Corporate responsibility efforts boost more than just reputation. “A study by IO Sustainability and Babson College… determined that well-designed CSR programs have the potential to increase a company′s revenues by up to 20 per cent, strengthen customer loyalty by 60 per cent and allow for premium prices to be charged on products and services.”

[COMMENTARY] The financial benefits accruing to companies with well-designed CSR programs are now virtually incontestable. We’re approaching what could be universal acceptance for CSR/ESG and ethical programs in companies everywhere — and correspondingly much heightened interest of mainstream investors in investment products geared to taking advantage of this development.
Corporate responsibility efforts boost more than just reputation, by CK staff, August 31, 2015, Corporate Knights, Canada.

Investors target anti-climate lobby. “A coalition of 25 institutional investors with over £40bn in assets under management is calling on nine major companies to review their membership of lobbying groups that seek to undermine EU climate policy. The investors have written to publicly listed BHP Billiton, BP, EDF, Glencore, Johnson Matthey, Proctor and Gamble, Rio Tinto, Statoil and Total.”

[COMMENTARY] These companies support financially business groups that lobby for policies that these businesses themselves oppose! Of course, businesses continue memberships in such groups for many reasons, but it is absolutely right for these investors to point out to these businesses the double standard they are playing by belonging to these business groups.
Investors target anti-climate lobby, September 2, 2015, reNEWS, UK.

Doing Good Is Good Business, But Can You Prove It? “The latest evidence that the financial benefits of CSR are causal and not just correlated comes in the form of a study as hefty as a brick. ’Project ROI: Defining the Competitive and Financial Advantages of Corporate Responsibility and Sustainability’ is an effort to assess the business case for CR for the benefit of senior executives, boards of directors and even Wall Street.

According to the study, with proper design and sufficient investment, a company′s ’CR Assets’ can support returns related to share price and market value; reputation and brand; sales and revenue; human resources; and risk and license to operate.”

[COMMENTARY] Surely and gradually the financial case is being made for CSR! Companies who ignore developing good CSR strategies are likely being seen as dinosaurs and whose stock price and reputation taking increasingly bad hits.
Doing Good Is Good Business, But Can You Prove It? By Ryan Scott, August 26, 2015, Forbes, USA.

Companies that Care for Consumers Earn Higher Returns: New Study. “A new study called ’Meaningful Brands,’ conducted by global advertising agency Havas, shows that when companies invest the time and effort to connect with consumers, it pays. Such companies typically command increased sales, better brand recognition and higher annual returns than other companies.

The study surveyed 300,000 people in 34 countries and asked them how they felt about 1,000 brands across 12 industries. The findings showed that a meaningful brand has a 46 percent higher share of the consumer′s wallet, which refers to the amount a consumer spends on a particular product. Furthermore, the top 25 more meaningful brand outperformed the stock market by 133 percent.”

[COMMENTARY] This study results make sense. It’s good to have hard data to prove what we believe to be true.
Companies that Care for Consumers Earn Higher Returns: New Study, by Vikas Vij, August 20, 2015, Justmeans, USA.

Almost Three Quarters of Investment Professionals Use Environmental, Social & Governance Information When Making Investment Decisions. “Almost three-quarters of investment professionals worldwide (73 percent) take environmental, social, and corporate governance (ESG) issues into consideration in the investment process, according to the CFA Institute ESG Survey, a new survey of CFA Institute members created by CFA Institute and the Investor Responsibility Research Center Institute (IRRC Institute).

In addition, 64 percent of survey respondents consider governance issues, 50 percent consider environmental issues, and 49 percent consider social issues in investment decisions. Only 27 percent do not consider ESG issues.”

[COMMENTARY] Wow, these numbers are incredible. I just wonder how the survey questions were framed. At face value, it would seem the work of the responsible-ethical investment community has been accomplished. But is that really the case?
Almost Three Quarters of Investment Professionals Use Environmental, Social & Governance Information When Making Investment Decisions, press release, August 17, 2015, The Investor Responsibility Research Center Institute (IRRC)/CFA Institute, USA.

Witness says brokers try to pass themselves off as fiduciaries. “’Brokerage firms now engage in advertising that is clearly calculated to leave the false impression with investors that stockbrokers take the same fiduciary care as a doctor or a lawyer,’ claims the report, which was co-authored by Christine Lazaro, director of the St. John′s School of Law securities arbitration clinic.

’But, while brokerage firms advertise as though they are trusted guardians of their clients′ best interests, they arbitrate any resulting disputes as though they are used car salesmen,’ wrote the attorneys.

Their report claimed that Merrill Lynch, Fidelity Investments, Ameriprise, Wells Fargo, Morgan Stanley, Allstate Financial, UBS, Berthel Fisher, and Charles Schwab all advertise ’in a fashion that is designed to lull investors into the belief that they are being offered the services of a fiduciary [when they aren’t].’”

[COMMENTARY] This type of misrepresentation is highly problematic in many areas of the financial industry — and in jurisdictions globally. Clearly, the investing public needs to know who is a salesperson and who is a real fiduciary! At least in the US they’re beginning to grapple with this issue. (Thanks to Joe Killoran for alerting me to this article.)
Witness says brokers try to pass themselves off as fiduciaries, by Nick Thornton, August 14, 2015, BenefitsPro, USA.

Morningstar to launch ESG scores for funds. “Chicago-based Morningstar Inc. plans to launch environmental, social, and governance (ESG) scores for mutual funds and exchange-traded funds later this year… Morningstar says that it will use the ESG ratings provided by Sustainalytics on more than 4,500 companies to create asset-weighted composite ESG scores for the mutual funds and ETFs that it covers based on the company-level ESG ratings.”

[COMMENTARY] This is terrific news! It will mean greatly increased exposure of ESG-ethical investment products to investors and the investment industry. It could encourage many more advisors to place ESG-ethical funds/ETFs in their client portfolios. Congratulations to Michael Jantzi and Sustainalytics for their part in this endeavour!
Morningstar to launch ESG scores for funds, by James Langton, August 13, 2015, Investment Executive, Canada.

Why Putting a Number to C.E.O. Pay Might Bring Change. “So why does anyone expect a different outcome from the Securities and Exchange Commission′s new rule requiring disclosure of the gap between what a company′s chief executive is paid and what its rank-and-file workers earn?

I put that question to some experts on executive pay…

Their thinking goes like this: Because the rule will generate an easily graspable and often decidedly shocking number, it may energize a cadre of new combatants in the executive pay fight. And because these newcomers — company employees, state governments and possibly even consumers — will most likely be more vocal on the matter than institutional investors have been, the executive pay bubble might actually start to deflate.”

[COMMENTARY] This article is well worth reading for all ethical investors who’re concerned about excessive executive pay. Though I’m hopeful it could help bring down the pay gap between executives and their employees, I’m concerned that ways will be found to kill its implementation before it starts in 2017.
Why Putting a Number to C.E.O. Pay Might Bring Change, by Gretchen Morgenson, August 6, 2015, The New York Times, USA.