E-newsletter of Investing for the Soul March 30, 2012
Top ethical investing news for March 2012
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!
Ethisphere Publishes Its 2012 Winners. - [COMMENTARY] "Each 2012 honoree -- including U.S. industry standard-bearers like Cisco, Ford and Timberland, and smaller international firms like the Ethical Fruit Company (UK), Tokio Marine Holding (Japan) and the Panama Canal Authority -- was chosen for promoting ethical business standards and practices by exceeding legal minimums for compliance, introducing innovative ideas that benefit the public and forcing their competitors to follow suit."
I think it is a good list, but the preponderance of US companies on the
list makes me wonder how deep is their research since European and
Japanese companies report more widely on CSR matters and appear to take
ESG more seriously.
Stock Exchanges Support Corporate Sustainability Reporting. - [COMMENTARY] "A report released today, ’Sustainable Stock Exchanges: A Report on Progress’, has found that a majority of stock exchanges remain committed to promoting greater corporate responsibility on sustainability issues but are restricted in the actions they can take... Written by Responsible Research, today′s report seeks to capture the progress on promoting corporate sustainability by surveying 27 of the largest exchange entities across the world′s markets."
This report is noteworthy when it refers to how restricted the stock
exchanges are in regulating sustainability reporting. Stock exchanges
compete for business (listings), thus many companies gravitate to the
exchanges with the least regulations. This is a call for global
cooperation on corporate sustainability reporting. I believe such
coordination will happen in the next few years.
Among Millionaires It’s The Younger Ones Who Most Favour SRI. - [COMMENTARY] "Half of Millionaires age 44 and younger say societal implications are an important investment selection factor, according to our latest quarterly study on the attitudes and behaviours of affluent investors. (Millionaires are defined as having a net worth of $1 million to $5 million, not including primary residence.) Young Millionaires are more likely than their older peers to make socially responsible investments. About 40 percent of baby boomers and 30 percent of investors age 65 and older identify social responsibility to be a key investment criterion."
This is good news for the future of SR-ethical investing, as we all know
that young people are our future.
63% Of Global Socially Conscious Consumers Are Under 40, Says Nielson Survey. - [COMMENTARY] "Consumers in Asia Pacific (55%), the Middle East and Africa (53%) and Latin America (49%) are more willing to pay extra for products and services from socially-responsible companies than consumers in North America (35%) and Europe (32%). According to Nielsen′s survey, the highest concentration of socially-conscious consumers is in the Philippines, where 68 percent of respondents are willing to pay extra for products, while the lowest concentration is in the Netherlands, where 21 percent of respondents indicated a willingness to spend more."
Most people believe that it’s young North American and European
consumers that are most willing to pay more for sustainable products.
Yet, this survey says it’s the young people in the Asia-Pacific region
that do so! Ethical investors could checkout the green companies they
invest in to see where they market their products.
Investment Banks Produce Best ESG Research, Says Research By
Integrity Research Associates. -
[COMMENTARY] "Asset managers plan to increase spending
on research analyzing the environmental, social and governance
performance of publicly traded companies, according to a recent study.
Investors ranked ESG research produced by investment banks more highly
than independently produced research." Though Mercer a few weeks
back indicated that only about 9% of managed portfolios truly
incorporated ESG in their portfolio design, they did indicate that ESG
was growing in importance. Integrity’s survey is further vindication of
The Goldman Ethics Fuss. - [COMMENTARY] I’m both astounded and somewhat bemused by the media frenzy surrounding Greg Smith’s critique of Goldman Sachs’ ethics. I didn’t even bother commenting on it myself yesterday because after what we experienced in 2008/9, I believed that everyone knew Wall Street and many bankers’ ethics were atrocious anyway! After all, the respected 2012 Edelman Trust Barometer finds public trust in banking and finance the lowest of any industries.
Yet, despite the anger, the public refuse to appoint politicians who will aggressively tackle the real ethical issues in the financial system. The reason: the public knows that to do so means they’ll take a financial hit! For instance, ethical practices should require marking assets at market values on balance sheets. On that basis, it’s likely that a huge swath of the US banking and financial industry would be insolvent and the public forced to take mammoth losses.
Until Mr. Joe public improves upon their own ethical conduct, putting ethics above financial gains or losses, we’re unlikely to see much change among politicians or in the financial and banking industries. That’s why I don’t see what all the fuss is about.
Study Says SRI Funds Might Be Less Concerned About ESG Issues Than Conventional Funds! - [COMMENTARY] "We cannot find strong evidence of differences between conventional and socially responsible mutual funds. In particular, the calculated risk tolerance parameters describing the real portfolio composition best show that socially responsible mutual funds may be even less concerned about the ESG-scores in the preference functional than conventional funds."
Well this is interesting. No doubt a lot of SRI fund managers and
ethical investors will want to review this research. Personally, if you
can do it, I’ve always favoured an individual stock portfolio reflecting
one’s own personal values.
Women More Likely To Make Green Investments. - [COMMENTARY] "Environmentally responsible or ’go green’ investments have a greater appeal among women investors, who are more likely than men to align their financial goals with their personal values, according to the latest research from Millionaire Corner. Nearly 42 percent of women - compared to less than 27 percent of men - say they are ’very likely’ or ’likely’ to make environmentally responsible investments, according to our February survey of 1,150 investors."
This is unsurprising to me. However, it would be great if these women
and men indicating their interest in sustainable investments actually
followed through on investments linked to environmental and corporate
sustainability. Stock prices would then reflect an even greater premium
for companies applying sustainability to the activities than they do
Ernst & Young Faults Companies On Quality Of Sustainability Reporting. - [COMMENTARY] "the growth of reporting is limited, if not undermined, by the tools companies are using to produce them. ’Based on our survey responses, those tools remain rudimentary, even primitive, compared with those used for reporting on financial measures.’ When asked to name the tools used to compile their sustainability reports, companies cited spreadsheets, centralized databases, emails and phone calls as the principal tools, with about one in four (24%) using packaged software."
It’s good that an accounting firm has compiled such a report and
demonstrated the need for much greater rigor in corporate sustainability
reporting. To improve on this situation, securities regulators,
governments and stock exchanges, have to request that all sustainability
reports meet certain reporting standards. Further, that these reports be
audited by qualified or licensed CSR/ESG auditors who provide an opinion
as to the quality and meaningfulness of the sustainability information
and data presented. Yup, just like for financial statements!
Younger Americans More Inclined To Socially Responsible Investing. - [COMMENTARY] "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 percent)."
Younger people are concerned with their long-term quality of life and
income. Seniors want income now.
Over $3 Trillion Invested In Green Transition. - [COMMENTARY] "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.
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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 © 2012 Ron Robins. All rights reserved.