Biofuels Increase Greenhouse Gas Emissions More Than Regular Fuels. - [COMMENTARY] I reported some months ago on research showing that the burning of biofuels creates 7-15% more greenhouse gases than with regular fuels. These new studies published in the magazine Science demonstrate biofuels will add considerably to the production of greenhouse gases when compared to conventional fuels. This is because of the added greenhouse gas production related to the clearing of new land to grow biofuels, or for food production as a result of lands being used for biofuel crops. I have always said that the whole promotion of biofuels was to win farmers votes. I stand by that. From a climate change standpoint, study after study is now showing it was a terribly wrong headed idea to subsidize biofuel production. If you have invested in the biofuel area as a result of all the media hype, these studies make sober reading!
Studies Deem Biofuels a Greenhouse Threat, by Elisabeth Rosenthal, February 8, 2008, The New York Times, USA.

UK Ethical Funds Not Investing Much In Green Tech Companies. - [COMMENTARY] A survey by Holden & Partners found that most UK ethical funds were heavily invested in banks and telecom companies and not climate change or environmental companies that most of their investors were interested in. Furthermore, the portfolios of ethical or socially responsible investing funds were not very different from regular funds. Personally, I am not surprised by this finding, especially when tobacco, defence, nuclear and such industries are excluded from a portfolio, it narrows the universe of stocks available to invest in. Most mutual funds (unit trusts in the UK) have up to one hundred or more companies in their portfolio. Contrast this with arguably the most successful investor of all time, Warren Buffett, who invests in relatively few companies.

It could be that most ethical funds try to be all things to all people. It may also be that financial planners demand a highly diversified portfolio for their clients! Ethical or socially responsible investors, not only in the UK but elsewhere too, may want to discuss these points with their investment advisor.
Ethical funds' exposure not so green, by Tom Stevenson, February 6, 2008, The Daily Telegraph, UK.

Fund Managers Who Are Well-Connected Make Significantly Higher Fund Returns Than Poorly Connected Managers. - [COMMENTARY] "This paper... focus[es] on
connections between mutual fund managers and corporate board members via shared education networks. We find that portfolio managers place larger bets on firms they are connected to through their network, and perform significantly better on these holdings relative to their non-connected holdings. A replicating portfolio of connected stocks outperforms a replicating portfolio of non-connected stocks by up to 8.4% per year. .. Our results suggest that social networks may be an important mechanism for information flow into asset prices." This is important research. It suggests to me that such networks might be conveying insider information!
Board connections and mutual fund returns, by Lauren Cohen, Andrea Frazzini, and Christopher Malloy, National Bureau of Economic research, USA.

Corporate Knights Lists Canada's Top 50 Greenhouse Gas Emitters. - [COMMENTARY] This list on page 21 of the PDF document linked to below, is worth reviewing, particularly if you are a green investor looking for environmentally conscious major corporations. Most of the big emitters are, of course, energy companies.
The Carbon 50, (PDF-9.31 MB), Corporate Knights, February, 2008, Canada.

US Banks Under Pressure As Governance Issues Come To The Forefront. - [COMMENTARY] This is a good article on the coming proxy fights that US banks will face in their annual general meetings, which occur for many of them after April. Governance deserves to come under great scrutiny with losses by the banks that will be in the hundreds of billions of dollars within the not too distant future. Meanwhile the losses for the banks shareholders are even greater!
US governance activists put pressure on banks, by Shanny Basar, February 26, 2008, Financial News Online, US.

UK Social Investment Forum (UKSIF) Launches New National Ethical Investment Week 2008 Website. - [COMMENTARY] The UKSIF is launching the National Ethical Investment Week campaign for May 18-24, 2008, and has created a special website for that purpose.

New US Study Reviews Validity Of Corporate Social Responsibility Findings By Socially Responsible Investing Research (SRI) Organizations. - [COMMENTARY] The study has two major findings... "[1] We found major social ratings [by SRI rating organizations] to have a fairly low correlation with each other, supporting theories of differentiation... [2] firms with high and low social ratings are equally likely to be embroiled in a major scandal a few years later – although this test of predictive validity has low statistical power." This study demonstrates the many different perspectives in CSR/SRI research and that these assessment organizations have no special insight into which companies will be embroiled in scandals. I believe this diversity is wholly beneficial to SRI.

However, I also think there should be specific uniform standards applied to all CSR/SRI organizations in reviewing a company's CSR activities. You can think of these standards being much like accounting rules. Without them, we have a hodge-podge of reporting. Fortunately, efforts are being made in this direction, such as with the Global Reporting Initiative.
Imitate or Differentiate? Evaluating the validity of corporate social responsibility ratings, by Aaron K. Chatterji, Fuqua School of Business, Duke University and David I. I. Levine, Haas School of Business, University of California, Berkeley. USA.