E-newsletter of Investing for the Soul July 30, 2011
Top ethical investing news for July 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!
Toyota, 3M, Siemens Top List Of Best Green Brands.
- [COMMENTARY] "At the top of a list that focuses on
both are Toyota, 3M and Siemens. Each of these firms have managed to
align how they walk the green walk with how they talk the talk,
according to ’Best Global Green Brands 2011,’ the inaugural ranking from
consultancy Interbrand." What is really interesting and probably
unique about this study is that it linked a company’s green reputation
with its real green/sustainability performance. The rankings are
interesting, but probably unremarkable to those in the SRI ratings
Sustainability Tied To Mining Companies Shareholder Value, Says Report. - [COMMENTARY] "A new study by Sustainalytics finds strong links between sustainability performance and shareholder value for companies in the mining sector. Sustainability and Materiality in the Natural Resource Sector: Mining looks at whether environmental and social practices impact competitiveness for companies within the mining sector. The study finds that effective management in four key areas of sustainability was positively linked to shareholder value."
This is the kind of study that needs to be done, most especially, in the
resource sector. Ethical investors who have avoided mining stocks might
possibly reconsider their views after reviewing this report.
Country’s Sustainability Linked To Their Sovereign Bonds’
Performance. - [COMMENTARY] "The
performance of government bonds issued by countries living within their
ecological means has been better than those pursuing unsustainable
policies, according to research by Bank Sarasin." This is intriguing
information for ethical investors! How many investors have considered a
country’s sustainability in reference to their bonds?
Nasdaq To Launch Water Based Equity Indexes. -
[COMMENTARY] "The Nasdaq OMX Global Water Index will
track companies worldwide that produce products that conserve and purify
water. A separate index, the Nasdaq OMX US Water Index, will do the same
for US-listed water sector companies." These indexes are timely and
likely to be widely followed by environmentally oriented investors.
France Requiring Large Companies To Report Their Carbon Footprint & Planned Carbon Reduction Measures. - [COMMENTARY] "Originally outlined in the 2009 Grenelle 2 bill, the GHG reporting law requires companies with more than 500 employees to disclose their carbon footprint and outline emission reduction measures by 31 December 2012. The new piece of legislation will support France′s long-term goal of achieving a 75% reduction in GHG emissions below 1990 levels by 2050."
Congratulations to France on this move! Hopefully, all countries will
follow France’s lead. Such disclosure is important to investors too, for
they need to know how exposed to the problems--both financially and
environmentally--the companies they invest in are to carbon related
Is The US Chamber of Commerce A Friend Or Foe To Ethical Investors? - [COMMENTARY] Two items crossed my screen today on the Chamber. One indicated the Chamber’s successful court challenge to abolish the proposed SEC rule that would have given investors the power to nominate individuals to company boards--clearly an unfriendly act towards ethical investors. See US court overturns proxy-access rule, by Raquel Pichardo-Allison, July 25, 2011, Global Pensions, USA.
The other, which is more positive, is that the Chamber is getting a little proactive on corporate sustainability. See 5 Reasons Why the Chamber of Commerce Can Be a Force for Green, by Alex Hahn, July 19, 2011, GreenBiz, USA.
Environmental Protection Agency (EPA) Mandates New Direction For US Utilities. - [COMMENTARY] "New rules on sulphur dioxide (SO2) and nitrogen oxide (NOx) emissions from US power plants are set to drive a substantial shift from coal to natural gas, shutting down coal plants and having a ’significant impact’ on US power, gas and coal markets from next year, according to research from Bank of America-Merrill Lynch (BoAML)."
As the US government is ’missing in action’ on the environmental front,
the US is lucky to have the EPA be its real environmental guardian.
Investors in US utility stocks might want to see how the EPA rulings
could affect companies they are invested in.
A New Trend? Swiss Bank Offers Investors Carbon Offsets For Their
Portfolios. - [COMMENTARY]
"Customers of Swiss bank Julius Bär will be able to calculate the carbon
footprint of their equity portfolio and offset the emissions using
carbon credits, through a service launched this week." This is an
approach that many ethical investors might welcome. It will be
interesting to see if other investment firms begin offering such
Blacklist Of Least Transparent Companies Includes DreamWorks, NASDAQ
and Madison Square Garden. - [COMMENTARY]
"DreamWorks, NASDAQ and Madison Square Garden are
among the well-known American brands that have appeared on a ’black
list’ of companies with poor transparency and corporate citizenship. The
Black List, by Corporate Responsibility magazine, comprises 58 Russell
1000 companies that tie for bottom ranking on these measures."
Companies that hide things need to be exposed. Corporate Responsible
magazine is performing an important service in exposing them.
Study Finds Screening Intensity Has No Effect On Fund Returns, But
Does Effect Risk. - [COMMENTARY]
"... screening intensity has no effect on returns but has a curvilinear
(inverted-U-shaped) effect on risk. This means that funds with the least
amount of screens have lower risk; this risk increases with the number
of screens but then again decreases at high screening intensity. My
findings suggest that the performance debate will continue to go on as
inconclusive." This study adds some new insights into ethical fund
returns and risks, but I prefer meta analysis--that of compiling the
data from many studies--before I would draw any conclusions.
Fossil Fuel Producers’ Stock Valuations At Risk, Says Study. - [COMMENTARY] "The world′s stock markets are over-exposed to fossil fuels, putting investors at risk of a ‘carbon bubble′, according to a report by research group Carbon Tracker Initiative which calls for an overhaul of the way capital markets value risk. The report looks at how fossil fuel reserves held by listed companies are assessed by the market and argues that up to 80% of the world′s fossil fuel reserves will be unusable if average global temperatures are to be limited to a 2°C rise, the level at which scientists believe global warming can be stablised."
This study’s findings are important to investors everywhere. However, it
might take extreme weather events to force governments to act on climate
change--such as the recent experience in Australia.
Indian Government Likely To Mandate Companies Disclose CSR Spending If More Than 2% Of Net Profit. - [COMMENTARY] "Indian companies may have to collectively spend close to $2 billion (about Rs 8,700 crore) a year on CSR programmes if the government makes it mandatory for them to spend 2% of profits on social responsibility programmes, a study said today... The [Indian] government last week said it would be mandatory for corporates to disclose to shareholders whether they have made a contribution of 2% of net profit toward corporate social responsibility activities."
Though I strongly believe that well designed and implemented CSR
programmes are integral and necessary to enriching corporate activities
and expanding profits, I do not believe mandating a certain percentage
of profits to CSR is the way to go.
Water Shortages Threaten Renewable Energy Production, Says Study.
- [COMMENTARY] "The study shows the
reliance on large amounts of water to create biofuels and run solar
thermal energy and hydraulic fracturing - a technique for extracting gas
from unconventional geological formations underground - means droughts
could hamper their deployment." Ultimately, societies everywhere
will come to accept the hard truth that energy and resource conservation
is by far the best way forward. Otherwise, we’ll be like lemmings going
over the cliff!
Thomson Reuters & IdealRatings Create Islamic Finance Index. - [COMMENTARY] "Thomson Reuters IdealRatings Islamic Indices will be available on Thomson Reuters Eikon and some of the company’s other services. The joint venture will cover over 60 countries and global equity markets in nine regions, as well as individual sectors. The index will be reviewed on a quarterly basis to ensure Sharia-compliant standards, which will be assessed using proprietary algorithmic searches run by a team of dedicated researchers."
Islamic finance has much in common with ethical finance and investments.
Whereas ethical investments are common in the Western world, the rough
equivalents in the Muslim world are Shariah-compliant investment
ESG Criteria Found To Improve Investing Performance.
- [COMMENTARY] "’Research conducted by
CFSGAM revealed that the top-rated ESG stocks in its global listed
infrastructure portfolio outperformed the bottom-rated stocks by more
than 20 per cent over
Ron Robins Interviewed On The Green Leader Radio Show by Robert Thompson concerning green investing on July 25, 2011. It’s a great interview on a great show. I hope you can listen to it!
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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.