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Ethical Investing News/Commentaries:
Aug.
2007 |
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Commentaries by Ron
Robins
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A Review Of
US Clean Energy Exchange Traded Funds (ETFs).
- [COMMENTARY]
ETFs are funds that trade like a stock, and now
there are a growing number of them that specialize
in clean energy. One advantage of ETFs is that they
generally have lower management fees. Always get
help with investing from a qualified investment
advisor though.
ETFs for Clean Energy Fans,
by Vaughan Scully, August 27, 2007, appeared on
Businessweek.com; source Standard & Poor's, USA.
Survey Shows
UK Companies Having Difficulty Going Green.
- [COMMENTARY]
Kyocera, the Japanese printer company just released
results of a UK survey of large UK companies and
found that the number of 'green practices' in those
companies was down 13% from 1993. Furthermore, "One-fifth
of those surveyed said they scrutinised suppliers
for environmental credentials and one-third said
they would pay extra for environmentally sound
products and services. But in 1993 this figure was
60%. Kyocera believes this lack of interest in green
purchasing has more to do with the subject’s
complexity than apathy." There is lots of
discussion concerning environmentally conscious
major corporations in this article and it is a
worthwhile read for all green investors. See article
at:
Climate change and the environment: UK business
turns a paler shade of green,
August 30, 2007, ClimateChange.org, UK.
UK Ethical
Funds Outperform Mainstream Funds For Past Three
Years.
- [COMMENTARY]
According to the magazine Investment, Life &
Pensions, for the three years prior to July 31,
2007, ethical funds returns were 57.2% compared
to 52.39% for mainstream funds and 48.02% for the
FTSE 100. For the 12 months to July 31, 2007,
ethical funds gained 18.36%, mainstream funds 13.73%
and the FTSE 100 13.28%. Investing in ethical stocks
and bonds is certainly providing good returns for UK
ethical investors!
Investors reap ethical rewards,
by Hilary Osborne, August 29, 2007, Guardian
Unlimited, UK.
Yahoo! Being
Sued For Divulging Names To Chinese Government.
- [COMMENTARY]
So is Yahoo! an ethical company or not? Should a
company conform to government laws even if those
laws offend basic human rights? Ethical investors
are regularly faced with such decisions concerning
investments. The situation with Yahoo! demonstrates
the importance of ethics and global business
decisions.
Yahoo! sued over disclosure of Chinese citizens'
identities,
by Mark Tran, August 28, 2007, Guardian
Unlimited, UK. In a related story, Yahoo!, MSN,
and Microsoft, are all engaged in Chinese press
freedom issues too. See:
CPJ News Alert 2007, August 27, 2008, Committee
To Protect Journalists, USA.
Does Your
Ethical Mutual Fund/Unit Trust Conform To Your
Values?
- [COMMENTARY]
The press release linked to below reminds ethical
investors, socially responsible investors, green
investors, etc., to truly delve into their
investments to see if they really do reflect their
personal values. Investors should also ask: Who should invest my money!
CHOICE warns on "responsible investment",
press release, August 27, 2007, Australia.
Ocean Based
Methane A Key To Our Energy Problems?
- [COMMENTARY]
Big money is going into this research and the
article in The Economist magazine provides a
quick overview of it. Intuitively, at this time, I
believe we should still focus on renewables such as
wind and solar. The production of oceanic methane
could carry with it enormous environmental and other
risks. Nonetheless, the buzz about oceanic methane
will get loud indeed in the years ahead.
Methane Hydrates (Clathrates) Could Power The World,
August 27, 2007, posted on
www.environmental-economics.blogspot.com, sourced
from The Economist, UK.
Ethical
Investments In The FTSE 350.
- [COMMENTARY]
This article focuses on what its authors believe are
the best ethical investments in the London FTSE 350
index. It is a collaboration of The Observer's
Good Companies Guide and research compiled by
Co-operative Investments. This is a helpful list for
ethical investors interested in finding UK ethical
stocks and bonds. Always get help with investing
from your investment advisor though.
The good, the bad and the FTSE,
by Ruth Sunderland, Heather Stewart and Zoe Wood,
August 26, 2007, The Observer, UK.
Green
Buildings Cost Much Less Than You Think.
- [COMMENTARY]
A study by the World Business Council for
Sustainable Development (WBCSD) found not only was
green building much less expensive than many
believed, but that it also saved more in operating
costs than had been foreseen previously.
"Green" building costs overestimated, study finds,
R744.com, August 24, 2007. For actual study, see:
Facts and Trends: Energy & Efficiency in Buildings,
August 2007, World Business Council for Sustainable
Development.
Study Argues
For Clean Energy.
- [COMMENTARY]
Greenpeace International and European Renewable
Energy Council (EREC) have completed a significant
study that persuasively argues for green energy.
Green investors should read this as it may help them
find the best socially responsible stocks to invest
in.
FUTURE INVESTMENT: A SUSTAINABLE INVESTMENT PLAN FOR
THE POWER SECTOR TO SAVE THE CLIMATE,
July, 2007, Greenpeace International and
European Renewable Energy Council (EREC).
What Is The
Social Responsibility Of Business?
- [COMMENTARY]
I recently came across this old article. Despite its
age, the article featuring the thoughts of three
fascinating people, Milton Friedman (American Nobel
Laureate in Economics who unfortunately passed-away
last November), Whole Foods' John Mackey, and
Cypress Semiconductor's T.J. Rodgers. The advantage
of using corporate social responsibility towards
social ends is deeply discussed and will interest
anyone engaged in ethical investing or who consider
themselves as socially responsible investors.
Rethinking the Social Responsibility of Business,
November 2005, Reason Magazine, USA.
Are UK Banks'
Climate Change Policies Mostly PR?
- [COMMENTARY]
This article and the reports it cites indicate that
UK banks (and many other businesses) are still not
taking climate change seriously. My suspicion is
that the banks are leery of going too far down this
path as it could hinder relationships with
their clients. Many businesses who do not want
to think about climate change impacts on their
activities might 'shop-around' to do business at a
bank with the least onerous climate/environmental
policies. For this reason, true socially conscious
banks are rare.
UK banks – dedicated followers of carbon fashion?
By Deborah Smith, August 24, 2007,
ClimateChangeCorp.com, UK.
Canadian
Socially Responsible Fund Buying Back Asset-Backed
Commercial Paper (ABCP).
- [COMMENTARY]
Meritas Financial Inc. whose funds invest in ethical
stocks and bonds, is buying back all its ABCP in its
money market and other funds. Many money market
funds hold such investments. With the advent of the
turmoil in the ABCP market, investors have been
bailing out of any money market fund that might
contain ABCPs and buying short-term government
investments, such as treasury bills. It is clear
that asset backed instruments are going through a
re-pricing as the risk of the asset backing them is
being re-evaluated.
Meritas Financial Inc. Announces Efforts to Relieve
Clients of ABCP Uncertainty,
August 22, 2007, Canada.
94% Of Public
Companies To Negotiate Green Clauses In Future
Outsourcing Agreements.
- [COMMENTARY]
A survey by the Brown-Wilson Group of Florida, which
studies the outsourcing industry, indicates a huge
move by North American and European companies to go
green in their outsourcing. Recipients of
outsourcing contracts in India and China are
therefore encouraged to go green as well. Looking
for the best corporation to invest in has now gotten
a lot harder!
More Companies Want Outsource Vendors to Green
Operations,
August 20, 2007, GreenBiz.com, USA.
UK Consumers
Desire 'Green' - Yet Few Buy Green Financial
Products.
- [COMMENTARY]
According to this survey by Beacon Asset Management,
73% of consumers know about green financial products
but only 15% use them. Only 19% of consumers
specifically knew about green investment products.
This confirms my belief that the quest for ethical
stocks and bonds, for green funds, etc., is still in
its infancy, not only in the UK, but also all around
the world.
Consumers not embracing green financial products -
UK, August
6, 2007, Mortgageintroducer.com, UK.
US Federal
Judge Rejects Federal Trade Commission (FTC)
Arguments - Gives Green Light To Whole Foods
Takeover Of Wild Oats.
- [COMMENTARY]
The FTC was trying to block the deal as it felt that
Whole Foods would yield monopolistic power in some
areas in the US. I have said before that the FTC's
arguments were ridiculous. I am glad to see that the
judge also felt the same way.
Whole Foods closing in on Wild Oats,
August 17, 2007, AP in The Globe & Mail,
Canada.
US Bureau Of
Land Management Announces Winners Of Best
Sustainable Development Practices Among Energy
Companies.
- [COMMENTARY]
The winners are: BP America, Dawson Geophysical,
Encana Oil & Gas (USA), and Williams Exploration. If
you are interested in environmentally responsible
investing, have a look at this press release.
BLM Honors Energy Companies for Sustainable
Development Practices,
August 14, 2007, press release, USA.
70% Of
American Workers Do Not Consider A Prospective
Employer's Corporate Social Responsibility (CSR)
Programs Important - But 46% Believe An Employer
Should Have Them Anyway!
- [COMMENTARY]
This survey was by Hudson, an American recruitment
group. I believe it shows the continuing and growing
desire by American workers to work for companies
with good CSR policies. CSR continues to make great
inroads among US companies as the proliferation of
non-financial reports, now more and more called
environmental, social and governance (ESG) reports,
gathers pace.
CSR has little impact on employment decisions,
by Brian Amble, August 15, 2007,
Management-Issues, USA.
New Insights
Into English Attitudes Towards The Environment.
- [COMMENTARY]
This survey by the UK's Department for Environment,
Food and Rural Affairs (DEFRA) is a comprehensive
survey of English attitudes towards their
environment. There is lots of data and charts to
stimulate our thinking. If you are interested in
ethical investing and looking for stocks to invest
in, you might at least get an angle of what
industries could benefit from the insights you glean
from this survey.
2007 survey of public attitudes and behaviours
toward the environment,
August 14, 2007, Department for Environment, Food
and Rural Affairs, UK Government, UK. For commentary
on this survey, see:
2007 DEFRA environment survey shows people don’t
walk the talk, by Peter Shield, August 15, 2007,
NaturalChoices.co.uk. UK.
Study:
European & Asian Socially Responsible Investment (SRI) Funds Under-Perform Benchmarks, Whereas
US And UK SRI Funds Show Little Difference To Their
Benchmarks.
- [COMMENTARY]
This global study is the first of its kind. And I
welcome comments from readers on it. The basic point
I gather from this work is that there are huge
differences in gains between SRI funds and that
investors or investment advisors are not able to
distinguish which funds will outperform the others.
This drives home two points I have always made: (1)
Selecting a fund, (or stocks that are good to invest
in), is ultimately dependent upon one's clarity of
consciousness and depth of awareness. And, (2) that
as global consciousness rises, the companies with
the highest ethics will tend to outperform their
competitors, and that this has yet to be tested over
time. To assist with the developing our
consciousness, I encourage ethical investors to look
into Transcendental
Meditation (TM). Also, consider enrolling in our
Ethical
Investing Services and
Workshops. See this study at:
The Price of Ethics: Evidence from Socially
Responsible Mutual Funds, by Luc Renneboog,
Jenke ter Horst, Chendi Zhang, published by the
Social Science Research Network.
Ethical Funds
Continue Growth Trend In UK.
- [COMMENTARY]
"Ethical Funds have grown from £4.26bn in the
second quarter of 2006 to their present record at
£5.6 billion." This, a 31% increase in one year,
is according to Britain's Investment Management
Association, quoted in the linked article below.
However, it still represents only about 1.1% of
funds under management in the UK. It strikes me that
the real holdup to even greater success to ethical
investing everywhere are the built-in biases of the
mainstream investment industry.
32% annual growth for ethical investment,
by Peter Shield, August 13, 2007,
NaturalChoices.co.uk, UK.
New Free UK
Company Report Service.
- [COMMENTARY]
Free Company Reports & Accounts is a free, new, UK
service covering some 3,000 UK public companies.
Environmental, social and governance reports are
sometimes also included in their database.
Download Free
Annual Reports,
August, 2007, UK.
Water
Industries Attracting Large Funds.
- [COMMENTARY]
Water is growing scarcer and more polluted around
the world. Companies engaged in water systems and
purification is frequently seen by some ethical
investors as offering stocks that are good to invest
in. According to Global Water Intelligence in the
UK, assets in water funds have experienced a 53%
gain in the past 12 months.
Very Liquid Assets,
by Alexandra A. Seno, August 20-27 issue,
NewsWeek International Edition, UK.
Religious
Investors Turning To Wall Street With Zeal.
- [COMMENTARY]
No longer are religious activists satisfied with
boycotts, etc., to get their message across to
corporate America. With their new found substantial
financial clout, they are bringing changes to
corporations via the boardroom and Wall Street. I
welcome this approach as it is resulting in greater
transparency of corporate actions as well as showing
companies the advantage of using corporate social
responsibility (CSR) policies.
Religious Investments,
by G. Jeffrey MacDonald, August 11, 2007, The
Washington Post, USA. Also, along the same
theme:
Resolved: Public Corporations Shall Take Us
Seriously, by Daska Slater, August 12, 2007,
The New York Times, USA.
Opportunities
For Socially Responsible Investing In Africa.
- [COMMENTARY]
Thomas Kostigen of MarketWatch interviews
RogersCasey about the opportunities for investment
in Africa. With the world hungry for resources,
Africa, with its huge resource endowment but yet
with its ever present poverty, is ready for socially
responsible investment funds.
Socially-responsible investment opportunities emerge
in Africa,
by Thomas Kostigen, August 9, 2007, MarketWatch,
USA.
India
Attracts Islamic Oriented Funds.
- [COMMENTARY]
Shariah funds are being attracted to
India. Funds based on Shariah principles have much
in common with ethical investing. It is useful for
ethical investors to be aware of such
personal/spiritual/religious values oriented
investing elsewhere in the world. In understanding
it, we may see additional investment options open up
for ourselves. Always get help with investing from a
qualified investment advisor though.
Islamic funds bullish on India,
by Zeeshan Ahmed, August 9, 2007, rediffnews,
India.
Market
Turmoil. Ethics Of Credit Market Participants A
Central Issue.
- [COMMENTARY]
From my perspective, the turmoil in the financial
markets revolves around ethics. Participants in the
credit and debt markets receive massive financial
incentives to create innumerable types of new
financial instruments that totally ignore
reality. As the pitiful ethics are exposed, trust
vanishes, and financial instruments are properly
'marked to market' rather than some mathematicians
hypothetical 'marked to model'. As the true market
prices become known, financial markets adjust
downwards to accommodate reality and many financial
institutions receive major hits to their profits.
Most ethical investors up to now have been
completely ignorant of this risk in the financial
institutions that they have invested in. It is time
now for everyone to work with their investment
advisors to determine just what are the best ethical
stocks and bonds to invest in among the banking and
brokerage concerns.
Mortgage Losses Echo in Europe and on Wall Street,
by Vikas Bajaj and Mark Landler, August
10, 2007, The New York Times, USA. Also:
SEC combing Wall St books for subprime losses,
by Joe Giannone and Lilla Zuill;
Additional reporting by Tim McLaughlin, August 10,
2007, Reuters, USA.
Political
Action Best Way To Encourage Ethical Consumption.
- [COMMENTARY]
A UK study says that those campaigns that try top
effect changes towards ethical consumption are most
effective on the collective level, as compared to
trying to coax changes on the individual consumer.
These findings are from a study funded by the
Economic and Social Research Council (ESRC) of the
UK. The study also points out that consumers are
generally aware of what they need to do in order to
be more ethical consumers, but often lack the money,
or the pathways to engage in such behaviour are not
readily available.
Ethical consumption: Consumer driven or political
phenomenon?
August 8, 2007, press release, Economic and Research
Council, UK.
Socially
Responsible Investing (SRI) Or Sustainable
Investing?
- [COMMENTARY]
Many investors are bewildered by what these terms
mean, and which one most fits their personal values.
This is an interesting article discussing these
definitions. Personally, I much prefer the term
ethical investing. It best suits my values and what
I am doing with this website. I do not believe
imposing my values on other people. But I do feel
acting honestly, truthfully and with integrity are
very important values. To me ethical investing
encompasses socially responsible investing,
sustainable investing, and responsible investing,
which in part seeks to screen for corporate
governance practices.
From Socially Responsible Investing to Sustainable
Investing,
by Joe Keefe, August 6, 2007, Environment News
Service, USA.
European
Investment Industry Encompasses Socially Responsible
Investing (Ethical Investing).
- [COMMENTARY]
Following on from the above article, this article -
do not worry about detailed definitions of terms
though - provides insight into just how mainstream
ethical or socially responsible investing, is
becoming.
Ethical boundaries help shape investment,
August 6, 2007, The Financial Times, UK.
Unique
Socially Responsible Stock Exchange Envisioned In
UK.
- [COMMENTARY]
It seems the UK government together with
other social investors is looking at the idea
of a special stock exchange whose listings comprise
exclusively companies with social missions set-up to
benefit local communities. It certainly sounds
interesting. Read this article and let me know what
you think.
'Fair exchange' plan for ethical firms,
by Nathalie Thomas, August 5, 2007, Scotsman.com,
UK.
Carbonised
Green Plant Gets UK Ministers Blessing.
- [COMMENTARY]
All green investors, ethical investors and others
will want to watch this development. It could be the
first of many and dramatically influence energy
production globally. "The decarbonised fuels
project at Peterhead would be the first industrial
scale project in the world to combine three separate
technologies - hydrogen production, power generation
and carbon capture and storage - to generate
electricity using hydrogen from natural gas."
Read more about this in the link below.
Green light for decarbonised fuel plant,
August 4, 2007, Green Guide Online, UK.
When Looking
For A Job Most UK Workers Say Company's Corporate
Social responsibility (CSR) Policies More Important
Than Salary.
- [COMMENTARY)
This survey by BT offers additional evidence as to
why companies should strive for excellent CSR
policies. Additionally, companies with such policies
are already evidencing comparatively higher profits
as seen in
Corporate Social and Financial Performance: A
Meta-Analysis.
See UK survey at:
Corporate social responsibility is more important
than salary when choosing a job, by Gareth
Vorster, August 2, 2007, PersonnelToday.com,
UK.
Teamsters
Union Cites Cummins Inc. For Union Bashing.
- [COMMENTARY]
Cummins Inc. is widely held among socially
responsible investment funds. However, with these
accusations it is possible that some funds may
reconsider their position.
Teamsters, Investors Examine Labor Abuses at Cummins
Inc., August
2, 2007, PRNewswire-USNewswire, USA.
British
Airways Fined £270 million For Price Fixing.
- [COMMENTARY]
Mr. Branson's Virgin Atlantic brought the problem to
light by contacting the UK Office of Fair Trading.
Though Virgin Atlantic needs to be congratulated in
coming clean on this activity, it did also
participate in it! The total also includes amounts
fined by the US Department of Justice. When
companies are perceived to be unethical, their sales
can be negatively impacted, hence the importance of
business ethics in the global society. Furthermore,
if higher consciousness is not sought and gained in
these organizations, ethical lapses are sure to
occur
again and again.
BA's price fixing faces passenger backlash,
by David Millward, August 2, 2007, Telegraph.co.uk,
UK.
French
Ethical Investments Rise 88% Last Year.
- [COMMENTARY]
"Socially responsible investment in France almost
doubled among institutional investors last year.
Ethical investments rose 88% from €5.4 billion in
2005 to €10.5 billion in 2006. Public pension funds
are driving the increase, according to research from
Novethic."
EthicalCorp.com, UK.
Pressure To
Reduce Meat Consumption Is On.
- [COMMENTARY]
The toll of meat production and its negative
consequences for our environment is well described
in this article. As a vegetarian for almost forty
years, I have long wondered why it has taken so long
for people to realize that consuming large amounts
of red meat in particular, is not wise for our
health, and certainly not for the planet. I believe
we are at a juncture where the pressure to reduce
meat consumption will become overwhelming in the
face of its detrimental environmental consequences.
Industries reliant on meat production and
consumption may experience significant difficulties
in the years ahead.
Ignoring the meat of the global warming issue,
by Neil Reynolds, August 1, 2007 The Globe &
Mail, Canada.
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