E-newsletter of Investing for the Soul November 29, 2011
Top ethical investing news for November 2011
Links may only be valid a limited time Commentaries by Ron Robins
Twitter allows me to cover more--and breaking news--to help you do better!
Judyth Piazza Interviews Ron Robins On Sustainable-Green Country Bonds & Green Jobs, - [COMMENTARY] In a time when there is so much concern about sovereign bonds (bonds-debt issued by countries), I discuss exciting new research that compares and ranks them from a green-environmental-social perspective. The interview is about 15 minutes long. The first two minutes are ads. The discussion of the bonds is midway through the interview, so please be patient. November 27, 2011, SOP Radio, USA.
Climate Bond Standard Created To Assure Integrity Of Green Claims For Investors, Governments. - [COMMENTARY] "The Standard is a screening tool for investors and governments to support investment in delivering a Low Carbon Economy. Bonds complying with the Standard will be certified as ‘Climate Bonds′— a mark that assures their contribution to the delivery of a Low Carbon Economy... The finalized text was approved by the Climate Bond Standards Board, a group of institutional investors and leading environmental NGOs consisting of the California State Teachers′ Retirement System(CalSTRS); the Natural Resources Defense Council; the California State Treasurers′ Office; the Investor Group on Climate Change (IGCC); the Carbon Disclosure Project; and the Ceres Investor Network on Climate Risk (INCR)."
With such backing, this is a great step forward and could encourage
significant growth and interest in green bonds!
US Millionaires Significantly Lower Their Expectations For Socially Responsible-Green Investment Gains In 2012, Says Survey. - [COMMENTARY] "According to a study from PNC Wealth Management, only one in ten millionaires are optimistic about the U.S. economy – the lowest since the survey started in 2006, and even below the 2008-2009 crisis levels. Fully 9% [are] invested in gold. When asked where they see the biggest growth for stocks in 2012, most said technology (54%), energy/utilities (49%), health-care (44%) and financial stocks (19%). They are followed by socially responsible investments (11%) [down from 21% in 2011], manufacturing (11%) and transportation (7%). Retail ranked dead last, at 7%."
I have been following this survey since its inception. After reading this review of the 2011 survey, I suspect there is an important dynamic at play here. I believe the reason for such a lowering of expectations for socially responsible-green investments has to do with their belief that the perceived hard times will push oil prices lower and thus interest in alternative energy lower as well. Also, companies might downshift ESG as a priority to save money.
Personally, I never believe in short-term forecasts, but for the
long-term I strongly suspect that oil prices will go much higher, and
that corporate ESG activities to continue strong as they frequently
relate to reducing costs and improving stock prices.
UK Survey Finds Only 5% Invest Ethically & 63% Don’t Know What An
Ethical Investment Is. -
[COMMENTARY] "Ethical investments are growing
investments, but awareness amongst consumers is still surprisingly low,
according to new research commissioned by Emerald Knight... While 16 per
cent of British people would only ever invest for personal profits, only
30 per cent think that you can have both profits and principles when it
comes to a socially responsible approach to investment." In
developed countries everywhere, there is still the wrong perception that
profits have to be sacrificed to invest ethically.
More Women In Management Improves Corporate CSR & Profitability. - [COMMENTARY] "A new study conducted by researchers at Catalyst and Harvard Business School (HBS) suggests that what′s good for women is good for business and also for society as a whole. According to Gender and Corporate Social Responsibility: It′s a Matter of Sustainability, companies with more women at the top may be better practitioners of corporate social responsibility (CSR). Prior Catalyst research has shown that such companies also financially outperform, on average, those with fewer women in senior leadership roles."
There are one or more US mutual funds that only invests in companies
with high ratios of women in management! Ethical investors might want to
incorporate gender ratios when they are reviewing the managements of the
companies they invest in.
New Sustainable Corporate Bond Fund Launched By Bank Sarasin, Switzerland. - [COMMENTARY] "Bank Sarasin is this week to begin marketing its first sustainable corporate bond fund, amid growing institutional interest in sustainable fixed income and real estate offerings. The Swiss private bank has had ’a good response’ to a mixed corporate and sovereign bond fund it offers, where the investible universe is subject to Sarasin’s sustainability screening."
A new investing paradigm is beginning with the launching of sustainable
corporate bond funds. With so much interest in sustainability by
investors worldwide, such funds could become sought after.
Congratulations to Bank Sarasin for being in the vanguard of this new
Islamic Finance Assets Projected To Double To $1.8 Tn By 2016, Says Deutsche Bank. - [COMMENTARY] "The global debt crisis may help Islamic finance nearly double to $1.8 trillion in assets by 2016 as stagnant corporate lending pushes institutions to seek alternative financing to traditional methods, according to a report by Deutsche Bank. The bank forecasts that there is over $2 trillion of deleveraging in the United States and Europe, creating a financing glut for both struggling countries and countries in developed markets."
I have remarked many times that Islamic finance, once it can overcome
market suspicions of it being linked to terror groups, particularly, is
a real contender to conventional finance. Furthermore, many of its
tenets, i.e. bonds and derivatives that must be asset-based and use of
ethical-spiritual screens, etc., might well be integrated into many
conventional finance products too in the years ahead.
China CSR Study Demonstrates Need To Understand How CSR Data Is Gathered & Interpreted. - [COMMENTARY] "Believe it or not, if there was no information on the CSR activities of a company, they scored that firm zero! And if their search of negative reports uncovered anything, then the company ended up with a negative score."
As I have said many times, when reading CSR/SRI rankings, it’s important
to know the biases, methodology and financial backers of the pertinent
study. This article makes it very clear as to how investors can be duped
by such rankings.
Corporate Accountability Of Political Expenditures Improving In The US, Says The Investor Responsibility Research Center (IRRC) Institute. - [COMMENTARY] "Corporate accountability and disclosure of political expenditures is on the upswing, with the boards of 31 percent of S&P 500 companies now explicitly overseeing such spending, compared to 23 percent in 2010. However, this increased oversight and transparency does not necessarily translate into less spending, as companies with board oversight of political expenditures spent about 30 percent more in 2010 than those without such explicit policies."
Personally, I’m dubious of any spending by corporations on political
activities. The fact that only 31% of US corporate boards actually
control such spending appears terribly negligent to me, as it is to
probably most ethical investors.
HP, Dell & Nokia Lead New, Revised, Greenpeace Electronics’ Companies
Rankings. - [COMMENTARY]
"You also won’t find easy comparisons to previous editions of
the report. ’That this really is a new day,’ Casey Harrell, an analyst
and campaigner at Greenpeace, explained in an interview. ’We’ve added
enough criteria that it’s not completely apples-to-apples to compare
with previous versions of the report.’" This article provides a good
overview of what Greenpeace has done in revising its just released
rankings. Some of the findings might be surprising--but worthwhile for
ethical investors to consider.
82% Of Fund Managers Believe ESG Issues Important When Choosing New
Investments, Says Clear Path Analysis.
- [COMMENTARY] "82% of fund managers
now believe that ESG issues are an important consideration when choosing
new investments, however 43% remain unclear about the links between ESG
and profits in the short to medium term. This is despite evidence from
Allianz Global Investors which indicates that this type of investing can
provide returns of up to 1.6% over traditional equities." It should
not be long before ESG considerations are built-in to all investment
analysis, not only for stocks, but for all forms of debt as well.
High Sustainability Firms Outperform Financially & In Stock Prices, Says Harvard Study. - [COMMENTARY] "Using a matched sample of 180 companies, we find that corporations that voluntarily adopted environmental and social policies many years ago – termed as High Sustainability companies – exhibit fundamentally different characteristics from a matched sample of firms that adopted almost none of these policies – termed as Low Sustainability companies... we provide evidence that High Sustainability companies significantly outperform their counterparts over the long-term, both in terms of stock market and accounting performance."
This might be a landmark study and have powerful positive ramifications
for companies and investors alike! Ethical investors can again take
heart that theirs is not only the ethical path--but possibly one of the
most profitable paths too.
LOHAS (Lifestyles Of Health And Sustainability) Markets To Grow From
$200 Bn To $420 Bn In 3 Years. -
[COMMENTARY] "18% of U.S. general population adults
(43 million) are classified as LOHAS consumers. LOHAS consumers have
strong attitudes regarding personal and planetary health, which are
widely reflected in their behavior. They are heavy users of healthy and
’green’ products and exude a strong influence over others." This is
encouraging news for many ethical investors, who themselves are likely
Corporate Reputation Equity Index Fund Launched. - [COMMENTARY "RepuStars Variety Corporate Reputation Index Launches November 1... by Steel City Re, a pioneer in developing tools linking reputation, risk, and enterprise value. The RepuStars Variety Corporate Reputation Index tracks up to 57 company stocks that appear to be underpriced relative to their metrics as measured by Steel City Re′s proprietary Corporate Reputation IndexTM, which tracks 5500 companies weekly. In using the RepuStars Index as an investment strategy, investors can take advantage of this price disparity."
Though not strictly an ethical index, the index may carry some
credibility for ethical investors. RepuStars past numbers suggest
potential market outperformance. It will be interesting to follow its
Impact Investing: Transforming How We Make Money While Making a
Difference, by Antony Bugg-Levine and Jed Emerson, Jossey-Bass 2011.
Note: Articles are linked to the original source. Some sites may require registration, and may, or may not, archive stories. All links were active at the time of publication.
Disclaimer: Neither The Soul Investor nor Ron Robins make investment recommendations. Nothing in this newsletter should be interpreted as a recommendation or solicitation to buy/sell any securities or investments. The Soul Investor is a source of general information and resources for spiritual investing, ethical investing, and socially responsible investing (SRI). Investors should consider their actions thoroughly and consult their professional advisers prior to taking any investment action. The Soul Investor does not necessarily agree with the opinions expressed in articles in its newsletter or offered on the web pages to which it might be linked. Such opinions are the responsibility of the writers themselves. Furthermore, The Soul Investor does not offer or provide any warranties, representations, guarantees, implied or otherwise, as to the accuracy, legality, copyright compliance, timeliness or usefulness of the information, materials or services in this e-newsletter, or other sites, to which it might be linked. Also, Mr. Ron Robins is not an investment advisor, nor is he licensed with any professional investment related body, and thus is not able to, nor does he make, any investment recommendations.
The Soul Investor is a publication of Investing for the Soul, a registered business name in Ontario, Canada. Copyright © 2011 Ron Robins. All rights reserved.