Ethical Investing News/Commentaries:
Commentaries by Ron
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Younger Americans More Inclined To Socially
"Younger investors are more apt to make socially and
environmentally responsible investments, according
to a February investor survey conducted by
Millionaire Corner... investors under 40 were most
resolute in their intention to make socially
responsible investments. Nearly half (49 percent)
said they are likely to do so, compared to 41.5
percent of those ages 41-50 and 38 percent of
boomers ages 51-60 (somewhat surprising in that this
generation is defined in part by its commitment to
social causes). Seniors over 60 were the least
likely to make this kind of investment (26
Younger people are concerned with their long-term
quality of life and income. Seniors want income now.
Socially Responsible Investments a Higher Priority
for Younger Investors, February 28, 2012,
Millionaire's Corner, USA.
Over $3 Trillion Invested In Green Transition.
"Ethical Markets Media, LLC (USA and Brazil),
released their 2012 GREEN TRANSITION SCOREBOARD®
tracking private sector investments since 2007 in
green companies and technologies globally, now
totalling more than $3.3 trillion. The 2012 Green
Transition Scoreboard® (GTS) report finds Asia,
Europe and Latin America catching up with the USA in
total non-government investments and commitments for
all facets of green markets."
This is one trend that has a bright long-term
future and which virtually all ethical investors
participate in. Congratulations to Hazel Henderson
and Ethical Markets for their tremendous work
gathering the data.
Detailed Research Shows Over $3 Trillion Invested in
Green Transition, February 29, 2012, Ethical
FTSE Launches New Carbon Indices.
"Investors and businesses in Europe, Japan and
Australia will from today be provided with a new
tool for tracking large firms' exposure to
carbon-related risks, after the FTSE Group launched
four new green indices as part of its FTSE CDP
Carbon Strategy Index Series. Developed in
partnership with the Carbon Disclosure Project (CDP)
and analyst firm ENDS carbon, the new indices apply
a weighting to existing equity indices based on a
company's level of exposure to carbon-related risks
such as new environmental policies and climate
FTSE has been a pioneer in SR-ethical investing
indices, and no doubt these will be widely followed.
Ethical investors can only benefit from these added
FTSE accelerates green push with new Carbon Strategy
indices, by James Murray, February 28, 2012,
Business Green, UK.
Corporate Knights 2012 Canadian Responsible
Investing Mutual Funds Rankings.
"The 10th annual RI fund ranking is a resource
designed to help investors make an educated
judgement on which funds have done the best job of
fusing the social, environmental, and financial
values they bring to the table. Investors can best
utilize our chart by making their own assessment
based on each fund's characteristics." There is
good information here for Canadian ethical
The 2012 Responsible Investing Guide, February
23, 2012, Corporate Knights, Canada. For discussion
by James Daw, see:
Responsible Investing: weighing the impact?
Canada's Social Investment Organization Pushes
For Mandating Advisors To Ask Clients About SRI.
"The SRI question could be part of the process to
open new accounts with clients or part of the annual
review, says SIO executive director Eugene Ellmen."
Eugene, I'm really with you on this! Every
investor survey says that investors are mostly in
favour of SR-ethical investing, yet advisors don't
want to know that. It seems that for whatever their
reason--laziness, incentives, stale beliefs,
whatever--advisors fail in what should be their most
important rule: 'know thy client!' Because most of
them don't follow that rule, their regulators need
to take them to task on it. The story is the same
for the US, UK, and for most countries.
Group pushes for mandatory SRI question, by Doug
Watt, February 21, 2012, Advisor.ca, Canada.
Bombay Stock Exchange To Launch New Green
"The Bombay Stock Exchange will launch a new index,
BSE Greenex, on Wednesday. The index will track
companies which are friendly to the environment
based on a methodology provided by IIM-Ahmedabad.
The index will also track companies that have
minimum carbon footprint. BSE will also launch a
guideline for investors which will help them
understand the relationship between the amount of
carbon footprints of each company and the respective
short-term and long-term impact on its investment
It's great to see the developing world stock
exchanges doing this. It makes it easier for
developed world ethical investors to invest in
BSE to launch Greenex, the green index, February
22, 2012, Business Standard, India.
FT Has Interesting Article On Sovereign Bond
"The ESG ratings on Greece, Italy, Spain, Portugal
and Ireland in 2007 were much lower than their
conventional bond ratings, according to James
Gifford, executive director of the United Nations
Principles for Responsible Investment." With the
losses on Greek bonds that investors are hit with
today, one would think that all bond investors would
want to see and understand sovereign bond ratings
according to ESG performance!
Fund file: bond reality check needed? By Emma
Boyde, February 19, 2012, FT blog, UK.
Japanese Study Says No Difference In SRI Vs.
Conventional Fund Returns.
"Our results indicate that the adoption of a social
screen does not decrease the efficiency of
portfolios when compared to those from an
unrestricted universe. Specifically, the results
demonstrate that conventional indexes do not
outperform SRI indexes. Furthermore, our results
have positive implications for SRI. Investors are
able to pursue environmental and social goals
without a significant sacrifice in terms of risk and
When reviewing the results of these types of
studies, it might be time to not lump them all
together. These studies need to be classified as to
whether they are focused on SRI, ethics, or just the
'E' (environmental) of ESG, etc. Only then can we
obtain a clearer picture of what most drives
superior returns. Most recent studies focusing on
sustainability seem to show higher long-term
Do Socially Responsible Investment Indexes
Outperform Conventional Indexes? By Shunsuke
Managi (Tohoku University), Tatsuyoshi Okimoto (Hitotsubashi
University), and Akimi Matsuda (Nomura Securities
Co., Ltd.), February 14, 2012, Japan.
Osmosis, A UK Investment Manager, Provides
More Evidence That Optimizing Resources Improves
Corporate Financial & Stock Performance.
- [COMMENTARY] "Osmosis
pulls together information on how companies use
energy, waste and water. It has compiled a basket of
more than 1,200 global companies, which it monitors
monthly. The basket has outperformed the MSCI World
index by more than 5 percentage points a year over
the past seven years... "
As the mainstream investment industry understands
that sustainably oriented companies can outperform,
look for them to invest ever-greater funds in
sustainably focused companies. This will further the
gains for sustainable stocks.
Resource strategy put to the test, by Ruth
Sullivan, February 19, 2012, Financial Times, UK.
New Europe-US Partnership To Spur Organic Food
"Under a deal announced yesterday by trade
representatives for each region, products certified
as organic by either the U.S. Department of
Agriculture or the E.U.'s Agriculture and Regional
Development department are authorized for sale in
either Europe or the U.S." US and European
organic products now have the ability to grow their
Europe-US Partnership Creates Huge New Market for
Organic Foods, by Matthew Wheeland, February 17,
2012, GreenBiz, USA.
US Heartland Scandal Might Force Companies To
Be Transparent With Donations.
"Companies have been warned they must be more
transparent about their funding of lobbying groups
in the light of leaked documents that apparently
detail corporate donations to US climate-sceptic
think-tank the Heartland Institute." Laws
everywhere should require transparency of all
donations by public companies.
Will the Heartland Scandal Force Transparency on
Company Donors? By Will Nichols, February 16,
2012, GreenBiz, USA.
New US Sustainable Utility Index Launched.
"Target Rock Advisors, LLC today released the
results of its first proprietary U.S. utility
sustainability rankings and related stock indexes.
The company has identified 15 'high performance'
domestic energy utilities that excel in sustainable
operations. The top 5... are: 1. Sempra Energy
(NYSE: SRE); 2. Xcel Energy Inc. (NYSE: XEL); 3.
PG&E Corporation (NYSE: PCG); 4. Edison
International (NYSE: EIX); and 5. Avista Corporation
For ethical investors, this will be an
interesting index to follow. I'm not aware of any
other indices specifically covering purported
'sustainable' US utilities.
New Sustainable Utility Index Launched, press
release, February 14, 2012, Target Rock Advisors,
Ceres Says Its Shareholder Resolutions Are
"The short report, Proxy Power: Shareholder
Successes on Climate, Energy & Sustainabiity, looks
at what successes resulted from 233
sustainability-focused resolutions filed by Ceres'
network of investors. Just under half of those
resolutions -- 111, or 48 percent -- were wins,
where companies agreed to address the investors'
concerns and the resolutions were withdrawn. And
once companies agree to address shareholder
resolutions, they are good to their word." This
report is very encouraging for shareholder activism,
which will please many ethical investors.
Ceres Shines a Light on the Power of Shareholder
Proxy Votes, by Matthew Wheeland, February 13,
2012, GreenBiz, USA.
Portfolio Managers Doing Poorly In Integrating
ESG Issues, Says Mercer.
"Only 9 per cent of more than 5,000 ESG strategies
analysed gained top ratings in the three years to
the end of 2011 in Mercer’s study. The ratings are
based on the extent to which portfolio managers
integrate ESG into the investment process and follow
good stewardship practice, such as engaging with
investee companies... Emerging markets and
Asia-Pacific showed the highest proportion of top
ratings, Canada the least."
Just when we thought that ESG was becoming
mainstream in portfolio management, Mercer shows it
is not so--yet. It will be interesting to see if the
London firms that recently fired their dedicated ESG
analysis teams are able to successfully
integrate--as they say--ESG factors into the work
of their other investment management teams!
Managers fail on ESG integration, by Ruth
Sullivan, February 12, 2012, Financial Times, UK.
US Pension Funds Call On Dell, Intel &
Motorola To Hold Suppliers Responsible.
"Comptroller John C. Liu and the New York City
Pension Funds called on Dell, Intel, and Motorola to
follow the example set by other tech giants who have
adopted their shareholder effort to increase their
suppliers’ compliance with
internationally-recognized standards of human and
worker rights. Apple, Hewlett Packard, and Microsoft
all recently adopted new policies after discussions
with the Comptroller’s office and the Pension
Considering how Dell and Intel particularly,
desire to project their CSR image, this should be a
no-brainer for them. Also, Google should be able to
pressure its proposed new subsidiary, Motorola
Mobility, to get behind this too.
LIU CALLS ON DELL, INTEL, MOTOROLA TO HOLD SUPPLIERS
RESPONSIBLE, press release, February 9, 2012,
Companies Falling Short On CSR Promises,
"Whether eliminating child labor, creating
environmentally friendly technology or working
against all forms of corruption, many corporations
fail to become socially responsible despite promises
to change, a new University of Michigan study
Concerning government coaxing, developing
countries' governments have more clout, says the
study. The authors want more government action so
that CSR is more than PR for many companies.
Many companies fall short of social responsibility
promises. Study authors are Alwyn Lim and
Kiyoteru Tsutsui, University of Michigan. Reporting
by Jared Wadley, February 8, 2012, University of
Michigan News Service, USA.
Greenpeace Rates Google, Cisco, Fujitsu Tops
In Green IT Rankings.
"Overall, the latest rankings show a steep decline
from the fourth round of scores, which were
published in December 2010, during the Cancun
climate talks. Cisco led the prior round's pack with
a score of 70, while Google held down fourth place
with a score of 47. The decline in overall scores
reflects what Greenpeace calls a lack of steady
progress in the greening of IT, even as demand for
IT services, particularly in cloud computing, is
Ethical funds often invest a high percentage of
their assets in IT companies. You might want to see
how the IT companies in your fund(s) are rated by
Greenpeace Puts Google, Cisco, Fujitsu at Top of
Green IT Rankings, by Matthew Wheeland, February
8, 2012, GreenBiz, USA.
US States Requiring Insurers To Disclose
"Insurance commissioners in California, New
York and Washington State will require that
companies disclose how they intend to respond to the
risks their businesses and customers face from
increasingly severe storms and wildfires, rising sea
levels and other consequences of climate change,
California’s commissioner said Wednesday."
It's about time that governments everywhere
started requiring insurance companies to produce
such information. The hidden potential losses from
climate change impacts are too great for any of us to
ignore. For some time now many ethical investors
have been greatly concerned about this problem and
frequently avoided investing in insurers for lack of
information on their climate change exposure.
Three States to Require Insurers to Disclose
Climate-Change Response Plans,
by Felicity Barringer, February 1, 2012,
The New York Times, USA.
Widespread SEC Disclosure Noncompliance
Triggered by Material ESG Issues.
"Widespread corporate noncompliance with SEC
requirements triggered by material ESG issues may
cause many SEC filings to be materially misleading,
inaccurate, or even fraudulent, finds the first
independent, comprehensive technical study of how
the SEC regime applies to ESG issues, conducted by
CSR Insight(TM) LLC."
I suspect that companies that don't comply with
ESG disclosure policies--whether SEC regulated or
not--will face market penalties, including that of
stock prices. However, this study suggests that SEC
noncompliance penalties could be significant too.
Widespread SEC Disclosure Noncompliance Triggered by
Material ESG Issues, press release, February 6,
2012, CSR Insight(TM) LLC, USA.
Higher Stock Prices Result From Corporate
Press Releases On Sustainability.
"Using voluntary disclosures made through the CSR
newswire service, we find that managers’ disclosure
decisions involving greenhouse gas emissions produce
positive returns to shareholders. This response
varies negatively with company size and public
information availability. For small companies in a
limited public information environment, we find that
mean adjusted share price increases significantly by
2.32 percent over days -2 to 2 around the CSR
newswire release date."
Again, more reasons for companies to go green.
This is the first study that I'm aware of that looks
at stock prices from the point of view of press
Going Green: Market Reaction to CSR Newswire
Releases, by Paul A. Griffin and Yuan Sun,
University of California, USA. For a good review of
their study see,
Companies Get a Boost in Stock from Reporting
Greenhouse Gas Info, by Jonathan Bardelline,
February 6, 2012, GreenBiz, USA.
EUROSIF’s European SRI Transparency Code
Attracts 350 Signatories.
"The European SRI Transparency Code, a document
outlining guidelines for maintaining the
transparency of socially responsible investing
(SRI), has attracted approximately 350 signatories.
The code was established in 2004 by the European
Sustainable Investment Forum (EUROSIF), a
France-based network that focuses on raising
accountability to investors and stakeholders of
retail SRI funds, with the aim of increasing the
sustainability of financial markets...
Signatories to the code commit to submitting clear,
informative and detailed information that is updated
annually and easily accessible on their websites."
Signatories to the code include many large
financial institutions. The code is another plus for
European Sustainable Investment Forum’s (EUROSIF’s)
European SRI Transparency Code Attracts 350
Signatories, press release, February 6, 2012,
Australia's Financial Services Institute
Issues ESG Guidelines For Superannuation
"'The acceptance of ESG principles by Australian
superannuation funds is growing but most funds … are
struggling with either developing policies or with
policy implementation,' according to the report,
'Implementing Environmental, Social & Governance
Principles in Investment Decisions.'” ESG rules
for corporate reporting continue to grow globally.
In a few years, investors will look back in
astonishment how they ever got by without seeing
companies report on ESG issues.
ESG principle push targets Australian superannuation
funds, by Barry B. Burr, February 3, 2012,
Pensions & Investments, Australia.
Multinationals Failing To Push Emissions
Reductions Down Supply Chain.
"Multinational companies are failing to encourage
similar levels of emissions reductions in their
supply chains as they are managing in their own
operations – despite high levels of supply-chain
climate risk. According to the fourth annual study
from the Carbon Disclosure Project (CDP) supply
chain programme, only 28% of suppliers have achieved
year-on-year emissions reductions, compared with 43%
of responding companies among the initiative’s 49
I don't believe we need to be surprised by this.
It seems fitting that multinationals have to first
set an example to their suppliers.
Multinationals failing to push emissions reductions
down supply chain, by Mark Nicholls, February 1,
2012, Environmental Finance, UK.
US SRI Organizations Urge US Government House
Leaders To Act On Transparency In Human Trafficking
"Christian Brothers Investment Services (CBIS), a
leader in socially responsible investing; the
Interfaith Center on Corporate Responsibility (ICCR);
US SIF: The Forum for Sustainable and Responsible
Investment; and Calvert Investments are among 80
signatories to a letter sent Jan. 26, 2012, to Rep.
John Boehner, R-Ohio, Speaker of the House of
Representatives, and Rep. Eric Cantor R-Va., House
Majority Leader, calling on them to take the steps
necessary to quickly bring the Business Transparency
on Trafficking and Slavery Act (H.R. 2759) before
the full House for a vote."
This appears to be an important piece of social
legislation. It remains to be seen if the
Republicans back it.
COALITION OF SOCIALLY RESPONSIBLE INVESTORS URGE
HOUSE LEADERS TO ACT ON BUSINESS TRANSPARENCY ON
HUMAN TRAFFICKING BILL, press release, February
2, 2012, Christian Brothers Investment
Services/Interfaith Center on Corporate
Responsibility (ICCR)/Calvert Investments, Inc.,
Great New Book.
Evolutions in Sustainable Investing: Strategies,
Funds and Thought Leadership, by Cary Krosinsky,
Nick Robins, and Stephen Viederman, Wiley 2011. Good
review by Robert Kropp,
Reuters Launches New Australian Islamic Stock
"Thomson Reuters and Crescent Wealth, the Australian
Islamic investment manager, have launched an Islamic
investment index for Australia to help open up this
resource-rich market to Islamic finance investors
globally. The Thomson Reuters Crescent Wealth
Islamic Australia Index will cover 143 equities with
combined market capitalisation of $160 billion, said
the company in a statement."
As can be seen by news developments, Islamic
stock indices and finance continue to make
significant gains. As they grow, they help promote
the concepts of ethics in finance and investing.
Reuters launches Australian Islamic index,
February 1, 2012, Trade Arabia News Service, USA.
Egyptian Officials Want Islamic Index.
"Egypt’s newly-elected Islamists say they want to
introduce an index of companies that comply with
sharia law as part of a wider move towards an
Islamic economy. Officials from Freedom and Justice,
the political arm of the Muslim Brotherhood, and
from Nour, a party of ultraconservative Salafi
Islamists, argue that such an index would encourage
a slice of investors who, they allege, have shunned
the bourse for fear that it might somehow contravene
It is possible that Egypt could become a major
player in Islamic finance. Ethical investors will
want to keep an eye open on what happens there,
particularly for its potential repercussions on
ethical finance globally.
Egyptian officials look to set up Islamic index,
by Heba Saleh, February 1, 2012, Egypt.
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