E-newsletter of Investing for the Soul June 29, 2011
Top ethical investing news for June 2011
Links may only be valid a limited time Commentaries by Ron Robins
Twitter allows me to cover more--and breaking news--to help you do better!
Stronger CSR Reports Lead To Better Companies.
- [COMMENTARY] "We [CSRHUB] recently
compared the perceived CSR performance of 630 corporations who have
committed to the Global Reporting Initiative (GRI) reporting standard
with the perceived CSR performance of more than 4,000 corporations who
have not, based on scores from CSRHUB’s CSR ratings system. Not only did
we find that GRI-committed companies have higher overall ratings in the
CSRHUB system, but they also receive more attention from socially
responsible investment (SRI) firms and receive more awards from NGOs and
activist groups." Of course what ethical investors would want to
know is what affect on stock prices does CSR reporting have?
Swiss Bank Pictet Finds SRI Not A Shield Against Stock Market Downturns. - [COMMENTARY] "During the crisis, SRI equity portfolios performed in line with the broad market. The fact that the SRI community warned against some of the methods that caused havoc, such as dysfunctional incentives, unethical business conduct and bad governance, did not make its portfolios less risky, says the firm. The study found that for this type of investment to thrive it needs to look into the sustainability of companies′ financial fundamentals."
The finding of Pictet’s research is not new to me--though
many ethical investors might be surprised and perhaps concerned by its
findings. They should not be. Investing according to our own ethical or
personal values also allows us to feel that we are doing the right thing
while it also benefits our personal and spiritual development.
Eurosif Reports On Aerospace & Defence Industries. - [COMMENTARY] "One of the most secretive sectors in which corruption and bribery issues are likely, the defence sector deals with flattening military budgets and controversial weapon international legislation to take effect in 2012... Research was provided by Sustainalytics, and the project was supervised by a steering committee of representatives from CM-CIC Asset Management, ECPI and Edmond de Rothschild Asset Management... With the EU Emission Trading Scheme taking effect on January 1, 2012, the report finds that the demand for alternative fuels is expected to grow in the coming years."
Yes, I have met ethical investors who invest in the
defence industry! And many ethical investors do invest in the aerospace
sector. Eurosif produces another very useful report for those interested
in these industries.
MSCI Launches New ESG Tool For Asset Managers. - [COMMENTARY] "The ESG Impact Monitor, according to the company, ’allows users to monitor a company’s significant social and environmental impacts and its ability to manage those impacts.’ At present, the ESG Impact Monitor covers companies listed on the MSCI World index, but will be expanded to include all companies in the MSCI Emerging Markets Index in September. Coverage of small-cap companies in several regions of the world will follow."
Continuing, "[The] Business Involvement Screening Research ’allows investors to identify all global publicly-traded companies involved in activities such as the production of alcohol or tobacco products, or those that violate religious screening mandates,’ MSCI stated. ’It also allows investors to divest from companies that violate legislative mandates that prohibit investment in companies that manufacture controversial weapons such as cluster bombs and landmines or operate in countries such as Sudan and Iran.’"
These appear to be
exciting new tools for asset managers/brokers etc.
Corporate Sustainability Reporting Rises In China. - [COMMENTARY] "More Chinese companies are producing sustainability reports, according to standard-setter the Global Reporting Initiative (GRI), driven largely by regulation and stock exchange listing requirements. Marjolein Bajhuis, Amsterdam-based director of communications and network relations for the GRI, said the number of sustainability reports produced in China has risen from 600 in 2009 to about 700 in 2010. Of these, around 60 applied the GRI′s guidelines. Chinese firms are increasingly required to produce such reports by regulation – including the listing requirements of the Shanghai Stock Exchange."
It is wonderful that Chinese companies are finally getting
on board with regards to sustainability reporting. Since so few use the
GRI though, I’m wondrous about their quality.
Social Investment Forum Changes Name to US SIF. - [COMMENTARY] "US SIF CEO Lisa Woll said: ’Our new name -- US SIF: The Forum for Sustainable and Responsible Investment – reflects an important evolution. The socially responsible and sustainable investing space has shifted considerably over the past 20 plus years since the organization was founded...’ Michael Lent, US SIF Board Chair and CIO of Veris Wealth Partners, added: ’US SIF is the umbrella organization for responsible, sustainable, socially responsible, ethical, values based, mission, green, impact and other double- and triple-bottom line investors. We believe our new name is a better fit for a rapidly evolving and growing field that has changed considerably since the days when the Social Investment Forum was first named.’"
The US SIF is probably the largest such organization in
the world. You can also read what Al Gore has to say at the
organization’s DC conference.
Ceres, Tellus Unveil Global Initiative for a Standardized, Comprehensive Corporate Sustainability Rating. - [COMMENTARY] "Founding partners of the new coalition, the Global Initiative for Sustainability Ratings, include leading investors and businesses like TIAA-CREF, the Calvert Group and Bloomberg. The initiative will be modeled on a successful Ceres/Tellus-launched program, the Global Reporting Initiative, that has become the de facto global standard used by 2,000 companies worldwide for corporate reporting on environmental, social and economic performance."
Many in the
SRI-ethical investing industry have long advocated for such a uniform
measure. I believe it would be good to achieve, particularly to see if
such a comprehensive rating is really viable, but I am unsure of its
value from an analyst’s perspective.
Canada’s Maclean’s Magazine & Jantzi-Sustainalytics
Rank Canada’s Top 50 Socially Responsible Companies. -
[COMMENTARY] "Each of the companies featured is either
Canadian-listed or a wholly owned subsidiary of a foreign-listed company
with significant operations or brand presence in Canada. Each of the
companies has a significant market capitalization or brand presence in
Canada and is featured on at least one of the following lists: the ROB
Top 1000, the ROB Top 350, or Interbrand′s Best Canadian or Best Global
Brands lists. Given that Canadian subsidiaries of foreign companies are
inextricably linked to their parent companies, the evaluation is based
on the performance of the foreign corporate entities." This is
another highly valuable analysis and ranking of Canadian companies
leading in socially responsibility.
Most Firms Failing In Water Management. - [COMMENTARY] "A vanishingly small proportion of large companies are adequately managing risks posed by water shortages, drought and pollution, according to research by EIRIS. The London-based research house specialising in environmental, social and governance (ESG) issues surveyed 3,000 large companies globally identified as exposed to water risks. Only 0.22% were adequately managing these risks – all of which were in the chemicals and pharmaceuticals sectors."
The news contained in this report is shocking. Ethical
investors might want to encourage the companies they invest in to take a
more proactive stance on water management. They can stress possible
benefits to the company’s bottom line--as well as investor appeal--that
monitoring and reducing water usage may have.
Large Investors Controlling $1trn In Assets Request
Russell 1000 Companies To Integrate Sustainability. -
[COMMENTARY] "Citing global climate change, resource
constraints and growing population pressures, more than two dozen major
institutional investors, collectively managing $1 trillion in assets,
have asked the Russell 1000 companies in a jointly-signed letter to
actively embrace the ’new reality’ of so-called ESG risks –
environmental, social and governance – in both their actions and
required investor disclosures." As we see here and from all that we
know about the benefits of integrating sustainability into corporate
activities, it is time that major asset managers demanded companies
integrate sustainability into their strategic plans.
UBS, Citi Outperform Their Reputations, Study Finds.
- [COMMENTARY] "Google, Apple and Honda
have earned reputations that far exceed their actual environmental,
social and governance (ESG) performance, while UBS and Citi don′t get
enough credit for their sustainability initiatives, according to a
report by Brandlogic and CRD Analytics." In regard to brand
reputation, it seems that producing useful and attractive high demand
products overrides ESG efforts. To be real winners, companies have to do
both effectively! For ethical investors, it is always useful to look at
brand reputations. They can be helpful in determining your investment
The 2011 Best 50 Corporate Citizens in Canada.
- [COMMENTARY] "The prize of clean
capitalism is the space race of the next decade. With Canada′s
unparalleled combination of per-capita natural capital assets and stable
pots of rock-solid big money institutions—and the 2011 Best 50 Corporate
Citizens leading the way—we are uniquely poised to pioneer prosperous
models that will enable us and our civilization to win this race against
the clock. We have nothing to lose but our chains to a fairy tale whose
time is up." This report by Corporate Knights is worth reading for
anyone interested in investing in Canada.
$1.2trn Investor Group Asking For Alberta Oil Sands Monitoring. - [COMMENTARY] "A group of 26 leading global institutional investors with a combined heft of $1.2trn (€820m) in assets have entered the debate about a new oil sands environmental monitoring scheme in Alberta, Canada. The group, led by NEI Investments, has written to the co-chairs of the new Alberta Environmental Monitoring Panel, Howard Tennant and Hal Kvisle. They say the system should be ’beyond reproach.’”
What they are calling for is right and should have been
done years ago.
Environmental Investment Organisation (EIO) Launches Environmental Tracking Index Series. - [COMMENTARY] "The Environmental Tracking Index Series is a hybrid between traditional ’socially responsible investment’ and passive index models... [it ranks companies by carbon emissions] intensity and transparency."
One mustn’t be misled here to think that the companies
ranked most highly have necessarily the lowest relative carbon
footprints. A company might have a very low carbon footprint, but not
report it, and thus be ranked lower. Nonetheless, it is an interesting
idea and could encourage companies to both reduce and report on their
’Fracking’ Becoming Big Issue At Oil & Gas Annual General Meetings. - [COMMENTARY] "Resolutions addressing hydraulic fracturing won substantial shareowner support at the annual meetings of major oil and gas companies last week. The resolutions, which call for increased transparency and risk management in an increasingly widespread drilling practice that has raised serious environmental concerns, gained 41 percent of the votes of shareowners at Chevron and 28 percent at ExxonMobil."
Fracking and understanding its associated environmental
problems have to be dealt with. Aside from the health risks, I’m
increasingly concerned about disturbing the rock formations and the
possibility fracking might cause earthquakes, as a recent report from
the UK could indicate.
SOP’s Judyth Piazza Chats With Ron Robins, June 1, 2011. I discuss the importance of personal values, ethics and spiritual development, for a successful career and life. To listen, click here.
Latest Commentaries by Ron Robins on Alrroya.com
Americans Say it′s Still a Recession—or Worse! June 1, 2011.
The Economic Statistic US Elites Keep ‘Hush-Hush,′ June 6, 2011.
Sustainability Profits Companies, June 14, 2011.
Ethics and Socially Responsible Investment: A Philosophical Approach, by Bill Ransome and Charles Sampford, Ashgate Publishing 2011.
Socially Responsible Investment in a Global Environment, by Hung-Gay Fung, Sheryl A. Law, and Jot Yau, Edward Elgar Pub 2011. (This is an e-book. PDF 12MB)
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Disclaimer: Neither The Soul Investor nor Ron Robins make investment recommendations. Nothing in this newsletter should be interpreted as a recommendation or solicitation to buy/sell any securities or investments. The Soul Investor is a source of general information and resources for spiritual investing, ethical investing, and socially responsible investing (SRI). Investors should consider their actions thoroughly and consult their professional advisers prior to taking any investment action. The Soul Investor does not necessarily agree with the opinions expressed in articles in its newsletter or offered on the web pages to which it might be linked. Such opinions are the responsibility of the writers themselves. Furthermore, The Soul Investor does not offer or provide any warranties, representations, guarantees, implied or otherwise, as to the accuracy, legality, copyright compliance, timeliness or usefulness of the information, materials or services in this e-newsletter, or other sites, to which it might be linked. Also, Mr. Ron Robins is not an investment advisor, nor is he licensed with any professional investment related body, and thus is not able to, nor does he make, any investment recommendations.
The Soul Investor is a publication of Investing for the Soul, a registered business name in Ontario, Canada. Copyright © 2011 Ron Robins. All rights reserved.