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Universities score poorly on climate change
risk investment. "While climate science has
been a prominent concern of many university based
researchers, these same venerable education
institutions have failed to walk the talk in regard
to applying climate change science to climate risk
investment of their financial assets. A new global
survey of universities has found that the
overwhelming majority are financially exposed to the
risk of stranded assets and physical impacts of
climate change."
[COMMENTARY]
The data is unsurprising. The university boards are
usually stuffed with conservative business leaders
who go by the advice of their fund managers that
still don't believe in the idea of fossil fuel
divestment and the impacts of climate change.
Universities score poorly on climate change risk
investment, by Takver, January 28, 2015, SF Bay
Area Indymedia, USA.
Helena Morrissey, Aiming at Britain’s Glass
Ceilings, Gets Results. "Ms. Morrissey has
directed her steely focus on Britain’s most powerful
men. Working behind the scenes, she has persuaded
120 of the country’s top chairmen that they want
what she wants: more diverse boards that will
produce better company returns.
The approach has produced some remarkable results.
Since 2010, the percentage of women on Britain’s top
boards has nearly doubled, to 23 percent, while in
the United States, the figure has crept up a few
percentage points to 17 percent."
[COMMENTARY]
There's a powerful case for including more women and
minorities on company boards. Many studies show they
improve board performance and corporate results.
It's for those reasons as well as for equity rights
-- and most likely Ms. Morrissey's own impeccable
character and credentials -- as to why she's been so
successful.
Helena Morrissey, Aiming at Britain’s Glass
Ceilings, Gets Results, Jenny Anderson, January
26, 2015, Dealb%k, The New York Times, USA.
The (Corporate) Sustainability Yearbook 2015
by RobecoSAM. "A record number of companies
participated in RobecoSAM’s Corporate Sustainability
Assessment. Out of more than 3,000 companies that
were invited, 830 companies from 42 different
countries participated. RobecoSAM views this as a
positive development in corporate sustainability.
For investors, the Sustainability Yearbook
identifies companies that are strongly positioned to
create long-term shareholder value."
[COMMENTARY]
Another good review of the most sustainably oriented
companies globally. European companies take top
spot, followed by Asian, then American companies.
What's good here are the industry profiles. Ethical
investors might want to review them.
The
(Corporate) Sustainability Yearbook 2015 by
RobecoSAM, January 23, 2015, Switzerland.
American High Income Women and Social
Responsibility. "Only 15 percent of high
income women do not consider social
responsibility in their investment decisions."
[COMMENTARY]
It's generally observed that relatively more women
than men favour socially responsible-ethical
investing. It's good to see that among rich American
women the interest in socially responsible-ethical
investing is so high.
High Income Women and Social Responsibility, by
Kent McDill, January 23, 2015, Millionaire Corner,
USA.
Corporate Knights 2015 Global 100 Most
Sustainable Corporations. "The Global 100
index (which is equally weighted) commenced on
February 1, 2005. From inception to December 31,
2014, it delivered a total return of 90.76%,
compared to 96.98% for its benchmark, the MSCI All
Country World Index. This is the first year-end that
the Global 100 Index has fallen behind its
benchmark, in large part due to the rising U.S.
dollar, as 81 per cent of Global 100 constituents
trade in non-US denominated currencies, versus
approximately 50% for the MSCI ACWI. The Global 100
is calculated by Solactive, the German index
provider. It is available on Bloomberg under the
ticker <CKG100 Index> and on Reuters under the
ticker <.CKG100>."
[COMMENTARY]
The top ten rated firms are: Biogen Idec, Allergan,
Keppel Land, Kesko, Adidas, BMW, Reckitt Benckiser
Group, Centrica, Schneider Electric and Danske Bank.
This is always a good review for ethical investors.
For full results,
click here.
2015 Global 100 results, January 22, 2015,
Corporate Knights, Canada.
Canadian Responsible Investments Surpass $1
Trillion says 2014 Trends Report.
"Responsible investing (RI) is experiencing rapid
growth in Canada, according to the 2014 Canadian
Responsible Investment Trends Report. The biennial
report, released today by the Responsible Investment
Association (RIA) and RBC... suggest that 31 per
cent of invested assets under management in Canada
involve some aspect of RI."
[COMMENTARY]
A quick look at the figures suggests continuing
great growth for responsible-ethical investments in
Canada. What I'm especially pleased about is that
retail responsible-ethical mutual fund assets are
growing almost twice as fast as 'conventional'
fund assets. This probably indicates a growing percentage
of Canadian investors moving into responsible-ethical
funds.
Canadian Responsible Investments Surpass $1 Trillion
says 2014 Trends Report, press release, January
22, 2015, Responsible Investment Association,
Canada.
Canadian MP who Championed Tougher Warnings on
Prescription Drugs now wants Tougher Warnings on
Cell Phones. "Conservative MP Terence Young
will announce today that he has multi-party support
from MP's across Canada for his Private Member's
Bill requiring warning labels on cell phones and
Wi-Fi routers wherever they are sold.
The Oakville MP was successful last year in passing
a law requiring clearer warnings on pharmaceuticals.
He's now introduced a Bill that will require safety
warnings on all microwave emitting wireless devices
sold in Canada.
'The World Health Organization places wireless
radiation on the same cancer warning-list as DDT,
lead and car exhaust,' said Young. 'Canadians have a
right to know this.'
[COMMENTARY]
Some 50 to 70 years ago concerns began to emerge
about the detrimental health effects of smoking. I
believe we're at the beginning stages of
understanding the negative health effects of
excessive electro-magnetic and wireless radiation.
As concern grows, this could negatively impact huge
swaths of the tech industry. Ethical investors might
want to avail themselves of the latest findings with
respect to this issue so that they aren't
sideswiped by market developments and possible
portfolio losses.
Canadian MP who Championed Tougher Warnings on
Prescription Drugs now wants Tougher Warnings on
Cell Phones, press release, January 19, 2015,
Canada.
Ethical Questions of Investing in Pot.
"Public pension funds and university endowments are
increasingly shying away from putting their money in
so-called sin industries and focusing on more
“socially responsible” investments, but it’s unclear
where marijuana falls on this spectrum. Is marijuana
closer to the health care industry, given its
benefits for certain ailments, or should it be
lumped into the same category as cigarettes,
alcohol, gambling, guns and, in some quarters,
fossil fuels and sugary soda?"
[COMMENTARY]
This is one of those issues that ethical investors
are beginning to vigorously debate. From my side, I
believe every investor should make up their own mind
on this issue. For ethical investors I've long
advocated that to truly reflect their personal
values it might be more appropriate to invest, where
possible, in individual stocks than mutual funds/ETS
-- if such products don't really reflect one's
values. However, for those managing other peoples'
assets such as pension funds -- it's a big dilemma
and one that I believe will never be really
resolved.
Ethical Questions of Investing in Pot, by Andrew
Ross Sorkin, January 12, 2015, DealB%k, The New York
Times, USA.
Denmark Sets New Wind Power World Record.
"Denmark has long been one of the world’s leaders
in wind power. The country of 5.6 million has set a
goal of generating 50 percent of its power from
clean energy sources by 2020 and aims to be entirely
fossil fuel-free by 2050. Those goals, especially
the one for 2020, are well achievable: Denmark has
announced it scored 39.1 percent of its energy from
wind in 2014."
[COMMENTARY]
For all those naysayers that it's not possible to
have most of our energy from renewable sources,
Denmark's experience demolishes that argument! Now,
with solar and wind financially competitive with
fossil fuel energy in many markets, that argument is
even more spurious. The future for renewable energy
shines bright. However, as in any developing
industry, ethical investors know to be aware as
there'll be many more companies failing than
succeeding. But the ones that do succeed will likely
show exemplary profits.
Denmark Sets New Wind Power World Record, by
Leon Kaye, January 9, 2015, TriplePundit, USA.
Wealthy (UK) under-40s are more likely to make
social investments, Charities Aid Foundation says.
"CAF surveyed more than a thousand people with
average wealth of £7.5m and found that four-fifths
of those under 40 were socially conscious investors,
compared with 63 per cent of over-40s."
[COMMENTARY]
This is continuing good news for ethical investors.
It suggests that the younger generations of wealthy
will increasingly favour ethical investing. One
important difference between the younger and older
generation that might be at play here, is that the
younger generations’ greater concern for the
environment and climate change. After all, they are
the ones that are going to have deal with it.
Wealthy under-40s are more likely to make social
investments, Charities Aid Foundation says, by
Sam Burne James, January 9, 2015, Third Sector, UK.
Clean Energy Investment Jumps 16%, Shaking Off
Oil’s Drop. "New funds for wind, solar,
biofuels and other low-carbon energy technologies
gained 16 percent to $310 billion last year,
according to Bloomberg New Energy Finance. It was
the first growth since 2011, erasing the impact of
lower solar-panel prices and falling subsides in the
U.S. and Europe that hurt the industry in previous
years."
[COMMENTARY]
Much of the gain is attributable to a 32% rise of
renewables' spending in China and huge offshore wind
developments. Lower oil prices might have a
detrimental effect on transportation related growth
but it is unlikely to dampen the continuing growth
for renewables in electrical generation where they
are increasingly cost-competitive.
Clean Energy Investment Jumps 16%, Shaking Off Oil’s
Drop, by Louise Downing, January 9, 2015,
Bloomberg, UK.
75% of [South Western UK] savers keen to see
their cash invested more ethically. "More
than three quarters (78%) of savers and investors in
the South West [of UK] would like to see their money
invested in environmental and social sectors.
According to research from the ethical bank Triodos
Bank figures show that 14% of those planning to
invest over the next year are likely to choose the
social investment sector; an increase on last year’s
figure of 11%."
[COMMENTARY]
In the UK, the Triodos Bank is pioneering a new kind
of socially and environmentally sensitive banking
aimed at ethical investors. When reading this
article you should be aware that in the UK there's a
huge backlash against the enormous bonuses that many
bank bosses are paying themselves, especially as
many of these bank were rescued by UK taxpayers. A
spin-off from this is that people are increasingly
interested in ethical banking and investing.
75% of savers keen to see their cash invested more
ethically, by Olivier Vergnault, January 9,
2015, Western Morning News, UK.
Four in five Americans favor companies with
green behaviours. "Tiller Green Survey
conducted nationwide has revealed that 78 percent or
nearly four in five American consumers believe that
it is important to 'purchase products from a
socially or environmentally responsible company.' In
fact, 43 percent of the respondents said that they
have declined to buy a product over the last 12
months out of concern for the impact that the
product or its packaging might have on the
environment."
[COMMENTARY]
This is encouraging news for ethical investors. So
often people say one thing and do another. The
latter point about 43% of people declining to buy
something in the past year that they thought might
harm the environment is terrific.
Four in five Americans favor companies with green
behaviours, by Vikas Vij, January 2, 2015,
Justmeans, USA.
Report: Energy Industry Spent $721 Million on
US Midterm Elections. "The American Progress
analysis... found that the energy industry as a
whole gave $84 million to candidates, political
parties and political action committees (PACs),
spent $163 million on television ads, and paid
nearly $500 million to Washington lobbyists in the
two years leading up to the elections.
Environmental organizations also spent some big
money... [but] amounted to a fraction of the energy
industry’s involvement... environmental groups spent
about $43 million on lobbying, while individual
candidates and PACs received a combined $11.7
million since 2012. Unregulated 'soft money'
contributions made up the bulk of donations, with
those groups receiving a combined $87 million from
environmentalists."
[COMMENTARY]
Clearly, the energy industry vastly outspent environmentalists. Of course that is nothing new.
The unfortunate result is that there will be a
greatly increased presence of anti-environmentalists
in the US Congress in 2015. Ethical investors will
need to watch carefully how the US supports or does
not support those programmes benefiting
alternative and renewable energy industries.
Report: Energy Industry Spent $721 Million on
Midterm Elections, by Bill DiBenedetto, December
30, 2014, TriplePundit, USA.
Climate report reveals which companies have
been naughty or nice. "Thomson Reuters this
week released its latest report (PDF) on the
greenhouse gas emission patterns of the global 500,
which reveals a mixed bag of environmental efforts
and encompasses companies in diverse industries. The
biggest emitters include household names
concentrated in the energy and manufacturing
fields."
[COMMENTARY]
This article is a good one to read. Ethical
investors might want to review some of their
holdings in light of this report.
Climate report reveals which companies have been
naughty or nice, by Lauren Hepler, December 25,
2014, GreenBiz, USA.
Financial Start-Ups Aim to Court the
Anti-Finance Crowd. "A number of new
financial start-ups are trying to reach younger and
middle-class Americans by upending the customary fee
structure of traditional brokerage firms and money
managers. They are backed by deep-pocketed venture
capital investors — and even celebrities like the
rapper Snoop Dogg — who are wagering that these
upstarts can challenge the Wall Street
establishment."
[COMMENTARY]
It's good to see innovative start-ups challenging
the established investment industry! The main
challenge the new start-ups present concerns client
fees--potentially much lower than with the
investment majors. American SR-ethical investors
might want to check them out.
Financial Start-Ups Aim to Court the Anti-Finance
Crowd, by William Alden, December 22, 2014,
Dealbook, The New York Times, USA.
Study Finds Institutional Investors, Proxy
Advisors Fail to Use Economic Value Creation as
Major Factor in Say-on-Pay Voting. "Economic
value creation is not a major factor in
institutional investors' Say-on-Pay voting, nor in
the recommendations of the two largest proxy
advisors that counsel investors how to vote. The
research reveals that there is no material
difference between institutional investors'
Say-on-Pay voting for those companies that create
economic value as compared to those that destroy
value."
[COMMENTARY]
I'm not surprised by this finding as
those promoting say-on-pay mostly want to
restrain executive compensation, no matter the
company's financial position. However, the
underlying premise of this report seems to be that
executive compensation should be related to the
company's underlying economic/financial position
both now and in the future. I agree with both
points of view.
Study Finds Institutional Investors, Proxy Advisors
Fail to Use Economic Value Creation as Major Factor
in Say-on-Pay Voting, press release, December
22, 2014, IRRC Institute, USA.
Bloomberg Markets Strategies: Finding Value in
Good Governance. "Stoxx Europe 600 companies
with higher-than-average female representation on
their boards have outperformed the overall index by
13 percentage points since 2008. Global oil
companies with leading safety records returned 63
percent in the five years through September 2014,
double those with higher incident rates. Those
examples highlight why investors and executives are
embracing the importance of environmental, social
and governance issues and how they can affect a
company’s reputation and performance. "
[COMMENTARY]
That last sentence says it all. But I'll continue to
harp about the majority of financial/investment
advisors who are blind to this information and not
representing their clients' interests!
Bloomberg Markets Strategies: Finding Value in Good
Governance, by Lee O’Dwyer, December 17, 2014,
Bloomberg, USA.
New York fracking ban reverberates nationally.
(Bans fracking due to health and environmental
risks!) "New York’s Department of
Environmental Conservation Commissioner Joe Martens
recommended the ban Wednesday after reviewing the
results of Acting Health Commissioner Howard
Zucker’s long-awaited report on the potential health
effects of fracking. 'I asked myself, would I let my
family live in a community with fracking? The answer
is no,' Zucker said in a statement. 'I therefore
cannot recommend anyone else’s family to live in
such a community either.'"
[COMMENTARY]
Finally, some reputable public health authority has
reviewed the respective environmental and health
risks related to fracking. And they've considered it
too risky. Many European countries also have come to
the same conclusion. It'll be informative and
unfortunate to see the resultant health and
environmental problems from fracking in the states
that have so vigorously promoted it. Furthermore, as
everyone realizes, should the low prices of oil and
gas continue, the growth of the fracking industry is
likely to stall or even decline in the years ahead.
New York fracking ban reverberates nationally,
by Peter Moskowitz, December 17, 2014, Aljazeera
America, USA.
Independent Research in Responsible Investment
(IRRI) Awards 2014. "Evaluating how asset
managers rate the services of independent providers
of sustainable and responsible investment (SRI) &
corporate governance (CG) research. Responses were
gathered through October 2014 by WeConveneExtel
from... over 1,000 voters, 500 different firms, in
35 different countries.
· Best SRI analysis (firm) - Sustainalytics
· Best SRI analyst (individual) – Tobias Jung,
Inrate
· Best Corporate Governance analysis (firm) – ISS &
MSCI ESG Research (joint first place)
· Best Corporate Governance analyst (individual) –
LoïcDessaint, Proxinvest
· Best Asset Management analyst (voted by companies)
– Cedric Laverie, Amundi
· Best Research firm analyst (voted by companies) –
Albert Charlier, Vigeo
· Best Asset Manager / Owner for use of SRI & CG
research – ERAFP
· Best Asset Manager / Owner for contribution to the
SRI debate – PGGM"
[COMMENTARY]
Evident from this survey is that it is mostly
smaller organizations winning the awards. Review the
video link below for the full survey results and
explanations.
Independent Research in Responsible Investment (IRRI)
Awards 2014, video, December 15, 2014, UK.
State of Corporate Citizenship Finds Executive
Support for Corporate Citizenship. "The
Carroll School of Management Center for Corporate
Citizenship at Boston College... finds that
executives believe that corporate citizenship
contributes to success, and plan to increase their
investment in the future...
The 2014 State of Corporate Citizenship key
findings include:
• The majority of executive respondents, across all
business types and industries, confirm that
corporate citizenship helps them successfully
achieve strategic goals, ultimately improving
performance.
• For the first time in over a decade, the majority
of executives anticipate resources for every
corporate citizenship dimension to increase over the
next three years."
[COMMENTARY]
Executives are increasingly finding that CSR pays.
Aside from ESG/CSR actions taken internally
frequently showing demonstrable financial benefits,
such actions also enhance a company’s overall
reputation, benefiting all aspects of its operations
-- including its stock price. Thank you Boston
College for this insightful research.
State of Corporate Citizenship Finds Executive
Support for Corporate Citizenship, December
2014, Carroll School of Management Center for
Corporate Citizenship at Boston College, USA.
Survey: UK pensions industry rejects polling
members on ethical investing. "A survey has
revealed that almost two thirds of the (UK) pension
industry does not believe that defined benefit
schemes should poll members on investment concerns,
such as environmental, social and governance (ESG)
issues."
[COMMENTARY]
Many in the pension industry believe the divergences
of responses they might get back from such surveys
don't warrant the effort. To me, that's a copout.
The opinions of those who're paying you to manage
their funds should matter a great deal! This only
illustrates the arrogance of many pension fund
managers. In this respect they're similar to
numerous financial advisors and brokers who really
don't want to know the personal values of their
clients. In fact, they fear knowing their values as
it might mean changing the way they do business.
Survey: pensions industry rejects polling members on
ethical investing, by Charlotte Malone, December
12, 2014, Blue & Green Tomorrow, UK.
Green Investors Flunk Fracking Industry on
Impact Management. "ExxonMobil, Chevron, and
WPX Energy are ranked among the worst fracking
companies in a new report by a coalition of green
investment firms that scores major oil and gas firms
on their efforts to reduce the negative impacts of
their operations."
[COMMENTARY]
According to this report,
“Disclosing the Facts 2014: Risk and Transparency in
Hydraulic Fracturing,” the fracking industry is
getting away with massive un-reporting and
misrepresentation concerning environmental
degradation and destruction. America's desire to be
energy self-sufficient is allowing it to overlook
the full health and environmental consequences of
fracking. With low oil prices likely restraining
fracking industry growth, perhaps some breathing
room will be found to consider the potential health
and environment effects of fracking. Meanwhile, most
ethical investors stay clear of this industry for
good reason.
Green Investors Flunk Fracking Industry on Impact
Management, December 11, 2014, Environmental
News Service, USA.
European investors stepping up responsible
investment strategies. "European asset owners
are increasingly moving towards responsible
investment strategies, according to a new survey
that shows 72% of investors have drawn up formal
responsible investment policies, an increase of 7%
on 2013.
Novethic published the survey at its annual
event in Paris. It questioned 185 long-term
investors, with over €6 trillion (£4.7tn) in assets
in 13 European countries about their commitment to
integrating environmental, social and governance (ESG)
factors into asset management."
[COMMENTARY]
The survey's findings are impressive and continue to
point to mainstream asset managers accepting that
ESG analysis adds to returns. If only investment
advisors and brokers were so knowledgeable!
European investors stepping up responsible
investment strategies, by Charlotte Malone,
December 9, 2014, Blue & Green Tomorrow, UK.
Green Bonds to reach $100 billion in 2015.
"Delegates from Spain, France, UK, Portugal and
the Netherlands have gathered at the Green Bonds
International Conference on yesterday in Madrid,
organized by the sustainability experts SUST4IN. The
number and variety of attendees at the conference
can be explained by the fact that the market for
green bonds has tripled this year to 35bn USD,
including in Spain, and should reach 100bn USD in
2015, according to the forecasts of most of the
speakers."
[COMMENTARY]
The issuance of green bonds is exploding. The above
projection is made by an authoritative figure, Sean
Kidney, CEO of the Climate Bonds Initiative. This is
tremendous news for ethical investors who'll now
have many new fixed income investment options.
Green Bonds to reach $100 billion in 2015,
December 4, 2014, SUST4IN, Spain.
Oil Investors at Brink of Losing Trillions of
Dollars in Assets. Gore: It's That Road Runner
Moment. "A major threat to fossil fuel
companies has suddenly moved from the fringe to
center stage with a dramatic announcement by
Germany’s biggest power company and an intriguing
letter from the Bank of England... Bank of England
Governor Mark Carney... instructed his staff to
review whether sizable losses from stranded coal,
oil and gas reserves could hurt banks, investors,
insurance companies and the rest of the financial
system."
[COMMENTARY]
When the Governor of the Bank of England is
concerned about the potential for stranded (fossil
fuel) assets to adversely impact the financial
system, you know that the economic and political
elites are worried. Actually, the stranded assets
scenario--the writing-down of fossil fuel
reserves--might also happen because of the current
oil glut and very low oil prices!
Oil Investors at Brink of Losing Trillions of
Dollars in Assets. Gore: It's That Road Runner
Moment, by Alex Morales, December 2, 2014,
Bloomberg, USA.
Concordia becomes first Canadian university to
begin divesting from fossil fuels. "However
small or tentative this first step may be, Concordia
University now has the distinction of saying it is
the first university in the country to have
initiated the process of divesting from fossil
fuels... But while some student groups welcomed this
as a step in the right direction, Divest Concordia
has called it a 'flat-out rejection of student calls
for full divestment from fossil fuels.'"
[COMMENTARY]
Though small, it is a beginning. It could serve as
'wake-up' call for other Canadian universities. The
'ice is broken' so it'll encourage other university
divestment groups and campaigns.
Concordia becomes first Canadian university to begin
divesting from fossil fuels, by Karen Seidman,
December 2, 2014, Montreal Gazette, Canada.
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