E-newsletter of Investing for the Soul July 30, 2013
Top ethical investing news for July 2013
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!
Ethical Lapses on Wall Street. - [COMMENTARY] "The second annual survey of Wall Street ethics (or the lack thereof) from the law firm Labaton Sucharow generated much interest but few surprises for me. Did you really believe Wall Street changed for the better since 2010 when the Dodd-Frank Act was passed by Congress?"
The results of the Labaton Sucharow survey serve a good purpose: they
remind us that for all the 'high ethical' talk of Wall Street leaders,
their industry is plagued with unethical behaviour requiring significant
regulatory oversight. However, what is also a pity is that the
regulators are often 'in bed' with those they regulate and the
regulatory agencies are purposely starved of funds by their political
masters who rely on Wall Street for their campaign funds.
Intel, Microsoft And Kohl’s Top EPA’s Green Power List. - [COMMENTARY] "Intel again topped the EPA's Green Power lists of partner organizations using renewable electricity. As the most aggressive private-sector partner, the tech giant uses more than 3.1 billion kilowatt-hours (kWh) of renewables annually. On the EPA's National Top 50 List, Intel was followed in order by Microsoft, Kohl's, Whole Foods Market, Wal-Mart, the Department of Energy (DOE), Staples, the city of Houston, Starbucks and Apple. First-timers to that ranking, released Tuesday, include Unilever, JPMorgan Chase and EMC Corporation."
If companies aren't part of EPA's Green Power Partnership
program--they're not covered. Hence, companies not part of EPA's program
such as IKEA and Google--and all doing great things in green
energy--aren't included in the rankings.
Non-Financial Reporting Falls Short, Investors Say. - [COMMENTARY] "Corporate non-financial reporting by European companies is not transparent or adequate enough for investors, according to a survey conducted by the European Sustainable Investment Forum and the Association of Chartered Certified Accountants... Some 93 percent of investors surveyed believe non-financial disclosure is insufficient to assess materiality."
As I've said on many occasions, until ESG reporting is in a standardized
format and independently audited by regulated auditors--much like
financial reporting--we will continue to have this problem.
Sustainable Investment Organization Releases Guide For Retail
Investors To Address Climate Change. - [COMMENTARY]
"Today the US SIF Foundation released Investing to Curb Climate Change:
A Guide for the Individual Investor. This guide seeks to meet the
increasing interest of a wide range of investors in using their
investment dollars to address the risks of climate change and to help
generate solutions... The US SIF Foundation will also release a Guide
for Institutional Investors on July 29." I haven't had the chance to
review this guide yet, but I'm sure it'll be worthwhile reading!
Apparently, it's the first of a series of guides for socially
Obama Enters Impact Investing Arena With New Program.
- [COMMENTARY] "At the G8 Social Impact
Investing Forum last month, the Obama Administration announced an
initiative to spur economic growth and job creation through enterprises
that reflect the triple bottom line of social, economic and
environmental performance." This is a good article outlining the
Obama administration's first real program for encouraging impact
Finance Giant UBS: ‘Sustainable Investment Has Entered The
Mainstream.’ - [COMMENTARY] "Leading
financial services firm UBS has released a report that outlines its
commitment to sustainable investment – which it says “has entered the
mainstream”. The report uses research projects that have been carried
out within the firm. It draws upon the conclusions of these to reiterate
the significance of sustainability and the value that such practices can
bring to the business." This is what all ethical investors have been
Social Responsibility Most Important To Generation Y Investors, Says
Survey. - [COMMENTARY] "Younger
investors are more concerned about making socially and environmentally
responsible investments, according to a survey by investor website
Millionaire Corner. Its study found that in 49% of millionaire investors
from Generation Y, also known as the Millennial Generation, social
responsibility is a factor in their investment decisions." This is
good news for the future of ethical investing. As these youngsters move
into management, it may indicate a keener interest in the future for
really dealing with issues such as sustainability and equity on a wider
High-Frequency Trading Is Making A Joke Of The Markets. - [COMMENTARY] "Knowingly or not, the HFTs had discovered their quotes could blind other investors to the true market price, and this soon became one of their biggest weapons against the investing public. HFT firms could afford 10-gigabyte pipelines, microwave-transmission towers, even tunneling through Pennsylvania Mountains to ensure they could be the first to see and react to the "real" price of assets they were trading. The rest of us were left to trade on the equivalent of yesterday's prices, as the HFTs' nanosecond trading made a full second seem like a full day's advantage!"
Nothing typifies the seeming corruptness of the regulatory agencies
'governing' the US/European financial markets than not putting a leash
on high frequency traders. This is a great article on the subject.
Q2 2013 Global Green Investment At $53.1B. -
[COMMENTARY] "Bloomberg New Energy Finance reported
that global green energy investment grew to $53.1 billion in the second
quarter of 2013. That’s a 39 percent improvement from the first
quarter’s four-year low of $43.6 billion, and was driven almost entirely
by quarter-over-quarter growth in the United States ($9.5 billion, up
155 percent) and China ($13.8 billion, up 63 percent)." The overall
numbers are good. They are blemished though, as European green
investment slumped with the raising of German feed-in tariff rates,
solar manufacturers there going bankrupt, and the EU recession impacting
Thomson Reuters Extel And UKSIF 2013 SRI & Sustainability Survey
Results. - [COMMENTARY] "The 2013
Survey represents the views of over 500 investment professionals from 29
countries, making it the most extensive assessment of socially
responsible investing (SRI) in the European investment community. Voting
was conducted from 26 March to 3 May 2013. It reflects a contribution
from 215 buy-side firms and 26 brokerage firms/research houses."
Checkout the results with the link below.
Companies With Women Board Members May Have An Edge In Performance
And Stock Price. - [COMMENTARY]
"According to the study ['Mining the Metrics of Board Diversity' by
Thomson Reuters] on average, companies with mixed boards have marginally
better, or similar performance to a benchmark index, such as the MSCI
World, particularly over the past eighteen months. Companies with no
women on their boards underperformed relative to organizations with
women board members, and had slightly higher tracking errors, indicating
potentially more volatility." The Thomson Reuters study confirms
what some other studies have also found--that women on boards add real
value to boards, to their company's and to stock values.
Ratings And Rankings: How Competition Promotes Corporate
Sustainability. - [COMMENTARY] "The
field of ratings and rankings has grown significantly in the last
decade. According to research by SustainAbility, the number of indices
jumped from 21 ratings in 2000 to 108 in 2010. That’s more than a
five-fold increase. Why the sudden explosion of “green” leadership
tables and indices? The short answer is stakeholder pressure. Socially
responsible investing has prompted many investors to look beyond balance
sheets and earnings reports." This is a good article on the subject.
U.S. Investment Industry Groups Scuffle Over Ethics, Costs. - [COMMENTARY] "Wall Street's brokerages would spend an average of $8 million each to implement a plan being considered by the U.S. Securities and Exchange Commission to impose higher ethical standards on brokers who give financial advice, according to estimates by the securities industry's largest trade group."
The core issue is that, "brokers are compensated by sales commissions and must only meet a 'suitability' standard by suggesting investments that are suitable for their clients [and frequently exclude non-firm products]. But RIAs, typically paid by clients, must be fiduciaries - they must put their clients' interests above their own at all times. The SEC is considering whether to streamline those standards through a new rule."
It's about time that US brokers put clients' interests first--and not
their own commissions!
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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.