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Ethical Investing News/Commentaries
May 2018
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Commentaries by Ron
Robins
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Responsible
Investment Association Australasia (RIAA) reports
big gains in funds interested in ESG.
"81% of Australia’s largest super funds are
committed to responsible investment (up from 70% in
2016), and 62% report annually on activity,
highlighting how deeply responsible investing has
become part of Australian investment markets."
[COMMENTARY] The
media release linked to below demonstrates that
responsible investing is growing fast in
Australasia.
Aussie super funds take up the gauntlet to improve
company behaviour, media release, May 30, 2018,
Responsible Investment Association Australasia
(RIAA), Australia.
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Millennials are
leading an investment revolution — here's what makes
their generation different. "Some 92%
of millennials agreed with the statement 'I care
more about having a positive impact on society than
doing well financially' compared to 52% of
nonmillennials."
[COMMENTARY] This
survey by Nuveen illustrates the sharp differences
between the way millennials and non-millennials
think about their lives, work, consumption, and
investing. Again, as in so many other surveys, it's
noteworthy how millennials are so much more likely
to be ESG-based investors.
Millennials are leading an investment revolution —
here's what makes their generation different, by
Kara Chin, Jacqui Frank and Sara Silverstein, May
29, 2018, Business Insider, USA.
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Ethical funds reach
record high in the UK. "Investors
bought £138m in ethical funds in March 2018 compared
to just £32m at the same point last year, according
to the most recent data from the Investment
Association. Ethical funds still make up a small
proportion of the total at 1.3 per cent. But the
number is growing, from 1 per cent in 2015."
[COMMENTARY] In
most developed economies, ESG-ethical funds are
gaining ground. And we can rejoice in that. However,
everywhere, they still represent a tiny fraction of
the retail fund space. Only when advisors really
apply their 'know thy client' rule to also consider
the personal investing values of their clients will
things change rapidly.
Ethical funds reach record high in the UK, by
Kate Beioley, May 23, 2018, FT, UK.
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[US government's] GAO
Urges Removal Of Roadblocks To ESG Investing In
Retirement Plans. "ESG (Environmental,
Social and Governance) investing roadblocks in
retirement plans should be removed, the Government
Accountability Office (GAO), the investigative arm
of Congress, urged in a report today. 'Asset
managers and state and municipal plans using ESG
strategies report enhanced risk management and other
benefits,' the report said."
[COMMENTARY] Good
to see other arms of the US government are proposing
that the recent US Department of Labor's guidance on
ESG use in pension funds is not only potentially
harmful but even likely injurious to long-term fund
returns.
[US
government's] GAO Urges Removal Of Roadblocks To ESG
Investing In Retirement Plans, by Ted Knutson,
May 22, 2018, Forbes, USA.
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A New Measure
Captures a Company’s “Total Social Investment.”
"In its report 'What
Counts: The ‘S’ in ESG, New Conclusions,' CECP,
with support from Cisco, introduces an aggregated
calculation called 'Total Social Investment (TSI).'
The calculation is a forward-looking reflection of
the innovative ways companies invest in society. TSI
offers a high-level and comparable snapshot for use
by investors and other stakeholders to determine the
value created by the 'S' efforts in Environmental,
Social, and Governance (ESG) measures."
[COMMENTARY] An
insightful, new perspective on evaluating the 'S' in
ESG. Hopefully, many companies and investors will
adopt this measure.
A New Measure Captures a Company’s “Total Social
Investment," by CECP, May 16, 2018, USA.
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In Sight of the Clean
Trillion. "The Ceres Clean Trillion
highlights the need for an additional $1 trillion
per year in clean energy investment to avoid the
worst impacts of climate change. Now that clean
energy has gone mainstream, this 'Clean Trillion'
goal is eminently feasible. This report, In Sight of
the Clean Trillion, points to significant
opportunities for investors to scale up their clean
energy investments while simultaneously meeting
their risk-return requirements."
[COMMENTARY] Investors
should download the
full report to get expert guidance on clean
energy investment opportunities. Ceres is doing a
terrific job!
In Sight of the Clean Trillion, press release,
May 10, 2018, Ceres, USA.
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Corporate
Responsibility Magazine Announces 2018 100 Best
Corporate Citizens. "'CR Magazine is
proud to present the only ESG ranking list that
doesn't rely on self-reporting,' said Dave Armon,
publisher of CR Magazine. 'Each year, the 100 Best
Corporate Citizens ranking measures the success of
the Brands Taking Stands movement by celebrating the
most successful, most transparent companies that
report on their responsible practices. We
congratulate those honored on this year's list for
their commitment to corporate responsibility.'"
[COMMENTARY] The
top five 2018 winners are Microsoft Corporation,
Accenture plc, Owens Corning, Intel Corp., and
Hasbro, Inc. See the full list at the link below.
Corporate Responsibility Magazine Announces 2018 100
Best Corporate Citizens, press release, May 7,
2018, USA.
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Mercer touts ESG
integration, SDGs. "We have seen good
progress with asset managers since we started
assessing ESG integration at the strategy level. In
2010, less than 9 per cent of investment strategies
with an ESG rating were ESG1 or ESG2. At the
beginning of 2018, more than 15 per cent of active
investment strategies achieved a high rating. This
highlights that there is still much room for
improvement across the market."
[COMMENTARY] A
good overview of the state of ESG integration in
financial analysis and the need for it, among asset
managers.
Mercer touts ESG integration, SDGs, by Sarika
Goel, May 7, 2018, Top 1000 Funds, Australia.
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Advisors Stand In Way
Of ESG Investing. "When it comes to
impact investing, advisors often say their clients
do not ask for it. But many clients do not know
enough to ask about the possibilities of ESG
investing, according to Marlo Stil, managing partner
and financial advisor at the Wealth Consulting Group
in Nevada...
When clients learn they
can invest in a way that promotes their personal
goals, '78 percent want to know more,' Stil said
during a discussion of environmental, social and
governance (ESG) investing at the Invest In Women
conference, which is being sponsored by Financial
Advisor and Private Wealth magazines and held in
Houston."
[COMMENTARY] Regular
readers of this column know that I believe the
biggest barrier at the retail level to ESG-ethical
investing are advisors. I was happy to see two
different financial articles in advisor related
publications on this subject today, and I thought to
post this one. I'm delighted that this discussion is
now occurring among advisors.
I could never understand that since the 'know thy
client rule' was central to advisors conduct with
their clients, that it was rarely, truly, applied.
It's as if the client's personal values really
didn't matter.
Advisors Stand In Way Of ESG Investing, by Karen
Demasters, May 2, 2018, Financial Advisor, USA.
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