Ethical Investing News/Commentaries
Commentaries by Ron
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Luxembourg Launches World’s First Green Stock
Exchange: LGX, ’The Full Green Monty’. "Today,
less than six weeks before COP22 , the Luxembourg
Stock Exchange (LuxSE) becomes the first stock
exchange globally to introduce a platform for green
financial instruments. Luxembourg Green Exchange (LGX)
is for issuers who dedicate 100% of the raised
funding to green investments. It will restrict
access to those issuers who comply with stringent
is a fascinating development. It’ll likely be copied in many places
if it works.
Luxembourg Launches World’s First Green Stock
Exchange: LGX, ’The Full Green Monty,’ by Dina
Medland, September 27, 2016, Forbes, USA.
New research shows IFAs (UK Independent
Financial Advisors) see increase in demand for
ethical investments. "Research from Heartwood
Investment Management reveals that one in four (25
per cent) IFAs have seen an increase in client
demand for ethical investing over the last few years
but just two in five (43 per cent) are satisfied
with the current range of ethical investment options
The research, which canvassed the views of UK based
IFAs, revealed that more than four in five (81 per
cent) would prefer to invest in a
globally-diversified ethical portfolio for their
clients. Just one in ten prefers investing in a
single-strategy ethical fund.
wonder if the 57% of IFAs who say they are not
satisfied with the current range of ethical
investment options truly know what is available. My
guess is that most haven’t really researched the
field. Nonetheless, it’s great to see that UK IFAs
see increasing demand for ethical investments.
New research shows IFAs see increase in demand for
ethical investments, by Beverly Chandler,
September 26, 2016, WealthAdvisor, UK.
Canada’s Responsible Investment Week Events,
October 17-21, 2016. Details
here. This is the third year for this great
event and it grows bigger every year!
AMNT: Climate change scores lowest on biggest
risks facing (UK pension) schemes. "Trustees
believe climate change is the lowest risk for their
schemes, according to this year′s Association of
Member Nominated Trustees (AMNT) survey. Only 1% of
respondents said climate change is a threat in
contrast to the 2015 survey where it was ranked as
the second top concern with 16% of MNTs calling it
their biggest worry.
Despite climate change coming bottom this
year, environmental social governance (ESG)
implications was the fifth most important concern
for MNTs, with 9% calling it their top concern.
Importantly, ESG, which is a broad term for many
things including climate change, was not an option
in last year’s survey."
survey question changed between 2015 and
2016 to include ESG. This might account for some of
the differences in responses to the climate change
concerns between those years. The number one concern
for the funds was market volatility.
AMNT: Climate change scores lowest on biggest risks
facing (UK pension) schemes, by Michael Klimes,
September 22, 2016, Professional Pensions, UK.
Investors abandon principles as low interest
rates put pressure on returns. "A survey of
more than 100 institutional investors found that
60pc believe that environmental, social and
corporate governance (ESG) risks justify rejecting
an otherwise attractive investment – down from 67pc
a year ago."
responses to such questions should be expected to
change -- up and down -- each year, though trending
higher over the long-term, which has been seen over
the past several years. Even at 60%, this is a
remarkable improvement from responses to similar
surveys some years back.
Investors abandon principles as low interest rates
put pressure on returns, by Tim Wallace,
September 19, 2016, The Telegraph, UK.
Canada′s 3rd annual RI Week: October 17-21,
2016. "Canada′s third annual Responsible
Investment Week will take place from October 17th to
21st, 2016. Responsible Investment Week is a week
dedicated to education and awareness about
responsible investment (RI). The Responsible
Investment Association (RIA) is coordinating a week
of events across Canada to promote learning about
environmental, social, and corporate governance (ESG)
issues that affect investments."
to RIA Canada for organizing this important, now
annual event. I urge all ethical investors in Canada
to take part in whatever way possible.
annual RI Week: October 17-21, 2016, press
release, September 14, 2016, Canada.
S&P lays out plans for green bond and ESG
market tools. "Influential ratings agency S&P
Global has launched plans for a new tool to examine
the environmental impact of projects or initiatives
financed by bonds.
Dubbed the Green Bond Evaluation Tool, the market
instrument would identify projects that aim to
reduce greenhouse gas emissions or mitigate the
impact of natural catastrophes."
is a welcome initiative and necessary development.
Only time will tell if they can get it right.
S&P lays out plans for green bond and ESG market
tools, September 13, 2016, Jocelyn Timperley,
New Study Shows Corporate America Continuing
to Invest in Sustainability. "Since its
inception, the study, which was first conducted in
2006, 2009, 2012 and now in 2015, has created a
five-stage sustainability scale ranging from those
companies that do not include sustainability as part
of their mission to those who view sustainability as
a transformative driver for their business.
The findings demonstrate that the percentage
of companies at the high end of the scale has grown
from 15% in 2006 to 41% in 2015. However, there has
also been a slight increase in those at the lower
end of the scale as well, with 21% in 2015 compared
to 17% in 2012."
corporate march towards an orientation to
sustainability continues to grow. Soon, with most of
the world’s major stock exchanges demanding more
detailed ESG reporting, the present 41% will rise
significantly over the coming years.
New Study Shows Corporate America Continuing to
Invest in Sustainability, press release,
September 8, 2016, Dodge Data & Analytics/Siemens,
Results Announced for 2016 Dow Jones
Sustainability Indices Review. "The three
largest additions and deletions (by free-float
market capitalization) to the DJSI World this year
include: Additions: Cisco Systems Inc, Royal Dutch
Shell PLC, Adobe Systems Inc.. Deletions: Intel
Corp*, Samsung Electronics Co Ltd, British American
DJSI is a great list of sustainable companies,
focusing on ’best of sector.’ However, the results
would be greatly improved if their analysis
incorporated the sustainability of the products and
services with respect to the revenues of the listed
companies. The full 2016 results will be published
September 12 on their
Results Announced for 2016 Dow Jones Sustainability
Indices Review, press release, February 8, 2016,
What Big Data Says About ESG. "ESG
factors can be used to identify signals for higher
return and reduced downside risk, so long as
investors possess the ’necessary sophistication.’"
is fascinating research from a whole new
perspective, that of ’data science.’ This is,
"Large scale, deep data, and advanced statistical
analysis — allowing researchers to identify what is
happening in the real world as opposed to what
should happen according to economic theory." The
study’s author is
Andreas Hoepner, a data scientist and professor at
UK’s Henley Business School professor.
What Big Data Says About ESG, by Amy Whyte,
September 6, 2016, Chief Investment Officer, USA.
PRI launches A practical guide to ESG
integration for equity investing. "To guide
investors - both asset owners and investment
managers - who are implementing ESG integration
techniques in their investment process, this report
is the most comprehensive description to date of
what ESG-integrated analysis is, and how it works in
appears to be an invaluable guide to ESG investing.
By using case studies, it demonstrates real life
practices of ESG integration in investment analysis
utilizing a variety of investment approaches.
PRI launches A practical guide to ESG integration
for equity investing, September 2016, UN’s
Principles for Responsible Investing (PRI), UK.
Does ESG Boost Returns? "And though
there is convincing evidence that good performance
on selected industry-specific materiality data leads
to increased returns, translating those
aggregate-level insights into portfolio-appropriate
ideas is not a linear process.
With these issues in mind, it seemed natural to ask
what readers of CFA Institute Financial NewsBrief
thought of how examining these disclosures might
yield better returns."
their survey question, "Do you think analyzing ESG
factors can boost returns?" 37% say they include it
in any complete analysis and only 15% said "no way."
Read the article as the results are interesting.
Does ESG Boost Returns? By Will Ortel, September
1, 2016, Enterprising Investor, CFA Institute, USA.
How ETFs Are Incorporating Sustainability.
"While the two largest diversified sustainable
investment options have been around for a decade,
the diversified set now totals 20 funds, with 17
launched in just the past two years, nine of them so
far in 2016, reflecting growing demand for
sustainable investment products as well as more
general investor interest in passive portfolios."
informative article from Jon Hale at Morningstar. It
will interest most ethical investors.
How ETFs Are Incorporating Sustainability, by
Jon Hale, September 1, 2016, Morningstar, USA.
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