Ethical Investing News/Commentaries
Commentaries by Ron
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SRI Research: CSR-Related Shareholder Wins Get
Bottom-Line Results. "Adopting corporate
social responsibility (CSR) shareholder resolutions
leads to large increases in shareholder value and
operating performance, according to the study
winning the 2013 Moskowitz Prize for Socially
Responsible Investing... Specifically, Flammer's
[the award winner] results show that the stock
market reacts positively to the passage of close
call CSR proposals (e.g., reducing CO2 emissions,
implementing equal employment opportunities
The Moskowitz Prize is the most respected award
in the socially responsible-ethical investing arena.
The 2013 winner highlights something very important
and should encourage company shareholders and
management to respond positively to shareholder
proxies that involve environmental, social and
governance (ESG) issues. This is a landmark study.
Congratulations to Caroline Flammer!
SRI Research: CSR-Related Shareholder Wins Get
Bottom-Line Results, press release, October 29,
2013, First Affirmative Financial Network,
UK PM Cameron to announce Islamic index on
LSE. "The London Stock Exchange will launch
an index to identify investment opportunities
compliant with Islamic principles, aiming to
capitalise on strong growth in the sector, Britain's
Prime Minister David Cameron will tell a
conference... Cameron will also reiterate Britain's
intention of launching its own Islamic bond worth
around 200 million pounds ($323 million) as early as
next year, making it the first Western country to do
so, according to the text of his speech distributed
by his office."
There is one thing about the UK--and most
especially about the City (London's financial
centre)--is its willingness to continuously reinvent
itself over the centuries and thereby maintain its
global banking leadership. In the case of
Islamic finance, London is well ahead of New York.
Can you even imagine New York trying to become the
global leader in Islamic (Sharia) finance!
Providing the doubts can be overcome about the
mandated distribution of profits to charities in
Islamic financial products--and the fears that some
of the profits might fund terrorist groups--Islamic
finance has a great future in western financial
centres. Many of its principles are strongly
ethically based and western ethical investment
products could benefit a lot from some of the principles
employed in Islamic finance
UK PM Cameron to announce Islamic index on LSE,
by Shadi Bushra, October 29, 2013, Reuters, UK.
Investors ask fossil fuel companies to assess
how business plans fare in low-carbon future.
"Coalition of 70 investors worth $3 trillion call on
world’s largest oil & gas, coal and electric power
companies to assess risks under climate action and
‘business as usual’ scenarios."
This follows on the 'stranded assets' item
below. How will fossil fuel companies react to a
low-carbon future? Investors must get answers from
these companies. Should companies have no plan or
seen to be irresponsible, investors must take note
Investors ask fossil fuel companies to assess how
business plans fare in low-carbon future, press
release, October 24, 2013, Ceres, USA.
Stranded assets and the fossil fuel divestment
campaign. "There are a wide range of current
and emerging risks that could result in ‘stranded
assets’, where environmentally unsustainable assets
suffer from unanticipated or premature write-offs,
downward revaluations or are converted to
liabilities. These risks are poorly understood and
are regularly mispriced, which has resulted in a
significant over-exposure to environmentally
unsustainable assets throughout our financial and
You might have heard Al Gore speaking on this
subject recently. Though these issues are very
real and I fully agree with the premise underlying
them, unfortunately, the time frame for them becoming
the issue could still be years away. Note the
US consumer's fury when gas prices rise! The
following recently released document is important
reading for all investors.
The Stranded Assets Programme, Smith School of
Enterprise and the Environment, University of
UK financial advisors wake up to ethical and
sustainable investment. "According to
research in the Voice of Advisors Report, conducted
by Blue & Green Tomorrow in partnership with Matrix
Solutions, private investors are increasingly
expecting their IFA to be able to provide advice on
how they can take advantage of ethical and
* Three quarters (74%) of IFAs say their clients are
asking for advice on green and ethical investments.
* 8% of clients expect IFAs to be able to advise
them on how green/ethical issues may shape their
* Nearly two-thirds of IFAs (61%) believe that
requests for ethical advice are growing."
The ethical investment industry in the UK is
well organized and proportionately appears to
receive much greater media coverage than in any
other developed country. As for the above survey
results, they speak for themselves. Again, those
advisors that really understand their clients'
personal values will be the ones that excel in the
IFAS wake up to ethical and sustainable investment,
press release, Blue & Green Tomorrow & Matrix
Societe Generale offers more proof of how ESG
analysis can provide stock price outperformance.
SRI: Beyond Integration. Q4 2013.
Report indicates US impact investment
potential. "Leading US social and
environmental investment firm Sonen Capital has
launched a new report which suggests that impact
investment can outperform traditional asset class
strategies. The report, Evolution of an Impact
Portfolio: From Implementation to Results, was
launched by Sonen Capital in partnership with the KL
Felicitas Foundation (KLF) on Monday, coinciding
with the UK’s National Ethical Investment Week."
The study mentioned measures the performance of
various 'impact portfolios' (money market, fixed
income, equities, etc.) of the KL Felicitas
Foundation and compares them to benchmarks of those
asset classes. The foundation's use of the term
impact investing is a little broader than the way
some use it, as it includes 'traditional' socially
responsible investments. The study is a great read
and highly encouraging to any charity or
philanthropical organization wanting to go the route
of ensuring their endowments and other funds are
used only for societal good, yet while achieving
above market returns!
Report indicates US impact investment potential,
by Nicky Stubbs, October 15, 2013, Blue & Green
Survey: environmental issues concern ethical
investors the most. "Environmental issues
remain the key driver for investors who want to
invest their money ethically or sustainably,
according to an ongoing survey by Blue & Green
Investor ahead of National Ethical Investment Week
This was a survey conducted on the site of Blue
& Green Tomorrow. Naturally, those going to that
site are mostly ethical investors attracted to that
sites' great content--and the site's name might
bias who views the site too. Hence, it's
unsurprising that most survey participants chose
issues related to sustainability and the environment
as being the most important to them. Were such a
survey conducted on another ethical investing
site--such as mine--the results might have been
skewed differently. Nonetheless, the survey results
are interesting and speak to the concern about the
Survey: environmental issues concern ethical
investors the most, by Alex Blackburne, October
11, 2013, Blue & Green Tomorrow, UK.
70% of UK investors don’t know if their
investments are ethical. "Some 70% of
investors are potentially seeing growth and returns
from companies and sectors, which, when prompted,
they are ethically opposed to... fewer than
one in eight are aware it’s possible to invest
ethically in mainstream companies... only 17% of
investors believe in investment return at all costs
and saying that achieving the highest possible
return is more important than being ethical."
These findings would likely be similar for most
developed countries. It continues to surprise me how
investment/financial advisors, not only in the UK,
but pretty much everywhere, continue to make a
mockery of the most basic rule in their practice:
the 'know thy client' rule! It just shows how most
advisors put their preferences ahead of that of
their clients. In most cases it's not malicious but
an attitude that 'I'm not that interested in what
the client thinks' and that 'I know better' than
them. The above survey results' reveal that the
advisor who really understands their client is
likely to win-out over those that don't!
70% of investors don’t know if their investments are
ethical, by Charlotte Malone, October 11, 2013,
Blue & Green Tomorrow, UK.
Cambridge University project to ‘put the value
of sustainable investment beyond doubt.’ "The
University of Cambridge has announced it is to join
forces with leading asset managers and owners to
advance the value of sustainable investing, ahead of
National Ethical Investment Week (NEIW). The
three-year project is designed to promote
understanding of how managing environmental and
social factors can improve positive long-term
An institution as renowned as Cambridge
University getting behind ethical investing/ESG
analysis will add further prestige to the subject.
Increasingly, it is getting ever more difficult for
naysayers of ethical investing to convince others of
Cambridge University project to ‘put the value of
sustainable investment beyond doubt,’ by
Charlotte Malone, October 9, 2013, Blue & Green
AUMs in Islamic finance reached $1.76 trillion
in 2012, claims Markaz. "In the executive
summary of its report on GCC Islamic Finance, Kuwait
Financial Centre “Markaz” notes that at the end of
2012, assets under management (AUMs) in Islamic
finance reached $1.76 trillion, growing at a CAGR of
24.8 per cent per annum in the preceding four
I've written several articles on and related to
Islamic finance and its exceptionally high assets'
growth rate doesn't surprise me at all. See,
The Rise of Islamic Finance and
Sharia-Compliant Investing Takes Off.
AUMs in Islamic finance reached $1.76 trillion in
2012, claims Markaz, by Robin Amlôt, October 9,
2013, CPI Financial, UAE.
The Companies With the Best CSR Reputations.
"To find which companies have the very best
reputations, the consulting firm [Reputation
Institute] invited more than 55,000 consumers across
15 markets to participate in a study between January
2013 and February 2013 that ranked the world’s 100
most reputable companies–all multinational
businesses with a global presence... Microsoft, The
Walt Disney Company, Google and BMW–tied for the No.
This is a great article for all ethical
investors to read. It details exactly the Reputation
Institute's methodology as well.
The Companies With the Best CSR Reputations, by
Jacquelyn Smith, October 2, 2013, Forbes, USA.
Americans Would Rather Remain Unemployed Than
Work for Companies with Bad Corporate Reputations.
"Corporate Responsibility (CR) Magazine, in
conjunction with Allegis Group Services, today
announced the findings of the publication's annual
corporate reputation survey, which found that 69
percent of Americans would not take a job with a
company that had a bad reputation, even if they were
unemployed. This is a six percent decrease from
Actually, superficially this sounds quite
positive. Digging into the numbers though--when
compared to its 2012 findings--suggests workers
are increasingly likely to work for companies with
bad reputations. One example, and quoting this
article, "Subsequently the average percentage
increase in salary that it would take to entice
Americans' decision to work for a company with a bad
corporate reputation has decreased. While the
majority in 2012 said they would require more than
double their salary to consider the move, the
majority in 2013 said they would require between a
I suspect that American workers continue to
struggle more than what government statistics say!
Americans Would Rather Remain Unemployed Than Work
for Companies with Bad Corporate Reputations,
press release, CR Magazine & Allegis Group Services,
October 3, 2013, USA.
Churchgoers mostly favor socially responsible
companies, study finds. "The research showed
that companies in areas of high concentrations of
people who practice religion engage in more
environmental disclosure as opposed to social
welfare disclosure. Companies also disclose more CSR
information when the population near the corporate
headquarters has more nonevangelical Christians than
evangelicals. The authors reasoned that this might
be because some evangelical organizations promote
skepticism of climate change science and embrace
more conservative social and political values than
their nonevangelical counterparts."
From this study, one could perhaps argue that
since more companies than ever are reporting on
their CSR activities and that regulatory agencies
are requiring companies to report more on them too,
that nonevangelical congregations are growing???
Personally, I believe that it is higher
consciousness and ethics that are growing and
responsible for more CSR reporting and that whether
congregations are nonevangelical or evangelical
might be a secondary factor.
Churchgoers mostly favor socially responsible
companies, study finds, press release, October
2, 2013, University of California, Davis, USA.
Huge investment needs temper Green bond hype.
"Despite major advances in 2013, Green bonds look
set to remain a niche product, unlikely to make a
meaningful contribution towards the estimated
USD6trn needed to support low-carbon energy projects
the green bond market to really take-off,
ethical investors need to take much more interest in
this sector. They should let potential issuers know
of their interest.
Huge investment needs temper Green bond hype, by
John Geddie, October 2, 2013, Reuters, UK.
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