E-newsletter of Investing for the Soul September 29, 2013
Top ethical investing news for September 2013
Links may only be valid a limited time Commentaries by Ron Robins
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Number of 'climate leaders' doubles in new CDP report.
- [COMMENTARY] "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: it's profitable!
Lehman anniversary: banking sustainability grows, but not enough. - [COMMENTARY] "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.
Sustainable Insight Capital Management Launches Joint Study With The Carbon Disclosure Project (CDP). - [COMMENTARY] "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 investors.'"
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 companies everywhere.
Solar Power & Wind Power Now Cheaper Than Coal Power In US. - [COMMENTARY] "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 and Sciences."
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
UK's Operation Noah launches Bright Now and calls on churches to
divest from fossil fuels. - [COMMENTARY]
"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 'unethical' investments!
Do sustainable companies offer sustainable pensions? - [COMMENTARY] "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
Volkswagen, Panasonic stand out on Dow Jones Sustainability Index.
- [COMMENTARY] "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, years.
PRI study: ESG factors influence countries’ economic development and
sovereign debt. - [COMMENTARY]
"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!
Green investments performing strongly for big business.
- [COMMENTARY] "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 emissions.
Achieving a new global corporate consciousness. -
[COMMENTARY] "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 fast enough?
Gender Divide A Growing Issue For Advisors (Women More Interested in
SR/Ethical Investing). - [COMMENTARY]
" 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.
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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 © 2013 Ron Robins. All rights reserved.