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Ethical Investing News/Commentaries:
June 2009 |
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Commentaries by Ron
Robins
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New York
State Common Retirement Fund Divests From Companies
Doing Business In Sudan. -
[COMMENTARY]
"New York State Comptroller DiNapoli announced
the withdrawal of investments in a set of companies
operating in Sudan from the New York State Common
Retirement Fund (Fund). DiNapoli also announced the
decision to continue to monitor and engage another
set of companies with Sudan-related operations. The
actions to be undertaken by the Comptroller,
particularly the latter, were developed in
coordination with the Conflict Risk Network (CRN), a
project of Genocide Intervention Network (GI-NET)."
Expect more actions like this as global collective
consciousness rises and becomes more concerned about
social, environmental, and governance (ESG) issues.
Increasingly, stocks that are good to invest in will
be those that have passed quality ESG screens.
New York State comptroller withdraws state
investments from companies in Sudan, press
release, June 30, 2009, Genocide Intervention
Network, USA.
New Global
Shariah Index Launched By Russell & Saudi Arabia's
Jadwa Investment. -
[COMMENTARY]
"Launching
in mid-summer 2009, the Russell-Jadwa Shariah Index
offers investors an accurate and complete
global-equity market index that reflects established
Shariah investment guidelines." This index
breaks new ground in that it is based on companies
around the globe that conform to Shariah ethical
investment values. Up until now, I believe all
previous Shariah screened indexes were country or
regionally based.
Introducing the Russell-Jadwa Shariah Index,
June 24, 2009, Russell Investments, USA.
86% Of
American Consumers Believe Profitable Businesses Can
Address Social Issues. -
[COMMENTARY]
"A new study
finds that 86 percent of consumers believe that
profitable businesses can address social issues. The
poll, conducted May 18-28, 2009, among a sample of
511 consumers and 320 marketing professionals
nationwide, highlights the current state of key
consumer perceptions in the area of corporate social
responsibility."
There are many other interesting
findings for businesses in this poll, including,
"[That] more than 70 percent of consumers and
marketing professionals believe there are companies
that are making a positive change in society through
the products and services they sell today."
Eighty-Six Percent of Consumers Believe Profitable
Businesses Can Address Social Issues, But Want
Efforts to Be In Keeping With Core Business
Strategy, press release, June 23, 2009, by RT
Strategies/Waggener Edstrom Worldwide, USA.
Poor ESG
Disclosure In Emerging Markets Deters Major
Investors: Survey. -
[COMMENTARY]
"Approximately 70% of a sample of
67 major asset managers and institutional investors
collectively representing $130bn of emerging market
investment, told the Emerging Markets Disclosure (EMD)
Project, that they wished to see the development of
national sustainability indices, ESG listing
requirements and greater incorporation by emerging
markets companies of global ethical standards and
norms before they could commit more money."
A
major issue is highlighted here with respect to
ethical investors finding stocks that are good to
invest in emerging markets. However, S&P, Dow Jones
and other index providers are increasingly offering
ESG/sustainability oriented indices in these
markets. For these indices see my links page,
Ethical Investing Stock and Bond Indices.
ESG disclosure holding back 70% of responsible
investors from upping emerging markets assets,
by Hugh Wheelan, June 22, 2009, Responsible
Investor, UK.
Interfaith
Center On Corporate Responsibility Marks 40th
Anniversary With Podcasts Chronicling Its History Of
Shareholder Advocacy. -
[COMMENTARY]
"Anticipating the celebration of
its upcoming 40th anniversary, the Interfaith Center
on Corporate Responsibility (ICCR) is telling its
story through a year-long series of monthly audio
podcasts. The series, entitled The Arc of Change,
relates how ICCR pioneered the practice of
shareholder activism, which has significantly
shifted widespread corporate practices to be more in
line with the tenets of environmental and social
sustainability. ICCR is a coalition of nearly 300
faith-based institutional investors representing
over $100 billion in invested capital."
Interfaith Center on Corporate Responsibility Marks
40th Anniversary With Streaming Audio Podcasts
Chronicling the History of Faith-Based Shareholder
Activism, June 18, 2009, press release,
Interfaith Center on Corporate Responsibility (ICCR),
USA.
Jantzi
Research & Maclean's Magazine Pick Canada's Top
Socially Responsible Companies. -
[COMMENTARY]
Jantzi's analysis is always top-notch. Anyone
interested in investing in Canada's best socially
responsible companies should review this list.
Jantzi-Macleans 50 Most Socially Responsible
Corporations, June 18, 2009, Macleans.ca,
Canada.
Société
Générale, UBS, & Cheuvreux Named As Tops In European
SRI & Sustainability Research In 2009 Thomson
Reuters Extel Survey. -
[COMMENTARY]
This survey is always interesting to look at, most
particularly in the light of recent cuts to SRI/ESG
research by financial institutions.
Soc Gen named best European sustainability research
house for 2009: full Thomson Extel rankings, by
Hugh Wheelan, June 18, 2009, Responsible
Investor, UK.
Three New
Indexes Focusing On Sustainability. -
[COMMENTARY]
"Three index providers this week announced new
products focused on companies that address
environmental issues or show class-leading efforts
on sustainability reporting." The expansion in
such products again underlines the increasing
interest in green and sustainable investing.
More indexes to address sustainable investment,
June 18, 2009, Environmental Finance, UK.
UK's
Multi-Faith Spiritual Community & Investment
Industry Promote Higher Investment Values At
Conference In UK Mosque.
-
[COMMENTARY]
"In a rare collaboration between faith
institutions and investment managers, the Three
Faiths Forum and The International Interfaith
Investment Group-3iG teamed up with CCLA Investment
Management and the Fortune Group and an audience of
over 100 City professionals to work out new
paradigms for responsible investment." I believe
that moral, spiritual, and religious values will
play an increasingly important part in investors'
investment decisions. The age of the 'spiritual
investor' is just beginning and is bound to play an
integral part in reshaping our world towards a
brighter ethical and economic future.
Faith in Capitalism Conference in London's Central
Mosque, press release, June 17, 2009, 3iG, UK.
Review
Articles On Socially Responsible & Ethical Investing
In Canada. -
[COMMENTARY]
"... a compilation of stories reported from the
Social Investment Organization's conference recently
wrapped up in Winnipeg, as well as other events
concerning governance. These articles probe the
future of an investment model built on principles
other than returns." These articles are a
worthwhile read for anyone interested in ethical
investing.
Is SRI sustainable in a downturn? June 16, 2009,
advisor.ca, Canada.
EU
Governments Seen Lagging In Green Investment.
-
[COMMENTARY]
"'"EU states spent three to 13 percent of
recovery aid on what we would call green
activities," he [Karl Falkenberg, head of the EU
executive arm's environment department] said. "On
the U.S. side we come up with about 14 percent ...
but we see China in the upper 30s.'" Clearly,
and generally speaking, I believe the emphasis on
green investing is still in its early stages.
EU seen lagging U.S. and China on green investment,
by Pete Harrison and Jan Strupczewsk, June 15, 2009,
Reuters, Belgium.
European SRI
Fund Sales Up In April.
-
[COMMENTARY]
"Total sector sales of European screened SRI
funds in April turned positive again at €682.5m
following a black month in March when €25.3m was
pulled from the SRI funds universe. Confidence in
equity SRI funds was still muted, however, with
money market funds remaining the best sellers and
securing the top three sales slots."
SRI and green fund sales turn positive in April
after March dip, by Hugh Wheelan, June 15, 2009,
Responsible Investor, UK.
Institutional
Investors Target Fortune 500 Companies For
Deforestation Risks.
-
[COMMENTARY]
"Investors running assets of US$1.3 trillion have
signed up to a new initiative backed by the United
Nations and HRH Prince Charles’ Rainforests Projects
that will ask 150 companies in the Fortune 500 index
as well as 50 other companies to report on risks
that they could be contributing to dangerous
deforestation." This type of initiative is
important to get companies to realize how they might
improve their practices, not only in regard to
deforestation, but in many other areas of
environmental, social and governance concerns as
well.
Investor-backed, UN/DFID supported project targets
Fortune 500 companies on deforestation risks, by
Hugh Wheelan, June 15, 2009, Responsible
Investor, UK.
Harvard Study
Shows How Investors Can Determine Long Term
Portfolio Risks Due To Labour & Human Rights
Activities Of Global Corporations.
-
[COMMENTARY]
"This paper explores how pension funds and other
investors can obtain data on the long- term
sustainability risks posed by the labor and human
rights (LHR) activities of global corporations, with
a specific focus on supply chains." This is a
precedent setting study and is something that all
ethical investors need to pay attention too.
Quantifying Labor and Human Rights Portfolio Risk,
by Aaron Bernstein, June 2009, The Labor & Worklife
Program at Harvard Business School, USA.
Pew Study
Finds Green Jobs In US Growing Twice As Fast As
Other Jobs.
-
[COMMENTARY]
"While traditional jobs grew by only 3.7 percent
between 1998 and 2007, Pew found that jobs in the
clean energy economy grew at a national rate of 9.1
percent. There were similar trends at the state
level, where job growth in the clean energy economy
outperformed overall job growth in 38 states and the
District of Columbia during the same period. The
report also found that this sector is poised to
expand significantly, driven by increasing consumer
demand, venture capital infusions, and federal and
state policy reforms." The Pew study adds
further fuel to green investing and that some of the
best socially responsible stocks to invest in over
the longer term will have a definite green flavour.
Pew Study: Green Jobs Growing More Than Twice as
Fast as All Other Jobs, by Tracey de Morsella,
The Green Economy Post, USA.
Five
Industrial Sectors Risk Losses & Reputational Risk
Due To Damaged Ecosystems: EUROSIF.
-
[COMMENTARY]
"The report, entitled Biodiversity Theme Report,
addresses risks to the agricultural, extractive,
paper and forestry, real estate and infrastructure,
and tourism industries. It considers both companies
that depend on biodiversity and ecosystem services,
and companies whose activities have an impact on
biodiversity and ecosystems. The business risks
associated with species loss and the restricted
functional capacity of ecosystems include decreased
availability of resources, the likelihood of
regulatory action to protect environmental
resources, increased prices and limited access to
capital and insurance, an increase in trends toward
ecologically responsible purchasing, legal action,
and reputational damage." This report is useful
reading for all ethical investors.
Damage to Ecosystems Can Lead to Financial Losses
and Reputational Risks for Companies, by Robert
Kropp, June 10, 2009, SocialFunds.com, USA.
Some Banks
Cutting Back On SRI Coverage: Survey.
-
[COMMENTARY]
"Several banks are cutting back their analysis of
companies’ socially responsible policies, according
to Thomson Reuters, which does a regular survey of
equity analysts... Steve Kelly, global head of
surveys at Thomson Reuters Extel, said Citigroup, JP
Morgan and Bank of America Merrill Lynch were among
the banks to have cut back in the past few months.
Merrill Lynch’s specialist, Zoe Knight, was one of
about 20 analysts to be let go in January, as a
result of the merger with Bank of America."
Some perspective
on these cuts must be noted. Though unfortunate,
they were not disproportionate to the layoffs
made generally in the industry.
Banks move to scale back socially responsible
investing, by Mark Cobley, June 8, 2009, Thomson
Extel article appearing in Wealth Bulletin,
USA.
Big Companies
Still Showing Poor Awareness Of Climate Change
Impacts On Their Operations.
-
[COMMENTARY]
"Two new studies from investor group Ceres, the
Environmental Defense Fund and the Center for Energy
and Environmental Security assess the major impacts
climate change could have on global companies, and
calls on the U.S. Securities and Exchange Commission
to set standards for climate-related risk reporting.
The two new studies, one an in-depth look filings
from 100 global companies in 2008, and another a
longitudinal look S&P 500 companies' reports over
the past 13 years, detail how slowly some of the
world's largest companies are in recognizing and
forming a plan to mitigate the impacts of climate
change on business operations."
In reviewing
these reports, ethical investors might glean some
insight as to whom they feel they are comfortable
investing in. It seems that many companies still do
not really understand the advantages of using
corporate social responsibility. The Ceres and
Environmental Defense Fund report actually reviews
and comments on individual companies.
Companies Show Little Awareness of Climate Change
Risks, Report Finds, GreenBiz, USA.
Interest In
SRI Rising Significantly In Mid-East.
-
[COMMENTARY]
"Economic downturn has increased Middle East
investors' inclination towards socially responsible
investments (SRIs), with interest rising four times
in the past six months... The SRIs are particularly
appealing to investors seeking diversification or
opting for investments that are socially responsible
or follow certain criteria in line with
Shariah-compliant products, said Firas Mallah, Head
of Middle East, Dexia Asset Management." It is
encouraging to see the interest in ethical stocks
and bonds rising in one of the most troubled regions
of the world.
Interest in SRI rises four fold, by Shveta
Pathak, June 8, 2009, Business24/7, United
Arab Emirates.
Carbon Cap
Could Wipe-Out Many US Companies' Earnings.
-
[COMMENTARY]
"American Electric Power Co., Allegheny Energy
and Ameren Corp’s future earnings potentially could
be more than wiped out by costs under a
cap-and-trade program requiring purchase of carbon
emission credits, according to a report released
today by the Investor Responsibility Research Center
Institute and Trucost, a provider of data and
analysis on corporate environmental impact." A
reminder--not only for ethical investors, but for
all investors--of the need to take into account the
future of carbon emission caps when evaluating a
company's prospective financial performance.
US carbon cap and trade could wipe out some US
companies future earnings: report, by Barry B.
Burr, June 3, 2009, Responsible Investor, UK.
US Pension
Shareholder Activism Has No Economic Value, May
Breach Fiduciary Duty: Chamber of Commerce.
-
[COMMENTARY]
"Shareholder proposals filed by union-sponsored
and public pension plans at US corporate AGMs show
no clear evidence of short- or long-term
improvements in operating or stock market
performance of the target firms and may be placing
trustees in breach of their fiduciary duty under
ERISA guidelines, according to a study commissioned
by the US Chamber of Commerce... The consultant
[Navigant Consulting] said its research found no
statistically significant overall short-run or
long-run improvement and said there was actually
some indication of a long-run decrease in market
value for target firms in the sample." I will be
fascinating to see if these findings affect
future shareholder resolutions! My guess is that the
pace of such resolutions will only increase until
whole industries change.
US pension shareholder activism has no economic
value, may breach fid duty: Chamber of Commerce,
by Hugh Wheelan, June 3, 2009, Responsible
Investor, UK.
Investment In
Clean Energy Tops 2007 Record, Despite Market Crash:
United Nations.
-
[COMMENTARY]
"Emerging markets allocations soar as crisis
dampens US investment... Investors put $155bn into
clean energy companies and projects worldwide in
2008, not including large hydro – a four-fold
increase since 2004 – according to a report prepared
for the UN Environment Programme’s (UNEP)
Sustainable Energy Finance Initiative."
Investment in clean energy tops 2007 record, despite
market crash: United Nations, by Hugh Wheelan,
June 3, 2009, Responsible Investor, UK.
UK Study Says
Ethical Investing Far More Important Today Than In
The Past.
-
[COMMENTARY]
"The Friends Provident study showed nearly three
quarters of Brits (74%) agree it is important that
companies take social, ethical and environmental
issues seriously. Further to this over half (54%)
think ethical investing is far more important than
it was 25 years ago when the UK was emerging from a
recession." Again, the Brits show leadership
concerning their desire for ethical investing.
Brits determined to make profit without compromising
principles, June 1, 2009, Easier Finance,
UK.
Dell, Procter
and Gamble, Hewlett-Packard, Better Place & Tririga
Win 2009 AMR Research Leadership Awards In
Sustainability & CSR.
-
[COMMENTARY]
"To determine the list, AMR Research surveyed
roughly 50 companies, many of which are part of the
Fortune 500. Leaders where chosen based on the
following categories of environmental and social
stewardship: corporate social responsibility, supply
chain innovation, and sustainable leadership
including sustainability and innovation, operational
sustainable performance, and clean technology."
The report makes clear some of the interesting
strides that the winning companies have made to
sustainability. Ethical investors might want to
review AMR's findings.
Dell, Better Place and HP Net Sustainability Awards,
by Andrea Nocito, June 1, 2009, Matter Network,
reported in Reuters, USA.
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