Ethical Investing News/Commentaries
Commentaries by Ron
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How to read a sustainability report.
"Here, then, are five tips to help you make sense of
the next report that lands on your desk or arrives
via email. They were developed with help from Steve
Lydenberg of Domini Social Investments -- the
principal author of 'How to Read a Corporate Social
Responsibility Report' [PDF], an excellent 2010
study from the Boston College Center for Corporate
Citizenship -- and Bill Baue, a consultant and
leader of the Sustainability Context Group, an
organization working to improve corporate
There's great advice in this article on how to
understand CSR reports by some top SRI specialists.
The article is especially useful for those just
recently interested in ethical investing.
Incidentally, if you or others you know would like
direction how to select such investments--and need
help with that--please see
How to read a sustainability report, by Marc
Gunther, September 30, 2013, GreenBiz.com, USA.
Why sustainability indexes miss the mark.
"The GC [UN Global Compact] 100 includes companies
long appreciated by sustainable shareholders, such
as Ericsson, Hewlett Packard, Johnson Controls, Novo
Nordisk and Electrolux. But there are some
surprises, such as companies in sectors that include
oil -- even tar sands -- natural gas, mining,
petrochemicals, automotive and airline sectors, as
well as companies with significant military
contracts, such as General Electric."
It's true that the stocks in many sustainability
indices are highly questionable for many ethical
investors. That's why purchasing an SRI index fund, ETF,
or even regular SRI funds, might not make sense for numerous ethical
investors. For those individuals, they're better off
creating their own ethical investment portfolio that
mirrors their personal values.
Not wanting to plug our services too much, but
again, if you or others you know would like tutoring
in this area, please see the
we offer. (There's help for investment
professionals too--especially if they can't afford
the time to do SRI research themselves or create SRI
Why sustainability indexes miss the mark, by
Michael Kramer, September 24, 2013, GreenBiz.com,
Interbrand releases 14th annual best global
brands report. "With Apple claiming the top
position this year, Google jumps to #2 and
Coca-Cola, the brand that held the #1 position for
13 consecutive years, moves to #3. This year, the
total value of all 100 Best Global Brands is USD
$1.5 trillion -- an 8.4 percent record increase over
the total value of the 100 Best Global Brands in
Remember, sustainability is not what is rated here.
What is rated is the brand that's considered the
'highest' regarded global brand. Interbrand's
top 100 brands' list is nonetheless worth reviewing
for ethical investors.
Interbrand releases 14th annual best global brands
report, press release, September 30, 2013,
Lehman anniversary: banking sustainability
grows, but not enough.
"In spite of the improvement, however, the banking
sector still ranks below controversial sectors such
as pharmaceuticals or oil and gas – and below the
average 3.3 score across all sectors. In other
words, progress is being made, but it remains slow."
This article in the UK's The Guardian newspaper and
written by EIRIS's CEO, further illustrates the
continuing poor level of ethics in much of the
global banking industry.
I continue to believe that really major financial
troubles are brewing in many developed countries'
banks and financial institutions.
Many banks, etc., are allowed by worried unethical
regulators to hide losses in their assets (real
estate, bonds, etc.) and to totally minimize the
risks of their massive highly unstable off balance
sheet derivative positions! Provisions for
derivative losses hardly exist and tiny losses could
sink any large bank.
I know EIRIS to be a wonderful analytical firm,
particularly with ESG matters. However, I don't know
how far they go in investigating and analysing the
problems I just outlined. For me, they're terrifically
important ethical and governance issues.
Lehman anniversary: banking sustainability grows,
but not enough, by Peter Webster, September 25,
2013, The Guardian, UK.
Sustainable Insight Capital Management
Launches Joint Study With The Carbon Disclosure
"According to SICM CEO Kevin Parker, 'Our analysis
demonstrates that industry leaders are not only
taking critical steps to establish the requisite
governance, management systems, and environmental
efficiencies to engage on climate, but that they
have also demonstrated superior profitability, more
stable cash flows and higher dividend growth for
This is a powerful study that says companies
should integrate sustainability into their
operations and benefit from higher financial and
stock performance. I hope that academic institutions
are able to perform such research too--or even to
audit these findings so that they're believable to
Sustainable Insight Capital Management Launches With
Joint Study With The Carbon Disclosure Project (CDP),
press release, September 24, 2013, Sustainable
Insight Capital Management, USA.
Number of 'climate leaders' doubles in new CDP
"Companies that have made the environment and
sustainability central to their businesses
strategies are seeing higher profits while also
better positioning themselves for an uncertain
future, says the CDP S&P 500 Climate Change Report,
the latest update on greenhouse gas emissions and
climate strategies from the biggest corporations in
the U.S. The report is based on responses from 334
companies on the Standard & Poor's 500." The
growth in interest by companies concerning
sustainability is mounting--and with good reason:
Number of 'climate leaders' doubles in new CDP
report, by Jonathan Bardelline, September 23,
2013, GreenBiz.com, USA.
Indian index to measure corporate social
- [COMMENTARY] "The Indian
Institute of Corporate Affairs (IICA) and the Bombay
Stock Exchange (BSE) Monday signed a pact to develop
India's first corporate social responsibility (CSR)
index. The IICA-BSE CSR Index will assess the impact
and performance of companies listed at BSE in CSR
activities. The index would also look at the
performance of companies in their mandatory CSR
spend as per the new Companies Act, 2013 as one of
the important and objective criteria. The index
would be sector neutral."
Here we see another good step being taken by
Indian business. The development of this index
should spur greater investment in Indian business by
ethical investors everywhere.
An index to measure corporate social responsibility,
September 23, 2013, Business Standard, India.
Solar Power & Wind Power Now Cheaper Than Coal
Power In US.
"It’s less costly to get electricity from wind
turbines and solar panels than coal-fired power
plants when climate change costs and other health
impacts are factored in, according to a new study
published in the Journal of Environmental Studies
This is unsurprising news to me, though it's good that the numbers to support it are finally
coming out. The big question is how to get those
authorities and investors backing energy projects to
include 'full cost' accounting--which would include
climate and health impacts--into their project
Solar Power & Wind Power Now Cheaper Than Coal Power
In US, September 20, 2013, Clean Technica, USA.
UK's Operation Noah launches Bright Now and
calls on churches to divest from fossil fuels.
"More than nine out of 10 [UK] church goers of all
denominations say churches should invest their money
ethically but a significant proportion remain
confused about what this means in relation to
disinvestment." This is obvious good news
from an ethical investor's viewpoint, though the
question could perhaps have been better phrased. For
instance, answering no to it implies the survey
respondent favouring their church invests in
Operation Noah launches Bright Now and calls on
churches to divest from fossil fuels, press
release, September 20, 2013, Operation Noah, UK.
Do sustainable companies offer sustainable
"We often think of European companies leading the
way on good environmental practices. But a recent
report by Independent Capital Management AG, took a
closer look at the pension funds of a number of
Swiss companies, all of which are listed on the
global Dow Jones Sustainability Index. Not one fund
it looked at adopted the same stringent investment
policies as its sponsoring company."
Is this a lapse of management oversight or only a
weak commitment to sustainability that sustainable
companies don't have sustainable pensions? Employees
and stockholders in all so-called sustainable
companies have to put this question to the
management of these companies.
Do sustainable companies offer sustainable pensions?
By Emma Simon, September 19, 2013, The Guardian, UK.
Pensions funds urged not to put money into
socially responsible investments.
"One of the City's best known figures on Wednesday
urged those handling pension funds not to put money
into socially responsible investments. Terry Smith,
a former top broker and now chief executive of his
own Fundsmith asset management business, said
ethical funds performed badly and were riddled with
I'm always amazed how purported top fund managers
(and others) state opinions about SR/ethical
investing without ever really investigating it.
Pensions funds urged not to put money into socially
responsible investments, by Terry Macalister,
September 18, 2013, The Guardian, UK.
Volkswagen, Panasonic stand out on Dow Jones
"Each year, research firm RobecoSAM asks 2500 of the
world's largest public companies to report on their
sustainability performance, covering governance,
social and environmental criteria. (In a recent
GreenBiz Intelligence Panel survey, 45 percent of
respondents named DJSI as a top sustainability
framework in terms of credibility and importance.)"
Interestingly, among the companies delisted from the
DJSI are Johnson & Johnson, HSBC and Bayer. The
first two had been SRI favourites for many, many,
Volkswagen, Panasonic stand out on Dow Jones
Sustainability Index, by Sustainable Business
News, September 13, 2013, GreenBiz.com, USA.
PRI study: ESG factors influence countries’
economic development and sovereign debt.
"Environmental, social and governance (ESG) factors
are 'material' in the $47 trillion sovereign debt
market, according to a new study by the Principles
for Responsible Investment (PRI)." This is
fascinating and important news. ESG factors will be
increasingly used in assessing sovereign bond risk!
PRI study: ESG factors influence countries’ economic
development and sovereign debt, by Alex
Blackburne, September 13, 2013, Blue & Green
Nearly half of Britons would buy more from a
store that supports charity.
"Eight in ten (79 per cent) Brits believe that
retailers should be doing more to support UK
charities, new research shows. The findings, from
social enterprise Give as you Live, show that UK
consumers increasingly perceive retailers as lacking
in Corporate Social Responsibility (CSR) credentials
and are urging them to do more to help UK
charities." The survey results could promote
more retailers taking CSR more seriously. And that
Nearly half of Britons would buy more from a store
that supports charity, by Michael Somerville,
September 13, 2013, Retail Gazette, UK.
Green investments performing strongly
for big business.
"79 per cent of US companies reported higher returns
on their emission reduction investments than those
from the average business investment, according to
the CDP Global 500 Climate Change Report 2013,
co-authored by CDP and PwC. It also found that
carbon emissions from the 50 biggest emitting
companies have risen by 1.65 per cent to 2.54
billion tonnes over the past four years." So
there is good and bad in this report. At least with
the Carbon Disclosure Project (CDP), we're starting
to get more reliable data on corporate carbon
Green investments performing strongly, by Sam
Fenwick, September 12, 2013, E2B, UK.
Achieving a new global corporate
"With significant reductions in poverty, progress in
key health indicators and greater economic
opportunity, an increasingly well-integrated,
technologically empowering, private-sector driven
international economy is turning into the most
transformational force since the Industrial
Revolution." George Kell makes a great case
as to how businesses--through largely integrating
ESG factors in their activities--are helping to
create a more sustainable world. My question is though, is it
Achieving a new global corporate consciousness,
by George Kell, Executive Director, UN Global
Gender Divide A Growing Issue For Advisors
(Women More Interested in SR/Ethical Investing).
" A recent U.S. Trust survey of high net worth
investors asked how important social, political or
environmental impacts were in evaluating
investments. Such impacts were considered 'somewhat'
or 'extremely' important by 65 percent of women but
only 42 percent of men." Financial advisors
especially, should read this article.
Gender Divide A Growing Issue For Advisors, by
Joseph F. Keefe, September 4, 2013, FA Magazine,
Why Advisors Should Consider Impact Investing.
Here, the term impact investing appears synonymous
with socially responsible/ethical investing. It's
another great article by FA Magazine for all
Why Advisors Should Consider Impact Investing,
by FA staff, September 4, 2013, FA Magazine, USA.
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