Larger Plans Continue to Outpace Smaller
Plans in Incorporating ESG Factors.
"While the top-line percentage was unchanged, plans
with more than $20 billion in assets increased
incorporation of ESG factors by 136% from 2013 to
2017, according to the findings. The authors note
that these plans now have the highest rate of
incorporation at 78%, compared to only 30% for the
smallest funds. ESG adoption across all plan sizes
has increased 68% since the firm’s first such survey
I wonder if one reason larger plans outpace smaller
plans in utilizing ESG criteria has to do with
staffing and resources of the plan managers?
Larger Plans Continue to Outpace Smaller Plans in
Incorporating ESG Factors, by Ted Godbout, NAPA,
State of Green Business Report 2018, by
GreenBiz/Trucost. "The report looks at
10 key trends and dozens of metrics assessing how,
and how much, companies are moving the needle on the
world’s most pressing environmental challenges. The
report is produced in partnership with Trucost, part
of S&P Global, a world leader in helping companies,
investors, governments, academics and thought
leaders to understand the economic consequences of
natural capital dependency."
The report is well worth reading for any ethical
State of Green Business Report 2018, January
2018, GreenBiz/Trucost, USA.
Demystifying negative screens: the full
implications of ESG exclusions. "In
this paper we explore the role of screening, the
activities typically targeted, the different ways
that exclusions are defined, and their effects on
investment strategies. Our aim is to help both those
investors with exclusion policies already in place
and those considering them to understand the options
available and the full implications of their
Shroders quantifies the effects of various negative
investment screens in a variety of investment
strategies such as growth, value, and income. It's a
pioneering work in this area and something that
anyone interested in ESG screening might want to
Demystifying negative screens: the full implications
of ESG exclusions, January 10, 2018, Sustainable
Investment Team, Shroders, UK.
MSCI links ESG with stronger asset
growth. "For calendar 2016 the managers
that scored the highest under MSCI's responsible
investment assessment recorded an average compound
annual growth rate of 3.7% in institutional assets
under management, vs. a 1.8% decline for those with
the lowest scores. Over the two years, the CAGR is
2.6% for the leaders vs. 1.6% for the lowest
scorers; and for the three-year period, those with
higher responsible investment scores saw 3.6% growth
in AUM, vs. 0.3% growth."
This is the first study of its kind that I'm aware
of. The results could give an impetus to fund
managers presently minimally or unengaged with ESG
to take it more seriously.
MSCI links ESG with stronger asset growth, by
Sophie Baker, January 8, 2018, Pensions &
Sexual Harassment Screens Making It Into
ETF ESG World. "Impact Shares, is
launching the first ETF focused on women empowerment
that will screen for sexual harassment. The fund
will contain around 200 to 300 stocks and will track
the Equileap North American Women's Empowerment
Index. The index applies 19 screening criteria,
which cover gender balance in leadership and
workforce, equal pay, flexible work options, safety
at work and freedom from violence, abuse and sexual
I suspect this will not be the only fund to advance
the cause. We'll probably hear from many ESG
oriented funds and managers that they'll similarly
screen for sexual harassment issues in their stock
Sexual Harassment Screens Making It Into ETF ESG
World, by Marie Beerens, January 5, 2018,
Investor's Business Daily/Nasdaq, USA.
Why managers need to wake up to ESG
threat. “'It will get to a point where,
if a fund group doesn’t have fully-implemented ESG
integration, and had it in place for sometime, we
won’t be able to use them anymore,' she [Teresa
Platan, who specialises in selecting emerging
markets and Japan equity funds for Aktia, a Finnish
bank] says. 'The shift has been so fast in the past
year with the clients suddenly asking so much about
ESG. It’s difficult to say exactly how long before
we’re there. Maybe only in a year or two.'”
The article's headline seems to imply a backlash
against ESG integration. However, as the quote
implies, it's really cautioning those investment
industry players not already on the ESG train to get
on-board now or lose business!
Why managers need to wake up to ESG threat, by
Dylan Emery, January 5, 2018, Portfolio Advisor, UK.
Why activists are cheerleaders for
corporate social responsibility.
"Profits, not ethics, are behind big-name investors’
interest in ESG issues."
Now we know ESG has 'arrived' and why it's fast
becoming integral to financial analysis. Investors
everywhere are realizing it pays to incorporate ESG
criteria in selecting investments no matter their
moral compass. However, I'd still prefer that the
new ESG oriented investors regard ethics as crucial
to their own decision making and behaviour.
Why activists are cheerleaders for corporate social
responsibility, by Lindsay Fortado, December 26,
2017, FT, UK.
CalPERS’ Ongoing Push Into ESG Drives a
Healthy Debate. "The debate started
when the American Council for Capital Formation
published a sharply written report alleging that, as
the group puts it, 'CalPERS has prioritized
relatively poor performing environmental, social and
governance [ESG] investments at the expense of other
investments more likely to optimize returns.'"
This is an interesting debate--but I believe CalPERS
is right to be ESG focused and they make a good
argument for that.
CalPERS’ Ongoing Push Into ESG Drives a Healthy
Debate, by John Manganaro, December 21, 2017,
2017 Engaged Tracking Carbon Rankings.
"A transparent, public and standardised ranking
of the world's largest companies and their carbon
Engaged Tracking created its carbon tracking
methodology with the help of the prestigious UK
university, Imperial College. So, it has a great
pedigree. Registration--which is free--is advised.
2017 Engaged Tracking Carbon Rankings, December
2017, Engaged Tracking, UK.
Influential investors urge 100
carbon-intensive companies to step up climate
action. "Today, as many as 225
influential global investors with more than $26.3
trillion in assets under management pledged to
engage with 100 corporates estimated to be
responsible for around 85 percent of total global
greenhouse gas emissions, so as to step up their
ambition on climate action."
This could greatly influence the direction of
numerous companies responsible for global greenhouse
gas emissions towards environmental sustainability.
It came out in parallel with this week's Emmanuel
Macron's One Planet Summit.
Influential investors urge 100 carbon-intensive
companies to step up climate action, by Michael
Holder, December 13, 2017, GreenBiz, USA.
Rediscovering our Moral Compass: JUST
Capital’s 2017 List of America’s Most JUST
Companies. "Today, JUST Capital, in
partnership with Forbes, has released the 2017 list
of America’s Most JUST Companies, our annual ranking
of the largest publicly-traded U.S. corporations."
With Forbes behind it, JUST Capital is getting much
attention--and justifiably so. The 2017 'just'
American companies' list is undoubtedly a key
ESG-ethical investors to review. My concern with the
list is its leaders are absolutely dominated by tech
companies. Hence, it makes me a little leery as to
Rediscovering our Moral Compass: JUST Capital’s 2017
List of America’s Most JUST Companies, December
2017, JUST Capital, USA.
Index Managers Taking Note as ESG Surges:
Morningstar. "Morningstar finds biggest
index managers have expanded their stewardship or
Morningstar's research findings are consistent with
other similar research.
Index Managers Taking Note as ESG Surges:
Morningstar, by Michael S. Fischer, December 8,
2017, ThinkAdvisor, USA.
More Advisers Expect Increased ESG
Demand. "More than one-third, 35%, of
asset managers have made the introduction of
environmental, social and governance (ESG) investing
a high priority, and another 57% say they are
placing a moderate level of priority on the task.
Together, this makes for a full 92% of asset
managers on the path to or considering offering ESG
investing options, according to the December issue
of The Cerulli Edge – U.S. Edition."
Finally, advisors are getting the message. Although
I haven't seen other surveys suggesting this level of
interest among advisors in ESG that Cerulli has
found. We'll just have to wait for that.
Nonetheless, this survey is good news for
responsible-ethical investors and investments.
More Advisers Expect Increased ESG Demand, by
Lee Barney, December 8, 2017, Plan Advisor, USA.
Can Index Funds Be a Force for
Sustainable Capitalism? "According to
my estimates for every dollar actively managed,
either through high turnover diversified portfolios
or through low turnover concentrated portfolios,
there are three dollars in indexing or
quasi-indexing. In such a market there will be
tremendous rewards for market participants that can
provide a differentiated service."
This is a great piece by Harvard's Professor
Serafeim on the way forward for ethical-ESG
Can Index Funds Be a Force for Sustainable
Capitalism? By George Serafeim, Harvard Business
Review, December 7, 2017, USA.
DB advisers could be sued over climate
change risk. "A report by environmental
law firm ClientEarth states that trustees are
legally required to respond to climate change risk
that may have a material impact on the scheme."
This will come as a shocker to the many pension fund
trustees who've argued against the inclusion of ESG
criteria in pension fund management. It appears that
both the EU and UK are seriously desiring to include
it in some way in their pension fund management
directives. It will not be long before much of the rest
of the world does the same.
DB advisers could be sued over climate change risk,
by Alex Warnakulasuriya, December 1, 2017, Pensions
Responsible investors have burning
questions about cannabis. "Determining
whether marijuana is a responsible investment
depends on several fundamental factors that should
be discussed with an investment professional versed
in ESG analysis."
How can you rate the ESG performance of cannabis
stocks? This is becoming an important question for
numerous ethical investors and advisors. In this
article, Dustyn Lanz (chief operating officer of
Canada's Responsible Investment Association)
provides a good overview of many of the points to
Responsible investors have burning questions about
cannabis, by Dustyn Lanz, November 26, 2017,
Investment Executive, Canada.
ESG investing and smart beta combination
grows in popularity. "A survey by FTSE
Russell shows nearly half (46 per cent) of global
asset owners have an allocation to smart beta, and
41 per cent of those using it or considering its use
anticipate applying ESG considerations."
Again, more proof that global asset managers are
utilizing ESG criteria.
ESG investing and smart beta combination grows in
popularity, by Pauline Skypala, November 27,
2017, Financial Times, UK.
European pension funds ramp up
responsible investments. "Six in 10
investors plan to increase their allocations to
responsible investments over the next three years.
The same proportion is concerned about the impact of
scandals on the value of their holdings, according
to a survey by Create-Research, the consultancy."
Contrast the finding in this survey with that below
where "82% [of advisors] also believe responsible investing
has a long way to go before it becomes mainstream."
Advisors are well behind institutional investors in
their understanding of ESG!
European pension funds ramp up responsible
investments, by Angus Peters, November 27, 2017,
Financial Times, UK.
Responsible Investing Strategies Still a
Challenge for Advisers--Q4 2017 Eaton Vance Advisor
Top-of-Mind Index (ATOMIX) survey of 1,000 financial
advisers. "Only 21% of advisers
surveyed reported feeling very well informed about
responsible investing strategies, and the survey
found accessing ESG data is a challenge for
Eighty-four percent of advisers reported
their clients have at least some interest in
responsible investing options. However, 82% also
believe responsible investing has a long way to go
before it becomes mainstream."
The data in this survey clearly demonstrate -- yet
again -- how out-of-touch are most
financial advisors. Is it a simple case of 'I just
don't want to bother?' Clearly, they aren't
fulfilling their most important goals of 'knowing
their client' and acting in the client's best
Furthermore, the fact that about $1 in $5 in the US
equity markets is now invested according to
responsible investing principles appears to be
unknown to the advisors surveyed. That fact alone
says that it's already becoming mainstream -- and
Responsible Investing Strategies Still a Challenge
for Advisers, by Rebecca Moore, November 21,
2017, Plan Advisor, USA.
Top 10 brands with the best green supply
chains. "The latest rankings on
international brands' environmental performance in
the China supply chain was jointly released by the
Institute of Public & Environmental Affairs (IPE)
and the Natural Resources Defense Council (NRDC).
The rankings are based on the Corporate
Information Transparency Index (CITI), which
collects public data on areas including government
compliance, online monitoring, confirmed public
complaint records, self-reporting and third-party
This year's ranking evaluated 267
international brands that run businesses in China. A
total of 25 Chinese brands were ranked among the top
Apple, Dell, and Levi's are the top three companies.
Top 10 brands with the best green supply chains,
by staff, November 20, 2017, China Daily, China.
EU considering sustainable investing as
fiduciary duty for investors. "The
European Union’s executive has decided to start work
on an impact assessment to assess whether and how
such a clarification could contribute to a more
efficient allocation of capital, and to sustainable
and inclusive growth."
Various advisory groups to the EU are deeply
concerned about the short-term focus of fund
managers at the expense of long-term issues that are
largely ESG related. It's likely the EU will
formally clarify its policy and incorporate the
importance of ESG measures in its guidelines.
That'll be good news for all investors.
EU considering sustainable investing as fiduciary
duty for investors, Susanna Rust, November 13,
2017, IPE, UK.
Advisors Failing To Talk ESG With
Clients. "According to a recent study
by Allianz Global Investors, only 14 percent of
1,061 investors with at least $100,000 in investable
assets who were surveyed had had a conversation with
their advisors about ESG investing, and 61 percent
of the clients had to bring up the subject
Is it that advisors don't keep up-to-date about
investment performance -- so can plead ignorance
about the generally comparable and good results of
ESG investing -- or are they purposefully
withholding important information from their
clients? And, if so, why? I suspect it has mostly to
do with not creating more work for themselves and
present fees/commission arrangements. Tell me if I'm
wrong. Anyway, they're not fulfilling what should be
their number one mandate to know and do their best
for their clients!
Advisors Failing To Talk ESG With Clients, by
Karen Demasters, November 8, 2017, Financial
Just released: new surveys related to ESG
It's clear that the mainstream investment industry
is adopting ESG criteria as important to investment
analysis and attracting millennials to investing.
However, I remain skeptical about much of the
surveys' findings due to the definition of ESG and
what people say and do being two quite different
things. Also, some surveys seem to contradict each
other in their results.
The following surveys have just been released
on the subject.
Responsible Investing: the Evolution of Ownership,
October 30, 2017, RBC Global Asset Management (GAM),
Money Meets Morals Study, press release, October
30, 2017, Harris Poll for Swell Investing, USA.
Responsible Investing & the Persistent Myth of
Investor Sacrifice, October 31, 2017, Hermes
Investment Management, UK.
New Equity Perspectives – Emerging markets, ESG and
the active/passive debate, October 30, 2017,
Over one third of [UK] charities do not have an
ethical investment policy, survey finds, October
30, 2017, Gabriel Research and Management, UK.
Commentary: What’s behind asset owners’ slow
adoption of responsible investment, October 30,
2017, Pensions & Investments, UK.
McKinsey: ESG No Longer Niche as Assets
Soar Globally. "More than a quarter of
the $88 trillion assets under management globally
are now invested according to environmental, social
and governance principles known as ESG, a McKinsey &
Co. study found."
McKinsey doesn't seem to be referring to original
work as the figures they're quoting appear largely
from published works such as the 2016 Global
Sustainable Investment Review. Perhaps they should
state their sources. Anyhow, it's terrific they're
engaged in promoting ESG!
McKinsey: ESG No Longer Niche as Assets Soar
Globally, by Amy Whyte, October 27, 2017,
Institutional Investor, USA.
Companies That Lead on Societal Impact
Reap Financial Benefits. "Companies
that outperform in industry-relevant environmental,
social, and governance (ESG) areas boast higher
valuation multiples and margins, all other factors
being equal, than those with weaker performance in
those areas, according to a new report by The Boston
Consulting Group (BCG)."
BCG's research shows that companies excelling in ESG
outperform others in their respective industries in
profit margins and stock prices, all else being
equal! What more confirmation do companies need to
optimally perform on ESG criteria? Likewise,
investors who’ve been ignoring the importance of ESG
should rethink their stance.
Companies That Lead on Societal Impact Reap
Financial Benefits, press release, October 25,
2017, Boston Consulting Group, USA.
Climate risk exposure falls as companies
boost green action. "Almost a quarter
(23%) of companies have targets to move away from
fossil fuels in energy consumption, while almost all
(98%) have designated climate risk as a board or
senior-management responsibility. The Carbon
Disclosure Project's (CDP) annual analysis for 2017
further found another one in seven have agreed to
set science-based targets to reduce emissions, while
a separate three in ten plan to do so within two
Despite the views of the Trump administration, it's
apparent that numerous American businesses increasingly view climate change as
Climate risk exposure falls as companies boost green
action, by James Phillips, October 24, 2017,
Professional Pensions, UK.
Three-quarters of companies don't
acknowledge climate risks. "That is the
stark conclusion of a new report from consultancy
giant KPMG, which reveals that 72 percent of large
and mid-cap companies worldwide do not acknowledge
the financial risks of climate change in their
annual financial reports."
One reason for this is that companies don't yet see
the investor/analyst/regulatory demands for it.
Also, companies don't want to add to their potential
liabilities by acknowledging possible associated
costs that could hurt long-term profits, stock
prices, and executive compensation from stock
Three-quarters of companies don't acknowledge
climate risks, by James Murray, October 19,
2017, GreenBiz, USA.
Seniors 65 and Older Are More Interested
in ESG Strategies Than Younger Generations, Finds
AllianzGI ESG Clarity Survey.
"AllianzGI found that 68% respondents in the 65+ age
demographic had a favorable view of ESG investing
compared to only 59% of those 25-44. In addition,
65% of seniors called it a sound investment strategy
compared to only 54% of those 25-44.
Seniors are also incredibly engaged in
practicing personal ESG in their daily lives with
81% of those 65+ engaging actively in the issues
they care about by staying up to date, deciding
which products to buy and contributing their time
and money to causes important to them. This compares
with only 66% of investors aged 25-44 who practice
It's heartwarming to see this data. I'm concerned
about a lot of these surveys though. Who doesn't
want to respond positively when asked, "Do you
invest in 'responsible' companies?" Most people
would be afraid of saying 'no' to the interviewer.
It'll be interesting to get feedback from the
pollsters on this. Of course, what people say and do
are very different things.
Seniors 65 and Older Are More Interested in ESG
Strategies Than Younger Generations, Finds AllianzGI
ESG Clarity Survey, press release, October 17,
2017, Allianz Global Investors, USA.
ESG analysis grows in all regions for CFA
Institute members; EMEA takes biggest leap.
"Although environmental, social and governance
consideration was up for all regions from the CFA
Institute's 2015 survey, Europe, the Middle East and
Africa replaced Asia-Pacific as the region where
investors are most likely to take ESG issues into
account at 85%, up from 74% in 2015. Meanwhile, some
81% and 68% of investors in the Asia-Pacific and
Americas, respectively, said they take ESG factors
into account, up from 78% and 59% in 2015."
The CFA is a highly reputable organization. However,
the percentages of investors saying they're taking
ESG into account look overblown to me. ESG analysis
is no doubt gaining in credibility but if these
responses are to be believed it would be dominant in
financial analysis today. Yet, it doesn't seem to be
the situation from any objective analysis of the
ESG analysis grows in all regions for CFA Institute
members; EMEA takes biggest leap, by Meaghan
Kilroy, October 18, 2017, Pensions & Investments,
PRI threatens to strip members of
signatory status in 'greenwashing' purge.
"The PRI argued that many of the 200 or so asset
managers and schemes that have signed up to the
United Nations-backed principles on tackling
environmental, social and governance (ESG) issues
pay little more than lip service to them. Now they
will be faced with a new set of standards to prove
they are making active efforts to effect change, or
they risk being removed from the PRI's official list
The UN Principles for Responsible Investment (PRI)
have been talking about doing this for some time.
I'm delighted to see it happening.
PRI threatens to strip members of signatory status
in 'greenwashing' purge, by James Phillips,
October 16, 2017, Professional Pensions, UK.
'True Bearing' Financial Planners Unveil
Consumer Attitudes Towards Sustainable Investment.
"With 32.9% wanting to invest in ESG/sustainable
investments, why do actual investments total only
3%? Using the survey results, the 3% of total UK
assets managed should increase many times over.
These figures suggest that IFA's are missing out on
a large market share, of those keen to take up ESG
This is something I've been talking and writing
about for decades! Most financial advisors and
planners -- so many different nomenclatures -- are
reluctant (or not required) to spend the time to
really know their clients. They make a mockery
of what should be their 'know thy client' mandate.
Also, the time to gain knowledge concerning
ethical/ESG investments, commission arrangements,
and other impediments, thus lead numerous advisors
to offer inappropriate advice to their clients.
'True Bearing' Financial Planners Unveil Consumer
Attitudes Towards Sustainable Investment, press
release, October 11, 2017, True Bearing Chartered
Financial Planners, UK.
Investors fear ESG investment will hurt
returns. "Almost half of big European
investors fear they will lose out on returns if they
invest sustainably, despite the majority believing
environmental, social and governance issues will
become increasingly important over the next five
Schroders definitely sees the future in ESG investing
and is taking it seriously. The research they're
compiling -- and its results -- is spurring
increasing attention throughout the investment
industry. Investment industry professionals should
note the results of the study below that just won
this year's Moskowitz Prize!
Investors fear ESG investment will hurt returns,
by Attracta Mooney, October 11, 2017, Financial
Announcing the 2017 Moskowitz Prize
Winner for Sustainable and Responsible Investing.
"This year, the Moskowitz Prize acknowledged the
superior quality of the paper Corporate Governance
and the Rise of Integrating Corporate Social
Responsibility (CSR) Criteria in Executive
Compensation: Effectiveness and Implications for
Firm Outcomes released in September 2017. The study
examined the integration of CSR contracting – that
is the linking of executive compensation to social
and environmental performance – and how it affects
'This study provides practitioners of
sustainable, responsible and impact (SRI) investing
with data that shows how companies that do good also
perform well,' said Steve Schueth, producer of The
SRI Conference and president of First Affirmative
Financial Network. 'The authors' findings add to the
mounting evidence that investing in companies that
integrate sustainability best practices into their
operations does not hinder financial performance,
but can improve it – especially for their long-term
I've given a lot of space to this study because it's
important for many reasons. Firstly, the Moskowitz
Prize offered by the Center for Responsible Business
at the Haas School of Business, University of
California, Berkeley, has become THE prize for
SRI/CSR researchers globally. Secondly, the winner
of this year's prize uniquely demonstrates the
advantages of CSR for company executives and
Announcing the 2017 Moskowitz Prize Winner for
Sustainable and Responsible Investing, press
release, October 10, 2017, SRI Conference and The
Center for Responsible Business at the Haas School
of Business, UC Berkeley, USA.
UK Good Money Week October 8-13, 2017.
"Letting people know they have sustainable and
ethical options when it comes to their banks,
pensions, savings and investments so we can protect
the environment and support society when we deposit
and grow our money."
The UK also has its yearly ethical-responsible
money/investing week too. Again, I encourage all UK
investors and investment professionals to take this
opportunity to help grow UK ethical-responsible
finance and investment. These 'weeks' garner greatly
increased media attention to these endeavors as
Good Money Week October 8-13, 2017, Good Money
Responsible Investment Week Canada Events
October 23-27, 2017. "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."
I encourage Canadian investors and investment
professionals to take part in these events! It's a
terrific opportunity to encourage the adoption of
ethical, sustainable, responsible investing. For a
listing of events see
Responsible Investment Week, Make Money, Responsibly,
Major asset managers moving slowly but
surely toward impact investing. "Nine
out of the top 10 largest U.S. asset managers are
now active in impact investing, according to new
Tideline analysis. All but Vanguard, the second
largest US asset manager, have stood up or are
actively testing impact investing strategies."
impact investing continues to grow, largely due to
the demands of high net worth investors says this
survey. Also, this survey found that institutional
investors are laggards in this area.
Major asset managers moving slowly but surely toward
impact investing, by ImpactAlpha/Kim
Wright-Violich, October 3, 2017, Tideline &
100 Women: Do women on boards increase
company profits? "More sophisticated
pieces of analysis carried out by academics have
shown very small positive correlations between
female board members and financial success. But this
is an average - in some companies the relationship
was neutral and in some it was negative. And proving
causation is far harder."
Ethical investors are convinced that having women on
boards improve corporate financial performance.
Studies support that thesis. However, this article
cites some research contradicting that finding. So,
who's right? As in most social science research,
results can differ greatly between studies.
Women: Do women on boards increase company profits?
October 2, 2017, BBC News, UK.
Research preoccupied with short-term
financial metrics. "Excluding
environmental, social and governance issues leads to
misallocation of capital... A global survey of 342
financial analysts by Aviva Investors found that 42
per cent of respondents thought research published
by banks and brokers was preoccupied with short-term
Interesting, aren't these the analysts that publish
the research? Yet, they're the ones criticising
themselves of a short-term preoccupation and
avoidance of ESG measures they know are important
for understanding the long-term financial prospects
of companies! At least they know their issues.
Perhaps it's their managers that need to get with it!
Research preoccupied with short-term financial
metrics, by Chris Flood, October 1, 2017,
Financial Times, UK.
Candriam: ESG analysis deems 49 countries
'non-investable.' "China, Russia and
Turkey are among 49 countries that are
'non-investable', according to an analysis of their
potential for long-term sustainable development by
Candriam. Of the 35 advanced economies analysed –
based on the definition used by the International
Monetary Fund – only Greece came out as
non-investable. Out of the 88 emerging economies, 48
were classified as non-investable."
Candriam have completed a fascinating analysis of
investible countries based on ESG criteria. What is
especially interesting is that this analysis applies
to both equity and bond investing.
Candriam: ESG analysis deems 49 countries
'non-investable, by Susanna Rust, September 29,
2017, IPE, UK.
The global rise of sustainable investing
-- Schroders. "To accurately gauge the
latest attitudes, we surveyed more than 22,000
people from 30 countries who invest. We asked them
about their knowledge, views and actions when it
comes to sustainable investing."
Schroders survey of global sustainable investing
provides some useful insights for all investors,
particularly supportive for ethical investors.
However, the self-reporting of those surveyed saying
that most of them are already investing in
sustainable ways is questionable. As we know, what
people say and actually do aren't always the same!
Nonetheless, it does show that sustainable investing
is increasingly important to investors.
The global rise of sustainable investing --
Schroders, September 27, 2017, Schroders, UK.
China’s sustainable firms are starting to
outperform. "Chinese companies that
disclose their environmental, social and governance
measures are outperforming on the stock market, data
There's been little evidence to date of Chinese
corporate ESG stock performance. This new data is probably
the first to indicate that possibility. Companies ESG
outperformance and correlated stock outperformance
appear to be a worldwide phenomenon. Most ethical
investors have probably avoided China so far, but
data like this could change that.
China’s sustainable firms are starting to
outperform, by Karen Yeung, September 27, 2017,
South China Morning Post, China.
[UK] Consultants pressure pension funds
over ethical investment. "Twelve large
investment consultants have joined forces to
increase pressure on pension funds that are not
taking environmental, social and governance (ESG)
factors into account when making investment
The group of consultants, which includes the
big three of Willis Towers Watson, Mercer and Aon
Hewitt, advise on close to £1.6tn of pension and
insurance assets in the UK alone and have huge
influence over the investment decisions of asset
This is great news. However, they're taking this
action because the UK government's pension regulator
says, according to the FT, that, "savers face
long-term financial risks because trustees are
failing to take climate change, responsible business
practices and corporate governance into account when
[UK] Consultants pressure pension funds over ethical
investment. by Aliya Ram, September 23, 2017,
Financial Times, UK.
Canadian Money Saver publishes an
article, "Do-It-Yourself Ethical Investing
Pays," by Ron Robins. "Though DIY
sustainable-ethical investing requires some work it
can pay handsomely. The process is engaging and fun
too. But the skills to do it effectively can be more
quickly acquired with coaching from those
experienced in this work."
I wrote this article -- and offer
tutorials on this subject too -- for individual
investors who want to have ownership and save on
fees in creating and managing a stock portfolio that
reflects their personal values.
Canadian Money Saver publishes an article,
"Do-It-Yourself Ethical Investing Pays," by Ron
Robins, September 2017, Canada.
Catching The Wave: The Spread of ESG in
Institutional Investment Portfolios.
"More than a quarter of North American institutions
use environmental, social and governance (ESG)
standards in their investment portfolios, and
approximately 60% of institutions that have not yet
incorporated ESG into their portfolios say they are
open to doing so in the future."
Their study provides some further insights into the
spread and utilization of ESG among institutional
Catching The Wave: The Spread of ESG in
Institutional Investment Portfolios, press
release, September 19, 2017, Greenwich Associates,
LEGO Group Leads Global Ranking of Best
CSR Reputation. "Reputation Institute
has released the main findings of its 201 7 Global
CSR RepTrak® 100 report, including the list of the
companies considered as the most responsible
worldwide. The report is based on over 170,000
ratings from interviews with the public in the 15
largest economies (United Kingdom, Spain, Italy,
Germany, France, Russia, Brazil, Mexico, USA,
Canada, Japan, China, India, Australia and South
Their top five are LEGO, Microsoft, Google, Walt
Disney, and BMW. Full results
Reputation Institute, September 12, 2017,
Ceres launches water use scorecards on
affected companies. "For food
companies, water management is a business imperative
like never before. And as risks of water scarcity
and pollution steadily increase, corporate leaders
must evaluate the most effective ways to water-proof
Ceres has created an impressive scorecard on how
food companies, in particular, use and manage their
Feeding ourselves thirsty, September 2017,
Big investors take aim at banks over
climate change risk. "A coalition of
institutional investors managing more than $1tn in
assets is demanding that 60 of the world’s largest
banks take action to protect the world from the
threat of catastrophic damage due to climate
This was bound to happen -- and good that it has.
Financial institutions and companies not reporting
or allowing for climate change effects on their
businesses will likely see reduced investor interest
and possibly lower relative stock prices over time.
Big investors take aim at banks over climate change
risk, by Chris Flood, September 14, 2017,
Financial Times, UK.
Responsible Investment Week Canada, "make
money responsibly." October 23-27, 2017.
"Responsible Investment Week is 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
All Canadian investors are encouraged to attend and
participate in RIA's Responsible Investment Week!
The event gets larger every year and the more people
that attend the greater the media coverage.
Responsible Investment Week Canada, "make money
responsibly." October 23-27, 2017, September 14,
2017, Responsible Investment Association, Canada.
US SIF Foundation Releases Resource Guide
For Retail Investors: "Getting Started in
Sustainable and Impact Investing."
"This resource is a concise guide for retail,
non-accredited investors exploring investment
options such as mutual funds, ETFs, and direct
ownership of stocks, as well as information on
seeking professional investment help."
A basic guide for novice sustainability focused
investors. It's a useful adjunct to my
Tutorial: Creating A Profitable Personal
US SIF Foundation Releases Resource Guide For Retail
Investors: "Getting Started in Sustainable and
Impact Investing," press release, September 14,
2017, US SIF, USA.
Big investors to put more money into
tackling climate change. "More than
two-thirds of institutional investors are planning
to increase investments related to tackling climate
change, according to a new survey that suggests
'green finance' is moving from the margins to the
mainstream of global markets.... in a study
commissioned by HSBC, will add weight to calls from
Mark Carney, governor of the Bank of England, and
others for greater disclosure of 'climate risks' in
the corporate and financial sectors."
How many companies in the insurance, utilities and
other hurricane affected industries in Texas and
Florida have put as potential liabilities on their
balance sheets potential hurricane damages? Though
such costs are difficult to assess, but, with
climate warming/change becoming increasingly costly
for businesses, perhaps investors need to ask such
questions more vigorously. Companies refusing to
acknowledge such costs might be shunned by investors
in years to come!
Big investors to put more money into tackling
climate change, by Andrew Ward, September 11,
2017, Financial Times, UK.
Investors Can Be Ethical and Still Beat
the Market, Study Says. "Ethical fund
managers don’t have to be envious of the
market-beating returns of so-called sin stocks. They
should be able to match them without dabbling in
vice, according to a study in the Fall edition of
the Journal of Portfolio Management. The study
debunks the popular theory that shares in the
alcohol, tobacco, gaming, and weapons industries
outperform because investors shun them, enabling
those with fewer moral scruples to earn a
'reputation risk premium.'”
So 'sin' stocks only outperform if their profits and
investment also outperform. This is an important
message, but one I feel will take time to be
accepted. Nonetheless, for ethical investors, it's
heartwarming to see the results of this study.
Also, as government health care costs continue to
explode, many sin sectors such as tobacco and
alcohol will continue to be taxed higher and higher,
thereby continually eroding the profitability of
companies in these sectors. Thus, their future
outperformance becomes questionable. See actual
Investors Can Be Ethical and Still Beat the Market,
Study Says, by Cormac Mullin, September 11,
2017, Bloomberg, USA.
Rising carbon prices could slash company
profits. "The impact of climate change
could hit global profits just as hard as the
financial crisis and Schroders have launched a new
tool to help investors work out which companies will
This is an important article to read for all ethical
investors. Such research will likely become ever
more important to investors as the world grows
increasingly concerned about climate change.
Rising carbon prices could slash company profit,
by Michelle McGagh, September 6, 2017, Citywire
Sustainable Signals: New Data from the
Individual Investor--Morgan Stanley.
"80% [of investors] are interested in sustainable
investments that can be customized to meet their
interests and goals."
Morgan Stanley's Institute for Sustainable Investing
has published the results of its second investors'
survey. Unsurprisingly, the results show a growing
interest in sustainable investing-- especially by
(Again, for individual investors interested in a
do-it-yourself approach, you'll find participating
in my free
DIY Ethical-Sustainable Investing Webinars very
Sustainable Signals: New Data from the Individual
Investor, Morgan Stanley Institute for
Sustainable Investing, September 2017.
Opinion: The pros and cons of ethical
debt instruments. "Innovative debt
instruments help to harness the powerful role of
capital markets and can connect more savings with
international development priorities such as the
SDGs. As investor interest continues to soar, they
could help move the world from billions to trillions
of dollars in financing for the SDGs [Sustainable
A fine article about ethical-sustainable debt by an
advisor to the UNDP.
Opinion: The pros and cons of ethical debt
instruments, by Gail Hurley, September 4, 2017,
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