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Ethical Investing News/Commentaries:
July 2011 |
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Commentaries by Ron
Robins
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Toyota, 3M, Siemens Top List Of Best Green
Brands. -
[COMMENTARY] "At the top of a
list that focuses on both are Toyota, 3M and
Siemens. Each of these firms have managed to align
how they walk the green walk with how they talk the
talk, according to ’Best Global Green Brands 2011,’
the inaugural ranking from consultancy Interbrand."
What is really interesting and probably unique about
this study is that it linked a company’s green
reputation with its real green/sustainability
performance. The rankings are interesting, but
probably unremarkable to those in the SRI ratings
industry.
Toyota, 3M, Siemens Top List of Best Green Brands,
by Tilde Herrera, July 28, 2011, GreenBiz, USA.
Sustainability Tied To Mining Companies
Shareholder Value, Says Report. -
[COMMENTARY] "A new study by
Sustainalytics finds strong links between
sustainability performance and shareholder value for
companies in the mining sector. Sustainability and
Materiality in the Natural Resource Sector: Mining
looks at whether environmental and social practices
impact competitiveness for companies within the
mining sector. The study finds that effective
management in four key areas of sustainability was
positively linked to shareholder value."
This is the kind of study that needs to be done,
most especially, in the resource sector. Ethical
investors who have avoided mining stocks might
possibly reconsider their views after reviewing this
report.
Sustainability Performance Linked to Competitiveness
in Mining Sector, July 28, 2011, Sustainalytics,
Canada.
Country’s Sustainability Linked To Their
Sovereign Bonds’ Performance. -
[COMMENTARY] "The performance of
government bonds issued by countries living within
their ecological means has been better than those
pursuing unsustainable policies, according to
research by Bank Sarasin." This is intriguing
information for ethical investors! How many
investors have considered a country’s sustainability
in reference to their bonds?
Sovereign bond returns linked to sustainability –
Sarasin, by Mark Nicholls, July 25, 2011,
Environmental Finance, UK.
Nasdaq To Launch Water Based Equity Indexes. -
[COMMENTARY] "The Nasdaq OMX
Global Water Index will track companies worldwide
that produce products that conserve and purify
water. A separate index, the Nasdaq OMX US Water
Index, will do the same for US-listed water sector
companies." These indexes are timely and likely
to be widely followed by environmentally oriented
investors.
Nasdaq to launch water indexes, by Charlotte
Dudley, July 22, 2011, Environmental Finance, UK.
Ron Robins Interviewed On
The Green Leader Radio Show by Robert
Thompson concerning green investing on July 25,
2011. It’s a great interview on a great show. I hope
you can listen to it!
France Requiring Large Companies To Report
Their Carbon Footprint & Planned Carbon Reduction
Measures. -
[COMMENTARY] "Originally
outlined in the 2009 Grenelle 2 bill, the GHG
reporting law requires companies with more than 500
employees to disclose their carbon footprint and
outline emission reduction measures by 31 December
2012. The new piece of legislation will support
France′s long-term goal of achieving a 75% reduction
in GHG emissions below 1990 levels by 2050."
Congratulations to France on this move!
Hopefully, all countries will follow France’s lead.
Such disclosure is important to investors too, for
they need to know how exposed to the problems--both
financially and environmentally--the companies they
invest in are to carbon related matters.
Large organisations subject to mandatory carbon
reporting in France, July 27, 2011,
Hydrocarbons, Belgium.
Is The US Chamber of Commerce A Friend Or Foe
To Ethical Investors? -
[COMMENTARY] Two items crossed my
screen today on the Chamber. One indicated the
Chamber’s successful court challenge to abolish the
proposed SEC rule that would have given investors
the power to nominate individuals to company
boards--clearly an unfriendly act towards ethical
investors. See
US court overturns proxy-access rule, by
Raquel Pichardo-Allison, July 25, 2011, Global
Pensions, USA.
The other, which is more positive, is that the Chamber is getting a
little proactive on corporate sustainability. See
5 Reasons Why the Chamber of Commerce Can Be a Force
for Green, by Alex Hahn, July 19, 2011,
GreenBiz, USA.
Environmental Protection Agency (EPA)
Mandates New Direction For US Utilities. -
[COMMENTARY] "New rules on
sulphur dioxide (SO2) and nitrogen oxide (NOx)
emissions from US power plants are set to drive a
substantial shift from coal to natural gas, shutting
down coal plants and having a ’significant impact’
on US power, gas and coal markets from next year,
according to research from Bank of America-Merrill
Lynch (BoAML)."
As the US government is ’missing in action’ on
the environmental front, the US is lucky to have the
EPA be its real environmental guardian. Investors in
US utility stocks might want to see how the EPA
rulings could affect companies they are invested in.
EPA emissions rule ‘a game changer′ for US gas,
coal, power markets – analysts, by Mark
Nicholls, July 20, 2011, Environmental Finance, USA.
Christian Brothers Investment Services
Mounting Campaign To Split CEO & Chairman Positions
At Rupert Murdoch’s News Corp. -
[COMMENTARY] "Christian Brothers
filed a petition with News Corp. on July 15 that
seeks to permanently split the CEO and chairman
positions." Virtually all observers in corporate
governance believe that no one person should hold
both CEO and chairman positions in any public
company. This avoids potential abuse of power and
too much of a one-sided viewpoint.
Murdoch Refusal to Take Responsibility May Dent
Credibility (3), by Cesca
Antonelli, July 20, 2011, Bloomberg, USA.
European Ethical Investors Favouring Active,
Themed, Environmental Funds. -
[COMMENTARY] "European retail
investors have moved away from screened SRI funds to
a more active themed and environmental slant over
the last year, according to an annual breakdown of
fund flows compiled for Responsible Investor by
Lipper FMI, the investment data group. The breakdown
of fund sales the year from May 2010 to April 2011
shows that green themed and norms-based European RI
retail funds took in €4.8bn in assets over the
twelve months." Personally, I believe that this
is taking place due to a new type of investor
entering the ethical investing space. Ultimately,
this is good news for all ethical investors.
Gradual shift from screened to themed SRI funds,
show Lipper fund flow stats for the year, by
Hugh Wheelan, July 19, 2011, Responsible Investor,
UK.
Private German Pension Funds Embracing SRI,
Government Funds Lag. -
[COMMENTARY] "Socially
responsible investment (SRI) is on the rise in most
German municipal funds and professional pension
funds (Versorgungswerke), but it has failed to take
off with federal and state funds, according to a
study by SD-M and Allianz Global Investors." In
general the retail market for socially responsible
investments in Germany has lagged that of Western
European countries. It is inspiring to see that at
least German private pension funds are adopting SRI.
German pension schemes embracing socially
responsible investment, by Barbara Ottawa, July
19, 2011, IPE, UK.
A New Trend? Swiss Bank Offers Investors
Carbon Offsets For Their Portfolios. -
[COMMENTARY] "Customers of Swiss
bank Julius Bär will be able to calculate the carbon
footprint of their equity portfolio and offset the
emissions using carbon credits, through a service
launched this week." This is an approach that
many ethical investors might welcome. It will be
interesting to see if other investment firms begin
offering such benefits.
Swiss bank to help investors offset portfolio
emissions, by Jess McCabe, July 14, 2011,
Environmental Finance, UK.
Australian Companies Found Lacking In ESG
Reporting. -
[COMMENTARY] "More than half of
Australia’s 200 largest listed companies still fail
to provide meaningful disclosure on their
environment, social and governance (ESG) performance
and related risks, research from the Australian
Council of Superannuation Investors (ACSI) has
found." Since resource companies are
generally laggards in ESG reporting, the finding
that many of Australia’s largest listed
companies--a large number of them resources based--is
therefore not unexpected in my view.
ACSI considers ESG name and shame measure, by
Wouter Klijn, July 15, 2011, Investor Daily,
Australia.
Blacklist Of Least Transparent Companies
Includes DreamWorks, NASDAQ and Madison Square
Garden. -
[COMMENTARY] "DreamWorks, NASDAQ
and Madison Square Garden are among the well-known
American brands that have appeared on a ’black list’
of companies with poor transparency and corporate
citizenship. The Black List, by Corporate
Responsibility magazine, comprises 58 Russell 1000
companies that tie for bottom ranking on these
measures." Companies that hide things need to be
exposed. Corporate Responsible magazine is
performing an important service in exposing them.
DreamWorks, Nasdaq ‘Black Listed′ for Lack of
Transparency, July 13, 2011, Environmental
Leader, USA.
Chinese Factories Beset With Labor Abuses,
Says Report. -
[COMMENTARY] "From October 2010
to June 2011, through an investigation of ten global
brand supplier electronics factories, China Labor
Watch discovered multiple violations of China′s
Labor Law, which was recently instituted in 2008,
and brand companies′ Corporate Social Responsibility
Codes of Conduct, who contract production out to the
Chinese factories. The majority of these violations
fall under five general categories: overtime, wages,
labor intensity, contracts, and discrimination."
Our modern lives are almost dependent on the output
of these factories. Perhaps our best response is to
continue to pressure the Apple’s and HP’s of this
world to adequately enforce their purported ’high’
CSR standards on their supplier factories in China
and elsewhere!
Tragedies of Globalization: The Truth Behind
Electronics Sweatshops, July 12, 2011, China
Labor Watch, USA.
Study Finds Screening Intensity Has No Effect
On Fund Returns, But Does Effect Risk. -
[COMMENTARY] "... screening
intensity has no effect on returns but has a
curvilinear (inverted-U-shaped) effect on risk. This
means that funds with the least amount of screens
have lower risk; this risk increases with the number
of screens but then again decreases at high
screening intensity. My findings suggest that the
performance debate will continue to go on as
inconclusive." This study adds some new insights
into ethical fund returns and risks, but I prefer
meta analysis--that of compiling the data from many
studies--before I would draw any conclusions.
Socially Responsible Investments in Europe: The
Effects of Screening on Risk and the Clusters in the
Fund Space, by Daniela Laurel, July 11, 2011,
Politecnico di Milano, Italy.
Fossil Fuel Producers’ Stock Valuations At
Risk, Says Study. -
[COMMENTARY] "The world′s stock
markets are over-exposed to fossil fuels, putting
investors at risk of a ‘carbon bubble′, according to
a report by research group Carbon Tracker Initiative
which calls for an overhaul of the way capital
markets value risk. The report looks at how fossil
fuel reserves held by listed companies are assessed
by the market and argues that up to 80% of the
world′s fossil fuel reserves will be unusable if
average global temperatures are to be limited to a
2°C rise, the level at which scientists believe
global warming can be stablised."
This study’s findings are important to investors
everywhere. However, it might take extreme weather
events to force governments to act on climate
change--such as the recent experience in Australia.
Fossil fuel-heavy stock market a risk to investors –
report, by Charlotte Dudley, July 11, 2011,
Environmental Finance, UK.
Indian Government Likely To Mandate Companies
Disclose CSR Spending If More Than 2% Of Net Profit. -
[COMMENTARY] "Indian companies
may have to collectively spend close to $2 billion
(about Rs 8,700 crore) a year on CSR programmes if
the government makes it mandatory for them to spend
2% of profits on social responsibility programmes, a
study said today... The [Indian] government last
week said it would be mandatory for corporates to
disclose to shareholders whether they have made a
contribution of 2% of net profit toward corporate
social responsibility activities."
Though I strongly believe that well designed and
implemented CSR programmes are integral and
necessary to enriching corporate activities and
expanding profits, I do not believe mandating a
certain percentage of profits to CSR is the way to
go.
Mandatory CSR spend to cost India Inc Rs 8,700 cr a
yr., Press Trust of India, July 11, 2011,
Business Standard, India.
Church Of England Threatens To Sells Its
Newscorp Holdings Over Scandal. -
[COMMENTARY] "The Church said in
a statement its Ethical Investment Advisory Group (EIAG)
wrote to News Corp on Friday, saying the behavior of
the paper, accused of illegally accessing countless
voicemail messages and making payments to police,
had been utterly ’reprehensible and unethical.’"
Valued at $32 billion, News Corp could see many
ethically oriented investors divest their holdings
in the company. This is another warning shot to
companies that unethical practices can cost them dearly
and that our focus on companies with exemplary ESG
is the best policy, ethically and financially.
Church of England threatens to pull News Corp
investment, by Jodie Ginsberg and Olesya
Dmitracova, July 9, 2011, Reuters, UK.
US Stockholder Activism On Sustainability
Makes Gains In 2011. -
[COMMENTARY] "From fracking by
companies such as Chevron, Exxon Mobil and Ultra
Petroleum to greater use of recyclable cups by
McDonald’s and Starbucks, a host of CSR issues
captured shareholders’ attention and support this
year, according to reports on the 2011 proxy season
from As You Sow and Ceres." A good review of
what 2011 means for stockholder sustainability
activism.
How Shareholder Activism Moved the Needle on
Sustainability in 2011, by Leslie Guevarra, July
8, 2011, GreenBiz, USA.
Global Green Energy Investment Up 32% In 2010
To $211 Billion Says UNEP. -
[COMMENTARY] "The main growth
drivers were backing for wind farms in China and
rooftop solar panels in Europe, it said. It also
found that developing nations invested more in green
power than rich nations for the first time last
year." Contrary to what most Westerners think,
developing countries are BIG on green energy.
Furthermore, many analysts believe oil prices will
continue to climb higher, thus making green energy
ever more competitive and attractive.
Green energy investment hits record global high,
by Mark Kinver, July 7, 2011, BBC, UK.
By Focusing On Fuel Efficiency, Europe’s
Airbus Trounces Boeing At Paris Air Show. -
[COMMENTARY] "Most underplayed
economic story of the week: European aircraft
manufacturer Airbus "trounced" the traditional U.S.
behemoth Boeing at the Paris Air Show, booking a
record $50 billion more in orders for new planes.
The reason: commercial plane buyers’ demands for
high fuel efficiency and low emissions." The
same mistakes that sent the US auto manufacturers
into bankruptcy are being repeated by Boeing: a
failure to focus on fuel efficiency and lack of R &
D.
How America just lost 1 million green(ish) jobs to
Europe, by Glenn Hurowitz, June 29, 2011, Grist,
USA.
GreenBiz Survey Suggests Corporate
Environmental, Health & Safety Spending Is Stalling. -
[COMMENTARY] "We recently
conducted our sixth semi-annual “Green & the
Economy” survey and the results have sent us
scurrying to find a pony buried in all the data. We
asked our more than 3,000-member GreenBiz
Intelligence Panel for their views on key green
economic indicators (you can join our panel here).
Our most recent survey, conducted in mid-June,
garnered 309 responses with 51 percent from
companies with revenues of more than $1 billion
(which we′ll refer to as ’large companies’)... As
with the rest of the economy, growth in green seems
to have stalled, if only temporarily."
Perhaps the mostly likely reason for this
slowdown is related to generally slowing economic
activity. It is a cause for concern, but not over
the long term.
Searching for Good News in the Sputtering Green
Economy, by John Davies, July 5, 2011, GreenBiz,
USA.
Water Shortages Threaten Renewable Energy
Production, Says Study. -
[COMMENTARY] "The study shows
the reliance on large amounts of water to create
biofuels and run solar thermal energy and hydraulic
fracturing - a technique for extracting gas from
unconventional geological formations underground -
means droughts could hamper their deployment."
Ultimately, societies everywhere will come to accept
the hard truth that energy and resource conservation
is by far the best way forward. Otherwise, we’ll be
like lemmings going over the cliff!
Water shortages threaten renewable energy
production, experts warn, by Suzanne Goldenberg,
June 27, 2011, The Guardian, UK.
Thomson Reuters & IdealRatings Create Islamic
Finance Index. -
[COMMENTARY] "Thomson Reuters
IdealRatings Islamic Indices will be available on
Thomson Reuters Eikon and some of the company’s
other services. The joint venture will cover over 60
countries and global equity markets in nine regions,
as well as individual sectors. The index will be
reviewed on a quarterly basis to ensure
Sharia-compliant standards, which will be assessed
using proprietary algorithmic searches run by a team
of dedicated researchers."
Islamic finance has much in common with ethical
finance and investments. Whereas ethical investments
are common in the Western world, the rough
equivalents in the Muslim world are
Shariah-compliant investment products.
Thomson Reuters and IdealRatings Team for Islamic
Finance Index, by James Rundle, July 5, 2011,
Waterstechnology, UK.
ESG Criteria Found To Improve Investing
Performance. -
[COMMENTARY] "’Research
conducted by CFSGAM revealed that the top-rated ESG
stocks in its global listed infrastructure portfolio
outperformed the bottom-rated stocks by more than 20
per cent over a three-year period to May 2010,
demonstrating the connection between ESG factors and
performance,’ CFSGAM chief executive Mark Lazberger
said at the launch of the company’s responsible
investment report yesterday." The research
concerning ESG continues to show its utility in
investment analysis.
Top-rated ESG stocks outperform: Colonial by
Walter Klijn, July 1, 2011, Investor Daily,
Australia.
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