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Ethical Investing News/Commentaries:
Oct. 2008 |
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Commentaries by Ron
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Leading
Socially Responsible Investment (SRI) Index
Providers, FTSE (UK) & KLD (USA) To Combine Forces.
-
[COMMENTARY]
"With the exception of the FTSE4Good index
family, all the FTSE and KLD indexes in the
sustainability space will be relaunched early in
2009 under the ‘FTSE KLD’ banner... Jerry Moskowitz,
New York-based president of FTSE Americas, told
Environmental Finance that the FTSE Group will take
over responsibility for managing the KLD indexes,
with KLD focusing on ESG research which will help
underpin all the indexes." This partnership will
be interesting to watch. FTSE is strong in Europe
while KLD is a leader in the US. Interest in ethical
stocks and bonds should be further enhanced by this
merger.
FTSE and KLD join forces on sustainability indexes,
October 30, 2008, Environmental Finance, UK.
Investor
Coalition Writes To 9,000 Companies To Pressure Them
On UN Global Compact. -
[COMMENTARY]
"The United Nations Principles for Responsible
Investment (UNPRI) has formed a pressure group of
more than 50 global investors running about $4
trillion (€3.2 trillion) in assets to lobby
companies they invest in to sign up to the UN Global
Compact, a set of 10 corporate standards on human
rights, working conditions, the environment and
anti-corruption." This is a great initiative.
The group argue that companies that sign-on improve
their governance and as a result, over time
experience better investment performance.
Investor coalition writes to 9,000 companies to
pressure them on UN Global Compact, by Hugh
Wheelan, October 27, 2008, Responsible Investor,
UK.
Responsible
Investment Market To Be Mainstream By 2015, Reaching
15-20% Of Global Assets. -
[COMMENTARY]
This is another report saying that investment in
ethical stocks and bonds is likely to grow
significantly in the years ahead. As ethics in
financial markets rises to the forefront of investor
concerns, it is clear that the mainstream investment
industry will have to embrace this trend.
RI will reach 15-20% of global asset management
market: fund manager report, by Hugh Wheelan,
October 28, 2008, Responsible Investor, UK.
For the actual report, see
Responsible Investing: A Paradigm Shift: From Niche
to Mainstream, by booz&co, Netherlands.
Certified
Financial Analyst's (CFA) Institute Offers ESG
Manual For Investors. -
[COMMENTARY]
The manual provides an environmental, social and
governance (ESG) framework for investors analyzing
companies.
ESG manual launched, by Giovanni Legorano,
October 27, 2008, Global Pensions, UK.
Click here for PDF version of the manual.
TIME Magazine
Reports On US Religious Mutual Funds. -
[COMMENTARY]
This is worthwhile reading for ethical investors. It
covers a number of key issues and addresses the
performance of top religious funds.
Which Religion Picks the Best Stocks? By David
Van Biena, October 25, 2008, TIME Magazine, USA.
Fourteen
Large US Investors Call On Securities Exchange
Commission (SEC) To Demand Greater Corporate Climate
Risk Disclosure. -
[COMMENTARY]
"The letter was sent in response to the SEC's
request for public comment on its 21st Century
Disclosure Initiative, File No. 4-567, which
proposes to modernize the current SEC disclosure
system to enhance its usefulness to investors. The
14 signatories to the letter include asset managers
and leading U.S. institutional investors such as
CalPERS, CalSTRS, and the Maryland, New Jersey, New
York City and New York State public pension funds or
treasurers."
Again, should not transparency in things that affect
corporate performance be something obvious? For an
overview of the state of global corporate social
responsibility reporting and my thoughts on the
subject see
We Need Mandatory Corporate Social Responsibility Reporting.
Investors Call on SEC to Require Better Disclosure
on Climate Change and Other Risks, October 24,
2008, CSRWire via Accountability-Central.com, USA.
72% Of
Canadian Financial Advisors Say Investments
Emphasizing Environmental, Social & Governance (ESG)
Screens Will Become More Popular. -
[COMMENTARY]
"... nearly half of all advisors said their
clients had initiated discussions about ESG
investments." This survey by VenGrowth Asset
Management Inc., continues to highlight the growing
investor and advisor interest in funds that screen
for ESG issues.
Growing Demand for "Green" Investments a Hot Topic
for Canadian Financial Advisors: Criterion
Investments Limited, October 23, 2008, press
release by VenGrowth Asset Management Inc., Canada.
The Robin
Cosgrove Prize For Ethics In Finance. -
[COMMENTARY]
"The global prize aims to promote greater
awareness among young people with an interest in the
banking and related financial industries of the
benefits of ethics in finance." The Prize of
$20,000 is for papers providing "Innovative Ideas
for Ethics in Finance". Submission deadline is March
31, 2009. This is a great idea with some big
sponsors. Some of you might know someone who might
want to apply.
Robin Cosgrove
Prize, Geneva, Switzerland.
Canada's
Ethical Funds Posts Survey Results Of Investor
Concerns & Actions It Seeks From Affected Companies.
-
[COMMENTARY]
This is not only an interesting survey of what
issues most concern Canadian ethical investors with
regard to screening criteria, but also Ethical Funds
provides the names of the companies it is in
discussion with, what they are discussing with them,
and how they rate the progress of those discussions.
This is useful information for anyone looking for
ethical stocks and bonds. To review the press
release see:
Ethical Funds Unveils 2009 Plan to Engage Major
Corporations on Top Investor Concerns, October
22, 2008, on Yahoo, and see their list of companies
and engagement activities at:
Ethical Funds Focus List 2009. October 2008,
Ethical Funds, Canada.
CSR Reporting
Guidance For Financial & Retail Firms Launched By UN
Environmental Programme's (UNEP) Finance Initiative
& Global Reporting Initiative (GRI). -
[COMMENTARY]
"From 2003 to 2008 UNEP FI and the Global
Reporting Initiative (GRI) led two international
working groups to develop and pilot-test the GRI
Financial Services Sector Supplement for the finance
sector. The Supplement provides guidance for retail,
corporate and commercial banking, insurance and
asset management on how to report on the
environmental and social performance of their
products and services."
Another big step is made in CSR reporting. For my
comments on this subject see:
We Need Mandatory Corporate Social Responsibility Reporting.
GRI Financial Services Sector Supplement,
October 20, 2008, UNEP FI, Switzerland.
UN Launches
'Green New Deal.' -
[COMMENTARY]
"The United Nations is backing a global Green New
Deal, which it says could be a ‘historical’
opportunity to rebuild economies debilitated by the
credit crisis and target future investment for
environmentally friendly markets." This UN
initiative could fit well with a possible new US
government stimulus package. Over the medium to
longer term, green-ethical stocks and bonds could
significantly benefit from such spending
initiatives.
UN launches Green New Deal for sustainable
investment, by Hugh Wheelan, October 22, 2008,
Responsible Investor, UK.
Is
Alternative Energy Threatened By Cheaper Oil & Gas?
-
[COMMENTARY]
Financing for alternative energy projects seems to
be becoming more difficult as oil and gas prices
plummet. Government support will be vital to make
continued rapid progress in this industry.
Fortunately, a new proposed US economic stimulus
package is likely to contain such support.
Alternative Energy Suddenly Faces Headwinds, by
Clifford Klaus, October 20, 2008, The New York
Times, USA.
Shariah
Finance: Its Ethics And Avoidance Of Excessive Risk.
-
[COMMENTARY]
This article makes fascinating reading and provides
insight as to how western finance, especially
securitization, might benefit from the ethics and
risk strategies inherent in Shariah finance.
Securitized securities involving sub-prime
mortgages, etc., are at the heart of the derivatives
meltdown.
Could It happen here? October 19, 2008,
Zawya.com, UAE.
Boston
College & Reputation Institute Reveal Top 50
Companies That US Public Says Rank Best In Corporate
Social Responsibility (CSR). -
[COMMENTARY]
"Google, Campbell Soup, Johnson & Johnson top the
2008 Corporate Social Responsibility Index (CSRI)...
Rounding out the top 10 are: Walt Disney, Kraft
Foods, General Mills, Levi Strauss, UPS, Berkshire
Hathaway and Microsoft." See the report,
discussion, and rankings.
Perception of Corporate Responsibility Linked to
Reputation, October 17, 2008, Boston College
Center for Corporate Citizenship, USA.
Social
Investment Forum (US) Survey Shows More Clean
Energy/Green Technology Funds Coming To Market.
-
[COMMENTARY]
All of the respondents surveyed said demand for such
products was going up. With the next US government
likely to get behind green technology in a big way,
green investment opportunities should flourish.
Social Investment Forum: Clean Energy/Green
Technology Focus Growing In Mutual Funds, Other
Investments, October 16, 2008, press release,
Social Investment Forum, USA.
Resources
Groups Lead In Sustainability In South
Africa, According To Ernst & Young Survey.
-
[COMMENTARY]
"Platinum producer Anglo Platinum, and synfuel
producer Sasol shared this year’s top honours,
followed by diversified miner BHP Billiton, gold
producer Anglogold Ashanti, and financial service
provider Standard Bank." It is refreshing to
here resource companies having good sustainability
policies.
Resources groups lead in sustainability report,
by Esmarie Swanepoel, October 16, 2008,
Engineering News, South Africa.
Eight Of Nine
US Banks Receiving US Government Funds Were Targeted
For 'Say On Pay' Resolutions In 2008. Many Large
Funds Refused To Support Resolution. -
[COMMENTARY]
"Analysis of mutual fund voting data from Fund
Votes’ proprietary database of investment fund proxy
voting shows that sixteen of the 70 fund groups
(including 1700 individual funds) surveyed by Fund
Votes failed to support even a single ‘say-on-pay
resolution at the eight bail-out banks targeted with
this resolution in 2008." Follow the link below
to see who did and did not support these
resolutions.
Large Fund Groups Failed to Support Tighter Pay
Practices at Banks named in Bailout Plan,
October 15, 2008, Governance Map, USA.
UK Companies
Lead Europe In Green Energy Investment. -
[COMMENTARY]
"UK companies attracted GBP 1 billion of venture
capital and private equity investment for renewable
energy projects and technologies. The figure is more
than twice that of any other European country and 41
per cent of the EU total." This survey was
commissioned by Shell to determine the role of small
and medium-sized enterprises are playing in dealing
with climate change.
Colour of money is green, and UK small firms lead
the race, October 15, 2008, originally published
in The Scotsman, World Business Council of
Sustainable Development, Switzerland.
George Soros,
Renowned Billionaire Investor, Sees Combating
Climate Change & Green Investing As Way Out Of
Global Economic Crises. -
[COMMENTARY]
In times like these it is good to have this kind of
support for green investing from one of the world's
most successful investors. View this short PBS video
and get inspired.
Can green
investing save the global economy? October 15,
2008, 4entrepreneur, USA.
Small Ethical
Banks See Gains. -
[COMMENTARY]
Europe's biggest ethical-socially responsible bank,
Triodos, is making profits and relatively unscathed
by the current global banking mess. It is likely
that many more banks will imitate the Triodos model
-- which is great news for ethical banking.
Day of the minnow, by Patrick Butler, October
15, 2008, The Guardian, UK.
US Ethical
Mutual Funds Online Screening Tool. -
[COMMENTARY]
Ethical fund investors in the US might fund this
tool useful. It allows them to compare the different
screens used by most US socially responsible mutual
funds. Please note though, that you have to provide
an email address and name in order to receive the
information.
Mutual Fund Social Screen Tool,
investedinterests, USA.
Australian
Funds Research Shows Different Carbon Footprints
According To Fund Type. -
[COMMENTARY]
"Investment funds run by Australian
superannuation funds and asset managers show a 36%
difference between the largest and smallest carbon
footprints and an eightfold difference in footprints
of the equity investment portfolios, according to
joint research between Trucost and the Australian
Institute of Superannuation Trustees. The report
examined the greenhouse gas emissions associated
with 100 equity portfolios of different investment
styles: growth, value, sustainability, index,
enhanced index, core and small/mid caps."
Continuing,
"It [the research] said that sustainability and
growth portfolios tended to be the most carbon
efficient, while enhanced index portfolios had the
greatest carbon intensity because of their tendency
to select more resources, construction and
materials, oil & gas and utilities stocks." For
many ethical investors, these results are
unexpected. However, it is good to have confirmed
that green investing does equate with helping create
a lower carbon footprint.
Investment funds run by Australian superannuation
funds, by Hugh Wheelan, October 9, 2008,
Responsible Investor, UK.
Green Funds
Take Hit. -
[COMMENTARY]
"Investment into green themed investment funds in
Europe plummeted again in July with €202.9m ($279m)
being pulled from the sector as the credit crunch
started to raise significant concerns about
financing for renewable and clean energy projects."
It seems that green investments and oil prices are
definitely correlated. I have been calling for a
level playing field in government energy incentives
and tax policies for a long time. Consider what
would be the cost of oil if you included the defence
costs to maintain our oil supplies. And for nuclear
energy, imagine adding these costs: the costs of
decommissioning -- which are as much as building the
original plant -- and the net present value of fuel
storage expenses for 10,000 years! Nope, it is
nowhere near a level playing field. But it will be
one day.
Green fund sales dive over credit crunch concerns,
by Hugh Wheelan, October 9, 2008, Responsible
Investor, UK.
Overview of
Sharia Compliant Investing, Primarily A UK
Perspective. -
[COMMENTARY]
"Islamic assets already total around $1 trillion
(£560bn) globally, estimates the Asian Development
Bank, with annual growth of 10 to 15 percent a
year." There are aspects to Islamic finance that
many ethical investors will find appealing. Their
strict ethical code has meant that they have
largely bypassed the difficulties associated with
many other financial entities.
Islamic funds, by David Stevenson, October 7,
2008, Investors Chronicle, UK.
Ethical
Investing Research Gets A Boost. -
[COMMENTARY]
"The [United Nations] Principles for Responsible
Investment (PRI) and the Enhanced Analytics
Initiative (EAI) have today announced that they will
join forces under the PRI name to internationalise
the call for better investment research. With joint
assets under management of more than US$15 trillion,
this new approach will represent a single, powerful
voice within international investment markets,
continuing to encourage the production of better
integrated and longer term research." The
research is aimed at 'extra-financial' issues. This
means promoting the role of environmental, social
and governance issues in investment research at the
world's biggest investment firms. This is welcome
news, further encouraging everything related to
ethical investing.
EAI and PRI join forces to internationalise the call
for better investment research, joint press
release, UN's PRI and Enhanced Analytics Initiative,
UK.
New Digital
Book Describes Green Programs At Some 70 North
American Companies, Including Apple, GAP, & Whole
Foods. -
[COMMENTARY]
"The
Vault Guide to Green Programs was released
this week. The firm [vault.com] says the book can be
highly useful to anyone considering environmentally
friendly companies." Investors interested in
green-ethical stocks and bonds, might want to see
what's in this book.
New Digital Book Profiles Green Programs at Apple,
Gap, Other Firms, October 2, 2008, GreenBiz.com,
USA.
American
Executives Believe Strongly In Climate Change. But
Fail To Act As Strongly In Corporate Actions.
-
[COMMENTARY]
"As consumers, they [executives] are personally
concerned about climate change and its potential
impact on the quality of life of future generations
(80%); Addressing climate change on a corporate
level can help make businesses more competitive
(73%)... 76% say that their companies should
be collaborating with industry groups, suppliers
and/or customers to address CO2 emissions standards,
but only 57% say that their companies are doing
this."
"While 71%
say that their companies should be educating
employees on climate change issues, only 49% say
that this is currently being done." Surveys like
this demonstrate the importance of corporate
governance in the world economy in addressing
climate change. I find it rewarding to hear that
executives are themselves convinced of the need to
act on climate change issues and that it can be
beneficial to their corporate performance.
The Green Gap between Attitudes and Actions on
Climate Change with Executives, October 3, 2008,
press release by Makovsky + Co., lohas.com, USA.
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