E-newsletter of Investing for the Soul August 30, 2015
Top ethical investing news for August 2015
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!
Morningstar to launch ESG scores for funds. "Chicago-based Morningstar Inc. plans to launch environmental, social, and governance (ESG) scores for mutual funds and exchange-traded funds later this year... Morningstar says that it will use the ESG ratings provided by Sustainalytics on more than 4,500 companies to create asset-weighted composite ESG scores for the mutual funds and ETFs that it covers based on the company-level ESG ratings."
[COMMENTARY] This is terrific news!
It will mean greatly increased exposure of ESG-ethical investment
products to investors and the investment industry. It could encourage
many more advisors to place ESG-ethical funds/ETFs in their client
portfolios. Congratulations to Michael Jantzi and Sustainalytics for
their part in this endeavour!
Doing Good Is Good Business, But Can You Prove It? "The latest evidence that the financial benefits of CSR are causal and not just correlated comes in the form of a study as hefty as a brick. 'Project ROI: Defining the Competitive and Financial Advantages of Corporate Responsibility and Sustainability' is an effort to assess the business case for CR for the benefit of senior executives, boards of directors and even Wall Street.
According to the study, with proper design and sufficient investment, a company’s 'CR Assets' can support returns related to share price and market value; reputation and brand; sales and revenue; human resources; and risk and license to operate."
[COMMENTARY] Surely and gradually
the financial case is being made for CSR! Companies who ignore
developing good CSR strategies are likely being seen as dinosaurs and
whose stock price and reputation taking increasingly bad hits.
Companies that Care for Consumers Earn Higher Returns: New Study. "A new study called 'Meaningful Brands,' conducted by global advertising agency Havas, shows that when companies invest the time and effort to connect with consumers, it pays. Such companies typically command increased sales, better brand recognition and higher annual returns than other companies.
The study surveyed 300,000 people in 34 countries and asked them how they felt about 1,000 brands across 12 industries. The findings showed that a meaningful brand has a 46 percent higher share of the consumer’s wallet, which refers to the amount a consumer spends on a particular product. Furthermore, the top 25 more meaningful brand outperformed the stock market by 133 percent."
[COMMENTARY] This study results make
sense. It's good to have hard data to prove what we believe to be true.
Almost Three Quarters of Investment Professionals Use Environmental, Social & Governance Information When Making Investment Decisions. "Almost three-quarters of investment professionals worldwide (73 percent) take environmental, social, and corporate governance (ESG) issues into consideration in the investment process, according to the CFA Institute ESG Survey, a new survey of CFA Institute members created by CFA Institute and the Investor Responsibility Research Center Institute (IRRC Institute).
In addition, 64 percent of survey respondents consider governance issues, 50 percent consider environmental issues, and 49 percent consider social issues in investment decisions. Only 27 percent do not consider ESG issues."
[COMMENTARY] Wow, these numbers are
incredible. I just wonder how the survey questions were framed. At face
value, it would seem the work of the responsible-ethical investment
community has been accomplished. But is that really the case?
Why Putting a Number to C.E.O. Pay Might Bring Change. "So why does anyone expect a different outcome from the Securities and Exchange Commission’s new rule requiring disclosure of the gap between what a company’s chief executive is paid and what its rank-and-file workers earn?
I put that question to some experts on executive pay... Their thinking goes like this: Because the rule will generate an easily graspable and often decidedly shocking number, it may energize a cadre of new combatants in the executive pay fight. And because these newcomers — company employees, state governments and possibly even consumers — will most likely be more vocal on the matter than institutional investors have been, the executive pay bubble might actually start to deflate."
[COMMENTARY] This article is well
worth reading for all ethical investors who're concerned about excessive
executive pay. Though I'm hopeful it could help bring down the pay gap
between executives and their employees, I'm concerned that ways will be
found to kill its implementation before it starts in 2017.
365 Companies and Investors Announce Support for EPA’s Clean Power Plan. "In an unprecedented show of business support for tackling climate change, 365 companies and investors sent letters today to more than two-dozen governors across the United States voicing their support for the Environmental Protection Agency’s Clean Power Plan for existing power plants and encouraging the state’s 'timely finalization' of state implementation plans to meet the new standards... [Signatories include: General Mills, Mars Inc., Nestle, Staples, Unilever and VF Corporation.]"
[COMMENTARY] Actions like these from
businesses of all sizes offer hope that Paris COP21 environmental
conference might actually produce real carbon reduction agreements.
Hitherto, business was acting as a retarding force to such agreements.
So these actions really point in a very positive direction.
SRI Investing Opens For 4.7 Million Government Workers. "For the first time, government workers and military personnel saving for retirement will have the option to invest in sustainable, responsible and impact investment funds, based on a vote this week by the Federal Retirement Thrift Investment Board. The board serves the government's massive retirement system known as the Thrift Savings Plan or TSP."
[COMMENTARY] It's taken a long time,
but finally, the US government is doing the right thing. There might
well be an infusion of new funds into ethical investment products,
providing further support for the sector.
Featured New Book
The Power of Impact Investing: Putting Markets to Work for Profit and
Global Good, by Judith Rodin and Margot Brandenburg, Wharton Digital
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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 © 2015 Ron Robins. All rights reserved.