Ethical Investing News/Commentaries:
Commentaries by Ron
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Socially Responsible Investor (SRI) Groups Ask Obama
To Create ’Office for Innovation in Corporate Social
"A dynamic Office for Innovation in CSR will help
ensure that the federal government not only leads
and assists the business sector to integrate best
practices in governance, transparency and management
of environmental and social issues, but also that it
incorporates this focus on sustainability throughout
its own agencies.” This is a great idea,
especially when we see the need for enhanced ethics
and transparency in business and government. Obama
has said himself that he favours such goals.
Obama Administration Urged by Over 50 U.S., Overseas
Leaders to Create “Office for Innovation in
Corporate Social Responsibility,”
January 29, 2009, Social Investment
At Davos, UN
& GRI Launch New ESG Reporting Guidelines For
"A set of best-practice sustainability reporting
criteria for financial services companies has been
launched at a high-level dinner at the World
Economic Forum in Davos by the United Nations and
the Global Reporting Initiative (GRI)... hosted by
Innovest, the SRI research company, expected [were]
Lord Nicholas Stern, author of the Stern report,
Joseph Stiglitz, the Nobel Laureate Economist,
George Soros, the financier and philanthropist."
This initiative is worth watching as it integrates
and represents views of those devoted to ESG as well
as established financial interests.
Davos launch of UN-backed ESG reporting guidelines
for financial services companies, by Hugh
Wheelan, January 29, 2009, Responsible Investor,
World Economic Forum Report: US $515 Billion needed
in Green Investments.
"New Energy Finance, which collaborated with the
World Economic Forum on the report, warns that
unless at least US$ 515 billion per annum is
invested in clean energy between now and 2030,
carbon emissions will reach a level deemed
unsustainable by scientists, causing temperatures to
rise by two degrees globally... Clean energy
investments increased from around US$ 30 billion in
2004 to over US$ 140 billion by 2008... Developing
countries attracted 23% (US$ 26 billion) of asset
financing in 2007, compared to 13% (US$ 1.8 billion)
in 2004." Clearly, with so many reports like
this coming-out in rapid-fire succession, the world
is getting the green message.
World Economic Forum Report: US $ 515 Billion needed
in Green Investments, January 29, 2009, World
economic Forum, Switzerland.
At Davos, IFC,
United Nations Global Compact & Swiss Government
Issue Report Urging Financial Industry To
Incorporate ESG Issues
In Investing Decisions.
"Ambassador Thomas Greminger, Head of the
Political Affairs Division IV, Federal Department of
Foreign Affairs (Switzerland), said, ’Better ESG
performance and integration into the management
practices requires not only market incentives but
standards set by regulation [of]... environmental
and social risk assessments and reporting as well as
transparency.’" Well done, I have been calling
for government action like this for years. To see
more on this point, read my editorial,
We Need Mandatory Corporate Social Responsibility
Report Urges Financial Industry to Integrate
Sustainable Investing Practices, January 28,
2009, press release, UN Global Compact & Swiss
Department of Foreign Affairs, Switzerland.
Investors Perspective, F&C Looks At Corporate
Governance In Emerging Markets.
Investing in emerging markets poses many
difficulties for ethical investors, including poor
laws, lack of enforcement, and frequent use of
bribes, amongst other impediments. This is a useful
overview of the subject.
Research Review: Corporate Governance in Emerging
Markets: An Investor’s Roadmap, December 2008,
F&C Investments, UK.
Knights Publishes Its Canadian 2009 Responsible
Canadian ethical investors, particularly, will want
to read this guide.
2009 Responsible Investing Guide, February 2009,
Corporate Knights, Canada.
& Textron Inc. Dumped & Blacklisted By Norway’s Oil
Barrick was excluded over concerns about the
environmental impact of its mines, while Textron was
blacklisted because its defence unit makes cluster
bombs, Finance Minister Kristin Halvorsen said."
This massive $300 billion sovereign wealth fund has
been a leader in applying environmental, social and
governance (ESG) strategies to its holdings.
Norway’s oil fund dumps Barrick, by Doug
Mellgren, January 30, 2009, The Globe & Mail,
Releases Its Canadian 08 Key Proxy Vote Survey.
"The 2008 survey results suggest a slight, but
encouraging, increase in the number of pension plans
that are giving their proxy-voting agents direction
on how to vote their proxies." Getting pension
plan and other institutional money managers to
actively engage in proxy voting is important for
ethical corporate governance. Considering our
present circumstances, the need for this is
08 Key Proxy Vote Survey, January 2009, SHARE,
Considering Legislation On Nanotechnology.
"The U.S. House of Representatives Committee on
Science and Technology is considering legislation
that will strengthen federal efforts to learn more
about the potential environmental, health and safety
risks posed by engineered nanomaterials, as well as
the ethical and societal aspects of the technology."
This is not only welcome, but action should have
been taken prior to now on this exceptionally
important topic. The risks, and some might say the
gains of this technology, are as great as in
biotech, GMOs, etc.
U.S. research offers chance to address
nanotechnology social, ethical concerns, January
27, 2008, Nanowerk, USA. To see the
comprehensive new report on this subject, click
Nanotechnology: the social and ethical issues,
by Ronald Sandler, USA.
Management Survey Found 71% Of US Wealthy Have
Socially Responsible & Green Investments.
"The survey of 1,263 wealthy Americans, all of
whom had at least $500,000 in investable assets,
revealed that 71 percent have socially responsible
and green investments in their portfolio, while 57
percent say they have up to 25 percent of their
portfolio in such investments, while nine percent
have between 25-50 percent. One quarter (25 percent)
believe that green investments will gain in 2009."
These are impressive figures. Increasingly, stocks
that are good to invest in could have a green
colour. Obama’s new stimulus package will also help
in this regard.
Wealthy Americans Go Green: Most Support
Environmentally-Friendly Choices and Policies,
January 29, 2009, The Energy Daily, USA.
Receive World Environment Center′s (WEC)
Twenty-Fifth Annual Gold Medal for International
Corporate Achievement in Sustainable Development.
"... for implementing strategic business
initiatives in the high impact areas of water
stewardship, sustainable packaging, energy
management and climate protection."
The Coca-Cola Company to Receive 2009 World
Environment Center Gold Medal for International
Corporate Achievement in Sustainable Development,
January 29, 2009, BevNet.com, USA.
Company: It’s Possible To Contain Increases In
Global Warming To Below 2 Degrees Celsius Until
"McKinsey & Company, supported by ten leading
global companies and organisations – The Carbon
Trust, ClimateWorks, Enel, Entergy, Holcim,
Honeywell, Shell, Vattenfall, Volvo, WWF – has
assessed more than 200 GHG abatement opportunities
across 10 major sectors and 21 world regions between
now and 2030." This is a monumental study and is
important reading for investors. It will help you
think about where you want to place your long-term
Pathways to a low carbon economy, January 26,
2009, McKinsey & Company, USA.
Publishes Its Updated Ethical Rankings List Of
"Geneva-based Covalence is publishing today its
annual ethical ranking covering an enlarged universe
of 541 multinationals within 18 sectors and based on
a renovated calculation methodology combining
popularity and diversified performance... Leaders
are HSBC, Intel, and Unilever... The following
companies enter the top 10: Xerox (5th), General
Electric (8th), and DuPont (10th), replacing IBM
(14th), Hewlett-Packard (30th), and Toyota (34th)."
It is always useful for ethical investors to review
Covalence Ethical Ranking 2008, January 2009,
Covalence SA, Geneva, Switzerland.
US Alternative Energy Industry
Will Find It Difficult To Meet Obama’s Objectives.
"Obama′s goal to double U.S. renewable-energy by
2012 may take years longer because even fully funded
projects take at least three years to develop.
[Quote by Clayt Tabor, finance director at Midwest
Wind Finance, a wind-farm developer in Minneapolis].
See this article for a good overview of the
headwinds Obama’s alternative energy objectives
Obama Green-Energy Dream May Lag Development Pace of
Bush Years, by Jim Efstathiou Jr., January 26,
US Poll Finds
Investor Interest In Green Investments Undiminished.
"About 78%, said they believed that there will be
more policies encouraging investment in the
environment in the next year than under the Bush
administration and that environmental technology
could be the ’next great American industry’... 48%,
said that it is likely that they will make an
investment this year to capitalize on the
environmental trend... [yet] 85% of the investors
surveyed said that advisers had made no
recommendations to them about environmental
This survey for
Allianz Global Investors demonstrates again a great
disconnect between what investors would like to do
and what most mainstream advisors advise them to do.
Certainly, the advisors fiduciary duty is to show
caution concerning their clients’ investments.
However, by not even discussing green/environmental
investment opportunities with their clients they run
the risk of losing them! (See my editorial,
Advisor: KNOW Your Client. Know their values!)
Mass-affluent investors are still optimistic about
green investing, by Sue Asci, January 21, 2009,
Investment News, USA.
Survey Says Ethics In UK Financial Sector Badly
"Only 2 per cent of the 852 adults questioned
said their bank was ethical, while 4 per cent said
it was trustworthy, and 5 per cent said it was
transparent, according to the study by
communications firm Cohn & Wolfe." It is no
wonder that Triodos and other socially conscious
banks are gaining in the UK when public perception
of the mainstream financial industry is so pitiful.
Lenders fail to pass on mortgage interest rate cuts,
by Myra Butterworth, January 23, 2009,
And Credit Suisse, Agree To ’Say On Pay’
"The Ethos Foundation for Sustainable Development
in Geneva says that food giant Nestlé and the
country’s two big banks, UBS and Credit Suisse, have
agreed to an advisory vote on management
remuneration." We are beginning to see the
glimmer of a more ethical business environment. One
aspect of this is increasing shareholder engagement
in overseeing corporate activities, such as ’say on
pay.’ Well done Ethos Foundation.
Major firms agree to vote on top salaries,
January 23, 2009, by Robert Brookes, Swissinfo,
On Factory Labour Standards In Emerging Markets From
An Investors’ Perspective.
A fascinating read for ethical and socially
responsible investors. One key point that many
economists have also stressed is that it will be
rising incomes from factory workers in the
developing world who will help lead the world to
greater future prosperity.
Factory Labour Standards in Emerging Markets: An
Investor Perspective, January 2009, by F&C
Investments. Courtesy of Responsible Investor,
Views On How
Downturn Is Affecting Corporate Social
Responsibility (CSR) & Green Corporate Behaviour.
FORTUNE magazine describes how Intel and
other companies continue to grow their CSR
activities despite the downturn. Meanwhile, a Booze
& Company survey reveals, "... that 40% of
respondents expect ’green’ and other corporate
social responsibility initiatives to significantly
slow due to the downturn. The pullback will be
especially pronounced in transportation and energy
industries, with, respectively, 51% and 47% of
respondents in those industries saying CSR agendas
will be delayed."
Studies show that carefully thought-out and
implemented CSR/green initiatives can reduce costs
and/or become revenue generators for companies.
Thus, this is not the time to cut them. Ethical
investors might want to see how companies in their
portfolios are reacting in this recession in regards
to their CSR/green activities.
Surprising survivors: Corporate do-gooders, by
Lawrence Delevingne, January 20, 2009, FORTUNE,
Why Companies Are Making the Wrong Moves,
January 20, 2009, press release, Booze & Company,
Launches First Islamic Bond Programme. -
"Singapore launched its first Islamic bond
programme, worth a total of S$200 million ($134
million), to promote Islamic finance in Southeast
Asia’s financial capital. The bonds, also known as
sukuk, are backed by the sale and lease-back of real
estate assets, or Al-Ijarah structured, and will be
treated at par with government securities." This
is the first such deal by a non-Muslim majority
country. Singapore hopes to attract petro-dollars
from the Gulf States, where Islamic finance is
growing fast. When companies issue such bonds, they
do not pay interest. Instead, bondholders receive a
share of company profits.
Singapore launches first Islamic bond plan,
January 19, 2009, Reuters, Singapore.
Concerns Regarding Investment Analysts’ Research.
If you read analysts investment reports or studies,
you should read this! It cites inadequacy and bias
in many investment studies.
For commentary on the report, see
Three simple steps to improve sell-side broker
research, by Hugh Wheelan, January 19, 2009,
Responsible Investor, UK. To download actual
Sell side research, three modest reform proposals,
by Michael Mainelli, Jamie Stevenson and Raj
Investment Forum (SIO) Asks President-Elect Obama
For Securities’ Industry Policy Changes.
"Needed Changes: Expanded Shareholder Access to
Ballot, Clarity on Duties of Fiduciaries, Expanded
ESG Reporting; New Direction Sought in SEC Rules and
Practices." The proposed changes make sense to
me, though ESG reporting should not only be
expanded, but should be made mandatory.
SIF Urges President-Elect Obama to Lead on Policies
Advancing Shareholder Rights, Increased Disclosure,
and Corporate Responsibility, January 15, 2009,
press release, Social Investment Forum, USA.
Resolutions Concerning Nanotechnology Use And
Policies Growing. -
"... companies that use nanomaterials will
increasingly be asked by shareholders to disclose
the presence of nanomaterials in their personal care
and food products and to describe their policies for
dealing with nanomaterials. Socially responsible
investment firms and advocacy organizations are
targeting such companies, and resolutions have been
filed for the 2009 annual meetings of Avon Products,
Kellogg Company, Kraft Foods, and McDonald’s
For those concerned about the environment, the use
of nanotechnologies is going to be a huge issue in
the years ahead. Though touted as potentially
creating a new industrial revolution benefiting the
whole world, its risks to humanity could be
Increase Expected in Shareholder Resolutions Urging
Disclosure of Nanomaterials, Policies, by Pat
Rizzuto, January 15, 2009, Meridian Institute, USA.
Increasing Loans In 2009 Over 2008.
"While the rest of the banking sector is cutting
credit lines and rebuilding balance sheets, Triodos
Bank in the UK expects 2009 to be a record year for
its lending to environmental businesses." This
is an example for the whole banking industry. Behave
ethically! Ethical and socially conscious
banks are likely to see big gains in business in the
Triodos Bank bucks trend with lending expansion,
January 15, 2009, Environmental Finance, UK.
Socially responsible Investing Funds Outselling
Mainstream Funds. -
"Total sales for the SRI sector for November were
€784.2m ($1bn) to take the overall value of the
sector to €35.3bn. Sales of mainstream equity funds
totalled €588.7m over the same period." Is this
a sign that the European investing public is taking
ethics and the environment more seriously when
investing? It will be interesting to see if this
trend continues and replicated elsewhere.
SRI funds beat mainstream equity fund sales, by
Hugh Wheelan, January 16, 2009, Responsible
Coalition With $3 Trillion In Assets Asks 130 Major
Listed Companies To Subscribe To Ten Principles Of
"Twenty-five of the companies have been praised
by the investors for producing notably high-quality
COPs [Communication on Progress], including Air
France and Starbucks, while over 100 companies
were identified as laggards by the investors for
failing to submit a COP this year." Submitting a
COP is mandatory for all members of the UN Global
Compact. Clearly, many of them are lagging in their
COP reporting and institutional investors want
action from them.
Companies sign-up to the UN Global Compact because
they see the advantages of using corporate social
responsibility (CSR). But their lack of compliance
by not completing the COP reports shows the
necessity for governments everywhere to legislate
CSR reporting. You might find my editorial,
We Need Mandatory Corporate Social Responsibility
(CSR) Reporting interesting in this regard.
Investors Give New Twist to Good COP/Bad COP,
United Nations Global Compact, January 12, 2009, UK.
Companies For Their Corporate Social Responsibility
"The 13 award-winning enterprises were: China
Construction Bank, Bank of China, China Datang
Corporation, China Steel Corporation, Lenovo, China
Ping An Insurance, Total (China), Volkswagen
(China), Du Pont (China), Hitachi (China), Amway
(China), Philips (China), and Phoenix Satellite
Television.. The forum was jointly sponsored by
China Newsweek and the Red Cross Society of China...
The companies were selected after a three stage
process: a public vote, a media forum, and an expert
appraisal based on a corporate social responsibility
China seems to be making real headway with CSR as
the country opens-up to the world. Note that some of
these companies are subsidiaries of multi-nationals.
Firms honored for social responsibility, by Wang
Zhiyong, January 11, 2009, China.org.cn, China.
For Exclusion Of PetroChina From UN Global Compact.
"The [eighty] NGOs say PetroChina, the publicly
traded arm of China National Petroleum Corporation (CNPC),
is Sudan′s largest oil industry partner and has
financial links to the regime perpetuating the
six-year humanitarian crisis in Darfur which many
consider to be genocide." I suspect that the new
global ethical business environment that is taking
shape will put PetroChina and other companies like
it under much closer scrutiny.
NGOs from 25 countries demand PetroChina’s exclusion
from United Nations Global Compact, January 8,
2009, Responsible Investor, UK. Read group’s
letter calling for the exclusion. Also, visit
Investors Against Genocide.
Mandates Corporate Social Responsibility Reporting
(CSR) For All Large Public & Private Companies By
For a full appreciation of what’s going-on and for
my views in this area, again, see
We Need Mandatory Corporate Social Responsibility
(CSR) Reporting. Companies too, are realizing
the advantages of using corporate social
responsibility programmes and initiatives in
enhancing customer loyalty, long-term financial
performance, and potentially higher stock prices.
Mandatory CSR Reporting for Denmark’s Largest
Companies, January 8, 2009, Greenbiz.com,
US Hybrid Car
Sales Down 8% In 2008 From 2007 And 42.8% Lower In
December Over Year Ago.
Lower gas prices, the recession, and credit
tightening all played a part in declining sales of
hybrids. I suspect gas prices might rise in 2009 and
may thus make hybrids more attractive relative to
the gas guzzlers.
Ouch! Sales of US Hybrid Car Sales Down 42.8% in
December, by Michael Graham Richard, CARS &
TRANSPORTATION on Treehugger.com, USA.
$300 Billion Pension Fund Ordered To Review Holdings
In Palestinian Territories In Light Of Israeli-Hamas
"The ethical guidelines prohibit the fund from
investing in companies where there is an
unacceptable risk of contributing to serious or
systematic abuses of human rights or serious
violations of individuals’ rights in war or
conflict... At the end of 2007, the fund owned
stocks in 12 Israeli companies and bonds from three
Israeli issuers." It remains to be seen if they
find any companies in the region in which they have
holdings violated their guidelines. Ethical
investors investing in companies who may have
activities in war or terrorist conflicts always have
to be alert as to whether their own values are being
compromised by holding such investments. Investors
also have to be concerned of the potential effects
on stock prices of affected companies.
Norway oil fund’s Israel holdings under scrutiny,
by John Acher, Reuters, Norway.
US Green Tech
Venture Capital Declines to $2.5 Billion From $2.9
Billion Between Q3 & Q4, 2008.
Evidence of a slowdown in green tech venture capital
is mounting. However, with the Obama administration
set to increase spending on green energy/tech, it is
possible that this sector will not be as badly hit
as many others will be in 2009.
A Record Year in Greentech Investing — $7.7B in
2008, by Eric Wesoff, January 5, 2009,
Apple Not So Green.
"The broadside from Dell, which claimed its
operations reached carbon-neutral status about six
months ago, was launched by Bob Pearson,
vice-president, in a company blog. In the blog he
accused Apple of using environmentalism as a PR
stunt." Furthermore, this article says, "A
survey by Gartner, the IT analysts and intelligence
group, places the development of green policies in
the top three of executives’ revenue-raising
priorities for 2009." Green is still in despite
Apple ’not green enough’, says Dell, by Bill
McGee, January 4, 2009, Scotland on Sunday,
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