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Ethical Investing News/Commentaries:
Apr. 2010 |
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Commentaries by Ron
Robins
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Green Confidence Index Shows US
Shoppers More Upbeat About Green Products &
Services. -
[COMMENTARY]
"The Index, which is derived from a monthly
online survey of approximately 2,500 Americans aged
18 and over, now registers 104.5, representing a
near 5 percent gain since its inception 9 months
ago. The Index measures Americans' attitudes towards
and confidence in how leaders and institutions are
perceived to be addressing environmental issues, the
adequacy of information available to them to make
informed decisions, and their past and future
purchases of green products."
How much of this improvement is
due to 'improving' economic conditions? Nonetheless,
it is a good sign that green is gaining ground if we
are to have a better world. Of course it is also
beneficial news for green and ethical investors.
Shoppers Feeling More Positive Toward Green
Purchases, Corporations, April 28, 2010,
GreenBiz, USA.
Regulation Driving Sustainability
Practices In Companies.
-
[COMMENTARY]
"Companies say that regulatory requirements are now
a more important factor driving corporate
sustainability initiatives while the competitive
advantage provided by such initiatives are viewed as
less important, according to a new report. AMR
Research surveyed 189 employees that handle
decisions on sustainability initiatives for the
report, which also looks at business risks, the
largest sustainability challenges and what companies
are doing to reduce emissions and increase energy
efficiency."
It
is unfortunate that it takes increased regulation to
drive companies to do the right thing. It is this
attitude why we are unlikely to see any major
changes in environmental or financial regulations
until we have either an environmental catastrophe
(and I am not talking about the BP oil spill in the
Gulf) or another financial meltdown. In my opinion,
both scenarios are likely to occur sooner than most
people think.
Regulation Eclipses Innovation as Main Driver in
Sustainability, April 27, 2010, GreenBiz, USA.
SHARE Canada Issues 1Q/10
Shareholder Engagement Report.
-
[COMMENTARY]
"10 of 12 ‘Say on Pay’ proposals filed by Meritas
were implemented... SHARE wrote letters to 41
companies about the Carbon Disclosure Project
(CDP)."
SHARE continues to excel in getting shareholders
engaged in proxy voting.
Shareholder engagement activity report Q1/10,
April 29, 2010, SHARE, Canada.
Only 40% Of UK Staff Say Their
Companies Are Ethical. -
[COMMENTARY]
"While employers that adhere to corporate social
responsibility and environmentally-friendly business
practices show better rates of employee engagement
and retention, only two out of five UK staff believe
that the organisation they work for behaves
ethically." The numbers are probably similar
throughout the developed world and probably apply
equally--at least--to the employees themselves.
People, generally, need to reach into their inner
values before a better business environment is able
to blossom.
Only 40% of employees say their business is ethical,
by Cath Everett, April 28, 2010, HRZone, UK.
Two US Government Reports Show
Green Investments Spur Growth, Reduce Pollution.
-
[COMMENTARY]
"Green investments are spurring significant
growth across the U.S economy while decreasing
industry's overall emissions per dollar of goods and
services, according to two reports released
Wednesday by the federal government."
This
is the kind of news ethical investors want to hear.
Do Green Investments Spur Growth or Emission Cuts?
By Douglas Fischer, April 22, 2010, Scientific
American, USA.
Major Pension Funds Pressuring
Companies To Reveal Their Policies Concerning
Bribery & Corruption. -
[COMMENTARY]
"A coalition of 20 pension fund investors and
fund managers with assets of $1.7 trillion – all
signatories to the United Nations Principles for
Responsible Investment – is pressuring major
companies, notably in the defence and construction
sectors, to reveal their management policies on
bribery and corruption." I fear that what these
companies say, versus what they actually do, might
not be the same. For ethical investors, this poses a
real dilemma.
Huge investor coalition demands bribery policy
clarity from 21 major companies, by Hugh
Wheelan, April 28, 2010, Responsible Investor,
UK.
Vatican Backs First Christian
Stock Index--Stoxx Europe Christian Index.
-
[COMMENTARY]
"Investors are being invited to put money into a
new Catholic equities index that is being backed by
the Vatican, which will not invest in companies
connected to gambling or birth control, among other
activities.”
I have been wondering for sometime when something
like this this might happen. We should note that
Islamic investments have from their inception
religious oversight. I believe the Vatican
involvement is positive for ethical investing
generally, as it brings more attention to ethics in
finance.
Vatican backs new equities index, by Phil Craig,
April 26, 2010, Financial News, UK.
55% Of US Advisors Allocating
Portion Of Client Portfolios To Green Investments.
-
[COMMENTARY]
"'To think, not five years ago, probably fewer
than 10% of the financial advisors stewarding
America’s private and institutional wealth even knew
what it meant to invest in alternative and clean
fuel solutions,' said Richard Bookbinder, Managing
Member of TerraVerde Capital Management and author
of Fund of Funds Investing: A Roadmap to Portfolio
Diversification."
SHARE Canada's 2009 Proxy Vote
Survey Shows Some Progress.
-
[COMMENTARY]
Slowly, but surely, fund managers are taking a more
active stance regarding proxy voting.
SHARE 2009 Key Proxy Vote Survey, April 26,
2010, SHARE, Canada.
What Should Ethical Investors Do
About Nanotechnology? -
[COMMENTARY]
This subject will come to the fore in the years
ahead. So far, it is an area completely unknown to
most ethical investors. The following discussion
provides some insight for us.
Nanotechnologies and socially responsible
investment, by Hilary Sutcliffe, April 23, 2010,
Matter for All, UK.
US States Begin Offering Legal
Protections For Socially Responsible Companies.
-
[COMMENTARY]
"When Ben Cohen and Jerry Greenfield sold Ben &
Jerry's to Unilever (UN) for $326 million a decade
ago, they did so reluctantly. They liked the payout
but feared the new owners would ignore the social
goals famously embraced by the ice cream maker. The
board, though, felt it had no choice but to accept
Unilever's offer. 'The legal advice was that the
primary concern for the directors was the financial
interests of the shareholders,' says Greenfield."
It seems that some US states are
likely to offer "benefit corporations" which would
have greater legal protections from the type of suit
that Ben & Jerry were concerned about in the above
quote.
New Legal Protections for Social Entrepreneurs,
by John Tozzi, April 22, 2010,
Bloomberg/Businessweek, USA.
Sustainable Investing Report
Concerning Canadian Companies.
-
[COMMENTARY]
"Major issues covered in the specific program
areas for 2009 included: climate change;
biodiversity; safeguarding water; human rights;
eliminating sweatshop conditions; respecting
Indigenous Rights and engaging communities; and
building transparency."
The report is very useful reading
for ethical investors interested in Canadian
companies. Northwest & Ethical Investments are doing
a fine job in analysing the Canadian scene.
Sustainable Investing Program Annual Report 2009,
April 2010, Northwest & Ethical Investment, Canada.
Oxford University Says Investing
In Arms Is Fine. -
[COMMENTARY]
"Oxford University released documents this week
showing it believes its investment in the arms trade
is ‘socially responsible'." I have known ethical
investors to be on either side of this issue. Where
do you stand?
University: now arms investment is 'ethical, by
Sophie Core & Natalya Segrove, April 22, 2010,
Cherwell.org, UK.
New Site: Climate Bonds
Initiative. -
[COMMENTARY]
"... the Climate Bonds Initiative is an
international network which promotes the development
and use of Climate Bonds. These bonds provide for
large scale issuance of long-term debt to overcome
medium term investment barriers preventing the
achievement of economies of scale in low-carbon
industry sectors. The bonds can thus finance that
global transition at speed and at scale."
I just came across this site,
courtesy of
Responsible Investor. Anyone interested in
green or climate related debt should research this
site.
Climate Bonds Initiative.
New World Bank Green Bond Issue.
-
[COMMENTARY]
"The World Bank yesterday issued its latest round
of "green bonds", releasing a $200m fixed-rate bond
designed to raise funds for investment in low carbon
projects in developing countries. The four year bond
were issued for the first time through the bank's
subsidiary, the International Finance Corporation
(IFC), and will be managed by financial group SEB,
which has worked closely with the World Bank on
previous green bond issues."
Still relatively small in size, but it is
anticipated these bond issues will get much larger.
However, it is strange that the World Bank is
encouraging green energy while it still funds dirty
coal plants too! Much like the record of the big
banks where they say they are green--just do not
look at their loan portfolios.
World Bank issues latest round of green bonds,
by Jessica Shankleman, April 16, 2010,
BusinessGreen, UK.
ConocoPhillips and ExxonMobil
Next Targets Of Oil Sands Campaigners.
-
[COMMENTARY]
"An institutional investor campaign which is
challenging oil giant BP (AGM) to improve its
reporting on financial, environmental and social
risks associated with oil sands investments in
Canada at today’s (April 15th) annual general
meeting, is being extended to similar resolutions at
oil majors, ConocoPhillips and ExxonMobil. The
investors have already lodged a resolution at
Shell’s AGM on May 18th in a campaign that is
gathering momentum, but seriously dividing
shareholder opinion."
With increasing environmental and water costs, oil
sands producers may not be as profitable as many
hitherto thought.
Oil sands campaign targets ConocoPhillips and
ExxonMobil ahead of today’s BP showdown, by Hugh
Wheelan, April 14, 2010, Responsible Investor,
UK.
A 'Data Engine' To Analyze
Corporate Social Impacts.
-
[COMMENTARY]
"A new group [GIIN]
is aiming to revolutionise the standard maths used
to select investments for billions of dollars worth
of assets by constructing a data engine that
contrasts – and quantifies – the tangible social
benefits of investing opportunities... A formidable
array of organisations joined forces last year to
form GIIN and propel the effort, including the
Rockefeller Foundation, Deloitte, PwC, Hitachi,
Citigroup, Deutsche Bank, JPMorgan, and the Bill &
Melinda Gates Foundation."
The value I see in these efforts
is that they are likely to bring huge new funds into
ethical investments. The problem with such efforts
is like that of economists trying to model the
economy--there are just too many variables to model
and account for. Nonetheless, it is wonderful they
are attempting to create such a model.
Architects of a ‘social investment data engine’,
by Tom Stabile, April 11, 2010, Financial Times,
UK.
New Global Sustainability Ratings
Initiative. -
[COMMENTARY]
"Global Initiative for Sustainability Ratings
(GISR), is a swipe at the profusion of
sustainability ratings providers and the
'proliferation of tools and methods' which GISR says
has created confusion for the market. The founders
say the rapid consolidation of the ratings field and
the proliferation of new raters are undermining
confidence and trust in the quality of 'available
ratings frameworks'. It’s argued that it’s not
uncommon for a single company to annually complete a
dozen or more disparate questionnaires – with
equally disparate outcomes."
The desire to create a single
ratings system to analyze corporate sustainability
efforts on the surface seems good. However, just as
two analysts can evaluate a single income statement
and arrive at different conclusions as to a
company's prospects, so, I'm sure will there be
continued variability in assessing outcomes using a
system such as the one proposed by GISR.
New global sustainability ratings initiative set to
launch, by Daniel Brooksbank, April 12, 2010,
Responsible Investor, UK.
$16 Trillion Investor Coalition
Quizzing Companies On Water Use.
-
[COMMENTARY]
"A group of 137 financial institutions globally
with a combined $16trn (€11.9bn) in assets have sent
out questionnaires to more than 300 of the world’s
largest companies on their water use as part of the
Carbon Disclosure Project’s Water Disclosure
initiative. The institutions include names such as
Allianz Group, CalSTRS, HSBC, ING, Mitsubishi UFJ
Financial Group (MUFG) and National Australia Bank."
Water is fast becoming the new oil in terms of
importance to economic activity. It will be
rewarding for investors to follow which companies
use extraordinary amounts of water and how they are
able to reduce its usage. It just might
significantly affect their bottom line in the future
as water becomes increasingly more costly.
$16trn investor coalition to quiz companies on
water, by Daniel Brooksbank, April 9, 2010,
Responsible Investor, UK.
German Investors Favour Ethical
Investing. -
[COMMENTARY]
"Almost two thirds of German retail investors
would prefer investing in ethical SRI products
rather than other, potentially more profitable,
opportunities, according to a survey commissioned by
German asset management firm Union Investment. The
survey, carried out by market research institute
Forsa, revealed that investors between 20-29 years
old were also the most likely to opt for a
sustainable investment with 45% of them considering
it an attractive option."
The news continues to be positive for ethical
investing. However, and I am not aware of the exact
figures for Germany, but in North America and the
UK, ethical/SRI mutual funds have less than three
per cent of the mutual funds market. This is the
perennial problem for the ethical/SRI industry--how
to get retail investors putting their money where
their values are.
German retail investors value SRI over profit,
by Atholl Simpson, April 8, 2010, Citywire,
UK.
As Resource Stocks Boomed, UK
Ethical Funds Lagged. -
[COMMENTARY]
"So why have fund managers been unable to turn
this sentiment [interest in ethics, sustainability,
etc.] into profit over recent years. In one word:
resources. In the fourth quarter of 2009 oil and
mining stocks flied ahead of the rest of the market
as beta begun to attract a higher multiple than
defensive growth stocks." This demonstrates the
characteristics of numerous ethical funds and
indexes: significant over or under exposure to
different industries.
Why are UK ethical funds doing so badly? By
Charlie Parker, April 6, 2010, Citywire, UK.
Global Renewable Energy Market
Predicted To Grow Seven Fold Within Five Years:
KPMG. -
[COMMENTARY]
"The global renewable energy market is set to
grow seven times over the next five years to about
US$560 billion. This is according to an expert from
KPMG, who was speaking at the sidelines of Eco World
2010." Predictions for renewable energy growth
are bright indeed.
Global renewable energy market to grow seven-fold to
US$560b: KPMG expert, April 8, 2010,
channelnewasia.com, Singapore.
Shareholders Pressuring BP To
Provide Full Environment Report On Tar Sands
Development. -
[COMMENTARY]
"Large shareholders will be pitted against each
other this week in a row over oil giant BP's
involvement with tar sands in a battle that is set
to dominate this year's round of company annual
meetings. A special resolution has been filed by 143
shareholders for BP's annual meeting on 15 April,
demanding the company provide a full report by next
year about the risks of its planned tar sands
development in Canada." Though the dissident
shareholders are unlikely to win the vote, they
could really shame BP. The company should do the
right thing. They should create and publish such a
report.
Shareholders at loggerheads over vote on BP's tar
sands development, by Ruth Sunderland, April 4,
2010, The Observer, UK.
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