E-newsletter of Investing for the Soul February 27, 2017
Top ethical investing news for February 2017
Links may only be valid a limited time Commentaries by Ron Robins
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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."
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.
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."
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.
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)."
Such developments are welcome news. Developments like this make
sustainable investing -- in this instance
for institutions -- a little bit easier.
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."
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.
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."
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
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."
are terrific results! I'm particularly impressed with the growth of 91%
growth of assets among individual investors.
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)."
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
The Resilient Investor: A Plan for Your Life, Not Just Your Money,
by Hal Brill, Michael Kramer, Christopher Peck with Jim Cummings,
Berrett-Koehler Publishers 2015
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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.