E-newsletter of Investing for the Soul  
                            
September 29, 2019

 

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

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Corporate Reporting Dialogue shows high level of alignment between major global reporting frameworks on TCFD recommendations. "As part of the Dialogue's Better Alignment Project, CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) collaborated intensively to assess alignment on the TCFD's disclosure principles, recommended disclosures and illustrative example metrics."

[COMMENTARY] The success of this project will ensure more coherence and cross comparability of corporate ESG/CSR performance!
Corporate Reporting Dialogue shows high level of alignment between major global reporting frameworks on TCFD recommendations, press release, September 24, 2019, Corporate Reporting Dialogue Better Alignment Project, USA.

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'Investing in a simple index fund is immoral' -- why climate-change investing has been more talk than action. "Just 4% of company 401(k) retirement plans offer the choice of a 'socially responsible' mutual fund as one of its investment options, the Plan Sponsors Council of America, a trade body, tells MarketWatch. And just 9% of those who are offered such a fund invest in it, said Fidelity Investments, a major plan administrator...

Meanwhile research by Morningstar says that despite a surge in interest in ethical investing and socially responsible mutual funds, the total amounts invested remain small."

[COMMENTARY] Good data concerning the US market for ethical and sustainable fund investing. Most US investors -- as elsewhere -- still not investing according to their values.
'Investing in a simple index fund is immoral' -- why climate-change investing has been more talk than action, by Brett Arends, September 25, 2019, MarketWatch, USA.

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Listed companies increase use of integrated reporting, says IIRC. "The International Integrated Reporting Council (IIRC) has published its annual integrated report, stressing that there is increased use of integrated reports detailing non-financial information."

[COMMENTARY] Integrated reporting offers many benefits to all stakeholders. It's good to see it quickly gaining ground.
Listed companies increase use of integrated reporting, says IIRC, by Pat Sweet, September 23, 2019, Accountancy Daily, UK.

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Fossil Fuel Divestment: The Financial Case. "We compare financial performance of investment portfolios with and without fossil fuel company stocks over the period 1927 -- 2016. Contrary to theoretical expectations, we find that fossil fuel divestment does not seem to impair portfolio performance. These findings can be explained by the fact that, so far, fossil fuel company stocks do not outperform other stocks on a risk-adjusted basis and provide relatively limited diversification benefits."

[COMMENTARY] The study makes a compelling case for fossil fuel divestment.
Fossil Fuel Divestment: The Financial Case, by Katelyn M. Kriesel, September 2019, Hansen's Advisory Services President, The Sustainable Economies Alliance, USA.

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Ultra-rich want wealth to make a difference. "The Global Impact Investing Network estimates the current size of the impact-investing market is at least $500 billion, but the potential size of the market is much bigger -- as much as $269 trillion according to a recent report from the International Finance Corporation."

[COMMENTARY] Impact investing is still at its beginning! It potentially offers a means to positively remake the investment world.
Ultra-rich want wealth to make a difference, by Jennifer Ayer, September 20, 2019, Investment News, USA.

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Jobs for 'good people' in finance are going to explode. "Goldman Sachs survey of opinions among its 2019 summer interns revealed, banking juniors (at GS at least) are environmentally aware and keen for carbon taxes to mitigate the effects of climate change. This accords with just about every survey of Gen Z and Millennial opinions ever done. It could become a problem for finance firms trying to hire people under the old amoral ethos - but that ethos is changing."

[COMMENTARY] Those young people entering the investment industry have such concerns as demonstrated in this article bodes well for the future of ethical and sustainable investing. Although with the advent of AI who knows how many will be employed in this industry in the decades ahead!
Jobs for 'good people' in finance are going to explode, by Sarah Butcher, September 18, 2019, efinancialcareers.com, USA.

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Married CEOs associated with better corporate social responsibility (CSR). "According to a new study, married chief executive officers (CEOs) are more concerned about their employees' well-being and are more accepting of diverse employees compared to their non-married peers. The study, led by the University of Connecticut and University of Saskatchewan, was published in the Journal of Corporate Finance."

[COMMENTARY] Should you look for companies with married CEOs? I wonder if any of the ESG ratings' firms include that in their assessments! Studies in this general area show that diversity in companies equals better financial results too.
Married CEOs associated with better corporate social responsibility (CSR), Joseph Nordqvist, September 17, 2019, Market Business News, USA.

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Faith institutions are largest group in global divestment movement. "A coalition of diverse and international faith institutions announced divestment from fossil fuels on 12 September and a new milestone was marked. Faith institutions constitute the greatest number of entities contributing to the global movement, with 150 Catholic institutions alone in the total of more than 1,100. Fossil fuel divestment now comes from institutions with $11 trillion in assets, up from a starting point of $50 billion just five years ago."

[COMMENTARY] Notably absent from this list are the American evangelical and Baptist congregations. Will they eventually join in this endeavor? If they do, then we'll know the US is truly on board concerning the seriousness of climate change.
Faith institutions are largest group in global divestment movement, by Ellen Teague, September 17, 2019, Independent Catholic News, UK.

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Does It Pay For Companies To Do Good? "This study is just one in a recent slew that show that there are strong self-serving reasons for companies to spend money on initiatives aimed at improving the social good."

[COMMENTARY] A newly published study -- an NBER working paper -- demonstrated how a company operating on high CSR principles can receive significant operational and financial benefits. It was uniquely designed and the fact that the prestigious US NBER published it as a working paper suggests the study commands great merit..
Does It Pay For Companies To Do Good? By Greg Rosalsky, September 17, 2019, NPR, USA.

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What's Behind the World's Biggest Climate Victory? Capitalism. "Solar and wind are proliferating not because of moral do-gooders but because they're now the most profitable part of the power business in most of the world. An industry that once relied on heavy subsidies and was propped up by government mandates is now increasingly standing on its own."

[COMMENTARY] Generally, this is great news! However, it's only recently that thought is being given to the huge material and mineral extraction needs for this changeover as well as dealing with the toxic chemicals in manufacturing and 'end of life' issues. The article has a remarkable graphic analysis of how renewable energy has grown in the US versus fossil fuel and nuclear energy output.
What's Behind the World's Biggest Climate Victory? Capitalism, by Lynn Doan, Brian Eckhouse, Christopher Cannon and Hannah Recht, September 15, 2019, Bloomberg, USA.

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Coller FAIRR Protein Producer Index. "The world's only assessment of meat, dairy and farmed fish producers on material environmental, social and governance risks."

[COMMENTARY] This is a great resource for investors!
Coller FAIRR Protein Producer Index, updated September 4, 2019, USA.

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Global Institutions Are Slow Adopters of ESG: Study. "The online study of 800 global institutions representing total assets of about $16 trillion was taken during the second quarter 2019, and also included several in-depth interviews... The study showed that 52% of those in the study were still ESG adopters, while 37% were ESG embedders-- those that show a high degree of incorporation through corporate engagement, sustainability themes and impact investing. The rest, 11%, had no ESG focus."

[COMMENTARY] The headline doesn't seem to match the data nor the commentary in the article. This study shows that ESG has grown substantially in the mainstream global investment community. Interestingly, again, North America lags Europe significantly in the adoption of ESG.
Global Institutions Are Slow Adopters of ESG: Study, by Ginger Szala, September 6, 2019, ThinkAdvisor, USA.

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Sharp rise in number of investors dumping fossil fuel stocks. "In 2014, investors with a total $52bn in assets under management had agreed to shed their fossil fuel holdings. Now that group represents more than $11tn in total assets, according to a report from 350.org, an environmental organisation advocating for divestment."

[COMMENTARY] In the current climate it'll be fascinating to watch how the Saudi Aramco IPO launches. However, big 'dirty money' will be behind it! Of course, the Saudi oil fields are among the world's truly low-cost oil producers.
Sharp rise in number of investors dumping fossil fuel stocks, by Billy Nauman, September 9, 2019, FT, UK.

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interactive investor launches [UK] 'ethical investments long list.' "This rigorously researched long list of ethical options for investors sends jargon to the recycle bin... interactive investor, the UK's second largest direct-to-consumer platform, has launched an 'ethical iinvestments long list' of more than 140 socially responsible and environmental funds, investment trusts and ETFs available on the platform. This is not a rated list, but is rather a rigorously researched long list of ethical options available to investors."

[COMMENTARY] This is a terrific updated research site for UK fund investors.
interactive investor launches [UK] 'ethical investments long list,' by Jemma Jackson, September 10, 2019, interactive investor, UK.

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Sustainalytics Launches Country Risk Ratings for Fixed Income Investors. "Country Risk Ratings, covering 170 countries, are based on more than 40 indicators, over ten proprietary event indicators from Sustainalytics along with 30 indicators from globally recognized sources, including the World Bank and the United Nations."

[COMMENTARY] The number of countries covered, and the comprehensiveness of their rankings is impressive. However, for now, it seems the availability of these rankings will be mainly for investment professionals accessing Bloomberg, Factset and Markit data systems.
Sustainalytics Launches Country Risk Ratings for Fixed Income Investors, press release, September 5, 2019, Sustainalytics, Canada.

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Do 'S' and 'G' really drive returns? Investors lack confidence in criteria. "Investors are failing to see beyond the ‘E’ in ESG as less than half of investment professionals see potential for ‘S’ and ‘G’ to drive returns, according to NN Investment Partners."

[COMMENTARY] Climate gets all the attention so it's no wonder that S and G are left out. However, some research shows that G has the most direct benefit on returns.
Do 'S' and 'G' really drive returns? Investors lack confidence in criteria, by Jessica Beard, September 2, 2019, Citywire Selector, UK.

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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 © 2019 Ron Robins. All rights reserved.