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"Almost three-quarters of investors (74 percent) would be more likely to work with an advisor who could give them competitive investment returns from investments that also made a positive impact on society and 65 percent of investors would be more likely to stay with an advisor who could discuss responsible investing with them."
--
TIAA Global Asset
    Management
(USA)
    May 2016

"The vast majority of Canadian investors are interested in responsible investments (RI) that incorporate environmental, social and governance (ESG) issues, and they would be more likely to choose responsible investments if their financial advisor suggested suitable RI options for them."
--
Responsible
    Investment
    Association (RIA)
 
  (Canada)
    June 2017

"70% of people [in UK] want to invest ethically but the financial services industry is failing to respond." Referencing research by Abundance.
--
Acquisition
    International
   
(UK) June 2015

 

Ethical Investing News/Commentaries
May 2015

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Commentaries by Ron Robins

If a link does not work, please e-mail us. Link may only be valid a limited time.

Update, re article below: Cut your portfolio’s risk -- and feel good as well. The new, exciting study referred to there is now available here.

Did you know that most investors believe that socially responsible investments will result in a similar return as other investments? "In research recently conducted by Spectrem Group, roughly the same percentage of investors felt that the return for a socially responsible investment should be the same as other investments as did the number of investors who believed it should be less. Only a small portion felt the returns would be better.

Older investors were more likely to believe social investments would have a lower return than other investments. This has historically been the belief and it will be harder for older investors to believe otherwise. Men are also more likely to believe that socially responsible investments will underperform the market."

[COMMENTARY] The inference from this is that younger investors might believe that SRI produces as good or better returns than 'conventional' portfolios. As many Millennials show a significant preference for working in companies having good CSR characteristics, perhaps they also appreciate that such companies are likely more profitable?
May 29, 2015 Millionaire Fact of the Day, Millionaire Corner, USA.

Cut your portfolio’s risk -- and feel good as well. "'In the past, many of the RI studies only looked at financial performance. However, we know environmental, social and governance factors seem to lower risk in an investor’s portfolio,' says Dr. Tessa Hebb, director of the Carleton Centre for Community Innovation at Carleton University, who conducted the study on behalf of OceanRock [Investments Inc.].

'We found that RI funds are able to protect investors from downside risk in their equity portfolios.'"

[COMMENTARY] This study used the data on about 100 Canadian RI funds. It's really exciting to find the downside risk mitigated by RI screens. This study could be deserving of the prestigious SRI Moskowitz Prize!
Cut your portfolio’s risk -- and feel good as well, by Clare O'Hara, The Globe and Mail, May 31, 2015, Canada.

Who Do Affluent Investors Contact about Socially Responsible Investing? "The highest percentage (48 percent) of affluent investors who wish to further explore socially responsible investments will first contact their financial advisor, according to a new Spectrem Group report, Investor Perceptions of Socially Responsible and Impact Investing. One fourth will consult the Internet, while less than 10 percent will seek the counsel of specific socially responsible organizations (9 percent), financial publications (8 percent), friends or family members (4 percent) or co-workers (1 percent)."

[COMMENTARY] Taken together with other Spectrum Group survey data, it appears that when wealthy clients ask their advisors about SRI, many advisors do not help in that regard. Of course, this is a continuing problem that is gradually being addressed. What is also interesting is how few of these clients consult SR organizations.
Who Do Affluent Investors Contact about Socially Responsible Investing? By Donald Liebenson, May 28, 2015, Millionaire Corner, USA.

BlackRock, Ceres create ESG governance guide for institutional investors. "The 68-page '21st Century Engagement: Investor Strategies for Incorporating ESG Considerations into Corporate Interactions' suggests tactics, including step-by-step advice, for use by institutional investors. BlackRock and Ceres plans to conduct a series of outreach programs and training events at conferences and in webinars, some by invitation only and some open to asset owner trustees and investment managers."

[COMMENTARY] It's fascinating to see the world's largest asset manager -- with almost $5 trillion in AUM -- being so engaged with ESG and working so cooperatively with Ceres! This a powerful combination promoting ESG to institutional investors who can no longer ignore the inherent value in integrating ESG into their investment mandates. As some commentators have suggested, not using ESG in managing some funds could be cause for charges of fiduciary mismanagement.
BlackRock, Ceres create ESG governance guide for institutional investors, by Barry B. Burr, May 28, Pensions & Investments, USA.

Seven out of 10 companies would turn their backs on unethical investments, finds PwC poll. "A stark 97 per cent of respondents said they expected responsible investment to grow in importance over the next two years, because of increasing concerns over upholding fiduciary duty, reputational risk and corporate values."

[COMMENTARY] This Pricewaterhouse Coopers (PwC) poll is yet one more indication of the growing importance of ethical investing. (See my editorial, How Ethics Benefits Corporate Profits.)
Seven out of 10 companies would turn their backs on unethical investments, finds PwC poll, by Jessica Shankleman, May 27, 2015, BusinessGreen, UK.

Canada’s 2nd annual Responsible Investment Week, next week, June 1-5. "Responsible Investment Week is a week dedicated to education and awareness about responsible investment (RI). The Responsible Investment Association (RIA) is coordinating a week of events across Canada to promote learning about environmental, social, and corporate governance (ESG) issues that affect investments.

RI Week events will explore opportunities to invest in a more sustainable future, and provide attendees with opportunities to network with industry leaders, hear from ESG experts and catch up on the latest issues, trends and developments in the field."

[COMMENTARY] The main events are planned in Banff (RIA Annual Conference), Toronto, Montreal, and Vancouver. I hope the many Canadians visiting this site can attend and get involved!
Canada’s 2nd annual Responsible Investment Week, next week, June 1-5, Responsible Investment Association, Canada.

Climate change threat demands reform to financial system – UNEP. "'Blowback' from climate change could wreck the financial system unless regulators rewire it to ditch fossil fuels. So says Nick Robins, former head of HSBC’s climate change unit and author of a UNEP report published today, which urges sweeping reforms to shift multi-trillion flows of international finance to insulate countries from global warming."

[COMMENTARY] This UNEP report is the strongest warning yet to the global financial system concerning how it needs to adjust in the face of stranded and marked down fossil fuel assets. Also, the report serves as a wake-up call to all fund managers and investors that losses on their fossil fuel holdings could be massive were there to be real global action to hold the world to the 2° C rise that scientists and governments say is necessary to avert catastrophic climate change.
Climate change threat demands reform to financial system – UNEP, by Alex Pashley, RTCC, UK.

CorporateRegister.com has released its CR Reporting Awards for best CSR reports. "You can download the full CRRA'15 report, which includes the latest statistics and trends, from the banner on our home page at www.corporateregister.com (Free registration/Sign in required to download)."

[COMMENTARY] Their report is well worth reviewing to see how the best corporate reports handle carbon disclosure, materiality issues, etc. Click here to register/download it.

Socially Responsible Investors Focus Most on the Environment. "Investors who wish to promote social responsibility are most focused on the environment and invest accordingly."

[COMMENTARY] Millionaire Corner is doing a great job with their surveys revealing how the affluent invest (or not) in SR-ethical investing.
Socially Responsible Investors Focus Most on the Environment, by Donald Liebension, May 21, 2015, Millionaire Corner, USA.

In What Companies are Socially Responsible Investors Likely to Invest? "Baby Boomers and seniors ages 65 and up are the strongest proponents of socially responsible investing and the investors most likely to support companies whose policies support causes in which they are passionate."

[COMMENTARY] It seems older investors want a better world for their kids and grandchildren. And that's a great reason for them to invest in SR-ethical investments!
In What Companies are Socially Responsible Investors Likely to Invest? By Donald Liebenson, May 19, 2015, Millionaire Corner, USA.

Oxford Joins Cambridge With Ethical Move on Investments. "Oxford University, one of the world’s oldest schools, has joined the ranks of British universities shunning investments in carbon-intensive energy projects... This follows a decision by Oxford’s arch-rival, Cambridge University, to appoint a new committee to beef up its 'socially responsible' investment policy."

[COMMENTARY] With such prestigious academic institutions taking an ethical stand against fossil fuel investments, the fossil free divestment movement gains additional momentum. It seems these great universities are also applying ethical criteria to other investments as well. SR-ethical investing -- which when I started familiarizing myself with it over forty years ago -- has come a long way!
Oxford Joins Cambridge With Ethical Move on Investments, by Juliet Samuel, May 18, 2015, The Wall Street Journal, USA.

Shareholders’ Votes Have Done Little to Curb Lavish Executive Pay. "It’s been five years since the Dodd-Frank law required that companies let investors vote on their executive pay practices. The idea, lawmakers said, was to give shareholders a chance to sound off when compensation plans are not in their best interests.

But has putting these matters to a vote done anything to rein in executive pay? Not a chance. Since these votes started being tallied, C.E.O. pay has risen on average 12 percent annually."

[COMMENTARY] We have what is akin to the 'tulip mania' in executive compensation -- everyone pushing the compensation envelope as far it will go. As is noted in the article, unless such shareholder resolutions are binding on companies, not much will change.

Furthermore, executive compensation committees -- themselves usually executives at other companies -- recommend management compensation packages that try to outdo their competitors. Also, shareholders largely believe that the companies they invest in should offer the biggest pay packets to attract the best talent. Hence, the say on pay laws and resolutions, though nice in theory, have proved useless in halting the compensation frenzy.
Shareholders’ Votes Have Done Little to Curb Lavish Executive Pay, by Gretchen Morgenson, May 16, 2015, The New York Times, USA.

RepRisk and CSRHub study finds link between perceived Corporate Social Responsibility (CSR) performance and reputational risk. "In addition, the data indicates that companies that have strong CSR programs as measured by CSRHub, in the areas of Human Rights and Supply Chain, Leadership Ethics, and Resource Management, seem to have lower risk exposure, whereas those companies who have strong programs in Community Development and Philanthropy, Environment Policy and Reporting, or Compensation and Benefits seem to have higher risk exposure."

[COMMENTARY] I think that most ethical investors assumed such a link, but it's good to get the hard data to support it and the detail as to what are the most important linkages.
RepRisk and CSRHub study finds link between perceived Corporate Social Responsibility (CSR) performance and reputational risk, press release, May 14, 2015, CSRHub/RepRisk, Switzerland/USA.

Does "Socially Responsible Investing" Mean Anything to You? "In general, the younger the investor, the more familiarity he has with socially responsible investing. Among investors under the age of 36, familiarity with 'socially responsible investing' was at 47.42, and familiarity with 'Impact investing' was at 35.76.

There was also a trend shown that the wealthier the investor, the more familiarity he has with socially responsible investing. Ultra High Net Worth investors with a net worth between $5 million and $25 million reported familiarity with 'socially responsible investing' at 55.11, well above the average, while Mass Affluent investors with a net worth between $100,000 and $1 million were at 42.24."

[COMMENTARY] The data are from the same survey as the item immediately below. I find the most interesting aspect here is that the very rich are more aware of SRI than the 'poorer' rich.
Does "Socially Responsible Investing" Mean Anything to You? By Kent Mcdill, May 12, 2015, Millionaire Corner, USA.

Socially Responsible Investing: Who Cares? "More than one quarter of all investors under the age of 45 have at least 25 percent of their investable assets invested in socially responsible companies. Conversely, more than 45 percent of all investors over the age of 45 do not invest in socially responsible companies."

[COMMENTARY] This survey finds what other similar surveys found: younger investors, particularly female, favour SRI.
Socially Responsible Investing: Who Cares? Press release, May 13, 2015, Spectrum Group, USA.

How to Avoid the Next Sovereign Debt Crisis. "Applying environmental, social, and governance (ESG) criteria to government bonds can help investors steer clear of the most indebted nations, according to Standard & Poor’s Dow Jones Indices (S&P DJI)."

[COMMENTARY] This coming from S&P-DJ is a tremendous endorsement for bond ratings utilizing ESG factors! Since, the build-up in sovereign debt has been so extraordinary in recent years, additional sovereign debt catastrophes are inevitable. All investors might want to review their bond holdings in the light of ESG criteria.
How to Avoid the Next Sovereign Debt Crisis, by Nick Reeve, May 5, 2015, Chief Financial Officer magazine, UK.

Canada's 2nd Annual RI Week June 1-5. "Responsible Investment Week is a week dedicated to education and awareness about responsible investment (RI). The Responsible Investment Association (RIA) is coordinating a week of events across Canada to promote learning about environmental, social, and corporate governance (ESG) issues that affect investments."

[COMMENTARY] Every country should have such weeks as they provide a focus for promoting ethical-responsible investing. The UK, Belgium, France, Australia and Canada, are among the countries that presently offer them.

I encourage everyone associated with ethical-responsible investing in Canada to participate in whatever way they can. A series of events are already arranged across Canada.
Canada’s 2nd annual RI Week: June 1-5, Responsible Investment Association (RIA), Canada.

Survey: Adoption of ESG Criteria Growing Among Hedge Fund & Private Asset Managers. "Although the results revealed that 60% of hedge fund managers were still reluctant to introduce ESG criteria into their investment approach, this is a big improvement over the results from the company’s last survey in 2011, when 75% of managers were reluctant. Meanwhile, the percentage of managers that do incorporate ESG criteria has increased significantly from 25% to 40% over the same time span."

[COMMENTARY] Surveys showing greatly increased adoption of ESG criteria in stock/portfolio selection by fund managers are everywhere these days. And for good reason as anyone who follows these studies/surveys knows that they repeatedly show the use of ESG criteria produces better returns.
Survey: Adoption of ESG Criteria Growing Among Hedge Fund & Private Asset Managers, May 5, 2015, FIN Alternatives, USA.

Fifth Annual Impact Investor Survey Reflects on Industry Growth, Past and Projected. "146 of the world’s largest impact investors, including fund managers, banks, development finance institutions, foundations, and pension funds report having committed $10.6 billion to impact investments in 2014, with plans to commit 16% more in 2015. The surveyed sample, which manages $60 billion in impact investment assets, indicates satisfaction with both financial returns and social/environmental impact performance, compared to expectations."

[COMMENTARY] J.P. Morgan Social Finance and Global Impact Investing Network (GINN) are providing a valuable service in surveying the impact investing market. As many of us know, the possibilities for impact investing are huge with immense potential benefits for society with prospective market returns for investors.
Fifth Annual Impact Investor Survey Reflects on Industry Growth, Past and Projected, press release, May 4, 2015, J.P. Morgan Social Finance/Global Impact Investing Network (GINN), USA.

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Disclaimer: This website does not make investment recommendations. Nothing in this site should be interpreted as a recommendation or solicitation to buy/sell any securities or investments. Investing for the Soul is a source of general information and resources for ethical investing and socially responsible investing (SRI). Investors should consider their actions thoroughly and consult their financial advisers and other professionals, prior to taking any investment action. This website does not necessarily agree with the opinions expressed in articles on its pages or offered on the web pages to which it might be linked. Such opinions are the responsibility of the writers themselves. Furthermore, this site 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 on this, or other sites, to which it is 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.

 

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