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"64% of those polled were interested in investing, or
investing more money, in SRI fund options; and 22%
said they were very interested."
--
TIAA-CREF Asset
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    November 2014

"Canadian investors are generally favourable towards SRI. A third (32%) said they are 'very' or 'somewhat' interested. [Another] 55 per cent indicated that they would consider SRI if the return was 'as good or better' than other investments... The majority of investors surveyed view SRIs as 'futuristic' (78%) and 'a win-win for the individual and society' (77%)."
--
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Ethical Investing News/Commentaries: Feb. 2010

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Commentaries by Ron Robins

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Social Investment Organization (SIO) Produces Canadian Guide To Socially Responsible Mutual Fund Companies. - [COMMENTARY] "All of the firms listed in this Directory are Sustaining or Associate Members of the SIO. As Canada’s national association for socially responsible investment, the SIO raises public awareness of SRI, educates the financial community and the public about SRI and takes a leading role in furthering the use of SRI." This is a very useful guide for all Canadian ethical investors.
Your Guide to Socially Responsible Mutual Fund Companies in Canada, February 26, 2010, Social Investment Organization, Canada.

Swiss Fund Manager Vontobel Says Sustainable Investment In Asia Could Climb From Current US$20 Billion Up To US$4,000 Billion By 2015. - [COMMENTARY] "In addition, the study examines on the one side the tremendous pace of change in social, environmental and corporate governance standards in the region and on the other the fact that although investors recognise the corresponding risks they underestimate the opportunities, thanks to the major progress achieved in data availability, to identify Asian companies with high standards of sustainability and consequently to optimise their investment strategy accordingly."

The $4,000 billion number is certainly an eye catcher! There is no doubt in my mind that sustainable investing in Asia is still in its early stages and will grow enormously in the years ahead--and probably much faster than their rapidly growing economies as well. We only recently became aware that China is outspending and outpacing the US in green tech.
Sustainable Investing in Asia - Uncovering Opportunities and Risks, February 2010, Vontobel, Switzerland.

Company Carbon Ratings Announced By Environmental Investment Organization (EIO). - [COMMENTARY] "For the first time a Ranking has been created which penalises and rewards companies on a global scale against absolute emissions with a particular emphasis on the reliability of the data being provided. The effect of the Rankings is first and foremost to encourage disclosure and verification amongst companies. It will then begin to create incentives for companies to reduce their emissions through share price pressure."

This is an idea whose time has come. Ethical investors can see the rankings of most of the world's big companies. The methodology of how they construct the rankings is also available. This ranking system might be one that many ethical investors will want to follow.
Launch of ET Carbon Ranking, press release, February 22, 2010, Environmental Investment Organization, UK.

UAE Companies Not Adopting CSR Policies. - [COMMENTARY] "More than 90% of businesses in the UAE do not adopt corporate social responsibility, or CSR, policies and practices associated with auditing and monitoring, a study revealed."  Is it the cultural characteristics of the region, or for other reasons, for the non-adoption of CSR by companies in the United Arab Emirates?
Study: Over 90% of UAE companies do not adopt CSR policies, by T. Ramavaman, February 23, 2010, MENAFN-Khaleej Times, Jordon.

SHARE Issues 09 Key Proxy Vote Survey Of Canada's Investment Managers. - [COMMENTARY] "The purpose of SHARE’s annual Key Proxy Vote Survey is to give pension fund trustees information that will allow them to compare proxy voting by investment managers and proxy voting services... more firms are issuing proxy voting reports to their clients, consulting with their clients in the development of their proxy voting guidelines, and disclosing their proxy voting guidelines to the public." This report will be of particular interest to Canadian pension fund boards and others who hire asset managers to manage their funds.
09 Key Proxy Vote Survey, February 2010, SHARE, Canada.

US Study Says Vice Fund (VICEX) Outperformed Domini Social Equity Mutual Fund (DSEFX) Over Long Term, But Not In 2009. - [COMMENTARY] "We examine the performance of socially responsible investing (SRI) vs. vice investing through sin funds. Our research shows while the annualized return of SRI through Domini Social Index (DS 400 Index) from 1990 to 2009 has been higher than that of S&P 500, the relative 5 and 10- year returns are more favorable in S&P 500. We also find that while SRI through Domini Social Equity Mutual Fund (DSEFX) outperformed vice investing through vice fund (VICEX) over the most recent one year, VICEX has outperformed DSEFX over the long term. Presumably, U.S. investors sacrifice returns by investing in social responsibility."

I believe we are entering a very different investment world now. The emphasis on environmental, social, and governance (ESG) criteria, plus the rising concerns about ethics, point to potentially superior long term results for ethical investors. Perhaps the past year where ethical funds performed really well against their conventional peer is indicative of the trend I foresee.
Socially Responsible Investing vs. Vice Investing, by Hoje Jo, Roopali Sharma and Sylvie Wright, all at Santa Clara University, and Tamanna Saha of New York University, February 2010, USA.

Natural Marketing Institute (NMI) Publishes Its Top 10 Trends For The Next Decade. - [COMMENTARY] "These trends are the result of various NMI research sources including the Health & Wellness Trends Database® (HWTD), the LOHAS Consumer Trends Database® (LCTD), Healthy Aging/Boomer Database® (HAB) and Supplements/OTC/Rx Database™ (SORD) as well as analysis of current activities in the marketplace. NMI databases, now including 11 years of data across 500,000+ U.S. consumers, provide comprehensive information across more than 150 product categories."

The trends include "Getting Off the Grid” and "Meaningful Green." To understand them click here. Studying these trends might help you on where to place some of your funds.
Top Trends for the New Decade, February 17, 2010, Lohas.com, USA.

Ethical Investor Groups Calling For Boycott Of 'Conflict Minerals' From The Democratic Republic Of The Congo. - [COMMENTARY] "Since the conflict began, more than 5.4 million have lost their lives. The DRC is one of the most mineral rich countries in the world, with sizeable deposits of gold, tantalum, tin and tungsten. According to the United Nations, over 50% of the mines in eastern Congo are controlled by warring armed groups, who demand 'taxes,' bribes or other payments for the minerals being extracted out of the mines. The majority of the minerals are smuggled to neighboring countries where they are sold to smelters, and ultimately find their way into finished consumer products. This practice directly hinders repatriation and disarmament efforts, as it provides armed groups with a robust funding source."

I see such calls to action rising in popularity. They are a signaling a higher consciousness among investors.
Investor Statement regarding Conflict Minerals from the Democratic Republic of the Congo, February 2010, As You Sow, USA.

Deutsche Bank & NASDAQ OMX Introduce The DB NASDAQ OMX Clean Tech Index. - [COMMENTARY] "DB Climate Change Advisors (DBCCA), the climate change investment and research business of Deutsche Bank's Asset Management business, and The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) today announced the introduction of the DB NASDAQ OMX(R) Clean Tech Index (DBCC). The index is an accurate, real-time representation of the global clean technology sector with exposure to clean energy, energy efficiency, transport, waste management and water companies. This is the first clean technology index co-branded by a global exchange company and a global bank."

We have another good clean tech index to watch now. For ethical investors, it is always useful to see what companies such indices include. They might give you ideas as to what to put into your own portfolio.
Deutsche Bank and NASDAQ OMX Introduce the DB NASDAQ OMX Clean Tech Index, press release, February 10, 2010, Deutsche Bank & NASDAQ, USA.

International Brands Disclosing Global Forest Footprint. - [COMMENTARY] "A Report published today by the investor-backed initiative the Forest Footprint Disclosure (FFD) project reveals the names of those businesses that have responded to its first call to disclose details of their ‘Forest Footprint’. This term indicates the extent to which procurement policies for Forest Risk Commodities (FRCs) such as palm oil, soy, timber, beef, leather and biofuels are linked to deforestation. The Report identifies two high profile British High Street names as ‘Best Performers’ in their sectors – Marks & Spencer (General Retail) and Sainsbury’s (Food and Drug Retail)."

Again, looking at what the companies report--or do not report--is a worthwhile exercise for ethical investors. It just might affect one's holdings.
International Brands lead the way in disclosing their global forest footprint, February 10, 2010, Forest Footprint Disclosure Project. See full report (over 6MB PDF). UK.

Shareholders Successfully Pressure Shell To Freeze Executive Salaries & Incorporate Sustainability Measures In Employee Bonuses. - [COMMENTARY] "Institutional shareholders have welcomed an announcement by Shell, the Anglo-Dutch oil giant, that it plans to limit top executives’ pay and include sustainable development as a significant part of performance bonuses." The winds of change are hitting corporations everywhere. By taking a lead like this Shell is demonstrating the advantages of using corporate social responsibility to advance its own interests as well.
Shell freezes exec salaries and includes sustainability performance after shareholder pressure, by Daniel Brooksbank, February 17, 2010, Responsible Investor, UK.

Corporate Water Usage Risk Unmeasured. - [COMMENTARY] "Unfortunately, the vast majority of large publicly traded companies are failing to adequately manage and disclose the risks they face from water scarcity, an issue that will likely become more acute as the world's population increases and the future impacts of climate change come to pass, according to new Ceres research." This is a subject ethical investors need to be aware of as it breaks upon the consciousness of investors generally. Water management and costs will be a huge consideration for companies in the not so distant future and could significantly affect financial results and stock prices.
Lack of Awareness About Water Risks Threatens to Sink Global Firms, February 11, 2010, GreenBiz, USA.

What Companies Are Green? Wide Gap Between Public Perception & Reality. - [COMMENTARY] "New research suggests some of the world's largest companies are still struggling with communicating their environmental efforts to customers. The latest installment of MapChange 2010 -- a joint effort from Change, a Canadian consulting firm, Angus Reid Public Opinion, and the nonprofit Climate Counts -- measured actual and perceived sustainability efforts of major consumer shipping, food service and banking companies, using a scale of 0-100." Amazing what good PR can do. Companies with terrible sustainability scores such as Wendy's International and Burger King score well on sustainability according to public perceptions.
Study Shows Wide Gap Between Actual and Perceived Green Efforts, February 9, 2010, GreenBiz, USA.

From Oil To Gold, 'Clean' Resource Inputs Demanded By Retailers. - [COMMENTARY] "Whole Foods and Bed, Bath and Beyond have begun working to phase out from its operations transportation fuel from the Canadian tar sands. Meanwhile, Cartier, Sears and more than 60 other retailers have committed to buying gold from environmentally responsible sources." A good discussion here on how even jewellery retailers are demanding 'untarnished' gold.
From Oil to Gold, Top Companies Shunning 'Dirty' Resources, February 10, 2010, GreenBiz, USA.

More Large US Companies Boycotting Canadian Tar Sands Oil. - [COMMENTARY] "... two Fortune 500 companies announced plans to eliminate the high-carbon Alberta fuel from its supply chain. The U.S.-based firms Whole Foods Market Inc. and Bed, Bath and Beyond Inc. both unveiled new fuel policies designed to wean themselves off 'higher-than-normal greenhouse gas footprints' inherent in feedstock from the Alberta tar sands." Despite the action of these large retail firms--and even if US companies increasingly boycott tar sands oil--companies from China, South Korea, and possibly even Japan, may well fill the gap by buying more of that oil. The need for a global climate change solution is evident by what is going-on with tar sands oil.
2 U.S. firms wash hands of tar sands, by Mitch Potter, February 10, 2010, The Toronto Star, Canada.

Investors Step Up Pressure On Corporate Responsibility Reporting. - [COMMENTARY] "A coalition of global investors from 13 countries, managing over US$2.1 trillion of assets, today added its voice to the increasing calls for better corporate reporting on environmental, social and corporate governance (ESG) activities. The international investor coalition is writing to 86 major companies urging them to honour the reporting requirements of the United Nations Global Compact, the world’s biggest voluntary corporate responsibility initiative. Each of the 86 'laggard' companies has previously joined the UN initiative but failed to produce the mandatory annual report on how it puts the initiative’s ten principles into action."

Most likely the majority of these companies are listed on stock exchanges in the US. Therefore, they now fall under the recently announced SEC guidelines requiring disclosure of any material impacts of climate change on corporate activities. Nonetheless, it is great that such a powerful investor group voices its concern on disclosure. See my related editorial, We Need Mandatory Corporate Social Responsibility (CSR) Reporting.
Investors Step Up Pressure on Corporate Responsibility Reporting, media release, February 10, 2010, UN Global Compact, UK.

Mercer Study Finds Equity Fund Managers Trading More Frequently Than They Think Appropriate. - [COMMENTARY] "Some active equity fund managers have higher portfolio turnover rates than they themselves claim, a new study finds. Nearly two-thirds of institutional investor-focused investment strategies exceeded their expected turnover from June 2006 through June 2009. Of these strategies, the turnover was on average 26 percent higher than anticipated, with some strategies reporting turnover between 150 and 200 percent more than expected."

As I mentioned in a previous report, stock turn-over rates are appalling among many funds. This Mercer study further supports that comment. Funds say to investors, invest for the longer term, yet they turn-over their entire portfolios once or more each year! And we wonder why the markets are a casino. I suggest that ethical investors quiz their fund managers on this issue.
STUDY: 65% of investment strategies have shorter investment horizons than intended, media release, February 9, 2010, Mercer, USA.

Geography Affects Corporate Social Responsibility. - [COMMENTARY] "The geographic location of a corporation's headquarters affects its approach to social responsibility, according to research supported by the Arthur W. Page Center for Integrity in Public Communication at Penn State.
Seventy-five percent of Japanese firms, for example, give to arts, sports or music programs, while only one-third of U.S. companies support those initiatives. European firms tend to focus on air pollution prevention and reduction, but giving to education is largely off their radar screens -- fewer than 7 percent do that. By contrast, 62 percent of Japanese companies and 61 percent of U.S. firms support education programs."

I do not think anyone is too surprised by the data here. However, this article mentions a new searchable website on CSR, CSR-Pedia. It says that it follows CSR activities of over 600 companies.
Study: Geographic diversity impacts corporate social responsibility, by Cinda Kostyak and Mary Ann Ferguson, February 5, 2010, Penn State Live, USA.

Vedanta Resources Slammed By Amnesty International For Air & Water Pollution At Alumina Mine. - [COMMENTARY] "A report by Amnesty International out today found that an alumina refinery in eastern India operated by a subsidiary of mining company Vedanta is causing air and water pollution that threatens the health of local people and their access to water." Extractive industries are necessary, but they have to be held accountable for any human suffering and environmental degradation that they cause. Companies like Vedanta have to learn the advantages of corporate social responsibility.
Amnesty report slams alumina mine run by Vedanta subsidiary in India, February 9, 2010, BBC News, UK.

Banks Sign On To Be Green--But Fail When Providing Loans. - [COMMENTARY] "The study assessed the performance of a group of leading financial institutions -- Crédit Agricole, HSBC and Standard Chartered and insurance groups Munich Re and Swiss Re -- against the Climate Principles, a set of green investment guidelines launched by the Climate Group in 2008 and endorsed by the five companies. It found that while the companies had made strides to reduce their carbon footprint, they scored badly in a review of the environmental impact of their project finance activities."

Incentives have to be found to reward bankers making greener loans. They could be based on the amount of carbon saved over the years of the project when compared to some type of benchmark. Unless some such device can be found, or by global financial industry/government rules in this area, I doubt if any of the major banks will do much about this problem in the near term.
'Green Banks' Still Bankrolling Dirty Investments, by Tom Young, February 1, 2010, GreenBiz, USA.

Church Of England Sells Stake In Indian Mining Project. - [COMMENTARY] "... the church said that it was not satisfied that the company, Vedanta, has shown enough respect for human rights. Campaigners said that the lives of indigenous people were threatened by the mining project." This is making big headlines in the UK. The trend of endowment and foundation funds and trusts to steer clear of companies with questionable ethics and environmental, social and governance issues, continues.
Church of England withdraws from India mining project, February 5, 2010, BBC News, UK.

Americans See Environment as Alternative Fuel Source for Economic Growth. - [COMMENTARY] "Of the investors surveyed, 73% think that enacting policies to promote 'green' practices and technologies will have a positive impact on economic growth. Further, 57% believe that the recent push to create 'green' jobs will really help turn around the economy." We have here further fuel to the US government's green initiatives.
Nationwide Survey Finds: Americans See Environment as Alternative Fuel Source for Economic Growth, media release, February 4, 2010, Allianz Global Investors, USA.

Canada's SRI Funds Improving On Social Factors. - [COMMENTARY] "Canada's socially responsible mutual funds appear to be doing better on issues like ESG screening and integration according to Corporate Knights magazine's annual responsible investing guide. The survey scores more than 50 SRI mutual funds on performance and social factors, including proxy voting, engagement and ESG integration." An interesting survey. I have not seen this type of fund analysis elsewhere.

Also, the article discusses the turnover of stocks in a fund. I saw some data on this a few days ago. It said that most US mutual equity funds hold an average of 160 stocks and turnover the stocks at least once a year! Talk about a short term focus!
SRI funds improving on social factors: survey, by Doug Watt, February 4, 2010, Advisor.ca, Canada.

Thirty US Institutional Investors Demand “Say On Pay.” - [COMMENTARY] "CalPERS and the other signees conclude in the letter that 'the opportunity for investors to have an annual advisory vote, coupled with investor engagement with management or boards, is an important communication vehicle for investors and companies alike.'" This is a good measure that continues to gain momentum.
Thirty Institutional Investors Demand “Say on Pay,” media release, February 3, 2010, hedgetracker.com, USA.

73% Of Dutch Pension Plans Using Socially Responsible Investing (SRI) Screens. - [COMMENTARY] "The number has more than doubled since 2006 according to the survey by the country’s umbrella pensions organizations, reports ipe.com." This probably makes Dutch pension plans the most SRI friendly in the world. Again, more good news for ethical stocks and bonds.
Number of Dutch schemes with SRI policies doubles within three years, say pension associations, by Hugh Wheelan, February 3, 2010, Responsible Investor, UK.

ECPI Global Carbon Equity Index Launched. - [COMMENTARY] "Developed in partnership with global management consultancy Arthur D. Little, the new Index will be part of ECPI’s thematic index family and will allow investors to gain equity exposure to those mid-large cap companies best equipped to tackle a world of rising carbon emissions and tougher climate legislation." I almost wondered whether to include this news item, as the number of these types of indexes is proliferating greatly. Which is good news for ethical investors.
ECPI and Arthur D. Little launch Global Carbon Equity Index, February 1, 2010, media release, Arthur D. Little, Italy.

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