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Ethical Investing News/Commentaries:
Sept. 2008 |
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Commentaries by Ron
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US Congress
Grants Extensions To Green Tax Credits. -
[COMMENTARY]
"The bill authorizes a one-year extension for
federal production tax credits for wind power, which
means developers and lobbyists will be able to take
a few months off before badgering Congress for
another extension starting next spring. Solar power
gets more breathing room—an eight-year extension of
investment tax credits, and generous support for
homeowners to install their own solar panels. (The
bill also includes support for clean coal
development.)" The entire US green energy
industry was quite relieved by the extension of
these tax credits! If they were not passed, there
was a danger of the US green energy industry coming
to standstill.
Green Bailout: House Passes Rescue Plan and Clean
Energy Credits, by Keith Johnson, October 2,
2008, Environmental Capital, a Wall Street
Journal blog, USA.
With An
Emphasis On Ethics, Islamic Banks Are Gaining
Non-Muslim Clients. -
[COMMENTARY]
"The Birmingham-headquartered Islamic Bank of
Britain said it had seen significant growth in
non-Muslim customers since the onset of turbulence
on financial markets as Islamic banks, bound by
strict religious principles, are largely seen as
insulated from the credit crisis." I have
recently read of such reports from a number of
countries. Perhaps this could represent a trend for
religious institutions everywhere to set-up their
own religious-ethically oriented financing and
investing organizations?
Non-Muslims turn to Islamic Bank as a safe option,
by Anna Blackaby, October 3, 2008, The Birmingham
Post, UK.
Cleantech
Venture Capital In North America, Europe, China and
India, Reaches New Record Of $2.6 Billion In 3Q08.
-
[COMMENTARY]
"The 3Q08 total is a 37 percent increase over the
same period a year ago, and 17 percent increase over
2Q08. Cleantech venture investments through 3Q08 now
total $6.6 billion, exceeding the full-year 2007
total of $6.0 billion." The article notes that
despite difficult economic times, cleantech
investment continues to grow strongly.
Cleantech venture investment reaches record of $2.6
billion in 3Q08, October 1, 2008, Cleantech
Group, USA.
New Eurosif
Survey Says Responsible Investment Now Represents
17.5% Of European Funds Industry. -
[COMMENTARY]
"The total socially responsible investment (SRI)
assets under management in Europe have reached
€2.665 trillion and represent as much as 17.5% of
the asset management industry in Europe, Eurosif
reports. This corresponds to 102% growth of since
Eurosif's previous European SRI Study in 2005."
Clearly, investing in ethical stocks and bonds has
become mainstream in Europe.
Responsible investment 17.5% of the European funds
industry, October 1, 2008, CSR Europe, Belgium.
Norway's 'Oil
Fund' Lags Other Ethical Funds In Addressing Climate
Change, According To Innovest & WWF. -
[COMMENTARY]
"A new report by WWF and financial analysts
Innovest shows that Norway's large and influential
Government Pension Fund, with a reputation as a
leader in ethical investments, does not apply best
practice in sustainable investments, and is not yet
fully addressing the impacts of global warming...
The $381bn fund is based on petroleum revenues and
is the world's second largest sovereign wealth
fund." Innovest and the WWF argue that since the
fund derives so much of its capital from Norway's
oil operations, that it has a special responsibility
to help offset the carbon emissions caused by those
activities.
Joint Innovest/WWF Report Shows Norway's "Oil Fund"
Lags Behind Peers in Addressing Climate Change,
September 29, 2008, CSRwire, UK.
Merrill Lynch
Study Finds Outperformance Using Values Based
Investing Approach. -
[COMMENTARY]
"In a recently conducted quantitative analysis
performed by Merrill Lynch Research, companies that
ranked high in responsible economic, environmental,
social and corporate governance issues demonstrated
lower volatility globally and provided higher
dividend yields in the U.S. than those with lower
scores." This is proving my thesis that we can
expect higher values to be recognized in the stocks
of companies with higher ethics. With the atrocious
ethics displayed on Wall Street, investing in
ethical stocks and bonds will in the future be at
the core of mainstream investing. View the video on
this link. Mr. Rasco is to make a presentation on
October 10 to the New York Society of Financial
Analysts about these findings.
Higher Dividends and Lower Volatility in Values
Based Investing, commentary by Jose Rasco,
Merrill Lynch, USA.
Whole Foods,
Toyota, GM, and Honda Capture the Largest Share of
Eco Bloggers. -
[COMMENTARY]
"Based on the analysis of 40 million blog posts
collected during the past six months, in six major
industries, four brands—Toyota, General Motors,
Honda and Whole Foods—garnered the greatest volume
of positive conversation among online bloggers
regarding environmental sustainability, according to
the J.D. Power and Associates 2008 Environmental
Sustainability Report... " Surveying blogs
represents an interesting new development in
marketing research. It could prove a useful method
in finding ethical stocks that are good to invest
in.
Whole Foods, Toyota, GM, and Honda Capture the
Largest Share of Eco Bloggers, September 26,
2008, Business Week article on lohas.online,
USA.
15% Of US &
European Consumers Interested In Plug-In Vehicles.
-
[COMMENTARY]
I have yet to see good analysis as to what plug-ins
will do to electrical demand? And are they really a
better trade-off environmentally and economically
than small, high efficiency gas/diesel/electric
hybrids? Ethical investors will need real answers to
these questions.
15% Of U.S. Consumers Very or Extremely Likely To
Buy Plug-In Hybrids, September 26, 2008,
Environmental Leader article on lohas.online, USA.
PricewaterhouseCoopers' Carbon Disclosure Project
Report Shows More Companies Taking Climate Change
Seriously. -
[COMMENTARY]
"The Carbon Disclosure Project (CDP), to which
PwC [PricewaterhouseCoopers] has been appointed
global adviser and report writer for the next three
years, has published the results of the Global500
and S&P500 companies that disclosed their
activities... It also shows how companies compare
against their industry peer group and who is leading
the field" Incidentally, a recent
study by the Swiss bank, Pictet, showed that
"a
socially responsible global equities portfolio would
have carbon emissions 40% below those of a portfolio
indexed to the MSCI global equities index."
Carbon Disclosure Project Report, September
2008, PricewaterhouseCoopers, UK.
Seven US
States & Four Canadian Provinces Starting Emissions
Cap & Trade System. -
[COMMENTARY]
"... the Western Climate Initiative, issued the
basic blueprint this week for the cap-and-trade
system designed to curtail heavy industry's
emissions of greenhouse gases." It is
fascinating to see individual US states and Canadian
provinces moving ahead of their respective federal
governments on this issue.
After smoke clears, a boon for business, by
Patrick Brethour, September 26, 2008, The Globe &
Mail, Canada.
China's
Central Bank & WWF Join Forces For Greener Banking
In China. -
[COMMENTARY]
Here is more evidence that the Chinese are taking
sustainability to a new level. Who knows, perhaps we
will soon see Chinese banks sign-on to
The Equator Principles! (These are social and
environmental principles that now guide the lending
practices of many of the world's leading banks.)
Ethical investors may want to keep an eye on the
possibility of investing in green oriented banks in
China.
Chinese central bank and WWF outline greener banking
roadmap, September 24, 2008, WWF, Switzerland.
UK
Government's The Carbon Trust Issues Report On How
Climate Change Could Create Or Destroy Company
Value. -
[COMMENTARY]
Ethical investors looking for stocks that are good
to invest in, need to be aware of how climate change
can have a major bearing on investment returns. This
extraordinary report covers the effects of climate
change 'on six
industry sectors: Aluminium, Automotive, Beer,
Building insulation, Consumer electronics and Oil &
Gas.' To obtain the report, register, which is free,
at the Carbon Trust website in the link below, then
download the PDF 4166 KB report.
Climate change – a business revolution?
September 22, 2008, The Carbon Trust, UK.
'Say On Pay'
Movement Grows. Swiss Pension Funds Demand A Say On
Executive Compensation At Switzerland's Largest
Banks & Companies. -
[COMMENTARY]
"... [Swiss funds
and ethical organization, Ethos, have] filed a
resolution for the 2009 annual shareholder meetings
of ABB AG, Credit Suisse, Nestle SA, Novartis AG and
UBS requesting shareholders have 'a UK-style
advisory vote' on remuneration reports." The
concerns around extraordinary executive compensation
are not just a US problem.
Swiss funds demand say on pay at UBS, top firms,
reporting by Cecilia Valente, editing by David
Holmes, September 23, 2008, Reuters, UK.
Half Of
Greentech Venture Capitalists See Capital Spending
To Increase 20% Over 2008, KPMG Survey. -
[COMMENTARY]
"In polling 301 venture capitalists, corporate
executives, entrepreneurs and bankers, KPMG found
that 91 percent of respondents indicated they expect
venture capital activity in the greentech sector to
continue rising in 2009, compared to only 76 percent
who indicated the same the previous year. In fact,
some 50 percent of respondents say investment
activity in greentech will increase by 20 percent or
more over 2008 levels, while another 34 percent
expect investment levels to increase by 10-19
percent range." This is great news, considering
all that is happening in the financial world today.
Venture Capital Community Not Worried About
Greentech Investment Bubble, See Significant
Increase in 2009 Funding, KPMG Study Finds,
September 23, 2008, press release KPMG LLP, USA.
KLD's
Environmental Ratings Promoted Improved
Environmental Behaviour Among Companies With Low
Scores. -
[COMMENTARY]
KLD is one of the top US socially responsible
ratings' organizations.
This is the first study to show that socially
responsible ratings can impact corporate behaviour.
It indicates the clout that socially responsible
ratings' organizations can have on corporate
behaviour and performance. This kind of research is
important for the SRI industry and for all ethical
investors.
Social reponsibility: Do outside ratings affect
companies? By Harvey Schachter, September 22,
2008, The Globe & Mail, Canada.
UK's The
Sunday Times Publishes Its Best Green Companies.
-
[COMMENTARY]
"The 50 companies listed in this report are all
pioneers — enterprising, enlightened and fizzing
with new ideas. They vary from Greencare H2O, a
business employing just 50 people distributing
watercoolers, to the banking giant HBOS, which has a
staff of 74,000." The newspaper claims to
have excellent selection criteria. It also
surveyed the employees of the companies being
reviewed! Positive reports like this continue to
demonstrate to companies the advantages of using
corporate social responsibility.
Best (UK) Green Companies Rankings, by Richard
Caseby,
September 22, 2008, The Sunday Times, UK.
Interbrand
Publishes Its Best Global Brands List. Says Managing
Sustainability Issues A Key To Brand Success.
-
[COMMENTARY]
The top ten companies — Coca-Cola, IBM, Microsoft,
GE, Nokia, Toyota, Intel, McDonalds, Disney and
Google — all spent more time than average in dealing
with sustainability issues. Environmentally
conscious major corporations do seem to win out in
the branding game.
Green Cred is Essential to Brand Strength: Report,
by James Murray, BusinessGreen, September 22, 2008,
UK. Actual report:
Best Global Brands, Interbrand, September 22,
2008, UK.
Aluminium And
Auto Companies Could See Further Massive Declines In
Value If They Do Not Prepare For Low Carbon Economy,
Carbon Trust. -
[COMMENTARY]
"Companies in the aluminium and automobile
sectors could see up to 65% of their value wiped out
in the coming years if they do not prepare for the
transition to a low carbon economy, according to a
report published today (Sept 22) by the Carbon
Trust, an independent company set up by the UK
government in response to the threat of climate
change."
Poor prep for low carbon economy could slash sector
values by 65 per cent, by Hugh Wheelan,
September 22, 2008, Responsible Investor, UK.
Chinese See
Environment As Higher Priority Than Consumers In The
USA Or UK. -
[COMMENTARY]
According to WPP Agencies, "The surveys found
that 31 percent of Chinese consumers said that the
environment was a higher priority than the economy,
as against 28 percent in the UK and 17 percent in
the US. In addition, 69 percent of the Chinese
respondents said that they expected to spend more on
environmentally friendly products in the next year."
This is great news and gives hope that China will
not only be buying more environmentally friendly
products, but that it will also begin to seriously
participate in global climate change initiatives.
China: Consumers see environment a high priority,
September 21, 2008, mallenbacker.net, UK.
Greenpeace
Publishes Its 2008 Guide To The Greenest Electronics
Companies. -
[COMMENTARY]
The top three are: Nokia, Samsung and
Fujitsu Siemens. Some on the list are considered to
be among ethical stocks that are good to invest in.
Check with your advisor though.
Guide to greener electronics,
September 2008, Greenpeace, USA.
Ten Of The
World's Largest Pension Funds & World Bank Exploring
Green Investments. -
[COMMENTARY]
"Dubbed "P10," the pension funds hail from
Australia, China, Western Europe and the U.S.,
including the California State Teachers Retirement
System (CalSTRS) and California Public Employees'
Retirement System (CalPERS), according to California
State Treasurer Bill Lockyer." Obviously, big money from
institutions such as these is needed to spur the
world to dealing with climate change.
World's Largest Pension Funds and World Bank
Exploring Green Investments: Lockyer, September
19, 2008, GreenBiz.com, USA.
Study Says US
Political Views Affect Firms' Corporate Social
Responsibility (CSR). -
[COMMENTARY]
"Companies with a high CSR rating tend to be
located in Democratic states, while companies with a
low CSR rating tend to be located in Republican
states... Amir Rubin of Simon Fraser University
analyzed the 2004 presidential election results of
communities in which corporate headquarters are
located."
Political views affect firms' corporate social
responsibility, September 17, 2008, Source:
Wiley, published in PHYSORG.com, USA.
UK Ethical
Funds Start Campaign To Get Shell & BP To Scale
Back Oil Sands Development. -
[COMMENTARY]
"Co-operative Asset Management, a leader in the
U.K.'s fast-growing ethical funds sector, revealed
plans on Sunday to campaign against oilsands and
other "unconventionals" as a too-risky investment
given the financial and ecological drawbacks, as
well as looming anti-climate change regulations that
would drive up costs even farther." This is
going to be a very interesting fight! The second
article below reveals F&C and others getting
involved in this effort as well.
U.K. ethical investment fund wary of oilsands push,
by Richard Boswell, September 14, 2008, Canwest News
Service, Canada. Also,
Investors press for disclosure of tar sands' climate
risk, by Terry Macalister, September 15, 2008,
The Guardian, UK.
Biofuels
Facing Challenges Says Report. -
[COMMENTARY]
"Research report says biofuels could make up 10
percent to 15 percent over the next 10-20 years, but
reaching those levels will be more challenging than
previously thought." Investors interested in
this debate should read the article below.
Global biofuels market faces challenges, by Lee
Bruno, September 9, 2008, Cleantech, USA.
UK's Ethical
Investment Association Publishes Transparency Award
Winners. -
[COMMENTARY]
The gold level winners are Henderson Global
Investors, Insight Investment, Jupiter Asset
Management and Standard Life Investments. The award
is for UK funds "... that best adhere to a
set of socially responsible investing (SRI)
reporting guidelines." This particular
guideline is known as the 'European SRI Transparency
Guidelines' and something similar needs to come into
use around the world to help serve ethical investors
everywhere.
Asset managers awarded gold SRI standard, by
Richard Harris, September 10, 2008, citywire, UK.
The €267bn
Norwegian Government Pension Fund Blacklists Rio
Tinto. -
[COMMENTARY]
Rio Tinto is "... accused of severe environmental
damage at world’s largest gold mine in Indonesia...
The fund alleges that the Grasberg mine discharges
approximately 230,000 tonnes of tailings – a mix of
ground rock, uneconomic metals and chemicals –
directly into a natural river system." It seems
that some companies still need to understand the
advantages of using corporate social responsibility!
Norwegian fund sells 600m euros of Rio Tinto shares
following government ban, by Hugh Wheelan,
September 9, 2008, Responsible Investor, UK.
Plenty
Magazine Lists 20 Businesses That It Says Will
Change The World. -
[COMMENTARY]
"Plenty’s second annual list honoring (in no
particular order) 20 dynamic individuals and 20
pioneering companies that are bettering the planet,
plus 10 innovative ideas that will revolutionize how
we live." Such lists are always useful to get
new ideas for stocks that are good to invest in.
However, it is important to understand how they are
put together and what biases they may have. So
remember, just because a company's name appears on a
list like this it does not always make it a great
investment. But sometimes it just might be.
Plenty Magazine recognizes 20 businesses, 20 people,
and 10 ideas that will change our world,
September 4, 2008, LOHAS online, USA.
US Wind
Turbine Market To Be Worth $60.9 Billion By 2013,
Says BCC Research. -
[COMMENTARY]
By comparison, the market for wind turbines in 2007
was valued at $7.9 billion. Wind turbine stocks have
been among the best socially responsible stocks to
invest in. It looks like they will continue to
attract a lot of attention with reports like this.
US Wind Turbine Market to be Worth $60 Billion in
2013, Report Predicts, September 1, 2008, Clean
Edge News, USA.
Innovest
Warned Investors In March About Food Safety Risks At
Maple Leaf Foods' Meat Operations. -
[COMMENTARY]
"Innovest Strategic Value Advisors' March 2008
profile of Maple Leaf Foods specifically warned
clients: "MLF has not developed a robust safety
policy that addresses the food safety risks of meat
packaging." Maple Leaf Foods Inc. (MFI-TO) has
issued a massive recall in response to a Listeria
bacteria outbreak linked to its products. The
outbreak has already resulted in 15 deaths and 29
other confirmed cases across Canada, with 31 more
cases under investigation. These numbers are
expected to rise." In response to the outbreak
though, Maple Leaf Foods has responded responsibly.
It is terrible that such an incident had to take
place at all. Well done Innovest in warning ethical
investors about this problem. Watch out for an
editorial I am writing in the weeks ahead on SRI
rating organizations and their ability to analyze
and predict corporate misdemeanours. There is some
fascinating new research on this topic.
Innovest Warned of Maple Leaf Safety Concerns in
March, press release, September 5, 2008,
CSRWire.com, USA.
Dutch
Socially Responsible Investing (SRI) Assets Grow
816% In Two Years. -
[COMMENTARY]
"SRI assets under management in the Dutch market
have increased by a massive 816% in just two years
from €47bn ($68bn) in 2005 to €435bn in 2007,
according to VBDO, the Dutch sustainable investment
organisation. The huge rise in SRI assets, it said,
was due to growing public concern about the
environment and awareness of social injustice, but
more pointedly to the impact of March 2007’s
documentary on pension fund investment made by
Zembla, the Dutch current affairs programme. Zembla
discovered that some large Dutch pension funds were
invested in companies that polluted heavily, were
involved in child labour or produced controversial
weapons like landmines or cluster bombs. The
programme caused uproar amongst scheme members and
politicians in the Netherlands." The trend
towards ethical stocks and bonds continues
everywhere.
Dutch SRI assets bloom: 816% rise in 2 years, by
Hugh Wheelan, September 4, 2008, Responsible
Investor, UK.
Sustainable
Business Publishes Its Top 20 Global Sustainable
Stocks. -
[COMMENTARY]
The list includes Canon, Electrolux, Green Mountain
Coffee, Vestas Wind Systems and Whole Foods Market.
This is their seventh year publishing the list. I
think it's great that lists like this get published.
But you always have to really examine the criteria
to see if it works for you. Also, the companies in
this list may be great from a sustainability
perspective, but one needs the advice of a
professional advisor to determine if they make sense
financially.
Global Top Twenty Sustainable Businesses Announced,
by Chris Milton, August 26, 2008, The Inspired
Economist, USA.
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