E-newsletter of Investing for the Soul                               February 27, 2017

 

Ron Robins, Editor. E-mail /289-271-0873            Latest news at http://investingforthesoul.com/

Top ethical investing news for February 2017

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The race is on for socially responsible investing in Japan. "The Japanese market is finally moving towards an ESG environment, similar to the mature markets of the US and Europe."

[COMMENTARY] This is good news for ethical investors globally. Historically, Japanese companies have been reticent to disclose much ESG information. This is now changing with Japan's new corporate stewardship code and especially Japanese institutional investors such as their huge Government Pension Investment Fund demanding ESG data.
The race is on for socially responsible investing in Japan, by Seiji Kawazoe, February 20, 2017, FT Advisor, UK.

How to solve the imbalance in ESG investing. "Investors are actively demanding more information about different components of environmental, social and governance investments. As evidence of this, S&P Dow Jones Indices, one of the world’s largest index providers and a division of S&P Global, acquired Trucost Plc, a carbon and environmental data provider, in October.

During a GreenBiz 17 program Wednesday, Dmitri Sedov, vice president of innovation and digital strategy at S&P Global, said the acquisition of Trucost will help solve a gap between the demand for sustainable investing and the supply of these investments."

[COMMENTARY] We see many of the pioneer organizations associated with ethical-ESG investing being acquired by mainstream investment industry behemoths. In time, we will see if these hookups truly benefit investors. Superficially, this deal appears promising for ethical-ESG investors.
How to solve the imbalance in ESG investing, by Keith Larsen, February 16, 2017, GreenBiz, USA.

Global financiers launch green investment criteria. "Nearly 20 global banks and investors have launched a set of criteria for investments to be considered sustainable. The group, which includes Société Générale and Hermes Investment Management and totals around $6.6 trillion (£5.28tn) in assets, outlined the Principles for Positive Impact Finance (PPIF)."

[COMMENTARY] Such developments are welcome news. Developments like this make sustainable investing -- in this instance particularly for institutions  -- a little bit easier.
Global financiers launch green investment criteria, by Jonny Bairstow, February 16, 2017, Energy Live News, UK.

Nearly a Third of Non-Profit Institutional Investors Say They Make "Mission-Related" Investments, According to Cambridge Associates Survey. "In a survey of 159 non-profit institutional investors around the globe, 31% say they're currently engaged in mission-related investing -- making investments designed to align with or advance institutional goals or values as well as provide financial returns. Of that group, 44% say they have increased their mission-related allocation over recent years, and 62% expect to grow their mission-related allocation in the coming five years. None of the institutions that currently make mission-related investments expect to decrease their allocations."

[COMMENTARY] We see continuing good news that non-profit institutional investors are increasingly aligning their investments with their missions. It always surprised me how a charity invested in companies that produced products or services abhorrent to its mission. Often it was blamed on the fund manager’s fiduciary responsibility. However, it was often due to the timidity of the charity in properly instructing their fund managers in what they expected from them.  See my editorial: Unethical Investing by Charities.
Nearly a Third of Non-Profit Institutional Investors Say They Make "Mission-Related" Investments, According to Cambridge Associates Survey, press release, February 15, 2017, USA.

Ethical investment demand outstrips adviser interest. "[UK] Fnancial advisers may be seriously underestimating demand for responsible investment, after research showed wide discrepancies between adviser and consumer attitudes to investing ethically."

[COMMENTARY] This is a problem everywhere and explains why the percentage of ethical retail fund assets is only 2-4% of all retail funds. It's an issue I've written about numerous times over the years. This FT article should be broadcast by all professional brokerage and financial planning organizations.
UK Ethical investment demand outstrips adviser interest. by James Fernyhough, February 6, 2017, FT Advisor, UK.

Canadian RI Assets Surpass $1.5 Trillion, up 49% in two years: Canadian RI Trends Report. "The 2016 Canadian Responsible Investment Trends Report reveals that Canada’s responsible investment (RI) market is continuing to experience rapid growth. Responsible investment refers to the incorporation of environmental, social, and corporate governance (ESG) factors into the selection and management of investments. This report provides a detailed overview of recent trends in Canada’s responsible investment marketplace."

[COMMENTARY] These are terrific results! I'm particularly impressed with the growth of 91% growth of assets among individual investors.
Canadian RI Assets Surpass $1.5 Trillion, up 49% in two years: Canadian RI Trends Report, press release, February 2, 2017, RIA Canada, Canada.

The Tipping Point: Women on Boards and Financial Performance. "This year, we analyzed U.S. companies over a five-year period (2011-2016). U.S. companies that began the period with at least three women on the board experienced median gains in Return on Equity (ROE) of 10 percentage points and Earnings Per Share (EPS) of 37%. In contrast, companies that began the period with no female directors experienced median changes of -1 percentage point in ROE and -8% in EPS over the study period (see below exhibits)."

[COMMENTARY] One would think after so many studies showing the financial benefits accruing to companies having women on boards, that shareholders would be demanding it. Yet relatively few do, especially in North America. The 'old boys' network is flourishing and only slowly breaking down.
The Tipping Point: Women on Boards and Financial Performance, by Linda- Eling Lee, January 31, 2017, MSCI, USA.

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Disclaimer: Neither The Soul Investor nor Ron Robins makes 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 © 2017 Ron Robins. All rights reserved.