Ethical Investing News/Commentaries
Commentaries by Ron
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Emerging Markets Are Leading The Way On Clean
Energy Growth. " Climatescope 2014, looks at
what is happening in 55 emerging markets in Africa,
Asia, Latin America and the Caribbean. The results
suggest renewable technologies can be just a cost
competitive solution in developing countries just as
they are in the industrialised world."
For those who might not know, China is now the
world’s largest manufacturer of wind and solar
generating equipment while also having the highest
demand for those products. Renewable energy is
becoming competitive around the world with
conventional energy production. Given the warnings
of the latest IPCC report--that’s just as well! For
ethical investors, the expansion of renewable energy
globally offers many potentially profitable
opportunities in the sector.
Emerging Markets Are Leading The Way On Clean Energy
Growth, by Mike Scott, October 31, 2014, Forbes,
Europe retail market for socially responsible
investing up 18 pct. "The European retail
market for funds focused on socially responsible
investing grew 18 percent to 127 billion euros
($161.82 billion) in the 12 months to June 2014, a
report on Wednesday showed. The number of funds also
rose, to 957 from 922 in the year earlier period,
the report by Vigeo, which evaluates corporate
responsibility, and fund analyst firm Morningstar
France and the UK led the growth. It’s great to see
the SR-ethical retail funds significantly outpacing
conventional funds in asset growth rates.
This is a further sign that ethical investing is
into the mainstream investing arena.
Europe retail market for socially responsible
investing up 18 pct., October 29, 2014, Reuters,
Are Canada’s Corporate Giants Re-engineering
US Politics? "Canadian corporations helped
raise significant amounts of money for political
parties in the United States and spent big bucks on
lobbying efforts, according to a paper released
The report, from the Shareholder Association for
Research and Education (SHARE), details involvement
of Canadian corporations in Political Action
Committees (PACs) and lobbying in the U.S. this
year. The group is an advocate for ethical
It seems anyone, whether you are American or of some
other nationality, can provide ’influence money’ to
US politicians. Though, when you read the actual
numbers provided for this endeavour by Canadian
companies, it’s quite small. SHARE estimates it’s
about $1.2 million for the 60 large Canadian
companies it investigated. A further $15 million was
spent on their lobbying efforts. However, SHARE believes
it’s a lot more than the publicly available
information provides and suggests Canadian laws need
to be changed to make full disclosure of these sums.
Investors should have the right to know this
Are Canada’s Corporate Giants Re-engineering US
Politics? By Jeremy J. Nuttall, October 30,
2014, The Tyee, Canada.
Good for Harvard, good for the world: Why HMC
embraced ESG with a passion. "Harvard
Management Corporation (HMC) signed up to the
UN-supported Principles for Responsible Investment
(PRI) less than a year ago, but the company that
manages the $36 billion Harvard University endowment
is already moving rapidly to build environmental,
social and governance (ESG) factors into every
investment decision it makes."
Harvard’s endowment fund integrating ESG into all
its investment decisions sends a strong message to
all asset managers that they should do it too! For
ethical investors, it means more money flowing into
the stocks and bonds they’re already invested in.
It’s good news ethical investors.
Good for Harvard, good for the world: Why HMC
embraced ESG with a passion, by Simon Hoyle, Top
1000 Funds, USA.
Green bonds to exceed $40 billion in 2014.
"The market for green bonds has existed in one form
or another since about 2007, but only recently
exploded. According to Bloomberg, $18 billion of
green bonds has been issued as of early August 2014.
That already matches, in seven months, the total
volume done from the inception of the market in 2007
to the end of 2013, a six-year period. At this pace,
the market will exceed $40 billion this year."
This article provides a good overview of what’s
happening with the green bond market.
Green bonds to exceed $40 billion in 2014, by
Suzanne Buchta, October 27, 2014, GreenBiz, USA.
Survey: half of surveyed financial
professionals have offered SRI options to clients.
"But Major Perception "Gender Gap" About SRI Seen
Among Brokers, Investment Advisors; Broad Agreement
Found that ’Millennial Investors’ Will Require Major
Changes by Financial Industry."
This surveys findings are valuable reading for all
financial professionals. What is also interesting is
that most of the financial professionals who offered
SRI options did so because clients requested it.
Again, it’s the market (clients) who lead and not
the mainstream investment industry! In any case,
it’s great that it is happening regardless of the
reticence exhibited by most investment
Survey: half of surveyed financial professionals
have offered SRI options to clients, press
release, October 23, 2014, First Affirmative
Financial Network, USA.
Insurer Climate Risk Disclosure Survey Report
& Scorecard: 2014 Findings & Recommendations.
"Amid growing evidence that climate change is having
wide-ranging global impacts that will worsen in the
years ahead, Insurer Climate Risk Disclosure Survey
Report & Scorecard: 2014 Findings & Recommendations,
ranks the nation’s 330 largest insurance companies
on what they are saying and doing to respond to
escalating climate risks. The report found strong
leadership among fewer than a dozen companies but
generally poor responses among the vast majority."
Anyone who invests in insurance companies or who has
insurance policies (probably everyone) might want to
read this review. Obviously, if a costly climate
event occurs and the company can’t payout your
policy, you might want to know the financial
preparedness of the insurer before continuing to pay
Insurer Climate Risk Disclosure Survey Report &
Scorecard: 2014 Findings & Recommendations,
Mark Carney (Governor of the Bank of England):
most fossil fuel reserves can’t be burned.
"The governor of the Bank of England has reiterated
his warning that fossil fuel companies cannot burn
all of their reserves if the world is to avoid
catastrophic climate change, and called for
investors to consider the long-term impacts of their
decisions. According to reports, Carney told a World
Bank seminar on integrated reporting on Friday that
the ’vast majority of reserves are unburnable’ if
global temperature rises are to be limited to below
I just saw (October 23) this report courtesy of The
Responsible Investment Association (Canada). As one of the
world’s top central bankers, this is truly
astonishing! Can anyone imagine Janet Yellen, Chair
of the Board of Governors of the Federal Reserve,
ever making a remark like that! She’d be ’fried
alive.’ As readers here know, I’ve long argued that
many fossil fuel companies could have significant
write-downs and losses as the affects of climate
impact government policies entailing the reduction
of our carbon footprint.
Mark Carney: most fossil fuel reserves can’t be
burned, by Jessica Shankleman, October 13, 2014,
The Guardian, UK.
SRI in Latin America: early stages.
"The financial world of socially responsible
investing (SRI) is gaining support in Latin America.
Governments, banks and investors are beginning to
understand the importance of shifting assets into
activities which support the triple bottom line.
Sustainalytics, a sustainability research and
analysis firm, recently published Inversión
Responsabley Sostenible, a report that describes the
context, growth and opportunity for SRI in Latin
America, dividing it into three levels of
involvement: Brazil as the first group, Chile,
Colombia, Perú and México as the second, and the
remaining countries in the third."
Latin America could be become a significant area for
ethical investing. This is a brief overview of the
current state of affairs there for SR-ethical
SRI in Latin America: early stages. By Julie
Fahnestock, October 21, 2014, 3BL Media and Just
Good Money Week: 83% of young Brits not
familiar with sustainable investment. "A poll
commissioned by the UK Sustainable Investment and
Finance Association (UKSIF) has revealed that the
majority of 18-24 year olds do not know what
sustainable investment is – with 37% even unsure of
what a bank actually is."
A mammoth hole in developed countries’ education is
that of money management. It’s truly startling that
one of the most important areas of life is not
taught in school. Mind you, where money education
exists, the curriculum is hugely influenced by
establishment interests such as banks! Thus, though
I’m in favour of money education, I’m not if it’s a
one-sided viewpoint promoting establishment
Good Money Week: 83% of young Brits not familiar
with sustainable investment. By Ilaria Bertini,
October 20, 2014, Blue & Green Tomorrow, UK.
The 2014-2015 Ethics In Finance - Robin
Cosgrove Prize For People Under 35. "The
global Prize aims to promote greater awareness of
the importance of ethics in finance among young
people with an interest in accountancy, banking and
financial services. This is the fifth edition of the
Prize, originally launched in 2006, well before the
topic of ’ethics in finance’ became fashionable. The
global financial crisis has since shown the
relevance of the theme and the significance of the
Prize. The Prize for Innovative Ideas for Ethics in
Finance is open to young people, aged 35 years or
younger, from throughout the world."
[COMMENTARY] This is a very worthy
endeavour and I encourage those under 35 with an
interest in this subject to submit their ideas. See
Global Ethics Prize Builds on Success. Website:
(UK) ‘Ethical′ funds still pouring money into
coal, oil and gas, new report finds. "Report
by advisers Barchester Green names winners and
sinners of ethical and environmental funds
[COMMENTARY] I suspect this is the
same in most countries. Ethical funds do this
sometimes because some energy companies are
diversifying into renewable/alternative energies and
also by holding shares ethical funds may have some
influence on how these companies operate. However,
with the fossil fuel divestment movement growing,
the potential for carbon taxes or caps as climate
change advances, and the possibility of balance
sheet write-down’s due to ’stranded assets,’ fossil
fuel investments might become problematic for many
‘Ethical′ funds still pouring money into coal, oil
and gas, new report finds, by Rupert Jones,
October 18, 2014, The Guardian, UK.
Why clean energy might be cheaper than you
think. "Wind and solar power often get a bad
rap for being more expensive than energy produced
from fossil fuels. But what happens when you factor
in, say, the health costs of people breathing smoggy
air? Or the financial impact of climate change′s
effect on ecosystems and precious resources like
Those are some of the questions the European
Commission sought to answer. A new report written
for the EC includes those environmental costs and
more in calculations of the total costs of producing
electricity from various renewable and nonrenewable
sources. The result? Wind and water are the best
bargains for making megawatts."
[COMMENTARY] It’s great that a
major governmental body has finally produced these
calculations! Of course, the input data will be
controversial, but the discussion has to start
somewhere. This study provides governments with some
firepower for renewable energy. Incidentally, in their
calculations, solar is not that much expensive than
wind. Gas and coal powered plants are much more
Why clean energy might be cheaper than you think,
by Sam Bliss, October 14, 2014, grist, USA.
Are Companies Still Committed to
Sustainability? "New Business Models: Shared
value in the 21st century, commissioned by Enel
Foundation, finds that 66 percent of companies
believe there is a link between sustainability and
long-term financial performance (see chart). More
managers also understand the wider importance of
sustainability and increasing efforts to embed it
into their strategies.
The report also shows an increasing minority of
business managers who do not believe there is a link
between sustainability and long-term financial
performance. This is up to 11 percent — an increase
from 6 percent in a similar survey carried out in
[COMMENTARY] The article’s headline
gives the impression that many or most companies
were committed to sustainability, but now might be
faltering in that commitment. I would argue that it
is only a small percentage of companies that have
ever been really committed to sustainability and
that number is growing, but not nearly as fast as is
necessary to help mitigate or stem the problems of
climate change. In the US particularly, among
corporate leaders--who are mostly Republican--only a
minority believe in climate change.
Are Companies Still Committed to Sustainability?
October 14, 2014, Environmental Leader, USA.
Fortune 500 companies spend more than $15bn on
corporate responsibility. "The research,
carried out by economic consulting firm EPG, found
that there was a clear difference in how US and
British companies approached CSR, but that on both
sides of the Atlantic spending was dominated by only
a handful of groups. In-kind donations, such as
donating free drugs to health programmes or giving
free software to universities, accounted for 71 per
cent of the $11.95bn US spending on CSR.
In the UK, while donating goods and services
in kind was the largest component of the $3.25bn CSR
activity, it totalled just 46 per cent of the total.
Employee volunteering and fundraising made up 34 per
cent and cash contributions 20 per cent."
[COMMENTARY] This study had a very
narrow definition of CSR: mostly how much companies
and employees give to outside groups. I don’t think
the researchers nor the FT should’ve used the term
CSR, but rather, ’philanthropic contributions’
would’ve been a more appropriate term. There are
many definitions of CSR, but one that is frequently
used is from
Mallenbaker. Quote, "CSR is about how
companies manage the business processes to produce
an overall positive impact on society."
Though CSR spending using this definition would
be extraordinarily difficult to calculate, it will
be hugely greater than the $15bn mentioned in this
Fortune 500 companies spend more than $15bn on
corporate responsibility, by Alison Smith,
October 12, 2014, The Financial Times, UK.
Ron Robins appeared on America Meditating
radio show, interviewed by Sister Jenna. In the
show I discuss the relevance of spirituality and
Transcendental Meditation® to investing and
economics. I emphasize that gaining individual inner
fulfillment is the only means to solving our
individual and collective financial and economic
Ron Robins on America Meditating radio show,
October 7, 2014, USA.
Impact investing market grows 132% from
2011-2013. "Responsible investment strategies
grew at a much faster rate than the European market
as a whole between 2011 and 2013, according to
research by the European Sustainable Investment
study is useful reading for everyone in the
investment industry. Though you might want to read
it on the weekend! It’s a large and extensive
report. I find it particularly interesting that
portfolio strategies excluding particular stocks or
industries involve "41% (€7 trillion) of European
professionally managed assets." Many people
might think it’s tobacco and alcohol stocks that are
the largest excluded segments, but no, its cluster
munitions and anti-personnel landmines that are.
It’ll be interesting to follow how fossil fuel
divestments gain traction in future years.
Impact investing market grows 132% from 2011-2013,
by Stephanie Baxter, October 9, 2014, Professional
Japanese Investors Adopting New Stewardship
Code (Principles for Responsible Institutional
Investors). "Japanese Financial Service
Agency (FSA) launched a Japanese version of
’Stewardship Code’ in February 2014, inviting
institutional investors to sign up. Modeled on the
British Stewardship Code adopted in 2010, these
Principles for Responsible Institutional Investors
were set out as a code of behavior for institutional
investors who hold corporate stocks...
As of May 2014, three months after it was
launched, 127 institutional investors had announced
their intention to adopt it. The number of the
investors increased to 160 as of August 2014. The
Government Pension Investment Fund (GPIF), managing
about 130 trillion yen (about U.S.$1.29 trillion),
is the biggest among them."
[COMMENTARY] Unlike some other
’stewardship codes’ the Japanese version does not
explicitly cover environmental or sustainability
issues. Nor is the code legally binding.
Nonetheless, it does codify important governance
factors regarding corporate behaviour that should be
helpful for ethical investors.
Japanese Investors Adopting New Stewardship Code
(Principles for Responsible Institutional
Investors), by Junko Edahiro, October 6, 2014,
Japan for Sustainability, Japan.
War – a minefield for ethical investors.
"’The world is changing,’ says Ron Robins, a
Niagara Falls, Ont.-based analyst who founded an
ethical investing advice website called Investing
for the Soul. ’Investors in sin industries may see
their returns suffer due to government austerity
programs,’ he says.
Governments facing deficits, unfunded pension
liabilities and rising health-care costs find it
irresistible to boost taxes on the sin industries,
particularly tobacco, alcohol and gaming, he says,
eventually driving away consumers. Meanwhile, more
socially responsible portfolios typically include
sectors that are on the rise in the 21st century, he
adds – finance, technology, medical equipment, clean
energy, consumer gadgets and so on."
[COMMENTARY] I was pleased the writer,
David Israelson, used these quotes of mine,
especially because I believe most conventional
investors seriously underestimate the ramifications
of most governments’ mammoth unfunded liabilities as
well as the financial impacts of required
adjustments concerning climate change. Thus I
suggest that ethical investors are in a superior
position to ’sin’ or conventional investors with
regards to long-term investment returns.
War – a minefield for ethical investors, by
David Israelson, October 6, 2014, The Globe & Mail,
New Numbers Show Increased Profits from ESG,
Climate Action, and Sustainability Communications. "A recent study by New Amsterdam
Partners finds that stocks with higher ESG ratings
deliver superior returns and lower price
volatility... CDP, formerly the Carbon Disclosure
Project, has released a study that shows... an 18
percent higher return on equity by companies
addressing climate change over their peers, and a 67
percent higher return than companies that do not
disclose on climate change. Dividends to
shareholders were also higher, by 21 percent."
[COMMENTARY] With report after report
showing that companies rated highly on ESG factors
perform better financially and offer superior stock
returns, when will mainstream investors wake-up and
fully integrate ESG criteria for picking stocks?
This demonstrates how structurally impaired is
the mainstream investment world. Ethical investors
can now enjoy their ’superiority’.
New Numbers Show Increased Profits from ESG, Climate
Action, and Sustainability Communications, by John Howell, October 2, 2014, 3BL
Pension funds still concerned activist stance
could damage returns. "Two-thirds of the
pension funds surveyed – 35 in total, with nearly
€1.2trn in combined assets – agreed that the
greatest ESG risk facing a board was that of
underperformance due to ethical investment
[COMMENTARY] This is the central issue
for getting pension funds onside for ESG-ethical
investing. And it goes back to fiduciary duties and
how they’re interpreted. If they invest for ethical
reasons and the investment turns sour, the pension
fund boards feel they could be found irresponsible
in their fiduciary duties. So, the real point
is--and it depends upon jurisdiction and whom
they’re managing the funds for--they must be able to
demonstrate financially sound reasons when investing
with an ESG-ethical investing focus. And that, in
most cases, should not be too hard to do. Let’s face
it, many boards are just too conservative and don’t
want to ’rock-the-boat’ to reorient themselves even
to potentially higher returns by investing with an
Pension funds still concerned activist stance could
damage returns, by Dominic Gane and Jonathan
Williams, October 1, 2014, IPE, UK.
Will There Be Enough ESG Opportunities To Meet
Demand? "But even as 87% of asset managers
surveyed in the report, The Cerulli Edge: U.S.
Monthly Product Trends (August 2014), said they
viewed the growing awareness about ESG investing as
a secular trend, the vast majority of them said it′s
only somewhat important to offer it. Does that mean
they′ll be slow to roll out products or invest in
[COMMENTARY] It seems a strange
headline, but what they’re saying is that if most
asset managers go for ESG screened portfolios, there
might not be enough ESG eligible stocks around.
Well, what a great day that’ll be! I think the study
authors might be overlooking the fact that when
company’s see their peers with higher ESG ratings
and higher stock prices, they will gravitate to
improve their own ESG performance. Ideally, the
majority of companies would then also become high
ESG performers. True, this would likely have the
effect of lowering ESG stock premiums--but hey,
it’ll mean higher profits too for most companies,
and thus, higher stock prices everywhere.
Will There Be Enough ESG Opportunities To Meet
Demand? October 1, 2014, FA Magazine, USA.
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