask this question to all their existing clients as well.
Ethics considered in factfinds, by Rebecca
Clancy, November 1, 2010, Financial Times,
UK.
2010 Clean Capitalism Report On
Canada’s S&P/TSX 60 Companies.
-
[COMMENTARY]
"The report includes an analysis of the ESG
status of S&P/TSX 60 companies, benchmark rankings,
and best practice highlights. The intention of the
report is to provide companies, regulators and
investors with data and analysis to help drive
sustainability performance for leading companies in
Canada. Data was collected on 13 indicators in 4
categories, Environmental, Social, Governance and
Transparency." The people behind producing this
report always do a commendable job. It is worthwhile
reading for all ethical investors.
2010 Clean Capitalism Report, by Sucheta
Rajagopal, October 27, 2010, SRI Monitor, Canada.
Green Labelling A Big Problem.
-
[COMMENTARY]
"According to a study... more than
95% of consumer products examined committed at least
one offense of "greenwashing,’ a term used to
describe unproven environmental claims, according TerraChoice, a North American
environmental-marketing company that issued the
report." No wonder that consumers are
sceptical of green claims and not at all eager to
pay more for green products. Manufacturers should be
forced to justify any green claims on their
products. Ethical investors also need to
understand the green-sustainability claims of
companies too.
Misleading Claims on ’Green’ Labelling, by
Gwendolyn Bounds, October 26, 2010, The Wall
Street Journal, USA.
Sustainability Fund Holdings Have
Similar Sustainability Risks To Conventional Funds,
Says Study Reported In UK’S Financial Times.
-
[COMMENTARY]
"A recent, but as yet unpublished, study by the
University of Zurich measured the sustainability of
large sustainable funds with the help of the RepRisk-Index
(RRI), and compared their RRI scores with those of
regular equity funds... Felix Remmers, author of the
study, [says] ’The shares that are in so-called
best-in-class-sustainability funds overlap to a
large extent with the ones we find in regular equity
funds. Hence it is no surprise that these
specialised funds are statistically not more
sustainable than their regular colleagues.’"
This is not surprising to me
either. It is to be expected that over time all
funds will gravitate to include ’best-in-class’
companies. Nonetheless, I am sure some readers will
be surprised by this data. If one can afford it, an
individually tailored portfolio that truly reflects
ones personal values might be preferable. That way,
you at least enjoy some real ’ownership’ of your
holdings and are not subject to some fund holdings
that might be contrary to your values.
Credibility of sustainable funds in doubt, by
Charlotte Jacquemart, March 24, 2010, Financial
Times, UK.
Companies With High ESG Scores
Suffered Less In Downturn, Says State Street Global
Advisors (SSgA) Study.
-
[COMMENTARY]
"SSgA found that, generally speaking, high
-scoring ESG corporates did, in fact, suffer less
during the down markets... " (Page 5). This is a
very interesting read on the evolution, importance
and future of ESG. I recommend it to all ethical
investors.
Sustainable Investing: Positioning for Long-Term
Success, October 2010, State Street Global
Advisors, USA.
Canada’s Northwest & Ethical
Funds Targets 50 Companies For Dialogue On ESG
Issues.
-
[COMMENTARY]
"Northwest & Ethical Investments L.P. (NEI),
through its ESG Services Team, plans to engage in
dialogue with over 50 Canadian and international
corporations in 2011 to advance environmental,
social, and governance issues, reduce portfolio risk
and increase shareholder value. The role of stock
exchanges in bringing stability and credibility to
the capital markets is an important focus in this
year’s engagement work." Congratulations to
these firms for this initiative. It is in everyone’s
interest that they succeed.
Ethical Funds Releases 2011 Focus List, press
release, October 20, 2010, Northwest & Ethical
Investments L.P., Canada.
Canadian Mining Abuses.
-
[COMMENTARY]
"The proportion of incidents globally that
involve Canadian corporations is very large,
according to the report. ’Of the 171 companies
identified in incidents involving mining and
exploration companies over the past 10 years, 34 per
cent are Canadian,’ the Centre [the Canadian Centre
for the Study of Resource Conflict] found. It said
the high incidence of involvement of Canadian
companies is in line with the Canadian industry′s
dominant position in global mining and exploration."
It is no secret that some of the practices of
certain companies in the extractive industries,
especially when they operate in developing
countries, are questionable and controversial. What
has to happen is for a body like UNPRI to conduct an
independent study of the activities of the
extractive industries in the developing world.
Otherwise, its game for small poorly funded groups
with special agendas
to produce critical reports that may or may not be
reliable and fair.
Canadian mining firms worst for environment, rights:
Report, by Les Whittington, October 18, 2010,
The Toronto Star, Canada.
FTSE And ECPI Launch First
Responsible Investment Index Series For The Italian
Market.
-
[COMMENTARY]
"Award-winning Global Index Provider, FTSE Group
(‘FTSE′) and leading independent sustainability
research and rating provider, ECPI have today
launched the first responsible investment index
series for the Italian market. The FTSE ECPI Italia
SRI Index Series will enable investors to track the
performance of companies listed on the Italian
Exchange with leading Environmental, Social and
Corporate Governance (ESG) practices."
I would have thought that Italy would have had such
an index by now, since almost every other European
market does. Still, the more such indexes there are
the better it is for ethical investing, generally.
FTSE And ECPI Launch First Responsible Investment
Index Series For The Italian Market, press
release, October 19, 2010, FTSE/ECPI, Italy.
Detailed information available at
FTSE ECPI Italia SRI Index Series.
NEWSWEEK’s 2010 Green (Company)
Rankings.
-
[COMMENTARY]
"NEWSWEEK’s 2010 Green Rankings is a data-driven
assessment of the largest companies in the U.S. and
in the world. Our goal was to cut through the green
chatter and quantify the actual environmental
footprints, policies, and reputations of these big
businesses." A quick look at their findings does
not reveal anything extraordinary. Nonetheless, it
is useful for ethical investors to peruse.
NEWSWEEK’s 2010 Green Rankings, October 2010,
NEWSWEEK, USA.
Study Finds European Company
CSR Reports Better Than Those Of US Companies.
-
[COMMENTARY]
"In a first-of-its-kind research project, the
Sethi CSR Monitor© has analyzed reports by 514
companies selected from a worldwide database of
1,300 companies. ’Our analysis shows a wide range of
differences in the content and quality of these
reports,’ says Professor S. Prakash Sethi, the
principal researcher and founder of the analytical
tool, the Sethi CSR Monitor." The reports’
analysis looks interesting--but at $700 is not for
everyone.
Critical Look at How Companies Report on Corporate
Social Responsibility and Sustainability, press
release, October 18, 2010, Sethi International
Center for Corporate Accountability, Inc., USA.
80% Of UK Investment Advisors
Offer Green Investments.
-
[COMMENTARY]
"Over 80% of financial advisers offer green and
ethical investments, a survey for National Ethical
Investment Week shows. But it says concerns remain
over the performance of green and ethical funds.
This is despite an October 2009 survey that found
90% of wealth managers reported their responsible
investment portfolios performed the same." Good
news continues for the growth of ethical investing
in the UK. Again, though, I wonder how much is due to
a real desire to invest ethically and according to
ones values compared to just investing in what is
considered to be the next ’big thing.’
80% of advisers offer green investments, by
Samuel Dale, October 18, 2010, Mortgage Strategy,
UK.
European SRI Retail Funds Grow
41% In One Year, Says Vigeo.
-
[COMMENTARY]
"The number of SRI retail funds increased to 879
from 683, while assets under management rose 41 per
cent to €76bn ($107bn) from €53bn in the 12 months
to June this year, according to an annual fund
review by Vigeo, a corporate social responsibility
ratings agency, and Morningstar."
This is phenomenal growth. I cannot help but wonder
how many investors buying sustainability oriented
funds are buying only because they believe it is the
next ’big’ thing, or are really buying also out of
ethical considerations for the planet’s welfare?
This needs to be studied to understand if socially
responsible-ethical investing is really gaining
ground or not.
SRI funds popular in Europe, by Ruth Sullivan,
October 17, 2010, Financial Times, UK.
Mexico Stock Exchange To Develop
New Responsible Investing Index.
-
[COMMENTARY]
"Experts in Responsible Investment Solutions
(ERIS) announces it is to help the Central American
nation develop a new sustainability index, one which
will allow assessment of companies according to a
range of socially-responsible investment criteria."
I believe the firm helping the Mexican Stick
Exchange if EIRIS, who a few months ago wrote a
report on the how stock exchanges need to move
forward on environmental, social and governance
criteria for their listed companies. Stock exchanges
around the world are moving towards implementing ESG
reporting for their listed companies.
Mexico embraces socially-responsible investment,
October 2010, Kleinwort Benson, UK.
US Companies Too Vague On
Political Expenditures.
-
[COMMENTARY]
"A new study finds that while nearly 80 percent
of S&P 500 companies have disclosed direct political
campaign spending policies, 86 percent have no
disclosed policies regarding indirect political
expenditures. Additionally, only 20 percent of
corporations disclose how much is actually spent and
which organizations or causes receive the funds."
I believe that all corporate political expenses
should be banned. At the very least, they should be
pre-approved by shareholders and all such donations
explicitly listed for public view.
Study Finds 86% of S&P 500 Companies Have Not
Disclosed Indirect Political Expenditure Policies,
Only 20% Disclose Spending, press release,
October 14, 2010, IRRC Institute & Sustainable
Investments Institute, USA.
China’s $300 Billion Sovereign
Wealth Fund, China Investment Corp. To
Avoid Alcohol, Defence & Casino Investments.
-
[COMMENTARY]
"China Investment Corp [CIC.UL], China’s $300
billion sovereign fund, will stay clear of investing
in defence-, casino- and alcohol-related sectors, a
senior official told a private equity conference on
Wednesday." Increasingly, ethical investing is
being utilized around the world.
CIC to avoid defence, casino investments - official,
September 30, 2010, Reuters via Responsible
Investor, Hong Kong.
Boston College Releases 2010 CSR
Index Ranking.
-
[COMMENTARY]
"For the last three years the Boston College
Center and Reputation Institute have created a
ranking of the top 50 companies in the United States
that the public distinguishes for corporate social
responsibility... Top companies are Johnson &
Johnson, The Walt Disney Company and Kraft Foods
Inc." This is a ’reputational’ index and
therefore many ethical investors may quarrel with
the findings from their perspective.
Corporate Reputation and Social Responsibility
Rankings, October 13, 2010, Boston College
Center for Corporate Responsibility, USA.
CleanTech Unveils Its Top 100
Private Global Cleantech Companies.
-
[COMMENTARY]
"The Global Cleantech 100 is unique in that it
highlights the most promising private clean
technology companies from around the world. The
selected companies are the most likely to make the
significant market impact over the next 5-10 years,
in the eyes of the world′s cleantech experts."
Though companies listed are not public, it might be
interesting reading for some ethical investors.
Cleantech Group Reveals Its 2010 Global Cleantech
100 List of the Most Promising Private Clean
Technology Companies on the Planet, press
release, October 13, 2010, CleanTech Group, UK.
European Responsible Investment
Doubles To €5 Trillion (About $7 Trillion) In Two
Years.
-
[COMMENTARY]
"The size of the European sustainable and
responsible investment market has almost doubled in
the last two years, despite the financial crisis,
according to the latest survey of the market by the
European Sustainable Investment Forum (Eurosif). Its
2010 European SRI study – the benchmark survey of
institutional investors on the topic – estimates
that total SRI assets shot up to €5 trillion as of
December 31, 2009, a significant jump from €2.7
trillion on December 31, 2007 – a growth of 87%, or
a compound annual growth rate of 37%."
This is tremendous growth and
indicates a major shift in investor attitudes
towards green-ethical investing.
European RI market doubles to €5 trillion in 2
years, despite crisis: Eurosif survey, by Hugh
Wheelan, October 13, 2010, Responsible Investor, UK.
Honda, Toyota & Hyundai Are
Cleanest Automakers Says Union Of Concerned
Scientists.
-
[COMMENTARY]
"For the fifth consecutive time, Honda earned the
title of Greenest Automaker for its efforts of
maintain low smog and greenhouse gas emissions
levels in its fleet."
Ford, GM and Chrysler were ranked the
lowest.
Honda Continues Five-Time Winning Streak as Greenest
Automaker, October 8, 2010, GreenBiz, USA.
Carbon Disclosure Project (CDP)
Reports On FTSE 350 Companies. HSBC, Reckitt
Benckiser, RBS, Scottish & Southern and Tesco Among
Climate Change Leaders.
-
[COMMENTARY]
"According to its latest report, the number of
companies in the FTSE 350 responding to the CDP rose
to 69% (243 companies) in 2010, from 67% (236) in
2009. This was ’impressive given the context of the
economic downturn and uncertainty about the future
direction of global climate policy.’"
The CDP performs admirable work and reports on
carbon emissions of companies worldwide. It produces
very useful information for ethical investors.
Carbon Disclosure Project unveils FTSE 350 climate
leaders, by Daniel Brooksbank, October 8, 2010,
Responsible Investor, UK.
US Firms Seen Doubling
Sustainability Spending By 2015.
-
[COMMENTARY]
"After analyzing over 1,800 companies worth $1
billion or more, Verdantix sees a growth of 11
percent in 2010 in how much companies will spend on
sustainability initiatives. That growth is expected
to accelerate, to 16 percent in 2011 and 24 percent
in 2012. All told, Verdantix predicts that by 2014,
the annual amount spent on green projects by U.S.
companies will reach $60 billion." Companies
have large hoards of cash and increasingly recognize
the financial benefits of green spending.
US Firms to Double Sustainability Spending to $60B by
2014, October 6, 2010, GreenBiz, USA.
42% Of French Want SRI
Information On Savings. Friends Of The Earth Says
Most French SRI Funds Are “Illegitimate.”
-
[COMMENTARY]
"The survey, commissioned by Eiris, the research
group, and carried out by Ipsos, was unveiled on
October 5 at the launch in the French National
Assembly of the country′s SRI week... Last
week, Friends of the Earth attacked the majority of
France′s SRI funds as being ’illegitimate’. The
French arm of the NGO, Les Amis de la Terre, said in
a report analyzing 89 SRI funds that 71 of them
invested in companies it considered as
’controversial’ for ’disastrous’ social and
environmental practices."
It is gratifying to see the
increasing interest in socially responsible-ethical
investing in France. Friends of the Earth are right
to critique the holdings of French SRI funds.
However, were they to analyze SRI funds elsewhere
they might find some similar concerns.
42 per cent of French want SRI info on savings -
Friends of the Earth slams “illegitimate” SRI funds,
by Hugh Wheelan, October 5, 2010, Responsible
Investor, UK.
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