2016 ET Carbon Rankings Report.
"The 2016 ET Carbon Rankings report represents
an in-depth analysis of the greenhouse gas emissions
data gathered to produce the public ET Carbon
Rankings. In addition to providing further context
to the Rankings and their application for low-carbon
and fossil-free indexes, it assesses the current
state of Scope 3 emissions disclosure and the
emissions reduction potential across the most
This is an illuminating report on the carbon
rankings of the world's largest public companies.
2016 ET Carbon Rankings Report, December 2016,
ET Carbon Rankings, UK.
Green bonds: New study shows
extraordinary growth and signals potential in
financing Europe’s climate and environment goals.
"In 2012 USD 2.6 billion of green bonds were
issued globally. By 2015 total issuance had
multiplied to USD 41.8 billion. It rose to USD 74.3
billion by end of November 2016. European and
Chinese issuers make up largest share of the
climate-aligned bonds market globally. In Europe,
France and UK are the biggest issuers."
As the above figures suggest, there's a huge latent
market for green bonds. As most of us know, we're
still at the early stages of their issuance.
Green bonds: New study shows extraordinary growth
and signals potential in financing Europe’s climate
and environment goals, press release, December
2, 2016, European Commission, Belgium.
The league table of countries with the
most 'caring' investors. "Europeans are
less concerned about environmental issues when it
comes to selecting investments than Asians or
Americans, according to a major study of attitudes
in 28 countries."
The results of this survey are surprising! However,
upon reflection, perhaps they're understandable.
The league table of countries with the most 'caring'
investors, by Andrew Oxlade, December 2, 2016,
CITY AM, UK.
S&P Global COP 22 Report - Aligning 2016
Green Finance Expectations with Green Bond Indices.
"Over the past 18 months, a number of industry-
and policy-led initiatives have been launched that
support the mainstreaming of private-sector capital
to address sustainable investment, green finance
challenges, and long-term value creation, to mention
just a few: the G-20
Green Finance Study Group under the Chinese G-20
presidency, the Task
Force on Climate-Related Financial Disclosures established
by the Financial Stability Board, the EU
Markets Union program of 33 actions to mobilize
capital and the Sustainable Stock Exchange's Green
Finance Working Group."
The following are a great overview by S&P of the
green bond markets!
S&P Global COP 22 Report - Aligning 2016 Green
Finance Expectations with Green Bond Indices,
by Martina Macpherson, November 16, 2016, S&P Dow
Jones Indices, SRI Connect, UK, and (2)
Green Finance: Scaling Up to Meet the Climate
S&P Dow Jones Indices, November 2016, UK.
Raising The Bar For ESG Investing
Expectations. "Nearly 70% of
institutional investors we surveyed said they expect
similar returns from ESG portfolios as from
traditional portfolios. These were professionals
from retirement plans, endowments and foundations
and other gatekeepers who collectively handle
roughly $500 billion in assets. Even more surprising
was that quite a few investors have raised the bar
for ESG: among the other 30% of respondents, almost
one quarter expected returns to improve."
I'm not sure whether to continue posting such
surveys since the majority of them find similar
results. That is widespread acceptance of ESG and
the understanding that there's likely no performance
penalty when accounting for it in stock
selections. Nonetheless, it's always satisfying to
see these surveys!
Raising The Bar For ESG Investing Expectations,
by Linda Giuliano, November 22, 2016, ValueWalk,
New Developments in Social Investing by
Public Pensions. "Public pension funds
continue to engage in social investing, most
recently divesting from Iran and fossil
fuels. However, social investing is often not
effective, as other investors step in to buy
divested stocks. Social investing can also produce
lower investment returns, conflict with the views of
beneficiaries and taxpayers, and interfere with
federal policy. In short, public pension funds
should not engage in social investing."
For ethical investors, this is a provocative report.
The concerns expressed in it are the views of many
stakeholders and need to be addressed by the
responsible-ethical investing community. Also,
analysts need to review and critique the report's
findings that SRI funds have lower returns and that
an SRI orientation in public pension funds could be
a breach of fiduciary responsibility.
Would this report have shown a different outcome if
SRI was replaced with an ESG analysis?
New Developments in Social Investing by Public
Pensions, November 18, 2016, Boston College,
Center for Retirement Research, USA.
Morningstar’s Sustainability Indexes:
Portfolio Tilts and Performance Implications.
"In his study Unintended Biases in ESG Index
Funds, Morningstar analyst Alex Bryan found that
methodological differences between ESG indexes cause
divergent portfolio exposures across sector, style,
region, and market capitalization. These biases
impact risk and return. Now that Morningstar has
created its own suite of sustainability indexes, we
can compare them to their non-ESG counterparts on a
portfolio and performance basis."
Anyone interested in Morningstar's sustainability
indexes should read this. Investors have always
known that ethical funds -- as compared to the
general fund universe -- usually have different
holdings. Thus, they outperform and
underperform the general fund universe depending on
what is happening in the economy. This article adds
detail to that story.
Morningstar’s Sustainability Indexes: Portfolio
Tilts and Performance Implications, by Dan
Lefkovitz, November 17, 2016, Morningstar, UK.
Morgan Stanley and Bloomberg Survey Finds
Sustainable Investing Has Entered the Mainstream.
"Two-thirds of asset managers polled pursue
sustainable investing, with 64% believing its
adoption will continue to grow."
It seems like a never-ending stream of the largest
financial institutions on the planet touting the
importance and relevance of sustainable/ESG
investing. Wow, what a difference a few years can
Morgan Stanley and Bloomberg Survey Finds
Sustainable Investing Has Entered the Mainstream,
press release, November 17, 2016, Morgan
Barclays: Sustainable Investing and Bond
Returns. "In the first report in
Barclays’ Impact Series, our study shows the
positive effect that environmental, social and
governance investing can have on bond portfolio
This is an important study, one of the first to
review the impact of ESG on bonds. Most other
similar studies concerned ESG and sovereign debt,
whereas, Barclays focused on US corporate bonds.
There's a link at the bottom of the press release to
a much more detailed discussion of their findings.
Barclays: Sustainable Investing and Bond Returns,
press release, November 17, 2016, Barclays, UK.
Report: Over 70% of Investors See Risk,
Investment Opportunities in Climate Change Impact.
"This week at COP22, the Global Adaptation &
Resilience Investment Working Group (GARI) released
its discussion paper, 'Bridging the Adaptation Gap,'
reporting that 70 percent of private investors
surveyed see both risk and investment opportunity
from the impact of climate change. According to
GARI, 78 percent of 101 surveyed investors and other
stakeholders thought evaluating the physical risk
from climate change was 'very important,' while 70
percent would consider making investments that
supported adaptation to climate change or climate
change resilience now."
Though Donald Trump doesn't believe in climate
change, it's clear from this and other reports that
most of corporate America does. And corporate
America wants to profit from it!
Report: Over 70% of Investors See Risk, Investment
Opportunities in Climate Change Impact, by Talia
Rudee, November 16, 2015, Sustainable Brands, USA.
RBC Global Asset Management survey
reveals opportunities and obstacles in ESG
investing. "According to a new survey
released by RBC Global Asset Management (RBC GAM),
most investors lack an understanding of how ESG
factors impact their portfolio. Many investors
remain unconvinced about ESG as a source of alpha or
risk mitigation – creating a perception gap that
smart, active investors and managers can exploit in
order to gain a competitive edge."
Congratulations to RBC GAM for conducting this
research. Some of its findings are illuminating. For
instance, "Only 17 percent of respondents said
they were somewhat or completely satisfied with the
quality and quantity of ESG-related data from
companies, which may contribute to their belief that
ESG investing is not a source of alpha."
I believe this shows some ignorance on the part of
the respondents as to what ESG data is available
and, also, the need for standardized corporate ESG
reporting. There are many more interesting findings
in this report.
RBC Global Asset Management survey reveals
opportunities and obstacles in ESG investing,
press release, November 15, 2016, RBC Global Asset
Sustainable Investments Surged by Third
to $8.7 Trillion in 2016. "Sustainable
investments surged by more than $2 trillion in the
last two years as money managers worked to
accommodate U.S. institutions’ demand for assets
that meet environmental, social and
The sustainable, responsible and
impact-investing category totaled $8.72 trillion at
the start of 2016, representing about one fifth of
all managed investments, according to a biennial
report published by Washington-based US SIF
Foundation, the Forum for Sustainable and
Responsible Investment. More than 1,000 investment
funds totaling about $2.6 trillion include ESG
criteria, the group said."
Again, terrific growth in responsible investing over
the past two years in the US. The results are
unsurprising when we see that most asset managers
now include ESG factors in their criteria for stock
Sustainable Investments Surged by Third to $8.7
Trillion in 2016, by Laura Colby, November 14,
2016, Bloomberg, USA.
New Report: Investors Finding Innovative
Paths to Address Systemic Environmental, Social,
Financial Issues. "The new study, Tipping
Points 2016: Summary of 50 Asset Owners and
Managers’ Approaches to Investing in Global Systems, examines
how 28 asset owners and 22 asset managers are
beginning to think about the impact of their
investments and, in turn, how those investments are
affected by global environmental, social and
financial systems. This new systems-level thinking
is additive to traditional investment scrutiny at
the security and portfolio levels."
This is a fascinating report that most ethical
investors will want to scrutinize. IRRC is also
webinar on November 15 to review the reports
New Report: Investors Finding Innovative Paths to
Address Systemic Environmental, Social, Financial
Issues, press release, November 7, 2016,
Investor Responsibility Research Center
Institute/Investment Integration Project, USA.
Sustainability Reporting Standards: Time
to Trade Competition for Collaboration.
"Even though SASB, GRI, and IIRC, cater to the same
market, sustainability information providers, each
company’s biggest end users are different.
Nevertheless some, particularly SASB and GRI, behave
as if in competition with each other, which does not
help either of them, nor the providers nor the final
users. Time would be better invested in
I completely concur with Antonio Vives. After 20-30
years of developing CSR/ESG/sustainability reports,
I now believe we're close to understanding exactly
what investors and other stakeholders need from
these reports. The time is now to develop uniform
standards for corporate ESG reporting!
Sustainability Reporting Standards: Time to Trade
Competition for Collaboration, by Antonio Vives,
November 10, 2016, TriplPundit, USA.
Sustainable Investing Research Suggests
No Performance Penalty. "Review
of academic studies show sustainable/responsible
funds perform on par with conventional funds... the
star-ratings results are consistent with the
research literature: Socially conscious funds have
similar risk-adjusted performance that, if anything,
skews positive relative to conventional funds."
Particularly interesting is the performance review
of the funds Morningstar tracks. They're divided
according to their star ratings over the years 2002
to 2016 and then sub divided between socially
conscious funds and those of the whole fund
Sustainable Investing Research Suggests No
Performance Penalty, by Jon Hale, November 10,
2016, Morningstar, USA.
SRI Research Prize Winner: Impact
Investing "Supply" Failing To Meet Demand.
"The demand for impact investing alternatives is
outstripping the available supply of such choices
for investors, according to a new study awarded the
2016 Moskowitz Prize for Socially Responsible
Investing during a special ceremony last night at
the 27th annual SRI Conference in Denver. The study
found the pinch is most acute in Europe where the
demand for impact investing (versus traditional
investments) is three times higher than in the U.S.
and the rest of North America.
Investing' is a study of 3,500 limited
partners, 5,000 funds, and 25,000 capital
commitments results and was conducted by Brad
Barber, University of California Davis, Adair Morse,
University of California Berkeley and Ayako Yasuda,
University of California Davis."
Congratulations to Brad Barber, Adair Morse, and
Ayako Yasuda, for winning the prestigious and most
important SRI prize in the world: the Moskowitz
Prize! Their research on impact investing is very
timely and the potential for this form of investing
is enormous. As governments become increasingly
stringent in the funds available for social and
environmental programs, impact investing offers a
unique opportunity to fill much of that void.
SRI Research Prize Winner: Impact Investing "Supply"
Failing To Meet Demand, press release, The 2016
Moskowitz Prize sponsors, USA.
Principles for Responsible Investment
launches ESG integration guide. "The
new guide is aimed at assist asset owners—public and
corporate pension funds, superannuation funds,
insurance companies, endowments, foundations, family
wealth offices—in revising their investment policy
and incorporate all long-term factors, including ESG
Many organizations who say they've implemented ESG
into their investment decisions have done so in a
piecemeal way. This guide will help them
professionalize that process. Thank you PRI!
Principles for Responsible Investment launches ESG
integration guide, press release, November 6,
2016, PRI, UK.
Vigeo Eiris 2016 UK & Europe Retail Fund
Estimates Show Strong Responsible Investment.
"In aggregate, RI funds represented 2% of the
overall European retail funds market, a higher
percentage than in 2015 (1.7%)."
As in North America, European retail responsible
investment funds still form
only a tiny share of retail funds assets. But
almost everywhere they are growing faster than the overall funds
market -- and that's what's important.
Vigeo Eiris 2016 UK & Europe Retail Fund Estimates
Show Strong Responsible Investment, November 2,
2016, by Blue & Green Tomorrow, UK.
(UK) Public Call for Financial ‘Kitemark’
to Help Identify Sustainable Financial Products.
"The Good Money Week annual research has
highlighted an overwhelming public demand for the
introduction of ‘kitemark-style’ label to allow
customers to identify which financial products are
sustainable/ethical... 69% want a new law requiring
financial advisors to ask customers if they’d like
to exclude specific sectors or companies. "
The story reveals that UK consumers would like to
see some identification mark on ethical
investments. Other results from this survey are
(UK) Public Call for Financial ‘Kitemark’ to Help
Identify Sustainable Financial Products,
November 1, 2016, Blue & Green Tomorrow, UK.
Failing Scores for ESG Raters.
"Due to different methodologies and different
human bias, disagreement among the scores
illustrates a crucial problem that confronts anyone
who hopes to measure environmental, social, and
corporate governance (ESG) performance by
I believe that just as a company might receive buy,
sell or hold recommendations from different analysts
reviewing the same information, so it's expected
that ESG raters have varying opinions on
investments. However, what this articles delineates
and the research it describes, is useful information
for ethical investors trying to understand the
divergence of ESG/CSR opinion research.
Failing Scores for ESG Raters, November 1,
TruValue Labs, Lipper Alpha Insight, USA.
3 trends propelling the spread of
sustainable business. "Audrey Choi, CEO
of Morgan Stanley’s Institute for Sustainable
Investing, cited the result of a study indicating
that 93 percent of equities face climate risk."
The above quote indicates how massive the task is
for investors to understand the impact of climate
change on investments. This article is a good read
to gain more insight into what is driving companies
3 trends propelling the spread of sustainable
business, by Gwenyth Jones, October 28, 2016,
New Research Reveals Opportunity, Methods
for Engaging Investors on Long-Term Value Creation.
"New research by Corporate Citizenship, in
association with S&P Dow Jones Indices – entitled
Getting on the Right Track: How to Demonstrate the
Value of Sustainable Business to Investors - reveals
that long-term thinking is still not the norm for
For companies to think long-term, compensation
throughout the organization must be long-term
based. However, this is difficult as work becomes
increasingly transitory and contract hiring a big
factor in many companies. Even the median tenure of
today's CEOs is only 4.9 years among S&P 500
Fortune magazine. This suggests these CEOs don't
necessarily have a long-term horizon for sustainable
investments and their potential returns.
New Research Reveals Opportunity, Methods for
Engaging Investors on Long-Term Value Creation,
October 26, 2016, Sustainable Brands, USA.
PwC’s 2016 ESG Pulse -- Investors,
corporates, and ESG: bridging the gap.
"For the past decade, investors have expressed
interest in ESG issues, including their importance
in investment decision-making. Corporates have paid
attention, and many are responding to investor
demands. But there still isn’t alignment between
these two groups on why, what, where, and how often
to report on ESG issues."
Hopefully, somehow, they'll be some integration of
the new GRI standards and those of SASB. Certainly,
all groups working on such standards need to come
together before we can have ESG reporting standards
satisfying most companies and investors.
PwC’s 2016 ESG Pulse -- Investors, corporates, and
ESG: bridging the gap, press release, October
27, 2016, PwC, USA.
2016 Global Cleantech 100 Ones to Watch.
"The GCT100 Ones to Watch list seeks to
highlight a group of upcoming companies that are
catching the eye of leading investors and corporates
in the market. They are companies that have yet to
become a Global Cleantech 100 company, and that did
not have quite enough market support to make the 8th
edition of the Global Cleantech 100 list itself
(which will be published on January 23, 2017).
However, the companies were part of the top
250 nominated and carry pockets of strong support
among the GCT100’s expert panel. As such, these
companies represent this year’s Ones to Watch."
This list will interest many ethical investors.
2016 Global Cleantech 100 Ones to Watch, press
release, October 26, 2016, Cleantech Group, USA/UK.
GRI Standards Push Momentum for Global
Sustainable Development. "On Wednesday,
the GRI announced the launch of the world’s first
Global Reporting Standards for sustainability
reporting. These new standards give businesses large
and small a common language for reporting
A long held dream of mine and for many in the
responsible-ethical investing community has been for
sustainability (and ESG/CSR) reporting standards!
Now it's coming true.
GRI Standards Push Momentum for Global Sustainable
Development, by Thomas Schueneman, October 21,
2016, TriplePundit, USA.
The CFA Exam Is Going Green.
"CFAs are 'telling us loud and clear that
investors are demanding ESG, and there's increasing
academic evidence that sustainable companies are
better-managed companies and have higher
risk-adjusted returns,' Steve Horan, managing
director of credentialing for the Charlottesville,
Virginia-based institute, said in an interview."
We need no more proof that ESG has become mainstream
and recognized for its materiality for corporate
profitability than that quote above.
The CFA Exam Is Going Green, by Emily Chasan,
October 20, 2016, Bloomberg, USA.
Green Power Leadership Awards.
"[The US Environmental Protection Agency] EPA
presented the awards in conjunction with the Center
for Resource Solutions (CRS) Exiton Monday, October
17 during the Renewable Energy Markets Conference
(October 16-18, 2016 in San Francisco, California).
The awards serve to recognize the leading actions of
organizations, programs, and individuals that
significantly advance the development of green power
Companies receiving the award Excellence in Green
Power Use, included: Biogen, Inc., BNY Mellon,
Forest County Potawatomi Community, Goldman Sachs,
Government of the District of Columbia (Washington,
DC), Intel Corporation, and SC Johnson.
Excellence in Green Power Use, press release,
October 17, 2016, EPA, USA.
Which Stock Market Will Deliver
Sustainable Profits? "ESG Scores
represent the degree to which companies in a
portfolio have transparent policies and management
systems in place to address their ESG-related
challenges. Denmark tops the global ranking with a
Portfolio ESG score of 69. Portugal and the
Netherlands are next. The top half is again
dominated by European, and in particular Eurozone,
A new fascinating ESG country-company-ESG-portfolio
analysis! As usual, European countries top this
list. Many ethical investors will want to read this
article as it provides a unique perspective on many
Which Stock Market Will Deliver
Sustainable Profits? By Francesco
Paganelli, October 17, 2016, Morningstar, UK.
Impact Investment is Growing Rapidly in
Canada: New Study. "The 2016 Canadian
Impact Investment Trends Report reveals tremendous
growth in Canada’s impact investment industry. The
survey, which represents data as at December 31,
2015, was conducted between April and August 2016.
Eighty-seven organizations responded to this year’s
survey. The RIA uses the Global Impact Investing
Network’s definition of impact investment: “Impact
investments are investments made into companies,
organizations, and funds with the intention to
generate a measurable, beneficial social and
environmental impact along with a financial return.”
This is great news. Impact investing in Canada has
grown from $4.13 to $9.22 billion between 2013 and
2015. It still has the potential to grow much, much
Investment is Growing Rapidly in Canada: New Study,
press release, October 13, 2016, Responsible
Investment Association, Canada.
Moody's: Sustainable investing an opportunity
for asset managers to generate value and sustain
active management fees. "Global assets under
management (AUM) linked to firms that have become
signatories to the PRI rose 195% to $62 trillion in
April 2016 from $21 trillion in 2010. Investor
expectations and regulations are driving demand for
sustainable investing, says Moody's Investors
"Integrating ESG criteria into investment decisions
should limit risks within portfolios and contribute
to lower volatility and better performance in the
long run. The effectiveness of these strategies
however will have to manifest through the cycle, as
well as across teams and strategies," says Marina
Cremonese, a Vice President at Moody's. Moody's
subscribers can access this report via the link
provided at the end of this press release."
Further elaboration on Moody's new, positive, ESG
Moody's: Sustainable investing an opportunity for
asset managers to generate value and sustain active
management fees, press release, October 6, 2016,
Moody's: Investors today are more sensitive
to climate change. "Interest in climate
change and sustainable investment among
institutional investors has expanded rapidly in
recent years and is only likely to increase in
importance following the ratification of the Paris
Agreement. hat is the conclusion of a new report
from influential ratings agency Moody's."
Moody's is stating the obvious. However, it's
pleasing to see them acknowledge and report it.
Moody's: 'Investors today are more sensitive to
climate change,' by James Murray, October 6,
2016, BusinessGreen, UK.
New Report Finds Slow Growth in Canadian Green
Bonds Market Despite Provincial and Federal
Government Commitments. "Key highlights
include: Canada's climate-aligned bond market has
grown to C$32.9bn - making Canada's markets the 5th
largest in the world; both the full climate-aligned
universe and the C$2.9bn labelled green segment of
the Canadian market have grown over the past year,
though less quickly than had been expected; 2016
remains an important opportunity for the federal and
provincial governments to take action and show the
leadership necessary to accelerate market growth."
[COMMENTARY] That Canada's green bond market is the
fifth largest in the world is pretty good
considering the size of its bond market. However, as
the report indicates, much more can be accomplished.
New Report Finds Slow Growth in Canadian Green Bonds
Market Despite Provincial and Federal Government
Commitments, press release, October 3, 2016,
Smart Prosperity Institute and Climate Bonds
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