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"Almost three-quarters of investors (74 percent) would be more likely to work with an advisor who could give them competitive investment returns from investments that also made a positive impact on society and 65 percent of investors would be more likely to stay with an advisor who could discuss responsible investing with them."
--
TIAA Global Asset
    Management
(USA)
    May 2016

"The vast majority of Canadian investors are interested in responsible investments (RI) that incorporate environmental, social and governance (ESG) issues, and they would be more likely to choose responsible investments if their financial advisor suggested suitable RI options for them."
--
Responsible
    Investment
    Association (RIA)
 
  (Canada)
    June 2017

"70% of people [in UK] want to invest ethically but the financial services industry is failing to respond." Referencing research by Abundance.
--
Acquisition
    International
   
(UK) June 2015

 

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Links may only be valid for a limited time   October 15, 2018

***List your event on our Events Page***

Canada's Responsible Investment Week, October 22-26. I encourage all Canadian investors to participate. For all events, click here!

Regulators are Taking a Tougher Stance on ESG Disclosure a New Study Reveals. "In the last three years alone Environmental, Social and Governance (ESG)-related regulations - grew by more than 100 percent across the United Kingdom (UK), The United States of America (US), and Canada, indicating that ESG regulatory landscape is evolving fast... ESG issues require mainstream attention."

[COMMENTARY] ESG issues have become mainstream in the investment world and in most industries. Regulators are playing catch-up.
Regulators are Taking a Tougher Stance on ESG Disclosure a New Study Reveals, press release, October 11, 2018, Datamaran, UK.

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Half of [UK] advisers talk about SRI with millennials. "More than half of advisers are very likely to recommend a sustainable and responsible investing (SRI) fund to millennials, according to the latest FTAdviser Talking Point poll."

[COMMENTARY] This is promising. These advisors might just find many of their older clients are interested too!
Half of [UK] advisers talk about SRI with millennials, by Saloni Sardana, October 10, 2018, FT Advisor, UK.

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Which Countries Have the Most Sustainability-Focused Companies? "Morningstar's sustainability atlas rates the stock indexes of 46 countries for sustainability, ESG and carbon risks."

[COMMENTARY] This fascinating new approach to finding companies with a sustainable orientation could interest many investors.
Which Countries Have the Most Sustainability-Focused Companies? By Bernice Napach, October 8, 2018, ThinkAdvisor, USA.

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7 Myths About Millennials and Investing, Busted. "The FINRA Investor Education Foundation and the CFA Institute have just released a new study that should probably be required reading for any advisor wanting to attract millennial clients."

[COMMENTARY] The study finds millennials are overconfident about their financial affairs and wary of the financial industry, among many other points of interest to investment professionals. Full report here.
7 Myths About Millennials and Investing, Busted, by Bernice Napach, October 5, 2015, ThinkAdvisor, USA.

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Advisers Slow to Respond to ESG Investing Demand. "'Providing advisers with materials that can be used to educate clients about a firm’s approach to ESG investing is crucial in increasing adviser adoption,' says Ed Louis, a senior analyst at Cerulli Associates...

Forty-five percent of U.S. households prefer an environmental, social and governance (ESG) approach to investing, Cerulli Associates learned in a survey. Among those between the ages of 30 and 39, this increases to 64%, and for those younger than 30, it is 67%."

[COMMENTARY] Another study citing great interest in ESG investing among retail clients, yet advisors lagging in advising on ESG investment products.
Advisers Slow to Respond to ESG Investing Demand, by Lee Barney, October 5, 2018, PlanAdvisor, USA.

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Institutional support grows for ESG, political spending transparency, report shows. "Based on the analysis of 4,090 shareholder meetings held in the first half of 2018, nearly 29% of institutional investors supported such proposals, a new high compared to 26% in 2017, 21% in 2016, and 18% in 2015. The numbers appear in stark contrast to the support of retail investors, only 16% of which supported such proposals in the first half of 2018."

[COMMENTARY] Here we have another example of institutional participation in matters concerning ESG significantly exceeding that of retail investors.
Institutional support grows for ESG, political spending transparency, report shows, by Rob Kozlowski, October 3, 2018, Pensions & Investments, USA.

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More Than Just Doing Good, ESG Investments Help Manage Volatility. "A report by State Street Global Investor’s SPDR Practice Management Team showed that 69 percent of ESG investors said the investments helped them manage volatility. In fact, that was one reason they chose to invest that way—67 percent said lower volatility and 54 percent said lower downside risk were important reasons they incorporated ESG into their investment process. Overall returns haven’t suffered as a result, either."

[COMMENTARY] ESG investors are echoing what the research is finding on ESG oriented portfolios.
More Than Just Doing Good, ESG Investments Help Manage Volatility, by Wealth Management, October 2, 2018, USA.

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Responsible Investing Accelerates as Investment Merits Gain Traction, RBC Global Asset Management Survey Finds. "Ninety percent of institutional investors believe environmental, social and governance (ESG) integrated portfolios are likely to perform as well or better than non-ESG integrated portfolios, according to a new global survey by RBC Global Asset Management (RBC GAM)."

[COMMENTARY] Finally, it seems that most institutional investors now understand that an ESG orientation doesn't mean poorer returns. We've come a long way!
Responsible Investing Accelerates as Investment Merits Gain Traction, RBC Global Asset Management Survey Finds, press release, RBC GAM, Canada.

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Do companies with bad ESG scores make better investments. "In the US, poorly-rated companies that were upgraded generated the strongest rewards. Those stocks with CCC ESG rating, but eventually received a two-notch upgrade, outperformed the S&P 500 Index by more than 5% in the 12 months following the upgrade."

[COMMENTARY] It's a case of looking for the 'turnaround' ESG situation. Seems like it a new strategy that can work with the right analysis. Perhaps more investors will now use it.
Do companies with bad ESG scores make better investments, by Shannen Wog, October 1, 2018, Citywire Selector, UK.

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The Next Wave of Socially Responsible Investors Has Arrived. "Swell Investing’s 2018 'Money Meets Morals' study finds that the vast majority of Gen Z investors aged 18-24 (84%) are either already invested in socially responsible or impact investments or plan to invest in the future. The study was conducted online by Harris Poll on behalf of Swell Investing and gathered insights from more than 2,000 US adults aged 18 and up, among whom over 1,400 have investments."

[COMMENTARY] Even if one disregards critiquing the questions and how those questions might be understood by survey participants, the results still demonstrate the terrific potential for ethical, sustainable, and ESG oriented investments among the youngest investors!
The Next Wave of Socially Responsible Investors Has Arrived, Swell, USA.

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[UK] Ethical funds beat market but struggle for breakthrough. "UK investors hold £16.7 billion in funds with an ethical remit, but that accounts for just 1.3% of Investment Association (IA) funds... 'Ethical fund sales are ticking up, albeit from a relatively low base', [said Laith Khalaf, senior analyst at Hargreaves Lansdown.]"

[COMMENTARY] The above data provides further validation of my comment immediately below. In the USA and Canada, ethical, SRI, ESG funds are around 3% of total retail fund assets.
[UK] Ethical funds beat market but struggle for breakthrough, by Michelle McGagh, September 27, 2018, Citywire Money, UK.

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UK millennials shun sustainable investments. "A survey has found that just 14 percent of UK millennial investors who cite an interest in sustainable investing actually invest in the area."

[COMMENTARY] What people say and what they do are two very different things! The survey data cited above provides a good explanation of why most investors who say they want to invest in ethical, sustainable, responsible investments, don't.

The latest Canadian data on responsible investing will be out in the next few weeks. I'll be watching closely to see if the percentage of total Canadian retail fund assets invested in responsible funds exceeds 4%. If not, it'll be another disappointment. Though, institutional responsible assets should still do well.
UK millennials shun sustainable investments, September 24, 2018, Private Banker, UK.

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Climate Change, Paris Accords Driving ESG Strategies: Report. "A new report from Newsweek Media Group’s Vantage Thought Leadership division says environmental, social and governance investing has gone mainstream, having gotten a boost from the Paris Climate Accord and adoption of the UN Sustainable Development Goals in 2015."

[COMMENTARY] It seems that ESG based investing has become so popular that almost every financial institution must do its own survey concerning who is using it. That's good. It's what I've been waiting to see since the 1970s! I was curious to see that in this survey respondents complained about lack of ESG oriented products. I can see this is probably true in fixed income and possibly ETFs. Though the latter is fast being addressed.
Climate Change, Paris Accords Driving ESG Strategies: Report, by Michael Fischer, September 21, 2018, Think Advisor, USA.

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Schroders Global Investor Study 2018: Minority of people globally concerned investing sustainably would hinder returns. "Only a quarter of people globally are concerned that investing sustainably would hinder investment outcomes, an indication that investors are increasingly convinced robust returns and a positive impact are not mutually exclusive."

[COMMENTARY] Schroders released the second part of their study which reviewed investors perception of returns concerning sustainable investing. It suggests that most investors globally now see sustainable investing producing good returns.
Schroders Global Investor Study 2018: Minority of people globally concerned investing sustainably would hinder returns, press release, September 17, 2018, Schroders, UK.

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Only 20% of rich Britons hold ethical assets, study finds. "UBS says Britons were second-least likely to buy into sustainable investments after Americans... Just 12% of wealthy people in the US had more than 1% of their fortunes held in sustainable investments – a broad term which includes renewable energy and companies which have committed to pay employees fairly.

... 60% of Chinese HNWIs had at least 1% of their assets held in sustainable funds, followed by Brazilians and people from the United Arab Emirates."

[COMMENTARY] The divide between institutional and retail investors concerning sustainable assets is still wide, especially in the developed world. I believe this problem rests mostly with the investment advisor/broker community. Most still don't or want to understand, the potential impacts of climate change on their client portfolios. In the USA particularly, it’s probable that advisors/brokers are largely 'climate change deniers.'
Only 20% of rich Britons hold ethical assets, study finds, by Rupert Neate, September 19, 2018, The Guardian, UK.

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Most Investors Are Going Green to Make Money, HSBC Says. "Financial returns were cited as the biggest reason to have a strategy focused on the environment, social issues and governance, known as ESG, according to a survey of 868 institutional investors by the U.K.’s largest bank. Nearly three quarters of companies with this focus said that this was their number one driver, followed by tax incentives."

[COMMENTARY] 'Financial returns' could also be code for using ESG criteria to screen for potential material issues. As such, it reflects what other surveys of this nature report. It's encouraging to see such huge numbers of institutional investors so engaged.
Most Investors Are Going Green to Make Money, HSBC Says, by Anna Hirtenstein, September 12, 2018, Bloomberg, USA.

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Two-thirds of institutional investors utilize ESG policy – report. "Two-thirds of institutional investors and almost half of companies globally have an environmental, social and governance policy in place, according to survey of 1,731 companies and institutional investors, sponsored by HSBC Holdings and conducted by East & Partners."

[COMMENTARY] The numbers here are somewhat higher than most recent similar surveys. Of course, survey questions may differ significantly, thus skewing the results. If true, this ESG survey would mean ESG has become truly mainstream.
Two-thirds of institutional investors utilize ESG policy – report, by Paulina Pielichata, September 12, 2018, Pensions & Investments, USA.

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Sustainalytics Launches its ESG Risk Ratings. "Materiality-Driven ESG Ratings Framework Enables Investors to Better Understand the Unmanaged ESG Risks Facing Companies."

[COMMENTARY] Sustainalytics may well be launching a new ESG ratings' platform that could become an industry standard in the years to come. It'll be fascinating to see how it is received and to track its results.
Sustainalytics Launches its ESG Risk Ratings, press release, September 12, 2018, Sustainalytics, The Netherlands.

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[UK] Government to demand greater transparency on pension investments. "Savers will be able to see at a glance if their pension money is held in ethical and socially responsible investments under measures to be unveiled today by the government."

[COMMENTARY] This is terrific news. It sets an example for governments and regulators globally to follow. However, one suspects it might be a while before such action occurs in the USA.
[UK] Government to demand greater transparency on pension investments, by Josephine Cumbo, September 11, 2018, FT, UK.

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ESG outperforms in European large caps and U.S. small caps. "Data compiled by Arabesque S-Ray show companies that score high in Arabesque's proprietary ESG rating algorithm outperform lower scoring peers, particularly among large-cap European firms and small-cap U.S. firms."

[COMMENTARY] The unique aspect of this study is the segregation of ESG performance according to a company's market size and geographical orientation.
ESG outperforms in European large caps and U.S. small caps, Charles McGrath, September 11, 2018, Pensions & Investments, USA.

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Deutsche Bank Subsidiary Launches ESG Money Market Fund. "The launch of the fund is a credit positive event because DWS is the first to bring ESG selection criteria into the $531 billion prime money market fund industry."

[COMMENTARY] With the launch of this fund, possibly all major asset classes now have ESG options. This is really good news and DWS will probably be followed by many more such funds.
Deutsche Bank Subsidiary Launches ESG Money Market Fund, by Ben Hernandez, September 10, 2018, ETF Trends, USA.

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Fossil fuel divestment funds rise to $6tn. "Insurance companies lead the sell-off of coal, oil and gas stocks over climate change and financial fears – oil majors now cite divestment as a risk to them."

[COMMENTARY] Yes, the oil majors should be worried and that's why many of them are actively pursuing alternative energy. Despite President Trump's attempts, these majors will continue to grow such energy sources.
Fossil fuel divestment funds rise to $6tn.,  by Damian Carrington, September 10, 2018, The Guardian, UK.

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Sustainable investment not core investment consideration for institutional investors. "Investing sustainably remains a minor factor in the investment decision-making process despite institutional investors’ expectations it will grow in importance, according to Schroders' Institutional Investor Study 2018."

[COMMENTARY] Sustainability wasn't even a minor consideration for investors not so long ago! Now, increasingly, it's on the radar for most of them.
Sustainable investment not core investment consideration for institutional investors,
September 3, 2018, Institutional Asset Manager, UK.

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ESG Investing Rarely Underperforms the Market, Study Finds. "The report also found that investment portfolios with high-scoring ESG companies outperformed their benchmarks by between 81 to 243 basis points over a four-year period (between 2014-2018)."

[COMMENTARY] More news supportive of ESG based investing.
ESG Investing Rarely Underperforms the Market, Study Finds, by Paul Davies and Michael D. Green, Latham & Watkins, September 3, 2018, Lexology, USA.

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Disclaimer: This website does not make investment recommendations. Nothing in this site should be interpreted as a recommendation or solicitation to buy/sell any securities or investments. Investing for the Soul is a source of general information and resources for ethical investing and socially responsible investing (SRI). Investors should consider their actions thoroughly and consult their financial advisers and other professionals, prior to taking any investment action. This website does not necessarily agree with the opinions expressed in articles on its pages or offered on the web pages to which it might be linked. Such opinions are the responsibility of the writers themselves. Furthermore, this site does not offer or provide any warranties, representations, guarantees, implied or otherwise, as to the accuracy, legality, copyright compliance, timeliness or usefulness of the information, materials or services on this, or other sites, to which it is linked. Also, Mr. Ron Robins is not an investment advisor, nor is he licensed with any professional investment related body, and thus is not able to, nor does he make, any investment recommendations.

 

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