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Shareholder Values

 
"Forty-five percent of U.S. households prefer an environmental, social and governance (ESG) approach to investing… Among those between the ages of 30 and 39, this increases to 64%, and for those younger than 30, it is 67%."
-- Cerulli Associates
 
 (USA)
    October 2018

"The vast majority of Canadian investors are interested in responsible investments (RI) that incorporate environmental, social and governance (ESG) issues, and they would be more likely to choose responsible investments if their financial advisor suggested suitable RI options for them."
-- Responsible
    Investment
    Association (RIA)
 
  (Canada)
    June 2017

"70% of people [in UK] want to invest ethically but the financial services industry is failing to respond." Referencing research by Abundance.
-- Acquisition
    International
   
(UK) June 2015

 

Events

 

Global Ethical Investing News & Commentary

Commentaries by Ron Robins  E-mail us your feedback

Links may only be valid for a limited time    September 19, 2020

***List your event on our Events Page***

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Latest Podcast: Green Energy Growth Stocks. And More... "Green energy growth stocks in North America, India, and elsewhere. They include SolarEdge Technologies, Inc., Enphase Energy, Inc., Canadian Solar Inc., Azure Power Global Ltd., NextEra Energy Partners, Clean Energy Fuels, and TPI Composites. Australian analyst makes their investment picks: BetaShares Global Quality Leaders ETF, Magellan High Conviction Trust, BetaShares Global Sustainability Leaders ETF. More..."
--
By Ron Robins

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Morgan Stanley Sustainable Reality Report Reveals Sustainable Funds Outperformed Traditional Funds and Reduced Investment Risk Despite Global Pandemic. "In January-June 2020: U.S.-based sustainable equity funds outperformed their traditional peers by a median of 3.9%. U.S.-based sustainable taxable bond funds outperformed their traditional peers by a median of 2.3%."

[COMMENTARY] This is the first such data I've seen on green bond funds for the first half of 2020. It's good to know that they too outperformed their benchmarks.
Morgan Stanley Sustainable Reality Report Reveals Sustainable Funds Outperformed Traditional Funds and Reduced Investment Risk Despite Global Pandemic, press release, Morgan Stanley Institute for Sustainable Investing, September 17, 2020, USA.

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New Journal On Impact And ESG Investing. "At a pivotal time of increasing client interest and adoption of social investing that is still confronting ongoing misconceptions and push back from some corners of government oversight and advisor skepticism, the Institute is happy to announce a new, much needed, professional research and thought leadership based resource covering the full social landscape of ESG, impact, and sustainable investing.

The first issue of The Journal of Impact and ESG Investing has just been launched this month by Portfolio Management Research, which is a leading provider of independent financial research within the investment sector."

[COMMENTARY] The launch of this journal is terrific news for ethical and sustainable investors.
New Journal On Impact And ESG Investing, by Bill Hortz, September 17, 2020, Financial Advisor Magazine, USA.

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Sustainability Leaders to Work on Common Corporate Reporting Standard. "A group of five global sustainability leaders that set environmental, social, and governance (ESG) standards will work together to develop a common framework for corporate reporting, the firms said Friday.

The lack of consistent sustainability disclosures has made assessing companies confusing and difficult, according to a joint report released Friday from the environmental nonprofit CDP (formerly the Carbon Disclosure Project), the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), and the Sustainability Accounting Standards Board (SASB). Together, the organizations set the majority of ESG reporting in the industry."

[COMMENTARY] This is great news for ethical and sustainable investors. Such common standards have been sought for decades! I hope it also includes the independent auditing of what company's report.
Sustainability Leaders to Work on Common Corporate Reporting Standard, by Sarah Min, September 14, 2020, Chief Investment Officer, USA.

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BIS Sees No Proof Green Bonds Improved Firms' Carbon Footprints. "Companies that issue green debt aren't necessarily reducing their carbon emissions, underscoring the need for firms to have an environmental rating, according to a report from the Bank for International Settlements."

[COMMENTARY] The reasoning behind green bonds is that the proceeds are used for green projects. Thus, by definition, a company's green-sustainable activities should be improved. It's fascinating that the BIS research found the carbon intensity of companies issuing green bonds not to be much changed.
BIS Sees No Proof Green Bonds Improved Firms' Carbon Footprints, by Jill Ward, September 14, 2020, Bloomberg Green, USA.

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Where ESG Ratings Fail: The Case for New Metrics. "One agency's A+ is another's 'laggard' -- and neither links to financial performance. Hybrid metrics will change everything, argue Harvard Business School's Mark Kramer and leaders in the shared-value movement."

[COMMENTARY] It'll be interesting to see if this concept proves itself. It's an appealing idea. I suspect the mathematics involved could be considerable.
Where ESG Ratings Fail: The Case for New Metrics, by Mark Kramer, Nina Jais, Erin Sullivan, Carina Wendel, Kerry Rodriguez, Carlo Papa, Carlo Napoli, and Filippo Forti, September 7, 2020, Institutional Investor, USA.

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ESG Bond Funds Fear Becoming Too Political. "The development of 'sustainable' government bond funds may be hitting a road bump as fund managers fear being overly critical of western government policies, notably those of the United States."

[COMMENTARY] This reminds me of the US DOL's missive about trying to restrict the application of ESG in pension funds. It's so backward-looking!
ESG Bond Funds Fear Becoming Too Political, by Max Chen, September 3, 2020, ETF Trends, USA.

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New Challenges to the Merits of ESG Investing. "The data used to measure a company's compliance with environmental, social and governance (ESG) guidelines is inconsistent and leads to misleading results. Moreover, when teams at the same company manage comparable ESG and non-ESG funds, the former more often underperforms the latter."

[COMMENTARY] Do all analysts come to the same conclusions when reviewing a company's financial statements in light of the company's prospects? No. I think the diversity of opinion is what makes financial markets. However, I do believe that audited common metrics need to be used in ESG measurements across companies and industries.
New Challenges to the Merits of ESG Investing, Larry Swedroe, August 31, 2020, Advisor Perspectives, USA.

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US Stocks With Higher ESG Scores Have Lower Returns. "EU stocks with higher ESG scores significant enhanced returns. "We observe that, for EU firms, there is a significant negative relationship between the market value and the excess return, suggesting that smaller EU companies generate higher returns on average," added the study.

In contrast, for US and other Asian firms there was a significant negative relationship between the ESG scores and excess returns. The authors said this could arguably be a result of less focus on sustainability in the US, leading to lower demand by investors than in the EU."

[COMMENTARY] This is fascinating, though unsurprising research. I would like to see such studies peer-reviewed and published in reputable journals.
US Stocks With Higher ESG Scores Have Lower Returns, by Shanny Basar, August 27, 2020, Traders Magazine, USA.

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Academics Attack ESG for Failure to Outperform During Crisis. "'These results suggest that innovation-related assets rather that social capital investments offer the greater immunity to sudden, unanticipated market declines,' the authors wrote."

(COMMENTARY] I believe I understand the study's main contention. However, ESG funds generally are full of 'innovation-related assets.' Such assets frequently have high ESG ratings too! That's why the ESG funds outperformed.
Academics Attack ESG for Failure to Outperform During Crisis, by Amy Whyte, August 20, 2020, Institutional Investor, USA.

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Vast majority of comments oppose ESG proposal - analysis. "More than 95% of the firms, groups and individuals who submitted comment letters or signed petitions in response to the Department of Labor's proposal on environmental, social and governance investments in ERISA plans opposed the initiative, an analysis published Thursday from several investor organizations and financial industry firms found."

[COMMENTARY] I suspect that despite the overwhelming opposition to this rule the Department of Labor will not back down. Trump's base is likely highly supportive of it.
Vast majority of comments oppose ESG proposal - analysis, by Brian Croce, August 20, 2020, Pensions & Investments, USA.

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Investors continue to align with SDGs. "Five years on since the SDGs were launched, an increasing number of investors are putting capital to work to earn returns alongside helping solve global scourges like the climate crisis, poverty and inequality."

[COMMENTARY] Investments that align with the UN's SDGs that make good returns are the ideal of ethical and sustainable investing!
Investors continue to align with SDGs, by Sarah Rundell, August 18, 2020, Top 1000 Funds, USA.

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Barclays Launches Systematic Study of ESG-Focused US Equity Funds. "Barclays' Quantitative Portfolio Strategy ('QPS') team finds that ESG-labelled funds do not necessarily provide more ESG exposure than conventional funds."

[COMMENTARY] This is interesting research. Of course, everything is in the details and I'd love to get some expert ESG opinion on Barclays' findings.
Barclays Launches Systematic Study of ESG-Focussed US Equity Funds, August 13, 2020, BusinessWire on Yahoo! Finance, USA.

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Why ESG ratings need an overhaul. "Under certain ESG standards, the ratings of fossil-fuel giant Exxon Mobil and electric car maker Tesla could well be the same."

[COMMENTARY] Such an anomaly as cited above has to do with ESG company raters not rating the ESG characteristics of a company's products or services and issues with cross-industry scoring. ESG raters typically rate only the ESG performance of a company's 'operations'.
Why ESG ratings need an overhaul, by Jim McClelland, August 9, 2020, Raconteur, UK.

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Ethical CSR focus triggers hostile investor activism, study finds. "This is because some activist investors view CSR as a sign that a company is wasting money rather than focusing on shareholder returns, according to research conducted by Pennsylvania State University's Mark DesJardine, Erasmus University's Emilio Marti and HEC Paris business school's Rodolphe Durand."

[COMMENTARY] Note this study included years as far back as 2000. Attitudes have changed recently and I wonder if the propensity for investor activism of this type is still occurring at the same rate?
Ethical CSR focus triggers hostile investor activism, study finds, by Laurence Fletcher, August 3, 2020, Financial Times, UK.

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Racial Injustice Will Have Greater Weight in ESG Scores, S&P Global Says. "About 217 businesses in the S&P 500 have publicly supported the Black Lives Matter movement to show solidarity and protect their reputations. Question: How sincere are they?"

[COMMENTARY] Rather than only saying that black lives matter, companies need to consider their internal functions and activities to determine how they can address internally such issues. Afterall, ESG scores are going to increasingly include corporate diversity issues!
Racial Injustice Will Have Greater Weight in ESG Scores, S&P Global Says, by Sarah Min, July 24, 2020, Chief Investment Officer, USA.

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Morningstar: DOL's ESG Proposal 'Out Of Step' With Best Advisor Practices. "If the DOL passes the rule as proposed 'it would lead to worse outcomes for plan participants as plan sponsors shy away from assessing ESG risks in selecting investments. Indeed, since most participants use qualified default investment options--and ESG considerations would be barred in these options--most participants would not get the benefits that ESG risk analysis can deliver,' Brock Johnson, president of Morningstar Retirement Services, said."

[COMMENTARY] I believe the DOL's proposed rule is about hindering ESG. It's saying US employee default pension plans should not exclude fossil fuel companies as most ESG plans would. So, it's simply an attempt to boost fund holdings of fossil fuel companies!
Morningstar: DOL's ESG Proposal 'Out Of Step' With Best Advisor Practices, by Tracy Longo, July 24, 2020, Financial Advisor, USA.

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US SIF Foundation Launches Sustainable Investing Course for Individual Investors. "The course, which takes approximately 30 minutes to complete, provides a brief overview of the development of sustainable investing and summarizes the investment options and strategies available. It also links to additional resources and offers next steps for interested investors."

[COMMENTARY] This is a great idea. It could also be a good adjunct to my DIY Ethical-Sustainable Investing pays Tutorial!
US SIF Foundation Launches Sustainable Investing Course for Individual Investors, press release, July 23, 2020, US SIF, USA.

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Canada's CPP Investments [C$409.6 billion pension fund] Sustainable Investing Policy: Update Reinforces ESG Role in Long-Term Value Creation. "Integrating ESG factors, including climate change, into investment analysis and asset management activities supports the organization's clear legislative objective: to maximize long-term investment returns without undue risk of loss."

[COMMENTARY] I've included this item to contrast this highly successful -- and one of the world's largest -- pension funds, with the recent US Department of Labor's ruling endeavoring to limit the use of ESG in US pension funds!
CPP Investments Sustainable Investing Policy: Update Reinforces ESG Role in Long-Term Value Creation, press release, July 23, 2020, Canada Pension Plan Investment Board, Canada.

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BlackRock Heats Up Climate Change Pressure On Boards. "BlackRock announced that it voted against management at 53 companies worldwide (primarily in the energy sector) for 'lack of progress' on climate concerns during the 2020 proxy season, and directed another 191 companies to take faster action."

[COMMENTARY] Blackrock, at last, appears to be serious about getting companies on board with climate change! It's a great example for all other fund managers.
BlackRock Heats Up Climate Change Pressure On Boards, by Michael Peregrine, July 19, 2020, Forbes, USA.

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ESG Investing Is About Long-Term Risk Management. "Sustainable investing isn't just about values, it's about managing risks that affect all investors."

[COMMENTARY] Some interesting data about ESG ratings and returns in this article. Important for all ethical and sustainable investors to understand.
ESG Investing Is About Long-Term Risk Management, by Alex Bryan, July 14, 2020, Morningstar, USA.

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Most ESG Investing Makes A Charade Of Fighting Climate Change. "Thus far, ESG funds have merely divested capital from the fossil fuel industry. They have put hardly any capital into new cleantech companies that could help with the energy transition. Energy efficiency technologies, hydrogen power, carbon capture and nuclear fusion remain severely underfunded."

[COMMENTARY] The writer makes one particularly good point about ESG funds. That is, only moving around funds between highly rated ESG companies just doesn't cut it. Could some ESG funds create venture capital arms?
Most ESG Investing Makes A Charade Of Fighting Climate Change, by Wal van Lierop, July 14, 2020, Forbes, USA.

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GRI and SASB are collaborating. Is that good news for companies? "For years, corporate reporters -- those inside companies responsible for creating sustainability reports and reporting environmental, social and governance data to various other organizations -- have been frustrated by what many refer to as an alphabet soup of standards and frameworks: CDP, GRI, IIRC, PRI, SASB, TCFD, UNGC and more.

And while they grumbled at how those various organizations' requests weren't harmonized, they dutifully complied with their requests and mandates. Finally, help may be on the way."

[COMMENTARY] It's great to see these groups collaborating. Should they succeed, it'll be a real boost to ethical and sustainable investors everywhere in understanding and comparing corporate CSR/ESG reporting.
GRI and SASB are collaborating. Is that good news for companies? Bu Joel Makower, July 13, 2020, GreenBiz, USA.

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ESG Scoring Is Failing: Time For Improvement. "While companies are developing more comprehensive criteria, the standards are far from consistent. The reasons for the inconsistencies are numerous, but of greatest concern is the bias of ratings and the lack of public disclosure about the criteria and standards used in making those ratings."

[COMMENTARY] I find that many company ESG ratings' firms do provide considerable information concerning how they score the companies they rate. I think it's the individual companies -- and not the ratings' firms -- that need numerical consistency in their reporting. I see the ratings' firms more like equity analysts --  who vary (often greatly) in their analytical methods and conclusions.
ESG Scoring Is Failing: Time For Improvement, by George Strobel, July 2, 2020, Forbes, USA.

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Corporate Knights 2020 Best 50 Issue. Now out. Always a great source for ethical and sustainable investing ideas. Cost Cdn$4.99.
2020 Best 50 Issue, Summer 2020, Co9rporate Knights, Canada.

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How To Read The Proposed New ERISA Rule And What It Gets Wrong On Sustainable Investing. "Secretary of Labor Eugene Scalia explained the rationale for the new rule: 'Private employer-sponsored retirement plans are not vehicles for furthering social goals or policy objectives that are not in the financial interest of the plan. Rather, ERISA plans should be managed with unwavering focus on a single, very important social goal: providing for the retirement security of American workers.'"

[COMMENTARY] One can sense the US administration's frustration with the growing importance of ESG by fund managers. How about the fact that ESG funds are outperforming their conventional counterparts? Isn't that evidence of providing the best opportunity of providing for the retirement security of American workers.?
How To Read The Proposed New ERISA Rule And What It Gets Wrong On Sustainable Investing, by Bhakti Mirchandani, June 25, 2020, Forbes, USA.

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Regulatory changes see ESG go mainstream. "A raft of regulatory changes introduced in recent years are placing environmental social and governance (ESG) funds at the centre of the advice process, industry experts have claimed...Ryan Medlock, senior investment development and technical manager at Royal London, said: 'There have been a raft of new regulations, mostly coming from EU level, and they leave the US and Australia playing catch up.'"

[COMMENTARY] Despite what's happening in Europe, until there's a change in the US administration I see little chance of any new regulatory changes favouring ESG investing coming anytime soon.
Regulatory changes see ESG go mainstream, by David Thorpe, June 24, 2020,
FT Advisor, UK.

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Canada's Greenest Employers. "This special designation recognizes the employers that lead the nation in creating a culture of environmental awareness in their organizations. These employers have developed exceptional sustainability initiatives -- and are attracting people to their organizations because of their environmental leadership."

[COMMENTARY] Green employers often correspond to best ESG performers too. So ethical and sustainable investors might want to review who's on this list!
Canada's Greenest Employers, June 2020, Canada.

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100 Best Corporate Citizens of 2020. "Now more than ever, corporate leadership on environmental, social and governance (ESG) issues is imperative. And so is transparency. 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] One of the best of the annual ESG corporate rankings!
100 Best Corporate Citizens of 2020, June 22, 2020, 3BL Media, USA.

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Top investors publish list of companies that have failed to disclose climate data. "Last Friday, the UN and the UK launched the high profile Race to Zero campaign with the news that around 1,000 corporates around the world have pledged to deliver net zero emissions by 2050 at the latest.

Today, investor-backed climate disclosure group CDP takes on the flip-side of corporate engagement with the climate crisis with the publication of a list of just over 1,000 companies that have declined to provide relevant information on their environmental impacts to investors."

[COMMENTARY] This is an important read for all ethical and sustainable investors as it might influence them in their investment selections.
Top investors publish list of companies that have failed to disclose climate data, by James S Murray, June 9, 2020, UK.

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Has responsible investment lost its soul? "When investors have to justify decisions based on financial materiality, is it truly responsible?"

[COMMENTARY] This is a fascinating question. Do a company's ESG activities that are financially material to it reflect your values? Would you buy a stock based on financial materiality at the cost of ignoring your values?
Has responsible investment lost its soul? By Rob Lake, June 10, 2020, UK.

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Where to Find Low-Cost ESG Funds. "Investing in sustainable funds doesn't have to cost more than traditional funds, thanks to a raft of newer funds with lower costs."

[COMMENTARY] There are many great charts in this article including one showing the over/under annual costs in various fund categories of ESG funds compared to their conventional counterparts.
Where to Find Low-Cost ESG Funds, by Katherine Lynch, June 6, 2020, Morningstar, USA.

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From tyranny to salvation: the credibility of common metrics for ESG reporting. "Professor Brendan O'Dwyer and Professor Chris Humphrey from the Accounting and Finance division at Alliance Manchester Business School critique the growing calls for standardised ESG metrics in company reporting."

[COMMENTARY] Standardization of ESG metrics is important so that companies can be better compared on them. This article is a useful read for everyone in the investment industry.
From tyranny to salvation: the credibility of common metrics for ESG reporting, by Brendan O'Dwyer and Chris Humphrey, June 1, 2020, Accountancy Age, UK.

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What To Make Of The SEC's Warnings And Recommendations For ESG Investing. "May has been a busy month for environmental, social, and governance (ESG) ratings and disclosure at the US asset management industry's top regulator, the Securities and Exchange Commission (SEC) between Chairman Jay Clayton's warning yesterday on ESG ratings and a recommendation earlier this month for ESG disclosures. This is due in part to the growth in sustainable investing."

[COMMENTARY] I thought the Trump administration was about de-regulation? Is the SEC (whose head is appointed with Trump's approval) about to impose significant regulation of ESG funds and investments?
What To Make Of The SEC's Warnings And Recommendations For ESG Investing, by Bhakti Mirchandani, May 29, 2020, Forbes, USA.

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China Crisis Puts Spotlight on Human Rights Risk for ESG Investors. "'The E and the G (risk) might not be changing so much, but the S may be changing with the Hong Kong demonstrations, and the way China has suppressed them, and the silencing of people during the Covid-19 crisis,' says Felix Boudreault, co-founder of Sustainable Market Strategies, which provides ESG investing advice."

[COMMENTARY] It's important that this risk is coming to the fore now. Before this, I was always concerned about the quality of Chinese accounting/audited statements and the quality and reliability of their CSR/ESG reporting!
China Crisis Puts Spotlight on Human Rights Risk for ESG Investors, by Leslie P. Norton, May 29, 2020, Barron's, USA.

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Man vs. machine: A tale of two sustainability ratings systems. "Two companies, Morningstar and Truvalue Labs, represent two distinctly different ways to assess companies on ESG data."

[COMMENTARY] I say there's a need for both and even more variety of opinions. What makes a person a buyer of a stock and the other a seller? More often than not, it's one's assessment of future returns. Hence, diversity of opinion is what stock markets -- and thus ratings -- are all about.
Man vs. machine: A tale of two sustainability ratings systems, by Mark Tulay, May 25, 2020, GreenBiz, USA.

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Just How Good An Investment Is Renewable Energy? New Study Reveals All. "Renewable energy investments are delivering massively better returns than fossil fuels in the U.S., the U.K. and Europe, but despite this the total volume of investment is still nowhere near that required to mitigate climate change.

Those are some of the findings of new research released today by Imperial College London and the International Energy Agency, which analyzed stock market data to determine the rate of return on energy investments over a five- and 10-year period."

[COMMENTARY] As the prices of renewable energy continue to fall, many renewable energy producers could continue to outperform their fossil fuel competitors.
Just How Good An Investment Is Renewable Energy? New Study Reveals All, by David Vetter, May 28, 2020, Forbes, USA.

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It's time for our financial statements to reflect the vital value of nature. "Most companies are in the dark when it comes to accounting for their impacts and dependencies on the environment, and investors struggle to compare what little disclosure there is in a meaningful way."

[COMMENTARY] In due course, all companies will have to account for their use and depletion of natural capital in their financial statements. How can the costs of natural capital be agreeably designated if there aren't markets to determine them?
It's time for our financial statements to reflect the vital value of nature, May 22, 2020, Corporate Knights. Canada.

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S&P Launches ESG Scores Based on 20 Years of Corporate Sustainability Data. "S&P Global has announced the launch of its S&P Global environmental, social, and governance (ESG) Scores with coverage of more than 7,300 companies, representing 95% of global market capitalization."

[COMMENTARY] The competition in ESG ratings continues to heat up -- thus mirroring the global interest in ESG!
S&P Launches ESG Scores Based on 20 Years of Corporate Sustainability Data, by Emily Holbrook, May 18, 2020, Environmental Leader, USA.

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'Generic and hugely mismatched': why ESG data remains insufficient. "[Peregrine Communications] research, which is entitled 'Making a Difference, Marketing a Difference', found a 67% global increase in ESG-related content from asset managers across top national media in the last 12 months. However, 34% of topics disproportionately focus on generic topics."

[COMMENTARY] Company reports need to get to the specifics that are material to their company when providing investor ESG information! Too many companies think they can take the easy route by talking in generalities, which incidentally, usually adds nothing to their stock values.
'Generic and hugely mismatched': why ESG data remains insufficient, by Victoire Barbin Perron, May 12, 2020, Citywire Selector, UK.

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Revealed: the top ESG funds and managers from around the globe. "Citywire research discovered that ESG mirrors of existing funds outperformed their peers during the worst of the March market downturn and the momentum for sustainability-minded funds remains strong. Citywire Selector looked more closely at the strategies of outperforming funds considered sustainable by Morningstar last month, with many offering a tech leaning or an emphasis on specific sub-sectors of the market."

[COMMENTARY] This is a good review that most ethical and sustainable investors will want to read.
Revealed: the top ESG funds and managers from around the globe, by Citywire, May 12, 2020, UK.

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T. Rowe Price Report Says ESG Disclosure Issues was #1 Topic Among Worldwide Companies in 2019. "The company said that the rising risks associated with climate change will impact virtually its entire universe of portfolio holdings to varying degrees. Because of this, climate change alongside other ESG factors is being increasingly factored into analysts' evaluation of company fundamentals."

[COMMENTARY] Many analysts also believe that the COVID-19 pandemic is making companies even more aware of the climate and environmental issues.
T. Rowe Price Report Says ESG Disclosure Issues was #1 Topic Among Worldwide Companies in 2019, by Emily Holbrook, May 11, 2020, Environmental Leader, USA.

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Few links between ESG criteria and executive pay -- report. "Few FTSE All World companies link executive pay to ESG criteria, according to a report from Sustainalytics. The report, 'The State of Pay: Executive Remuneration and ESG Metrics,' is aimed at helping global equity investors assess how ESG criteria are factored into executive compensation, as a topic for corporate engagement."

[COMMENTARY] In an era where the issue of executive compensation is coming to the fore, this is a timely report!
Few links between ESG criteria and executive pay -- report, by Hazel Bradford, April 30, 2020, Pensions&Investments, USA.

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SEC Rule Changes Will Hobble ESG Investors. "The proposed SEC rule changes would raise proposal resubmission thresholds from 3%, 6%, and 10% for those voted on once, twice, or three or more times respectively to 5%, 15%, and 25%... back-testing by the Sustainable Investments Institute contends that under the new rules, 30% of the 614 proposals that went to vote between 2010 and 2019 would not have been eligible for resubmission."

[COMMENTARY] Clearly, this is another way that the SEC-Trump administration, wants to damp down rising shareholder advocacy on sustainability and ESG issues.
SEC Rule Changes Will Hobble ESG Investors, by Mark Tulay, April 24, 2020, Barron's, USA.

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Commentary: Active beats passive in promoting sustainable development. "Genuinely active investment managers, with high active share and more concentrated portfolios, should be better placed to assess these gray areas and therefore make more considered and conscious judgments."

[COMMENTARY] This analyst makes a case for active management for ESG funds.
Commentary: Active beats passive in promoting sustainable development, by Lorna Logan, April 23, 2020, Pensions&Investments, UK.

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Green 50: Top business moves that helped the planet. "There is a lot to reflect on from the last 50 years. Amidst the COVID-19 pandemic, it's worth remembering we have a pretty good track record of fixing planetary-scale problems when we set our minds to it."

[COMMENTARY] Corporate Knights have provided a wonderful offset to our present fears by compiling this list. It serves to remind us of the positive developments that businesses can make to society. Well done Corporate Knights!
Green 50: Top business moves that helped the planet, by Adria Vasil Laura Väyrynen & Toby Heaps, April 20, 2020, Corporate Knights, Canada.

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How Are "Green Bonds" Coping With COVID-19 Turmoil? "The current volatile environment does not seem to be impacting the trend towards sustainable finance -- allocations to green bonds are not being affected at all... NN IP expects the sovereign green bond segment to also benefit from the unprecedented fiscal and monetary policy response."

[COMMENTARY] Enormous amounts of bonds will be issued by governments coping with the COVID-19 crises. And green bonds will likely comprise a major segment of that issuance!
How Are "Green Bonds" Coping With COVID-19 Turmoil? By editorial staff, April 15, 2020, Wealth Briefing, UK.

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Future Returns: Covid-19 Bonds Emerge as a Financing Tool. "'There's been a flurry of activity in the number of social bond issues in response to the pandemic,' says Kevin Ranney, director of sustainable financial solutions at Sustainalytics, an ESG rating and analytics firm. 'I expect that we're going to see a surge, based on what our team is observing and hearing in conversations with underwriters and prospective issuers. In general, the market is really looking for innovation in this area.'"

[COMMENTARY] COVID-19 is giving a tremendous boost to the green bond market and it's likely to greatly expand interest in them.
Future Returns: Covid-19 Bonds Emerge as a Financing Tool, by Karen Hube, April 14, 2020, PENTA, USA.

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Don't Be Fooled by Most ESG Rankings. Focus on Materiality Instead. "The Wall Street Journal recently ran an article about how big technology stocks dominate ESG funds. Tech companies are not usually associated with the big ESG issues like climate change, renewable energy, or diversity. So, are investors being fooled?"

[COMMENTARY] The writer makes a good case for materiality. This article is well worth reading.
Don't Be Fooled by Most ESG Rankings. Focus on Materiality Instead, by Emily Steinbarth, Advisor Perspectives, April 8, 2020, USA.

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LSE sustainable business head: ESG is the highest priority for large investors. "David Harris, group head of sustainable business of the London Stock Exchange, spoke to Finextra TV about how he works to integrate sustainable finance across the capabilities of the group..."

[COMMENTARY] It's good to hear in these uncertain times that stock exchanges like the London Stock Exchange believe so confidently that ESG has the 'highest priority for large investors.'
LSE sustainable business head: ESG is the highest priority for large investors, by Finextra TV, April 6, 2020, UK.

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ESG Stock Resilience Is Paving the Way for a Surge in Popularity. "Most exchange-traded funds focused on companies with above-average marks for environmental, social and governance practices have outperformed this year, according to research from Bloomberg Intelligence. So far in 2020, 59% of U.S. ESG ETFs are doing better than the S&P 500 Index while 60% of European ESG ETFs have beat the MSCI Europe Index."

[COMMENTARY] More evidence of ESG outperfromance! This will likely mean that when the markets recover, ESG, ethical and sustainable companies, may well outperform on the upside.
ESG Stock Resilience Is Paving the Way for a Surge in Popularity, by Claire Ballentine, March 31, 2020, Bloomberg, USA.

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BIS: Reserve Management and Sustainability: The case for Green Bonds? "Central banks are playing an increasingly active role in promoting the move towards a sustainable global economy. One area in which they are thus involved is in guiding attempts to mobilise funds to contribute to the large-scale public sector investment required to achieve the goals of the Paris Agreement.

A key tool in this context is foreign exchange reserves, with green bonds being an increasingly popular investment choice among reserve managers."

[COMMENTARY] Central banks buying green bonds! This could be a major extra push for the growth of green bonds. It's another reason for ethical and sustainable investors to consider them. However, my only caution is that the debt markets in general, are already 'priced for perfection.' Can they really only go higher?
BIS: Reserve Management and Sustainability: The case for Green Bonds? by Ingo Fender, Mike McMorrow, Vahe Sahakyan and Omar Zulaica, March 30, 2020, BIS Working Papers #849, Switzerland.

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UBS Says Investors Should Prefer Green Bonds Over Regular Debt. "Sustainable bonds are a 'defensive opportunity' that credit investors should favor over non-green, investment-grade corporate notes, said UBS Global Wealth's head of credit, Thomas Wacker."

[COMMENTARY] For similar reasons as to why ESG equity funds are outperforming conventional funds, UBS says favour green bonds over their conventional counterparts.
https://www.bloomberg.com/news/articles/2020-03-30/ubs-says-investors-should-prefer-green-bonds-over-regular-debt, by David Caleb Mutua, March 30, 2020, Bloomberg Green, USA.

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The ESG Fund Universe Is Rapidly Expanding. "Record flows, strong performance, and other takeaways from the 2019 Sustainable Funds U.S. Landscape Report."

[COMMENTARY] Jon Hale describes the situation for 2019 and early 2020. With the downdraft in the markets of the past two weeks, it remains to be seen how ESG funds perform going forward. However, early indications are that ESG funds are doing better than their non-ESG brethren.
The ESG Fund Universe Is Rapidly Expanding, by Jon Hale, March 19, 2020, Morningstar, USA.

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'FTSE companies urgently need to raise their game on CO2 reporting'. "Alexia Perversi and Andrew Jones of Mazars say a recent study by the auditing firm casts huge doubt on the credibility and utility of carbon disclosures in year-end reports."

[COMMENTARY] The researchers' main complaint is the non-standardized way the data is displayed as well as the data's utility to understanding how the data might affect a company's operations.
'FTSE companies urgently need to raise their game on CO2 reporting', by Alexia Perversi, March 18, 2020, Ethical Corporation, UK.

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Point of No Returns. "A ranking of 75 of the world's largest asset managers' approaches to responsible investment."

[COMMENTARY] Provides an insightful ranking. The five given an 'A' grade are RobecoSam, BNP Paribas Asset Management, Legal & General Investment Management, APG Asset Management, and Aviva Investors.
Point of No Returns, by ShareAction staff, March 2020, UK.

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ESG Study: How Institutional Investors Embrace Responsible Investing. "Franklin Templeton commissioned a comprehensive study across 21 markets, to see the extent of how responsible investing is incorporated into investment decisions. We highlight four themes to track the way asset owners are adopting responsible investing and ESG considerations over time."

[COMMENTARY] It's a really interesting read for all investors.
ESG Study: How Institutional Investors Embrace Responsible Investing, by Team of Franklin Templeton Investments, March 5, 2020, Advisor Perspectives, USA.

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Swiss bank report queries better returns for ESG investments. "ACCORDING to the latest study from Credit Suisse's in-house think tank the jury is still out on whether ESG and sustainable investing really outstrips traditional investment offerings.

Published by the Credit Suisse Research Institute, in collaboration with London Business School and Cambridge University professors, the 2020 edition of the Credit Suisse Global Investment Returns Yearbook features a dedicated chapter on ESG investing."

[COMMENTARY] It's hard to argue with the credibility of the researchers involved. It will take other prestigious individuals and entities to argue the case for ESG!
Swiss bank report queries better returns for ESG investments, by Tom King, March 2, 2020, The Asset ESG Forum, Asia.

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ESG Funds Might Soon Have to Prove to SEC They're Actually ESG. "The Securities and Exchange Commission wants to know whether money managers are engaging in false advertising by saying funds are devoted to doing good when the reality is much murkier."

[COMMENTARY] I think the SEC is just trying to make ESG funds look bad so as to support carbon-intensive industries.
ESG Funds Might Soon Have to Prove to SEC They're Actually ESG, by Benjamin Bain, March 2, 2020, Bloomberg Green, USA.

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