|
Events
|
|
Global Ethical
Investing News & Commentary
|
|
Commentaries
by Ron Robins E-mail
us your feedback
|
|
Links may
only
be valid for a limited time
January 17, 2022
***List
your event on our
Events Page***
|
-------------------------------------------------------------
Latest Podcast:
Best ESG Stocks and Funds for 2022.
"This podcast has 19 articles with dozens of terrific
reviews! Companies include Enphase Energy, First Solar,
Netflix, Canadian Solar, ChargePoint Holdings,
Brookfield Renewable Corporation, NextEra Energy
Partners LP. Funds include iShares MSCI KLD 400 Social
ETF, SPDR S&P 500 Fossil Fuel Reserves Free ETF,
Fidelity Select Biotechnology Portfolio, and VegTech
Plant-based Innovation & Climate ETF."
-- By Ron
Robins
-------------------------------------------------------------
Can Global Regulators
Save the ESG Movement From Itself? "Without
state intervention and global standards, the
environmental, social, and governance movement is a
recipe for greenwashing and corporate deception."
[COMMENTARY] Yes,
I favor increased government regulation concerning
corporate ESG reporting standards, how they're measured,
and who gets to audit them. We're certainly not there
yet.
Can Global Regulators Save the ESG Movement From Itself?
By Michael Moran, January 10, 2022, Foreign Policy, USA.
-------------------------------------------------------------
The Non-Performance
Benefits of ESG Investing. "The above
findings should not lead to questioning whether ESG
strategies can offer substantial value to investors.
Instead, they suggest that
investors who look for value-added through
outperformance are looking in the wrong place -- ESG
strategies should be considered for the unique benefits
they can provide, such as hedging climate or litigation
risk, aligning investments with norms and making a
positive impact for society.
In addition, ESG investors
get an added benefit by employing strategies that tilt
toward factors with higher expected returns -- a
strategy employed by the sustainable investment funds of
Dimensional."
[COMMENTARY] Two
particularly interesting studies are reviewed here. What
has always concerned me in most ESG portfolios is the
overweight of tech and financials in them. Now, if in
the years ahead we are to fulfill our renewable energy
ambitions, massive increases in mining for lithium,
copper, cobalt, silver, etc., will be needed. Will ESG
investors and funds turn to miners that mine in a 'most'
sustainable way?
The Non-Performance Benefits of ESG Investing, by
Larry Swedroe, January 3, 3022, Advisor Perspectives,
USA.
-------------------------------------------------------------
4 Best ESG Stock
Screeners. "While this list is a great
starting point for any potential ESG investors, it's
essential to supplement it with your own research as
well."
[COMMENTARY] I'm
biased towards Sustainalystics since I've been aware of
their sincerity and quality of ESG research since their
beginning days over two decades ago!
4 Best ESG Stock Screeners, by The Impact Investor,
January 1, 2022, USA.
-------------------------------------------------------------
ESG shares underperform
oil and gas in 2021. "As of December 29, US
giants Exxon and Chevron had added 48 per cent and 40
per cent respectively in 2021. The duo have helped power
global energy equity funds past many of the hundreds of
US and European sustainable funds as defined by
Morningstar, a data provider."
[COMMENTARY] In
my view, there are two reasons this is happening. First,
still relatively high fossil-fuel demand yet with low
investment in new replacement production that is forcing
higher fossil-fuel prices. Secondly, it could be that
divestment helped forced down the price of many fossil-fuel
producer stocks to a point that higher fossil-fuel
prices gave way to higher profits. Thus, their shares
became attractive to many investors and sent their
stock prices higher.
ESG shares underperform oil and gas in 2021, by
Patrick Temple-West and Kristen Talman, December 30,
2021, Financial Times, UK.
-------------------------------------------------------------
Today's widely adopted
ESG ratings and net-zero pledges are mostly worthless,
two pioneers of sustainable investing say.
"Scores of new funds are claiming to practice
environmental, social and governance investing, but
their managers are failing to put in the work of
determining whether companies they own adhere to those
standards. And that's leading to style over substance,
two long-time ESG portfolio managers said in an
interview."
[COMMENTARY] There
are some useful insights in this article concerning
ESG ratings. However, I stand by my contention that just
as investors have differing views about a stock, so
should ESG raters have different opinions too. However,
I do believe that ESG raters need to be transparent
about their methodologies and market performance
integrated into their data.
Today's widely adopted ESG ratings and net-zero pledges
are mostly worthless, two pioneers of sustainable
investing say, by Debbie Carlson, December 28, 2021,
MarketWatch, USA.
-------------------------------------------------------------
CFA Institute Publishes
First Global ESG Disclosure Standards. "The
Standards are intended to address current issues with
ESG investing, such as inaccurate disclosure practices,
and aim to support investors with complete, reliable,
consistent, clear and accessible information. The
Standards have been designed to accommodate the full
range of investment vehicles, asset classes and ESG
approaches offered in markets around the world."
[COMMENTARY] Frankly,
the CFA Institute should've been out with these years
ago. But, better late than never. We'll have to see how
they work in practice.
CFA Institute Publishes First Global ESG Disclosure
Standards, by Bennett Jones LLP, December 17, 2021,
USA.
-------------------------------------------------------------
An ESG analysis on the
Covid-19 crisis. "Our framework highlights
how Social and Governance performance have a close
correlation with the outcome of the COVID-19 pandemic in
the various economies of our selected universe.
Additionally, this study
should serve as a driving force for continuous
investment in a sustainable and responsible array of
public policies. Economies that suffered the most from
the COVID-19 pandemic were also those whose sovereign
spreads widened during the pandemic, putting further
financial pressure on their economies."
[COMMENTARY] This
is a fascinating study on which countries -- and why
certain countries -- outperformed economically during
one phase of the Covid-19 pandemic.
An ESG analysis on the Covid-19 crisis, by FTSE
Russell, November 23, 2021, UK.
-------------------------------------------------------------
2021 RIA (Canada) Investor Opinion Survey.
"While 77% of respondents said they want their
financial services provider to inform them about
responsible investments that are aligned with their
values, only 27% said they had ever been asked if they
were interested. About one-third of respondents said
they currently own responsible investments, similar to
last year."
[COMMENTARY] This
is a problem I've been concerned with since I began in
the investment industry over 50 years ago. It goes back
to how the 'know-your-client' rule is legally
interpreted.
I believe it's the major financial
institutions that have never wanted to include the
understanding of a client's personal values applied in
this rule. Canada's RIA is lobbying to get this changed.
They now have the backing of many Canadian financial
heavyweights, so perhaps it'll finally be changed!
2021 RIA (Canada) Investor Opinion Survey, December
8, 2021, RIA (Canada).
-------------------------------------------------------------
Why sustainable business
needs better ESG ratings. "Environmental,
social, and governance data is noisy -- and may not help
firms protect the planet. Here's what to keep in mind as
you measure and invest."
[COMMENTARY] Beth
Stackpole provides good insight into the state of ESG
corporate reporting and how ESG rating agencies rate
companies on ESG measures. Also, the writer asks tough
questions about the relevance of what's being reported
and potential outcomes concerning sustainability.
Why sustainable business needs better ESG ratings,
by Beth Stackpole, December 5, 2021, MIT, USA.
-------------------------------------------------------------
Rating Muni Bonds on ESG
and Impact. "Across muni-bond sectors,
there are more than 200 data-driven metrics and 5
million annual data points to measure performance.
VanEck and HIP Investor have partnered to track the
overall impact and sustainability of 122,000 entities
that could benefit from muni bonds."
[COMMENTARY] This
article presents a good analysis of how US muni bonds
can be ESG rated. This will be of interest to many
investors.
Rating Muni Bonds on ESG and Impact, by Paul Herman,
December 5, 2021, ETF Trends, USA.
-------------------------------------------------------------
Investor Guide To Natural Capital by HSBC
Asset Management. November 2021
[COMMENTARY] Though
for institutions, this guide is also incredibly useful
and informative reading for all ethical and sustainable
investors.
-------------------------------------------------------------
Is your 'green' fund
really any different to one without the trendy label?
Top experts warn they can be almost identical - and
demand a crackdown. "Leading investment
experts are calling for the country's [UK] financial
regulator to act swiftly to stop the mis-labelling of
green investment funds by some of the world's biggest
asset managers."
[COMMENTARY] This
is probably the same situation in most western
countries. With the enormous growth in green funds, it's,
frankly, expected that many funds would jump on the
bandwagon that aren't really green or sustainable.
Is your 'green' fund really any different to one without
the trendy label? Top experts warn they can be almost
identical - and demand a crackdown, by Jeff
Prestridge, November 27, 2021, Financial Mail on Sunday,
UK.
-------------------------------------------------------------
Oil Nations Are Selling
Billions In Green Bonds. "Saudi Arabia, the
world's biggest oil producer, has announced plans
to boost oil production further, from the
current 12 million barrels a day to 13 million barrels a
day by 2027. The UAE has an even more aggressive growth
plan, with state-controlled oil company ADNOC saying
it will increase oil output by 25% to
produce 5 billion barrels a day by 2030. Meanwhile,
Qatar continues to invest
heavily in African oilfields and is
building the world's
largest liquified natural gas (LNG)
terminal."
[COMMENTARY] One
major concern is that these states become huge green
bond issuers while also greatly expanding their
fossil-fuel production--which becomes increasingly
difficult to finance! Hence, is the green bond issuance
'subsidizing' fossil-fuel investment?
Oil Nations Are Selling Billions In Green Bonds, by
Alex Kimani, November 27, 2021, Oilprice.com, UK.
-------------------------------------------------------------
Institutional investors
wary of companies' ESG promises. "92% of
investors are concerned that companies aren't
effectively executing on their net zero promises."
[COMMENTARY] It's
easy for companies to make promises that are many, many,
years into the future! Particularly when it promotes
your stock price. However, presenting detailed plans for
achieving those promises is still rare. And that's what
creates investor skepticism of such 'promises.'
Institutional investors wary of companies' ESG promises,
by Lynn Pollack, November 25, 20221, Benefits Pro, USA.
-------------------------------------------------------------
Company valuations and
climate strategies are poles apart.
"Analyses of companies globally by management
consultancy Kearney in November seen exclusively by
Reuters, as well as data by Credit Suisse Group AG
published in April, found that companies that lowered
their emissions in sectors where doing so was expensive
and government regulation was limited were valued less,
on average, than more emitting peers."
[COMMENTARY] There's
a vicious or virtuous circle that's happening --
depending on your viewpoint -- as regard to fossil-fuel
prices. High prices please many investors! Hence,
companies fully
engaged in fossil fuel production are reaping big
profits. Environmentalists love it too as it dampens
fossil-fuel demand. However, consumers are mad about it.
For many investors and fund managers, it's a bit like
why not invest in tobacco companies? They usually make
huge profits, often have great ESG ratings, and are
included in many ESG indices and ESG funds? You see my
point!
Also, its increasingly difficult to find funding for
fossil-fuel developments thus limiting potential future
supply. So, many investors see investing in 'purer'
fossil-fuel plays as a win-win-win! Similarly, in many
industry sectors.
Company valuations and climate strategies are poles
apart, by Elizabeth Howcroft and Simon Jessop,
November 24, 2021, Yahoo! Finance, USA.
-------------------------------------------------------------
Green Bond Impact
Ratings: Turning Brown into Green. "This
special report examines how ESG factors are changing the
landscape in fixed income investing, and how
institutional investors and security issuers are
navigating the new terrain."
[COMMENTARY] A
great article on this timely subject.
Green Bond Impact Ratings: Turning Brown into Green,
from the Nov 2021 PGIM Fixed Income ESG Special Report,
November 23, 2021, Institutional Investor, USA.
-------------------------------------------------------------
Bob Eccles and Jean
Rogers on ISSB and the future of ESG reporting.
"So what does the formation of the ISSB mean for the
evolution and efficacy of ESG reporting? To answer that,
I checked in with those who I thought would know better
than most: Jean Rogers, founder of the Sustainability
Accounting Standards Board (SASB) and, as of this month,
global head of ESG at Blackstone; and Robert Eccles,
founding chairman of SASB, professor of management
practice at Oxford and a founder of the International
Integrated Reporting Council (IIRC)."
[COMMENTARY] This
is a good insightful discussion of the newly formed
International Sustainability Standards Board (ISSB) and
what it might mean for all ethical and sustainable
investors.
Bob Eccles and Jean Rogers on ISSB and the future of ESG
reporting, by Grant Harrison, November 17, 2021,
GreenBiz, USA.
-------------------------------------------------------------
Advisers must be careful
not to create 'inherent bias' towards ESG - P1.
"Advisers could soon have to ask clients about their
sustainability preferences in a similar way to attitude
to risk, as ESG becomes ingrained in the investment
process, according to Quinitin Rayer, head of research
and ethical investing at P1 Investment Services."
[COMMENTARY] I've
been waiting over forty years for investment advisory
professionals to realize what has been obvious since the
beginnings of their profession! To properly serve a
client the 'Know-thy-client' rule should also mean
'know-their-values'. Otherwise, how can you properly
advise a client financially!
However, this article seems to also warn that advisors
need to caution their clients about overly favoring
ESG. To me, that arises from a mindset that doesn't
properly understand ESG.
Advisers must be careful not to create 'inherent bias'
towards ESG - P1, by Julia Bahr, November 17, 2021,
Professional Advisor, USA.
-------------------------------------------------------------
Majority of investors
see gap between ESG preferences and current portfolio.
"The study set out to examine the client side of ESG
investing and establish investors' attitudes in the UK,
the US and Singapore towards ESG investing, their true
ESG preferences, the strengths and weaknesses of their
existing financial adviser on the subject and what would
constitute for them the ideal ESG investment experience.
Investors' ESG preferences were shown to vary widely and
be distributed right across the spectrum of available
forms of sustainable investment."
[COMMENTARY] This
study suggests that the 'know-thy-client' rule is not
properly applied by advisors and that investors aren't
doing enough research themselves. It's laziness by both
groups. Blaming each other is at least a start in
hopefully correcting the situation!
Majority of investors see gap between ESG preferences
and current portfolio, press release, November 15,
2021, Capital Preferences, USA.
-------------------------------------------------------------
Bonds are an ESG blind
spot in investing. "BBVA Global Markets
Research has estimated that in late 2020 the stock of
green, social and sustainable bonds had yet to reach
$1tn out of a market total of $128tn. While this green
exposure is rising fast from a low base, it is
indisputably minuscule."
[COMMENTARY] The
writer seems to believe that ESG is partly a 'marketing
ploy' among equity asset managers. He's probably right
to some extent. But he gives the impression that the
bond markets are more sophisticated. Hence, the reason
for green bonds being such a small proportion of total
bond issuance.
Bonds are an ESG blind spot in investing, by John
Plender, November 10, 2021, Financial Times, UK.
-------------------------------------------------------------
ESG investing has a
blind spot that puts the $35 trillion industry's
sustainability promises in doubt: Supply chains.
"Investors' trust in ESG funds may be misplaced. As
scholars in the field of supply
chain management and sustainable
operations, we see a major flaw in how
rating agencies, such as Bloomberg, MSCI and
Sustainalytics, are measuring companies' ESG risk: the
performance of their supply chains."
[COMMENTARY] The
issue of supply chains is coming to the fore! The reason why ESG rating companies have largely ignored
it is because it's complex, difficult -- and costly to
evaluate. My guess is until a way is found to cover such
increased costs, fully including supply chain issues
into ESG scores will be mixed at best.
ESG investing has a blind spot that puts the $35
trillion industry's sustainability promises in doubt:
Supply chains, by Tinglong Dai and Christopher S.
Tang, November 9, 2021, The Conversation, Canada.
-------------------------------------------------------------
Why Investor Engagement
with 'Dirty' Companies Is Better Than Divestment.
"Investors who espouse environmental,
social and governance (ESG) principles will achieve
little by selling their shares in ESG-unfriendly
companies, according to a new research paper titled 'The
Impact of Impact Investing' by finance
professors Jonathan
B. Berk at Stanford University and Jules
H. van Binsbergen at Wharton.
Instead,
investors could have more success if they buy those
so-called 'dirty' stocks and then engage with those
companies' managements to adopt ESG-friendly policies,
the paper contended."
[COMMENTARY] This
theme of engagement rather than divestment for poorly
performing companies concerning fossil fuels and ESG
performance, has become commonplace among academics and
some ethical investors too. Yet, student groups continue
to press for divestment in university endowments.
Why Investor Engagement with 'Dirty' Companies Is Better
Than Divestment, by Knowledge@Wharton, November 8,
2021, USA.
-------------------------------------------------------------
A Sign of the Times: The
ESG Buyback. "In an ESG buyback, the
company commits part of the buyback profits to finance a
socially responsible or green initiative. Early adopters
include BIC, Campari and Enel."
[COMMENTARY] I'm
not sure how to view this. It is a good way to use
'excess profits.' However, when companies can't see a
way to utilize profits to enhance their own business I
think they need new management!
A Sign of the Times: The ESG Buyback, by Theo
Vermaelen, November 8, 2021, INSEAD Knowledge, France.
-------------------------------------------------------------
IFRS announces global
sustainability standards board. "Efforts to
establish a global consensus for climate and
sustainability disclosures took a major step as the
International Financial Reporting Standards Foundation
(IFRS) announced a series of 'significant developments'
including its new International Sustainability Standards
Board (ISSB)."
[COMMENTARY] This
development is great news and timely. I and many others
associated with ethical and sustainable investing have
decades called for this development.
UPDATE: Canadians are happy too, that one of the three
main offices of the new Board will be in Montreal.
IFRS announces global sustainability standards board,
by Sam Alberti, November 3, 2021, Accountancy Age, USA.
-------------------------------------------------------------
Most Automotive Leaders
Back Hydrogen over BEV, Study Claims. "The
study run by automotive technology management
consultants, Expleo, is based on the views of 225 senior
executives from the automotive industry, split equally
between the UK, France and Germany. It 71% of
respondents believe hydrogen has significant ecological
advantages of battery powertrains but there remains
uncertainty around infrastructure and green hydrogen
which is holding investment back."
[COMMENTARY] This
survey covered European car maker directors. Would
American directors also favor hydrogen- fueled vehicles
over BEV's? It's interesting that governments
continually push BEV's and the general public aren't
aware that the directors of most European automakers
prefer hydrogen-fueled vehicles!
Anyway, I recall reading that the latest research on
'green hydrogen' suggests that it's not so clean after
all!
Most Automotive Leaders Back Hydrogen over BEV, Study
Claims, by Paul Myles, October 28, 2021, TU
Automotive, UK.
-------------------------------------------------------------
US holds back on support
for global sustainability standards.
"Objections to new international outfit aiming to bring
clarity to ESG investment hinge on its broad approach."
[COMMENTARY] Such
standards should have existed for many years already. As
usual, regulators are behind the curve and by the time
they get basic standards together, markets will be ahead
on phases 2 and 3 of standards.
US holds back on support for global sustainability
standards, by Alan Livsey, October 31, 2021,
Financial Times, UK.
-------------------------------------------------------------
ESG metrics trip up
factor investors. "Adding an ethical tilt
to a portfolio may not necessarily lead to better
returns."
[COMMENTARY] This
article provides a good discussion of implementing ESG
into factor-based investing.
ESG metrics trip up factor investors, by Emma Boyde,
October 31, 2021, Financial Times, UK.
-------------------------------------------------------------
New Research: Ethical
and unethical investments under extreme market
conditions. "This study examines the
time-varying volatility and risk measures of ethical and
unethical investments.
We compute the
value-at-risk and expected shortfall using the MS-GARCH
model based on the Bayesian estimation framework.
Ethical investments are
less affected than unethical investments during global
financial crises.
Investors consider ethical
investments as a hedging asset for their portfolios in
the downside risk."
[COMMENTARY] This
research confirms the findings of previous studies that
show ethical investments outperform during market
downtowns.
Ethical and unethical investments under extreme market
conditions, by Petter
Olofssona, Anna Råholm, and Gazi Salah Uddin at
Linköping University, Sweden; Victor Troster,
Universitat de les Illes Balears, Palma, Spain; and Sang
Hoon Kang, Pusan National University, Republic of Korea.
October 2021, International Review of Financial
Analysis.
-------------------------------------------------------------
Why Divestment Doesn't
Hurt "Dirty" Companies. "A new analysis
finds that selling off stocks in corporations that don't
meet your values has minimal impact on their behavior."
[COMMENTARY] This
research agrees with the activist funds that say you
need to invest in 'dirty' companies to change
them. When enough investors seeking corporate change
invest in companies performing poorly in ESG metrics,
they can influence or change the boards of these
companies and effect change that way. Hence, investment,
rather than divestment, is the key to moving companies in
the direction of ESG.
Why Divestment Doesn't Hurt "Dirty" Companies, by
Alexander Gelfand, October 27, 2021, Stanford Business,
USA.
-------------------------------------------------------------
Does Divestment From
Fossil Fuels Really Work? "Private equity
funds are very keen to grab the available stocks, bonds,
and assets, as the margins in oil and gas, and even
coal, are very impressive and will remain so for longer.
National oil companies and
non-Western oil and gas giants will be happy to produce
every last drop of oil, gas, and even coal they can.
Private equity funds, with a
much shorter investment horizon than funds, will be
pushing for higher production sooner, which will not
only produce higher emission levels but will constrain
the price competitiveness of renewables."
[COMMENTARY] As
many experts have said, fossil fuels have to be made
increasingly expensive to drive consumption to
renewables. However, cheap fossil fuels create cheap
mass food, cheap transportation, etc. Hence, the
political reticence to properly tax fossil fuels.
Does Divestment From Fossil Fuels Really Work? By
Editor OilPrice.com, October 27, 2021, Yahoo! News, USA.
-------------------------------------------------------------
100 Best ESG Stocks
Combine Performance And Value With Values.
"IBD's third annual Best ESG Companies special report,
featuring our table of top ESG companies with both high
Dow Jones ESG scores and superior IBD Composite
Ratings, can help investors pick the best
ESG investments."
[COMMENTARY] Worth
reviewing, particularly by ethical and sustainable
investors.
100 Best ESG Stocks Combine Performance And Value With
Values, by Alexis Garcia, October 25, 2021,
Investor's Business Daily, USA.
-------------------------------------------------------------
Navigating the thicket
of ESG metrics. "Sustainable investing may
be gratifying for wealthy individuals and families, but
it is far from simple. A lack of standards in the
measurement and reporting of ESG (environmental, social
and governance) products and funds can leave investors
confused. And when it comes to impact investments,
capturing the right data takes time, effort and, often,
a hands-on approach."
[COMMENTARY] This
FT article is a good review of some of the approaches
dealing with this important subject.
Navigating the thicket of ESG metrics, by Sarah
Murray, October 24, 2021, Financial Times, UK.
-------------------------------------------------------------
Is Mandatory Fossil-Fuel
Divestment Coming For Your 401(k) And IRA? And How Much
Will It Cost You? "Over the past several
years, pension funds in Scandinavia have announced
divestment from oil and gas companies, and the NEST
retirement savings fund in the UK, that is, the
government-managed IRA-like fund into which workers are
defaulted if their employers don't otherwise provide
benefits, has said it will likewise pull its assets from
coal mining, tar sand oil production, or arctic
drilling.
In the United States, in
2020, a pair of representatives proposed legislation
that the Thrift Savings Plan, the 401(k)-like plan for
government employees, likewise 'decarbonize.'"
[COMMENTARY] As
much as I believe that it's right for pension funds to
go fossil-fuel-free, I think it inappropriate for
governments to mandate them.
Is Mandatory Fossil-Fuel Divestment Coming For Your
401(k) And IRA? And How Much Will It Cost You? By
Elizabeth Bauer, October 24, 2021, Forbes, USA.
-------------------------------------------------------------
Analysis: Investors face
myriad green investing rules. "More than 30
taxonomies outlining what is and isn't a green
investment are being compiled by governments across
Asia, Europe and Latin America, each one reflecting
national economic idiosyncrasies that can jar with a
global capital market which has seen trillions pour into
sustainable funds."
[COMMENTARY] Let's
hope there's a lot of commonality between them or it'll
get mighty messy for everyone!
Analysis: Investors face myriad green investing rules,
by Huw Jones and Kate Abnett, Simon Jessop, October 19,
2021, Reuters, UK.
-------------------------------------------------------------
Are Stranded Assets an
Unexploded Bomb? "Many assets will be
uneconomic in a low carbon world, but sectors as diverse
as commercial property and tobacco may be seriously
unprepared for the financial impact."
[COMMENTARY] Stranded
assets aren't just fossil fuels as this article makes
clear.
Are Stranded Assets an Unexploded Bomb?
By Cherry Reynard, October 19, 2021, Morningstar, UK.
-------------------------------------------------------------
Exotic World Of ESG
Derivatives Triggers Warning From Regulator.
"The European Securities and Markets Authority
(ESMA) says it's hard to verify the positive impact of
derivatives sold under environmental, social and
governance labels. The watchdog says standardized
criteria should be met before firms can add ESG tags to
products such as forwards, options and swaps...
ESMA told Bloomberg News in
a written response. 'The absence of disclosure
requirements or recognized labels with minimum
sustainability criteria implies that claims as to the
impact of these instruments cannot be substantiated.'"
[COMMENTARY] It
seems to be presently a 'wild west' when it comes to ESG
derivatives.
Exotic World Of ESG Derivatives Triggers Warning From
Regulator, by John Ainger and Greg Ritchie, October
18, 2021, FA-Magazine, USA.
-------------------------------------------------------------
Transition
Finance Week, Canada, November 29 - December 3,
2021. "Industry Dialogues on Financing
Canada's Transition to Net-Zero... Join 10+ key sessions
on Transition Finance in live webcast format. Learn from
thought leaders in ESG and sustainable finance. Interact
with panelists through live-polling and in-session chat
features. Network with fellow attendees and speakers via
peer-to-peer chat options. Earn CE credits and PDUs from
several accreditors."
-------------------------------------------------------------
ESG 2.0 Is in the
Making. "While some may expect the
repudiation of ESG as an investment fad, our view is
that the current debate on the validity of ESG heralds
not the end of ESG investing but instead a transition
toward major improvement."
[COMMENTARY] Some
interesting insights into the future of ESG based
investing by two highly reputable individuals with
significant ESG backgrounds.
ESG 2.0 Is in the Making, by Georg Kell and Todd
Cort, October 11, 2021, Barron's, USA.
-------------------------------------------------------------
Dumping stocks to punish
bad corporate behavior has tiny impact.
"Even as billions of dollars diverts toward firms
scoring higher on environmental, social and governance
measures, the funding costs for bad actors has hardly
budged, a study has found."
[COMMENTARY] The
better way according to this study is for asset owners
to directly engage with the companies.
Dumping stocks to punish bad corporate behavior has tiny
impact, by Tasneem Hanfi Brögger and Sam Potter,
October 9, 2021, Bloomberg on Business Standard, India.
-------------------------------------------------------------
BlackRock's Landmark
Move on Proxy Votes Fuels a Big ESG Debate.
"The world's largest asset manager revealed on Thursday
that from next year, some institutional clients will be
able to play a bigger role in shareholder votes. The
move will apply to about 40% of $4.8 trillion in index
equity assets that BlackRock manages."
[COMMENTARY] This
freedom is long overdue. Each institutional client needs
to decide what its objectives are regarding its holdings
and consequent relationship with them. Then, their
assets may
perform even better!
BlackRock's Landmark Move on Proxy Votes Fuels a Big ESG
Debate, by Tasneem Hanfi Brögger and Sam Potter,
October 8, 2021, Bloomberg on Yahoo! Finance, USA.
-------------------------------------------------------------
Sovereign bonds are not
exempt from ESG consideration. "Just as
bondholders engage around fiscal and monetary policies,
they should broaden conversations around ESG topics."
[COMMENTARY] This
article has great information on how ESG impacts stock,
corporate and sovereign bond prices and other related
data.
Sovereign bonds are not exempt from ESG consideration,
by Carmen Nuzzo, October 6, 2021, ETFStream.com, UK.
-------------------------------------------------------------
What can corporate
actors learn from climate change litigation?
"In May of this year, climate change litigation made
global headlines in the wake of an unprecedented
judgment issued by the Hague District Court in the case
of Milieudefensie
v Shell. The court ordered Shell to enhance
the ambition of its greenhouse gas emissions reduction
efforts, requiring the company to set -- and meet --
companywide emissions reduction targets of 45% below
1990 levels by 2030.
While this case was the
first of its kind, it is also part of a growing global
body of climate change litigation, which is playing an
increasingly critical role in the domestic
implementation and enforcement of the Paris Agreement."
[COMMENTARY] Many
companies could be faced with this type of court
challenge in the years ahead. Naturally, stock
valuations could be affected too. So it's something to
become familiar with. This is an excellent article from
the London School of Economics on the
subject.
What can corporate actors learn from climate change
litigation? By Catherine Higham and Joana Setzer,
October 4, 2021, London School of Economics, UK.
-------------------------------------------------------------
Harvard cracks on fossil
fuels and a dam breaks. "Academic
endowments are entering a new normal after the richest
school in the world followed
the lead of other colleges and universities
to divest from fossil fuels.
Now a cascade of similar
announcements has followed, with Boston
University, the University
of Minnesota and the $8 billion MacArthur
Foundation pulling the plug on fossil
fuels."
[COMMENTARY] Most
of their faculty is in some way connected academically
to some facet of global warming and/or climate change.
Hence, it's unsurprising that these institutions give up
on fossil fuel investments.
Harvard cracks on fossil fuels and a dam breaks, by
Jordan Wolman, September 28, 2021, Politico, USA.
-------------------------------------------------------------
Deep Dive: Do not
neglect the G in ESG. "Likewise, according
to a 2016 study from Barclays, a divergence in priority
appears between some asset managers and their clients
regarding the relative importance of the three ESG
components. Clients regard environmental factors as the
most important, while governance is top of the list for
bond managers.
Moreover, the same study
showed that bonds with higher governance scores tended
to have fewer downgrades and better outperformance,
during the period from August 2009 until April 2016,
than those with lower scores, validating the emphasis
bond managers have historically placed upon effective
governance."
[COMMENTARY] I
think it's fair to say that most individual investors
regard the 'E'--environment -- as the most important of
ESG investing. However, among investment managers, the
'G' -- governance -- is the most important. And for good
reason, since I've seen studies that demonstrate that
the governance characteristics and activities of
companies positively influence profits more than any
other factor.
Deep Dive: Do not neglect the G in ESG, by Chris
Bowie, Investment Week, UK.
-------------------------------------------------------------
Blog: How do companies
address governance issues for corporate political
activity? "Deloitte and the Society for
Corporate Governance report on a survey they conducted
in July 2021 about companies' approaches to publicly
addressing controversial social and political issues."
[COMMENTARY] This
is an area that could have significant effects on a
company's image and therefore, stock price.
Blog: How do companies address governance issues for
corporate political activity? By PubCo@Cooley,
September 22, 2021, JD Supra, USA.
-------------------------------------------------------------
NYSE working with IEG to
develop new asset class, Natural Asset Companies.
"'This new asset class on the NYSE will
create a virtuous cycle of investment in nature that
will help finance sustainable development for
communities, companies and countries,' Douglas Eger, CEO
of IEG, said. 'Together, IEG and the NYSE will enable
investors to access nature'' store of wealth and
transform our industrial economy into one that is more
equitable.'"
[COMMENTARY] This
could be either the most exciting new development in
finance this century -- or its biggest disaster. The
idea is terrific. Only time will tell if the
environmental community and the public at large view it
as an important step to dealing with today's climate
crises.
NYSE working with IEG to develop new asset class,
Natural Asset Companies, by Dave Kovaleski,
September 16, 2021, Financial Regulation News, USA.
-------------------------------------------------------------
Sustainable investments
could make up majority of global private wealth
portfolios in coming years, finds report.
"The world's wealthiest individuals, family offices, and
foundations, are preparing to plough billions of dollars
into sustainable investments over the coming years, as
they increasingly view addressing climate change as both
a social responsibility and an attractive investment
opportunity."
[COMMENTARY] I
suspect that with companies realizing that going sustainable
has great payback, the number of sustainable
companies could grow to a point that the majority of
one's portfolio would naturally be sustainable! No effort
is needed! Wow--what a dream--or is it?
Sustainable investments could make up majority of global
private wealth portfolios in coming years, finds report,
by staff, September 15, 2021, Institutional Asset
Manager, USA.
-------------------------------------------------------------
Sustainable or sellout?
Four revealing questions in a company's environmental
disclosure. "How can we sift through
greenwashing to spot genuine climate action?"
[COMMENTARY] This
article is written by Simon Fischweicher, head of
corporations and supply chains, CDP North America. So
he's an expert on this subject. I'm sure that many
ethical and sustainable investors will benefit from Mr.
Fischweicher's insights.
Sustainable or sellout? Four revealing questions in a
company's environmental disclosure,
Simon Fischweicher, September 9, 2021, Corporate
Knights, Canada.
-------------------------------------------------------------
China to create first
green stock index in fresh push to curb carbon emission.
"China will set up a green stock index and
develop futures trading for carbon emission rights --
both of which will be the first such instruments,
according to a new sweeping guideline issued on Sunday,
marking an important step in expanding China's
market-oriented securitization and financing mechanisms
to accelerate the country's long-term carbon trading and
achieve its carbon neutrality goal."
[COMMENTARY] We'll
have to see whether this amounts to anything or is
mainly a 'PR' exercise. After all, China is still
building and planning to build a huge number of coal
power plants.
China to create first green stock index in fresh push to
curb carbon emission, by GT staff reporters,
September 12, 2021, Global Times, China.
-------------------------------------------------------------
Why Sustainable
Investment Means Investing in Advocacy.
"Combining traditional impact investment approaches with
investment in advocacy is the only way businesses and
investors can fuel meaningful social and environmental
progress."
[COMMENTARY] These
knowledgeable authors make a compelling case that
without advocacy the sustainable and ESG causes will be
limited.
Why Sustainable Investment Means Investing in Advocacy,
by Alan Schwartz and Reuben Finighan, September 9, 2021,
Stanford Social Innovation Review, USA.
-------------------------------------------------------------
Ten ways to be sure your
'green' fund really does help save the planet... and can
make you money at the same time. "Green
investing is more popular than ever with inflows into
ethical, sustainable or responsible-badged investment
funds running at record levels. But how do you know that
the fund you are buying -- for an Isa or a pension -- is
really green and in line with your ethics? Not easily,
according to Mary Stevens, innovation manager at
environmental pressure group Friends of the Earth."
[COMMENTARY] Here's
some good advice for the new ethical and sustainable
investor.
Ten ways to be sure your 'green' fund really does help
save the planet... and can make you money at the same
time, by Jasmine Birtles, September 11, 2021, This
is Money, UK.
-------------------------------------------------------------
US SIF Releases Tips to
Implement Sustainable Funds. "As more
participants express an interest in ESG investing, US
SIF recommends steps plan sponsors can take to add the
investments to retirement plans."
[COMMENTARY] Some
useful information for all pension plan sponsors.
US SIF Releases Tips to Implement Sustainable Funds,
by Amanda Umpierrez, September 7, 2021,
PLANSPONSOR, USA.
-------------------------------------------------------------
Deutsche Bank's ESG
Probe Triggers Review at Asset Managers.
"Anxiety around greenwashing -- mis-stating how climate
friendly assets are -- is palpable across the industry as
fund managers react to German and U.S. investigations of
DWS Group.
Though the Deutsche Bank
unit says it did nothing wrong, the development has led
to a moment of reckoning as fund managers wake up to a
new regulatory era in which once fluffy environmental,
social and governance definitions are no longer
tolerated."
[COMMENTARY] It's
about time that funds proclaiming their green
credentials were duly evaluated for them. Such
investigations, and perhaps prosecutions, will create
greater confidence for investors that they're getting
what's advertised.
Deutsche Bank's ESG Probe Triggers Review at Asset
Managers, by Christine Watkins, September 5, 2021,
Bloomberg via Sports Grind Entertainment, USA.
-------------------------------------------------------------
Investors care more
about fair wages for workers than environmental issues,
ESG survey shows. "When broken down by
topic, preference for investing in a company that pays
workers fair wages edged out a preference for
environmentally friendly companies, with 65% of total
respondents flagging wages and 53% citing environment."
[COMMENTARY] The
predominant thinking has been that it's the 'E' in ESG
that attracts investors. Do we see evidence that the 'S'
side is gaining momentum? Or is this survey skewed in
some way? I'm not convinced that many
professional investors in this space would agree with
this survey's findings.
Investors care more about fair wages for workers than
environmental issues, ESG survey shows, by Debbie
Carlson, September 4, 2021, MarketWatch, USA.
-------------------------------------------------------------
Most Green Investment
Funds Missing Paris Goals. "The report from
InfluenceMap -- 'Climate Funds: Are they Paris Aligned?'
-- analysed 723 listed-equity funds with total assets
under management of over US$330 billion, dividing funds
which used one of 30 descriptions into two categories:
broad ESG and climate-themed.
In the broad ESG category,
Influence Map identified 593 equity funds with over
US$265 billion in total net assets of which 71%, had a
negative Portfolio Paris Alignment score.
Of the 130 climate-themed
funds, with titles such as 'low carbon', 'fossil fuel
free' and 'green energy', and over US$67 billion in
total net assets, 55% had a negative Paris Agreement
alignment score. The lowest score was -- 42% with the
best scoring fund hitting +90%."
[COMMENTARY] Big
players such as State Street, UBS, and even Blackrock,
did particularly badly. I think that the report's
researchers are also somewhat off-base by not accounting
for the highly differentiated objectives of these funds
by exclusively focusing on whether or not they
specifically align with the Paris Agreement.
For instance, if a fund's objective is to purposely buy
stocks in fossil fuel-related companies to encourage
engagement with them to promote greater carbon reduction
through new reduction methodologies or renewables, that
would seem to put such funds at the low end of this
analysis.
Most Green Investment Funds Missing Paris Goals, by
ESG Investor, September 2, 2021, Regulation Asia,
Singapore/Hong Kong.
-------------------------------------------------------------
Yale climate professor:
'Divestment is a waste of time and energy.'
"PODCAST: Cary Krosinsky explains why the divestment
movement doesn't help solve climate change and what fund
managers can do instead."
[COMMENTARY] I
haven't had a chance to listen to this podcast yet. but
Cary Krosinsky is someone with terrific credentials and
whom I greatly respect. From my perspective, there's an
argument that can be made that divestment affects
secondary financial markets and has little direct
influence on new issuers of say, funding new coal
projects.
Also, note that starving funding for new fossil fuel-related projects can make their stocks more profitable
than they might otherwise be. The reason is that
continuing or rising high prices for their products
(note oil!) with dwindling supply enables much higher
margins and profits. Thus benefiting shareholder
returns.
Furthermore, it possibly
detracts from the possibility of funding fossil fuel-related projects to reduce carbon emissions.
Yale climate professor: 'Divestment is a waste of time
and energy,' by Loukta Gyftoppoulou, September 2,
2021, Wealth Manager, USA.
-------------------------------------------------------------
SEC Wants Sustainable
Funds to Disclose More About Their Criteria.
"In
a videoconference, Chairman Gary Gensler
told members of the European Parliament that the SEC is
considering whether to require fund managers to disclose
more information about the labeling of their
environmental, social and governance, or ESG, investing
products. Gensler said he has asked SEC employees to
make recommendations for disclosure requirements.
Calls for public comment are
expected to start by year's end or early 2022."
[COMMENTARY] There's
little doubt that some 'sustainable' funds are barely
that at all, hardly differing in their stock components
to 'conventional' counterparts. They can argue that
their aim is to 1) engage with climate 'laggards' to
encourage them to do better. And, or, 2) purposely
invest in climate laggards that propose to do much
better on ESG as these companies have often shown to
have greater stock price appreciation than established
high-performance ESG companies.
SEC Wants Sustainable Funds to Disclose More About Their
Criteria, by Evie Liu, September 1, 2021, Barron's,
USA.
-------------------------------------------------------------
Exchange for ethical
investments gets off the ground with two listings.
"A stock exchange hatched out of Silicon
Valley that's taking on established rivals in New York
and Chicago is listing its first two companies."
[COMMENTARY] This
new exchange will be fascinating to watch! Will it
attract listings? Will it attract investors? I hope that it receives rapid success.
Exchange for ethical investments gets off the ground
with two listings, by Katherine Doherty, August 27,
2021, Independent.ie, Ireland.
-------------------------------------------------------------
Investor Familiarity
With Sustainable Investing Remains Low.
"Despite its growing importance in the capital markets,
news about sustainable investing or ESG funds has not
trickled down to average U.S. investors. And with the
pandemic perhaps shifting investors' economic
priorities, they are expressing less interest in such
funds for themselves.
Still, the future of
sustainable investing looks promising, with younger
investors paying closer attention to it and expressing
greater interest than older working-age investors and
retirees."
[COMMENTARY] I
find it amazing that the investment industry's interest
in ESG and sustainability has gained tremendous
momentum. Yet, interest in this space by individual US
investors has not changed since before the pandemic.
Though this survey does indicate, as numerous others
show, that younger investors are much more interested in
ESG and sustainable investing.
Investor Familiarity With Sustainable Investing Remains
Low, by Lydia Saad, August 23, 2021, Gallup, USA.
-------------------------------------------------------------
There's $35 Trillion
Invested in Sustainability, but $25 Trillion of That
Isn't Doing Much. "Since ESG lacks
definitions, it can often mean different things to
different people, said Lisa Sachs, who heads Columbia
University's Center on Sustainable Investment.
And because ESG integration
is often conflated with other responsible investment
strategies such as impact investing and negative and
positive screening, it's helping to create a false
impression that the world of money management is
directing capital towards helping solve societal ills."
[COMMENTARY] As
I've said previously both ESG reporting standards and
funds touting ESG credentials need to have more
stringent standards. However, there is a caveat to this.
Funds that explicitly invest in companies beginning
their ESG journeys. Studies have shown that such
companies can see more rapid stock appreciation than
companies with established ESG credentials.
I believe that the Global Sustainable Investment
Alliance who collates the data needs to have categories
varying from 'deep' green to 'light' green in terms of
assets under management!
There's $35 Trillion Invested in Sustainability, but $25
Trillion of That Isn't Doing Much, by Saijel Kishan,
August 18, 2021, Bloomberg Green, Australia.
-------------------------------------------------------------
'More emissions than
Exxon': Is meat the next target for divestment?
"The finance sector is increasingly reluctant to
finance fossil fuel expansion, and 'Big Ag' could be
next in the divestment campaign firing line, argues
Charlotte Moore from SIGWATCH."
[COMMENTARY] On
an individual basis, it's happening already. I know many
individual investors who won't touch meat stocks. Look
at the success of Beyond Meat. Only institutions are
holding back. It's just a matter of time before many of
them join the numerous individual investors in this
endeavor.
'More
emissions than Exxon': Is meat the next target for
divestment? By
Charlotte Moore, August 17, 2021, Investment Week, USA.
-------------------------------------------------------------
ESG Investing: Does It
Distort the Market? "Bottom line on ESG:
Overall, it must be a force for good to measure company
externalities and hold investors accountable in some
way. It just seems we got into a weird phase of its
evolution with the concentration in mega-cap tech
stocks. I look forward to reading about the movement at
the end of this decade and if created the changes we
wanted, or more unintended consequences."
[COMMENTARY] It
can be argued that ESG investing does distort the
markets. However, isn't that the point! Now, one could
argue that passive index investing means possible
carelessness with ESG criteria of companies in the index
which over time lowers ESG standards... and returns!
ESG Investing: Does It Distort the Market? By Kevin
Cook of Zacks, August 13, 2021, Nasdaq.com, USA.
-------------------------------------------------------------
US issuers still split
on ESG standards, study finds. "As the SEC
considers imposing climate-related reporting rules, US
companies are divided on what they should look like."
[COMMENTARY] It's
to be expected that issuers will have differing opinions
on ESG standards. I expect that there'll be many common
standards but others will be industry-specific.
US issuers still split on ESG standards, study finds,
by Maria Ward Brennan, August 11, 2021, Corporate
Secretary, USA.
-------------------------------------------------------------
Bond investors need to
step up on human rights. "Too many fund
firms use strong rhetoric on abuses while lending money
to oppressive regimes."
[COMMENTARY] With
many ESG rating firms providing sovereign ESG ratings,
it seems not much of a step to incorporate more scrutiny
of human rights issues. I believe some rating
organizations already do this.
Bond investors need to step up on human rights, by
Laurence Fletcher, August 7, 2021, Financial Times, UK.
-------------------------------------------------------------
ESG: EU Green Bond
Standard. "The European
Green Bond Standard proposal will create a
high-quality voluntary standard for bonds financing
sustainable investment. Issuers will have a recognised
way of demonstrating that they are funding green
projects aligned with the EU Taxonomy. Investors will be
better able to ascertain that their investments are
sustainable, thereby reducing the risk of greenwashing."
[COMMENTARY] This
new standard sounds great. We'll have to see in practice
how it works out. If successful, it could, in short
order, become the global standard for green bonds.
ESG: EU Green Bond Standard, by Richard Kelly, July
27, 2021, Ireland.
-------------------------------------------------------------
Amory Lovins:
Decarbonizing industry isn't just about costs, it's
about profits. "This week Amory
Lovins, co-founder of RMI and clean energy BAMF,
released a paper, 'Decarbonizing
our toughest sectors -- profitably,' encouraging a
fresh perspective on the costs of decarbonizing heavy
transport and industrial heating. The paper makes the
case that deep decarbonization isn't a cost: It's an
investment that will make communities and companies
money."
[COMMENTARY] Amory
Lovins is one of the great pioneers of ethical and
sustainable investing. In his new article, he makes a
great case demonstrating that de-carbonizing the biggest
polluters can be profitable for all stakeholders. It
pays to listen to him.
Amory Lovins: Decarbonizing industry isn't just about
costs, it's about profits, by Sarah Golden, August
6, 2021, GreenBiz, USA.
-------------------------------------------------------------
5 ways to separate real
ESG leadership from greenwashing. "How can
people better identify greenwashing and help reinforce
the growing sense of accountability for ESG standards?
Look for these factors."
[COMMENTARY] Some
good points in how to identify 'greenwashing' in
companies are made in this article.
5 ways to separate real ESG leadership from
greenwashing, by Marjella Lecourt-Alma, August 4,
2021, Fast Company, USA.
-------------------------------------------------------------
Where's All That Green
Bond Money Really Going? "Overall issuance
is skyrocketing, but transparency is hard to come by."
[COMMENTARY] There's
a clear need for a universal mechanism for tracing the
flow of funds raised via green bonds. Otherwise,
confidence in this market could falter, and dealing with
climate change negatively affected. This is beside the
potential detrimental impact on the stock and bond
prices of the corporation for misbehavior. That alone
might be a sufficient deterrent. Who knows?
Where's All That Green Bond Money Really Going? By
Tim Quinson, August 4, 2021, Bloomberg Green, USA.
-------------------------------------------------------------
More than $3T of
companies outside the EU could be on the hook for SFDR.
"Until recently, European legislation may
not have been at the top of the agenda for financial
services firms in the U.S., or anywhere outside the
European Union.
But two factors might have
you suddenly realizing that it's worth paying attention
to EU sustainable investment regulation, regardless of
where you’re based. This is, especially true since some
of this regulation is already in effect.
First, in order to market
investment funds in the EU, firms often set up a local
legal entity that could potentially expose the parent
company to EU regulation. Second, the EU put new
regulation in place mandating sustainability disclosure
from certain types of financial firms."
[COMMENTARY] For
those readers engaged in financial services with European
operations this is something you must investigate!
More than $3T of companies outside the EU could be on
the hook for SFDR, by Divya Mankikar, July 30, S&P
Global, UK.
-------------------------------------------------------------
Regulators to unlock
'black box' of ESG corporate ratings.
"Global regulators took a first step on Monday to unlock
the 'black box' of corporate environmental, social and
governance (ESG) ratings, suggesting formal oversight of
a sector which helps channel trillions of dollars into
climate-friendly investment funds.
Despite growing influence,
ESG raters and data providers are largely unregulated,
lack transparency in their methods, offer uneven
coverage and harbour potential conflicts of interest,
said the International Organization of Securities
Commissions (IOSCO), which groups market regulators from
the United States, Europe and Asia."
[COMMENTARY] I
just hope that should the ESG raters be regulated that
there is room for differences of opinions between them
on any given stock. I do agree, however, that the
structure of the ESG data needs more uniformity. That
would provide for better cross-rater comparisons on
companies.
Regulators to unlock 'black box' of ESG corporate
ratings, by Kim Kyung-Hoon, July 26, 2021, Reuters,
UK.
-------------------------------------------------------------
Blog: Acting Enforcement
Director warns of ESG enforcement actions.
"According to Law
360 reporting on a webcast panel last week,
Acting Director of Enforcement Melissa Hodgman, warned
that, in addition to 'increased scrutiny' of 'funds
touting green investments,' we may well see more ESG
disclosure-related enforcement actions in general."
[COMMENTARY] I
believe it's a good idea that funds and fund managers,
etc., live up to what they profess. If not, there should
be penalties.
Blog: Acting Enforcement Director warns of ESG
enforcement actions, by Cooley LLP, July 21, 2021, JD
Supra, USA.
-------------------------------------------------------------
ESG Assets in Europe
Shrink after Regulatory Consolidation Efforts.
"While assets in sustainable investments declined to
$12 trillion in Europe over 2020 from $14 trillion in
2018, the falling assets in attributed to falling
investment demand for the ESG theme, Bloomberg reports.
The drop in ESG assets in Europe is a result of policy
changes that tightened the requirements for what can be
considered a responsible investment, according to Simon
O'Connor, chair of the Global Sustainable Investment
Alliance."
[COMMENTARY] With
36% of assets under management globally now termed
'responsible' by the GSIA, I wonder if there's been a
weakening as to what are considered
ethical-ESG-sustainable investments? I think these
numbers from Europe provide the answer. Probably 'yes'.
ESG Assets in Europe Shrink after Regulatory
Consolidation Efforts, July 21, 2021, ETF Trends,
USA.
-------------------------------------------------------------
What you should know
about potential new international reporting standards.
"The International Integrated Reporting
Council (IIRC) and Sustainability Accounting Standards
Board (SASB) have merged into
the Value Reporting Foundation. They and three other
sustainability reporting bodies -- CDP, Climate
Disclosure Standards Board (CDSB) and Global Reporting
Initiative (GRI), known as the Group of Five -- have
called for closer coordination and launched a prototype
climate-related financial disclosure standard."
[COMMENTARY] It's
great to see this finally coming together. When it does,
analyzing ESG performance between companies should be
easier.
What you should know about potential new international
reporting standards, by Adam Fishman, July 19, 2021,
GreenBiz, USA.
-------------------------------------------------------------
The GSIA Releases its
Global Sustainable Investment Review 2020.
"Responsible investment assets under management make up
a total of 36% of total assets under management."
[COMMENTARY] This
is a staggering amount! I can't help but feel as per the
article below ("This World May Be Better Off Without
ESG Investing") that the guidelines of what is
sustainable, responsible, etc., are becoming ever
weaker. This is not to say that numerous companies are
now being encouraged to be more sustainable though!
The GSIA Releases its Global Sustainable Investment
Review 2020, by Responsible Investment Association
Canada, July 18, 2021, Canada.
-------------------------------------------------------------
The World May Be Better
Off Without ESG Investing. "The bar for
what constitutes a good corporate citizen is abysmally
low... This could explain why Exxon and BP,
which pose existential threats to the planet, get an
average ('BBB') aggregate score from MSCI..."
[COMMENTARY] In
some quarters ethical and sustainable investors invest
in companies they consider 'light,' 'medium' or 'deep'
green. I think the ESG rating companies need to do a
similar thing!
The World May Be Better Off Without ESG Investing,
by Hans Taparia, July 14, 2021, Stanford Social
Innovation Review, USA.
-------------------------------------------------------------
Can ESG disclosures get
you sued? "Everyone expects the SEC to make
climate change and other ESG reporting mandatory, and
those tech giants -- Amazon, Alphabet, Autodesk, eBay,
Facebook, Intel and Salesforce -- said in a joint
letter they support this. What they don't
support is including the information in filings such as
annual 10-Ks and quarterly 10-Qs because, they say, it
could open them up to costly lawsuits."
[COMMENTARY] I
think it's right that the SEC should make ESG reporting
mandatory in company filings. Furthermore, that
interested parties should have the ability to challenge
such reporting. And in the courts if necessary. However,
clearly, limits of some kind would have to be placed on
legal challenges.
Can ESG disclosures get you sued? By CJ Clouse, July
15, 2021, GreenBiz, USA.
-------------------------------------------------------------
CFA Institute's draft
ESG standards could facilitate 'greenwashing,' IFIC
says. "Without establishing standards for
labelling environmental, social and governance (ESG)
products, the CFA Institute's proposed disclosure
standards could lead to more 'greenwashing' of
investment funds, Canada's fund industry lobby group
says."
[COMMENTARY] I
wonder if other affected organizations, funds, etc.,
have come to the same conclusion?
CFA Institute's draft ESG standards could facilitate
'greenwashing,' IFIC says, by Mark Burgess, July 14,
2021, Investment Executive, Canada.
-------------------------------------------------------------
What you need to know
about the European Green Deal - and what comes next.
"The European Green Deal has the potential
to play a key role not only in ensuring this recovery in
the short term but also in addressing long-term climate
change threats. The launch of the 'Fit for 55' package
this week is expected to mark an important step in
overhauling climate policies and enabling the EU to
deliver on its commitment to reduce emissions by 55% by
2030."
[COMMENTARY] This
is a big deal. It will influence and affect numerous
industries, governments, and probably billions of
consumers, globally. Everyone needs to pay attention to
this!
What you need to know about the European Green Deal -
and what comes next, by Teresa Belardo, July 13,
2021, World Economic Forum, Switzerland.
-------------------------------------------------------------
Study: Financial Markets
Ignore Environmental Damage. "Credit-rating
agencies say they can discipline companies that behave
badly, and they have in some cases, but research reveals
negligible progress."
[COMMENTARY] Although
most investors profess a concern for the environment
while investing, this study might suggest they really
don't. I'd like to see other studies of this kind to see
if the findings from the study are true.
Study: Financial Markets Ignore Environmental Damage,
by Lilah Burke, July 12, 2021, The Revelator, USA.
-------------------------------------------------------------
AMG Acquires Control of
Parnassus, the Last Big ESG Firm. What This Means for
ESG Investors. "Sustainable investing is
red-hot. For the most recent evidence, look at last
week's acquisition news: Affiliated Managers Group paid
$600 million for a majority stake in privately held
Parnassus Investments, which sent Affiliated's stock
(ticker: AMG) up as much as 7% on the day the deal was
announced."
[COMMENTARY] Many of the ethical and SRI pioneer firms are falling
into the hands of huge establishment players. I suppose
it was inevitable that this happens. However, there are
some nimble and niche players also entering the space!
AMG Acquires Control of Parnassus, the Last Big ESG
Firm. What This Means for ESG Investors, by Leslie
P. Norton, July 9, 2021, Barron's, USA.
-------------------------------------------------------------
Schroders Institutional
Investor Study 2021: On ESG, US Investors Focus on Data,
Social Impact. "US institutional investors
focus more on ESG data and social factors than their
global counterparts, according to a new study by global
asset manager Schroders."
[COMMENTARY]
The survey results support the findings of other similar
studies.
Schroders Institutional Investor Study 2021: On ESG, US
Investors Focus on Data, Social Impact, press
release, July 6, 2021, Schroders/Business Wire, USA.
-------------------------------------------------------------
Will Mandated ESG
Disclosures Lead to Increased Litigation Risk?
"With the Securities and Exchange Commission
resolute in its efforts to establish new disclosure
requirements related to environmental, social and
governance (ESG) risks, companies appear increasingly
resigned to some measure of mandatory reporting.
But these companies haven't
yet given up: in an effort to contain litigation risk,
they continue to press the SEC to show some flexibility
in the means by which ESG risks are reported.
The distinction between
furnishing and filing climate change disclosures is not
purely semantic, as filed disclosures are held to a
higher regulatory standard than those that are merely
furnished."
[COMMENTARY]
One can see why companies are concerned -- as should
their shareholders. Such a distinction 'between
furnishing and filing climate change disclosures'
might well be the case in many other jurisdictions too.
Will Mandated ESG Disclosures Lead to Increased
Litigation Risk? By Bracewell LLP, July 2, 2021, JD
Supra, USA.
-------------------------------------------------------------
2021's Best 50 Canadian
corporate citizens. "Every year since 2002,
Corporate Knights has evaluated Canadian companies with
annual revenue of over $1 billion on a growing number of
key performance indicators. This year's Best 50
Corporate Citizens were evaluated against 24 key
performance indicators, including the clean revenue
result for each company, which is percentile-ranked
against industry peers and weighted at 50% toward the
overall score."
[COMMENTARY]
Many of the companies on this list will be of interest
to ethical and sustainable investors from around the
world.
2021's Best 50 Canadian corporate citizens, by
staff, June 30, 2021, Corporate Knights, Canada.
-------------------------------------------------------------
Why Green Assets May Not
Continue to Outperform. "Many investors are
attracted to ESG securities on promises of high returns,
but they are 'misguided, Wharton finance professor Luke
Taylor said on the Wharton
Business Daily radio show on SiriusXM.
(Listen to the podcast here.)
The past performance of ESG
securities is not a reliable indicator of returns in the
future, especially when past returns were largely driven
by 'shocks' such as bad news about climate change, he
noted. 'Absent more unexpected shocks in the future, we
don't see those green stocks outperforming ['brown' or
environmentally unfriendly stocks] in the future.'"
[COMMENTARY]
The research paper appears to rest on a common thesis:
that high-priced stocks usually provide lower future
returns. Time will tell.
Why Green Assets May Not Continue to Outperform,
June 29, 2021, Wharton Business Daily, USA.
-------------------------------------------------------------
Low-quality assurance of
ESG reports pose stability risk: IFAC.
"Only 51% of companies back up their reports on
sustainability with assurance, a study of 1,400
companies by the International Federation of Accountants
(IFAC) found, warning that low-quality assurance is an
'emerging investor protection and financial stability
risk.'"
[COMMENTARY]
I've had a big concern for over four decades. It's that
when ethical investing finally gets its day in the sun
that there will be not only be agreed reporting standards
but also a regulated independent class of specialized
auditors to audit and assure the numbers and facts.
Low-quality assurance of ESG reports pose stability
risk: IFAC, by Jim Tyson, June 24, 2021, CFO Dive,
USA.
-------------------------------------------------------------
Is ESG harmonization and
convergence finally coming? "Last week, the
U.S. House of Representatives passed legislation that
would require public companies to report environmental,
social and governance (ESG) metrics...
The bill, simply titled the
ESG Disclosure Simplification Act of 2021, comes on the
heels of the U.S. Securities and Exchange Commission's
(SEC) decision to open public comments on climate change
disclosures to inform its impending guidance -- and gets
us one more step closer to mandatory ESG disclosure."
[COMMENTARY]
Finally, the U.S. government and regulatory authorities
look like they're getting the message from the markets.
Is ESG harmonization and convergence finally coming,
by Aman Singh, June 24, 2021, GreenBiz, USA.
-------------------------------------------------------------
Professionals see
evolving ESG links to executive compensation.
"Boards and investors may not always see eye to eye
on metrics and weights."
[COMMENTARY]
This is all part of the evolution of corporate ESG. It
will certainly be messy for a while.
Professionals see evolving ESG links to executive
compensation, by Ben Maiden, June 24, 2021,
Corporate Secretary, USA.
-------------------------------------------------------------
House (US) Passes ESG
Disclosure Simplification Act of 2021. "By
a razor thin vote of 215 to 214, the House of
Representatives passed the
ESG Disclosure Simplification Act of 2021.
The Act would require public companies to disclose in
any proxy or consent solicitation material for an annual
meeting of the shareholders... "
[COMMENTARY]
This is good news, though I believe it still has to pass
the US Senate. Many think it might not make it through
there. Let's hope it will.
House (US) Passes ESG Disclosure Simplification Act of
2021, by Dodd-Frank, June 21, 2021, Lexology, USA.
-------------------------------------------------------------
The Dark Side of Solar
Power. "Solar
energy is a rapidly growing market, which should be good
news for the environment. Unfortunately there's a
catch. The replacement rate of solar panels is faster
than expected and given the current very high recycling
costs, there's a real danger that all used panels will
go straight to landfill (along with equally
hard-to-recycle..."
[COMMENTARY]
Recycling solar panels has long been a major concern of
mine regarding solar power. The firms in the business
have to get behind solutions or see their business
potentially 'dwindle.'
The Dark Side of Solar Power, by Atalay Atasu,
Serasu Duran, and Luk N. Van Wassenhove, June 18, 2021,
Harvard Business Review, USA.
-------------------------------------------------------------
Green Bonds Were a
Better Safe Haven Than Gold During the Pandemic.
"Climate-friendly debt served as a better
protection against large market fluctuations than gold,
as well as performing better than other environmental,
social, and governance investments, according to new
research from Imran Yousaf of Pakistan's Air University,
Muhammed Tahir Suleman of the University of Otago in New
Zealand, and Riza Demirer of Southern Illinois
University Edwardsville."
[COMMENTARY]
This is not a surprising finding. Green bonds have
become the new investment favourite. How many people
want gold today?
Green Bonds Were a Better Safe Haven Than Gold During
the Pandemic, by Jessica Hamlin, June 8, 2021,
Institutional Investor, USA.
-------------------------------------------------------------
Mandatory ESG
disclosures are a political inevitability.
"The SEC is
gathering public input about corporate
climate reporting. The comment request is
one of several actions the agency has
taken over the past several months to elevate ESG
oversight, including establishing a
climate and ESG enforcement task force...
In a
June 3 speech, Roisman said the thrust
of climate disclosure seems to be on assessing the
damage a company does to the environment, not the havoc
climate change can wreak on a company. That led him to
question the SEC's role."
[COMMENTARY]
It seems to me that investors need to know both sides:
the effects of climate change on the company and how the
company contributes to climate change.
Mandatory ESG disclosures are a political inevitability,
by Mark Schoeff Jr., June 9, 2021, Investment News, USA.
-------------------------------------------------------------
Banning Investment
Managers Who Shun Fossil Fuels Is a Bad Idea.
"Texas has joined a group of states proposing
legislation that would ban private investment management
companies that focus on sustainable investing, to the
ire of the oil and gas industry. Attorney J. Carl Cecere
argues politicizing state-pension investment strategy is
bad for pensioners and violates the First Amendment."
[COMMENTARY]
I agree with the writer. Not only because I'm biased
towards renewable energy, but also on the basis that
asset managers need to have the freedom to invest
according to their client's wishes, and so forth.
Banning Investment Managers Who Shun Fossil Fuels Is a
Bad Idea, by J. Carl Cecere, June 4, 2021, Bloomberg
Law, USA.
-------------------------------------------------------------
Rating the ESG raters:
Why Sustainable Investing Needs More Independent
Verifiers. "With an array of data providers
and indices to choose from, third party ESG verifiers
have stepped into the market to help screen information
available and offer some clarity. In Switzerland, one
such company is Geneva-based sustainable investment
advisory firm Conser. Founded by Angela de Wolff (also
one of the co-founders of Sustainable Finance Geneva),
the firm has developed its own proprietary methodology
to capture a variety of different ESG opinions."
[COMMENTARY]
I guess this type of service had to happen. And I think
it's good. It'll be a while to see if it takes off.
Rating the ESG raters: Why Sustainable Investing Needs
More Independent Verifiers, by Kasmira Jefford, June
2, 2021,
Geneva solutions, Switzerland.
-------------------------------------------------------------
Auditors may see
increased demand for ESG attestation.
"During a virtual session Monday, Kristen Sullivan, CPA,
CGMA, a partner with Deloitte & Touche LLP and the
firm's Americas region sustainability services leader,
gave an overview of the concerns public companies,
directors, and auditors have about the new regulatory
focus on ESG disclosures.
To date, ESG disclosures
have tended to be separate from regulatory filings. But
the CAQ's road map is meant to help guide capital market
participants through the frequency and consistency of
the disclosures and whether the information is
comparable from company to company, Sullivan said."
[COMMENTARY]
I've long believed that CSR/ESG disclosures need to be
audited and attested to by a regulated and licensed
auditing entity. Only in this way can investors and
stakeholders have confidence in the facts, data, and
material being presented. Furthermore, there must be, as
is now occurring, some standardization of such facts,
data, and material. It should also be shown in what way
it might be material to the activities and financial
performance of a company.
Auditors may see increased demand for ESG attestation,
by Joseph Radigan, May 28, 2021, Journal of Accountancy,
USA.
-------------------------------------------------------------
The Theory at the Heart
of Modern Portfolios Is Leading Investors Astray.
"These
activities (ESG, SRI, and impact investing) form a coherent challenge to the limitations
of modern portfolio theory. MPT, the dominant investment
paradigm in the world, focuses on diversification to
minimize risk."
[COMMENTARY]
Yes, MPT is upended by our emphasis on ESG,
sustainability, and ethics!
The Theory at the Heart of Modern Portfolios Is Leading
Investors Astray, by Jon Lukomnik and James P.
Hawley, May 28, 2021, Barron's, USA.
-------------------------------------------------------------
Does corporate social
responsibility affect shareholder value? Evidence from
the COVID-19 crisis. "We observe that firms
engaged in more CSR activities outperform other firms.
This suggests that CSR plays a positive role in
determining shareholder value, particularly for an
emerging market where minority shareholder rights are
weak. Collaborating with our main finding, we further
find that governance metrics play a significant role."
[COMMENTARY]
This study was done in India on companies whose main
revenues and activities were also in India. It's good to
note that CSR was found to be positive for shareholder
value.
Does corporate social responsibility affect shareholder
value? Evidence from the COVID-19 crisis, by Somya
Arora, Jagan Kumar Sur, Yogesh Chauhan, at the Indian
Institute of Management Raipur, Raipur, India, May 26,
2021. International Review of Finance.
-------------------------------------------------------------
Indexing Giants 'Should
Prepare for Disruption' Says New Report.
"MSCI, FTSE Russell, S&P Dow Jones and Bloomberg could
see their dominance of the indexing industry threatened
by sustainability specialists, according to a new
report."
[COMMENTARY]
When a new industry takes shape, there are always new
entrants and winners. It'll likely be the same as ESG
investing matures. Who will be the winners?
Indexing Giants 'Should Prepare for Disruption' Says New
Report, by staff, May 25, 2021, Banking Exchange,
USA.
-------------------------------------------------------------
Keeping Promises? Carbon
Risk (CR) Disclosure and Mutual Fund Portfolios.
"Indeed, fund managers are sensitive to
disclosures only in the presence of binding commitments
to environment sustainability. Sustainable funds lower
their CR score by reducing exposure to fossil fuels, not
by increasing exposure to renewables."
[COMMENTARY]
This is a highly insightful paper that illuminates the
carbon risk of conventional and sustainable US mutual
funds.
Keeping Promises? Carbon Risk (CR) Disclosure and Mutual
Fund Portfolios, by John R. Nofsinger, University of
Alaska Anchorage and Abhishek Varma, Illinois State
University. April 27, 2021.
-------------------------------------------------------------
Danger of being
corrupted? ESG ratings increase risks of greenwashing. "The
European Commission (EC) asked 650 individuals and
organisations last year for their views on the
concentration of providers in the ESG ratings market and
on the quality of the ESG ratings' analyses. 74% of
respondents called for action.
The European Securities and
Markets Authority (ESMA), noting that 'climate and
environmental risks constitute a key source of potential
financial instability', claimed the 'clear mandate to
prevent threats to financial stability and ensure
investor protection.'
Consequently, ESMA demands
that the regulatory regime should be adapted to tackle
not only an increased risk of greenwashing but also
risks of 'capital misallocation and product
mis-selling'.
Should the EC adopt this
proposal, which seems likely, this will not just mean an
end to unethical selling practices of ethical ratings,
it will also help forward-thinking investors allocate
resources and capital to truly eco-friendly projects and
to companies that take their ecological and social
responsibility seriously. Our children will thank us."
[COMMENTARY]
I thought to include the above-extended quote to give
importance to the fact that the EU is strongly
considering regulating ESG raters.
Danger of being corrupted? ESG ratings increase risks of
greenwashing, by Alpay Soyturk. May 19, 2021,
Investment Week, USA.
-------------------------------------------------------------
The Impact Of Sin Stock
Exclusion On Portfolio Performance. "'As
about 10% of the market can be classified as sin, this
would imply an additional 0.10% return loss if sin
stocks are excluded. Combined with the 0.27% estimated
loss due to the adverse effect on factor exposures ...
this brings the total loss in expected return to 0.37%
per annum.
Although this might seem
small, a pension fund which generates 0.37% lower
returns on its equity portfolio than peers may end up
providing 5% lower pensions in the long run.' That is
not an insignificant loss."
[COMMENTARY]
This article reports on a study saying that excluding 11
particular industries in a portfolio results in a
0.37% annual loss in returns. I'm sure many will debate
the methodology and conclusions of this study.
The Impact Of Sin Stock Exclusion On Portfolio
Performance, by Larry Swedroe, May 19, 2021, Seeking
Alpha, USA.
-------------------------------------------------------------
The rise of the climate
economy is upon us. "What was once a narrow
purview around clean tech recently has morphed into the
all-encompassing term of climate tech, and unlike the
boom and bust cycle that accompanied the clean energy
frenzy of the late 2000s, climate tech appears to have a
sustainable presence in the minds of long-term
investors."
[COMMENTARY]
I thought it was interesting that the term climate tech
appears to be replacing clean tech. Also, what that
means for ethical and sustainable investing.
The rise of the climate economy is upon us, by
Michael Ferrari, May 17, 2021, GreenBiz, USA.
-------------------------------------------------------------
The 100 Best Corporate
Citizens of 2021. "As companies
decarbonize, align with the Sustainable Development
Goals and rebuild an equitable economy post-pandemic,
they must be open about their efforts. Each year, 3BL
Media evaluates the largest public U.S. companies on ESG
transparency and performance."
[COMMENTARY]
This is always a good list to review, particularly for
ethical and sustainable investors.
The 100 Best
Corporate Citizens of 2021, May 17, 2021, 3BL Media,
USA.
-------------------------------------------------------------
ESG Investors Turn to
Emerging Markets, Defying Skeptics.
"There's a growing number of money managers in green
finance turning to markets not usually associated with
sustainability. Fund bosses in Europe's North, where
climate-friendly investing has gone mainstream, have
started looking much further afield to find cheap assets
they say will eventually meet their environmental,
social and governance goals."
[COMMENTARY]
I remember seeing research that says that stock
outperformance is superior in companies who are just
beginning to grow in their ESG performance. That is when
compared to companies already mature in their ESG
development. This might be something that many ethical
and sustainable investors might consider.
ESG Investors Turn to Emerging Markets, Defying
Skeptics, by Leo Laikola, Hanna Hoikkala, and
assistance from Filipe Pacheco, May 17, 2021, Bloomberg,
USA.
-------------------------------------------------------------
Faith-Based Investing
Makes Up Ground in Gains and Convenience.
"Investing according to theological beliefs 'is much
easier to do now,' a wealth adviser said. It's also as
profitable as investing without a religious screen, and
no more risky."
[COMMENTARY]
This is a simple overview of US faith-based investing.
Faith-Based Investing Makes Up Ground in Gains and
Convenience, by Paul Sullivan, May 14, 2021, The New
York Times, USA.
-------------------------------------------------------------
Investors May Turn to
Proxy Voting to Convey ESG Preferences. "As
ESG becomes increasingly relevant to investing,
investors are realizing the power of active ownership as
an investing strategy and are turning their attention to
how ESG issues are represented on corporate proxy
ballots and how funds vote on these issues, Morningstar
reports in 'The
Power of the Proxy in Retirement Plans: Empowering
workers saving for retirement with a voice on ESG issues.'"
[COMMENTARY]
Many corporate boards that have shown a reticence to
adopting significant ESG adaptations to their activities
might well be forced to do so. As ESG funds grow they
will likely become ever more active in pushing their
shareholder agendas on corporate boards.
Investors May Turn to Proxy Voting to Convey ESG
Preferences, by Ted Godbout, May 11, 2021, National
Association of Plan Advisors (NAPA), USA.
-------------------------------------------------------------
Demand for minerals
threatens clean energy rollout, IEA warns.
"'Looming mismatch' between world's climate ambitions
and availability of necessary critical minerals,
according to a new report."
[COMMENTARY]
Most ethical and sustainable investors avoid mining
stocks. Yet, without massive growth in mining, there
will be no growth in the green economy! It's high time
that sustainable investors considered investing in
mining stocks with the best ESG performance.
Not only
will they be supporting a green climate change-friendly
economy -- but they will find a new sector that'll
likely provide potentially good stock returns.
Demand for minerals threatens clean energy rollout, IEA
warns, by Nadia Weekes, May 5, 2021, Windpower
Monthly, UK.
-------------------------------------------------------------
See Japan in a different
light: How investors get ESG in world's third-largest
economy wrong. "Greenwashing is a
persistent and growing problem in the ESG landscape.
However, many companies in Japan suffer from this issue
in reverse and we believe their ESG ratings are often
significantly worse than they deserve."
[COMMENTARY]
This is important. I've long thought that Japan is
underestimated for its ESG corporate contributions. This
article explains the how and why of this. Managers of
western ESG portfolios need to consider increasing
allocations to Japanese companies.
See Japan in a different light: How investors get ESG in
world's third-largest economy wrong, by Richard
Kaye, May 5, 2021, Investment Week, UK.
-------------------------------------------------------------
ESG does not generate
outperformance, Scientific Beta warns.
"'The results show that the quality factors (high
profitability and low investment) make pronounced
positive return contributions to most types of ESG
strategies,' the report added."
[COMMENTARY]
The headline is misleading. What it boils down to is
that the concentration on tech and financials in ESG
portfolios is largely responsible for their
outperformance. When these portfolios are adjusted for
such concentration, there's no outperformance.
Also,
I don't believe this paper is to be published in a
peer-reviewed journal. Thus, one always has to be
suspect of such study results when they aren't.
ESG does not generate outperformance, Scientific Beta
warns, by Tom Eckett, May 5, 2021, ETF Stream, USA.
-------------------------------------------------------------
ESG metrics rest on
sand, not granite. "The challenge of
identifying metrics that drive 'better' or 'worse' ESG
results."
[COMMENTARY]
This is a good article that describes the situation and
challenges of creating and obtaining the 'right' ESG
metrics for any given company.
ESG metrics rest on sand, not granite, by Ingo
Walter, May 4, 2021, MarketWatch, USA.
-------------------------------------------------------------
Ethical investing
encourages consumers to invest more.
"Latest research shows ESG finance encourages investors
to leave less in cash."
[COMMENTARY]
This shows that investors get excited about ethical,
ESG, and sustainable investing once they see how to do
it--and particularly if it's during a time of gains!
Ethical investing encourages consumers to invest more,
by Mark Shoffman, April 27, 2021, Interactive Investor,
UK.
-------------------------------------------------------------
Sixty-eight of 77
industries significantly affected by climate risk, SASB
says. "SASB released an updated Climate
Risk Technical Bulletin last week to help companies
better understand how they can disclose climate risk in
a manner that provides investors with helpful
information."
[COMMENTARY]
This is not just important reading for the affected
companies, but for investors too!
Sixty-eight of 77 industries significantly affected by
climate risk, SASB says, by Mike Schnitzel, April
27, 2021, CorporateSecretary, USA.
-------------------------------------------------------------
Wall Street's
Trillion-Dollar ESG Club Comes With Huge Tax Perks.
"Four banks pledge $6 trillion in
sustainable finance, and the billions they'll save in
taxes is one of the benefits."
[COMMENTARY]
Hopefully, there's some innate desire to do such
investments too
though!
Wall Street's Trillion-Dollar ESG Club Comes With Huge
Tax Perks, by Max Abelson and Lananh Nguyen, April
23, 2021, Bloomberg Green, USA.
-------------------------------------------------------------
U.S. SEC review of
socially responsible funds finds 'potentially
misleading' claims. "The U.S. Securities
and Exchange Commission on Friday said it has found
'potentially misleading' claims and inadequate controls
around investing environmental, social and governance
(ESG) issues in a review of investment advisors and
funds."
[COMMENTARY]
This is good news. The industry needs some cleaning out
of the greenwashing that exists.
U.S. SEC review of socially responsible funds finds
'potentially misleading' claims, by Reuters staff,
April 12, 2021, Reuters, USA.
-------------------------------------------------------------
BlackRock Is Pushing to
Offer Sustainable Investments to 401k Plans, CEO Says.
"With the Biden Administration friendly to
sustainable investing, BlackRock is making a push to
offer those types of investments to retirement plans,
CEO Larry Fink said in an interview."
[COMMENTARY]
Employees of most firms will welcome this! As you know
the number of such ESG-ethical-sustainable plans has
been pathetic relative to the number of people interested.
BlackRock Is Pushing to Offer Sustainable Investments to
401k Plans, CEO Says, by Leslie P. Norton, April 16,
2021, Barron's, USA.
-------------------------------------------------------------
SEC will not assess
merit of ESG investments: Peirce. "The
agency's role is not to determine whether any particular
strategy is a good one, but to ensure investors know
what they are getting, according to Securities and
Exchange Commission member Hester Peirce."
[COMMENTARY]
This is what I'd expect from the SEC.
SEC will not assess merit of ESG investments: Peirce,
by Mark Schoeff Jr., April 13, 2021, InvestmentNews,
USA.
-------------------------------------------------------------
(US) ESG funds beat out
S&P 500 in 1st year of COVID-19; how 1 fund shot to the
top. "In the first 12
months of the COVID-19 pandemic, many large investment
funds with environmental, social and governance criteria
outperformed the broader market. One fund went from
being among the poorest performers to the top of the
list following tweaks to its portfolio."
[COMMENTARY]
This is a good review of how US ESG funds performed in
2020.
(US) ESG funds beat out S&P 500 in 1st year of COVID-19;
how 1 fund shot to the top, by
Esther Whieldon and Robert Clark, April 6, 2021, S&P
Global, USA.
---------------------------------------------------------------
If you are a spiritual investor, or believe in ethical
investing and socially responsible investing, get the
latest relevant news in your inbox. Sign-up now for our
free e-newsletter,
The Soul Investor.
Special note on news intermediaries.
|
