Ethical Investing News/Commentaries
Commentaries by Ron
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The SEC Turns A Blind Eye On
Corruption In CSR Payments.
implementation of the Dodd-Frank Wall Street Reform
and Consumer Protection Act, the U.S. corporate
watchdog recently proposed a new rule to explicitly
allow resource extractive businesses to exclude
public disclosure of payments made in connection
with Corporate Social Responsibility (CSR )
initiatives they undertake in emerging markets."
proposed rule does seem strange -- and why
explicitly for extractive industries' CSR payments?
If illegal bribes are paid, it seems this might be a
good loophole for companies to quietly pay them! The
SEC has some explaining to do.
The SEC Turns A Blind Eye On Corruption In CSR
Payments, by Harry G. Broadman, February 29,
2016, Forbes, USA.
Industry's First Sustainability Rating for 20,000
Funds Globally, Giving Investors New Way to Evaluate
Investments Based on Environmental, Social, and
Governance (ESG) Factors.
"The new rating
will enable investors around the world to evaluate
mutual funds and exchange-traded funds based on how
well the companies held in their funds are managing
their ESG risks and opportunities."
Morningstar and Sustainalytics have done it! This
could help those interested in ethical investing
everywhere. Now it will be interesting to see how
the SR-ethical investment world reacts.
Morningstar Introduces Industry's First
Sustainability Rating for 20,000 Funds Globally,
Giving Investors New Way to Evaluate Investments
Based on Environmental, Social, and Governance (ESG)
Factors, press release, March 1, 2016,
Science will help push
companies towards a low-carbon future.
community hasn’t done enough to help curb global
warming. Now, companies can rely on science-based
targets and data to help get results."
companies have needed -- and now able to get -- are
science-based initiatives about their carbon
footprint, sustainability, etc. Analysts and
investors are increasingly concerned about such
risks for companies.
Those companies that can show a proactive
scientifically based method for measuring and
reducing climate change/carbon risks, etc. might see
their stocks outperforming their peers who are not
so engaged. This provides a competitive environment
for much improved corporate disclosure of these and
related risks in the years to come.
Science will help push companies towards a
low-carbon future, by Cynthia Cummis, February
23, 2016, The Guardian, UK.
CFA Institute Survey:
Investors Want Transparency, Ethics, Performance.
"Retail investors’ trust in financial
services increased in the U.S., U.K. and
Australia, fell in Canada and Hong Kong since
Investment costs are even more important than
performance to investors globally, and firms are
not meeting expectations in this area.
Institutional investors rank ethical
standards above all else in important attributes
of a firm.
Investors in China and India lean toward robo-advisor
options, whereas investors in Canada, the U.S.,
and U.K. still value human interaction.
Transparency and cybersecurity are key
concerns among investors.
A third of investors feel that another
financial crisis is likely within the next three
years, and about half of investors lack
confidence in their firm’s ability to manage
through a crisis."
Trust to Loyalty: A Global Survey of What Investors
Want,” is a follow-up to the 2013 Edelman/CFA
Institute Investor Trust Study. This is a remarkable
survey with important results that all investors --
and particularly advisors -- might want to consider.
CFA Institute Survey: Investors Want Transparency,
Ethics, Performance, press release, February 17,
2016, CFA Institute, USA/UK.
92% of pension funds plan to
upgrade governance: report.
Corporation's report] Pensions with Purpose: Meeting
the Retirement Challenge report, which is based on
responses from 400 pension professionals in 20
countries, found that respondents believe their
board’s expertise is not strong enough in critical
areas and must be improved, with 45% planning to
increase training and education opportunities for
board members... also found... funds will continue
to diversify their investment strategies, with 83%
expressing moderate or high interest in
environmental, social and governance (ESG)
an issue is that many board members of pension funds
are not necessarily knowledgeable in financial
matters -- particularly the latest trends such as
ESG. It's also good to hear the continuing
confirmation that pension fund manager's are really
interested in ESG!
92% of pension funds plan to upgrade governance:
report, by Jennifer Paterson, February 17, 2016,
Benefits Canada, Canada.
Companies that Treat
Employees Well Attract 35% More Investment From SRI
"Now, a study has found that practicing good
employee relations can also be profitable in terms
New research concludes that it’s worth thirty-five
percent more investment from socially responsible
funds. The study, conducted by Onur Tosun, Assistant
Professor of Finance at Warwick Business School in
Coventry, England, studied one thousand five hundred
eighty-five U.S. corporations, and forty-seven
socially responsible investment funds, using
measurement criteria from the KLD Index and the US
Forum for Sustainable and Responsible Investment. He
found that those companies who treated their
employees the best attracted the most money from SRI
seems obvious that this should be true. However,
it's good that someone has studied it and found it
valid. This study could entice more companies to put
some emphasis on the 'S' in ESG.
Companies that Treat Employees Well Attract 35% More
Investment From SRI Funds, by John Howell,
February 15, 2016, USA.
Investors Call For Mining
Companies To Address Climate Risks.
"A group of
shareholders called the ‘Aiming for A’ investor
coalition is asking three giant mining companies to
be more transparent about the climate change risks
to their businesses. The investors are responsible
for over $8 trillion in assets. Shareholder
resolutions to Anglo American, Glencore and Rio
Tinto include support from four of the world’s
largest pension funds."
a view shared by most ethical investors, this
investor coalition calls on three huge extractive companies
to clearly explain and
attempt to quantify their climate change risks. I
guess if these companies agree, it could force many
others in these and related industries to similarly
release such information and data.
(For some companies there could even
be opportunities. For instance,
silver is used in photovoltaic solar panels.)
Investors Call For Mining Companies To Address
Climate Risks, by Gina-Marie Cheeseman, February
12, 2016, TriplePundit, USA.
Sustainalytics' "10 for
2016" Report Presents Key Investor Insights into the
bottom-up assessment looks at 10 companies, spanning
six countries and nine industries, that are taking
significant steps to get ahead of the climate change
curve. The companies featured showcase diverse
approaches to tackling climate change, from
disruptors like Tesla on energy storage to
Borregaard on petrochemical alternatives to Cisco on
the Internet of Things."
does excellent work in illustrating the type of
sustainable activities that companies in many
sectors might emulate. This report provides insights
for ethical investors about what they might look for
when reviewing potential investments through a
Sustainalytics' "10 for 2016" Report Presents Key
Investor Insights into the COP21 Agreement,
February 10, 2016, Sustainalytics, Global.
Green Bank Network aims to
unleash private clean energy capital.
"During the Paris
climate conference, six green banks and two
nonprofit organizations jointly announced the
opening of the network Dec. 7. The network will
accelerate clean energy installations and mobilize
private investments worldwide... The six
participating green banks are Connecticut Green
Bank, Japan’s Green Fund, Malaysian Green Technology
Corporation, UK Green Investment Bank, NY Green Bank
and Australia’s Clean Energy Finance Corporation."
joining of these banks could be the beginning of a
global green bank network. We will see if over time
it becomes a significant player in global green
energy finance. Some green banks, like the UK's
Triodos Bank, seem to be left out.
Green Bank Network aims to unleash private clean
energy capital, by Yinong Sun, February 9, 2016,
The First Benefit
Corporation IPO Is Coming, And That’s A Big Deal.
ready for the first public stock offering by a
chartered Benefit Corporation. This ain’t no
friendly neighborhood organic coffee roaster,
either. Laureate Education promises to operate as a
triple-bottom-line business, but this is a much
bigger, more complicated deal.
Laureate is the world’s largest for-profit operator
of online and campus-based higher education. It
owns, controls or manages 88 institutions that
enroll more than 1 million students, 90 percent of
whom live outside the United States. It has been
growing rapidly, and in 2014 its revenues exceeded
$4.4 billion. It’s a 16-year-old company, but it
announced its new charter as a Delaware Benefit
Corporation just four months ago, on the same day it
registered for its IPO."
investors in Laureate are KKR and the World Bank's
International Finance Corporation! So this deal
looks like it will be very widely watched and could
the beginning of a whole new era of financing for
companies focused on triple bottom line results.
Ethical investors everywhere could get excited and
interested in such deals.
The First Benefit Corporation IPO Is Coming, And
That’s A Big Deal, by Brad Edmondson, February
4, 2016, TriplePundit, USA.
JPM teams up with World Bank
and S&P for ESG platform.
Investment Bank’s structured products team has
launched a new ESG-related platform alongside index
provider S&P and World Bank, the group has
The platform is called JP Morgan Ethos Investments
and it is aimed at investors seeking to deploy
capital in ESG-focused assets by investing across
trackers, principal protected products, equity,
credit and fixed income."
new product will be fascinating to watch. It
certainly has a blue-chip pedigree. Clearly, with
this type of backing it could go far.
JPM teams up with World Bank and S&P for ESG
platform, by Silvia Sciorilli Borrelli, February
1, 2016, Citywire Selector, UK.
Adviser launches ethical
online investment service for the UK.
Financial's expertEthical website is powered by
Parmenion and will provide advice exclusively on
ethical investments. The company said it wants to
make specialist advice on ethical products more
affordable for consumers."
investment advisory services are proliferating, but
I believe this is the first in the UK to offer
purely ethical products.
Adviser launches ethical online investment service,
by Carmen Reichman, February 1, 2016, Professional
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