February 2024 Newsletter
News & Commentaries by Ron Robins
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New Podcasts:
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“UK investors push Apple for AI transparency. Scottish asset manager Abrdn and London’s Legal and General Investment Management (LGIM) are planning to back a resolution for the company to disclose information about the ethics and usage of its AI technology.”
[COMMENTARY] Among the concerns these and many other stakeholders have is the ability of AI to create ‘deepfakes’. Besides the ethical issues raised, what about the legal ones? Could AI companies be sued if someone uses their AI technology for illegal purposes?
UK investors push Apple for AI transparency, by Oscar Hornstein, February 26, 2024, UKTN, UK.
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Does ESG performance indicate corporate economic sustainability? Evidence based on the sustainable growth rate. “Based on a sample of Chinese listed companies from 2009 to 2021, this study finds that environmental, social, and governance (ESG) performance has a positive impact on having a sustainable growth rate (SGR).”
[COMMENTARY] This study adds to a large body of studies indicating that ESG usually has a positive relationship with a company’s financial and sustainable performance.
Does ESG performance indicate corporate economic sustainability? Evidence based on the sustainable growth rate. February 24, 2024. By Zihao Lin, Institute of Guangdong, Hong Kong and Macao Development Studies, Sun Yat-sen University, China.
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Despite tripling assets, responsible investing funds haven’t outpaced market. The headline doesn’t match the article’s contents. More accurate is this. “An analysis shows retail investors drove global growth over the past 10 years, while the bias for negative screening and active strategies continued.”
[COMMENTARY] Despite the inappropriate headline the article has some interesting statistics on responsible investing.
Despite tripling assets, responsible investing funds haven’t outpaced market, by Leo Almazora, February 21, 2024, Investment News, USA.
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Will Europe’s new standard help or hinder green bond market growth? “The European Green Bond Standard (EUGBS) can potentially benefit both issuers and investors; its uptake is key for continued market growth.”
[COMMENTARY] This article offers some good insights into the new EU green bond market regulations.
Will Europe’s new standard help or hinder green bond market growth? By Kevin Leung, February 19, 2024, Institute for Energy Economics and Financial Analysis, USA.
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The ESG Investment Surge: A 2023 Retrospective and What Lies Ahead in 2024. “In 2024, ESG investing faces challenges from regulatory shifts, market dynamics, and declining investments. AI, like IntellectAI’s ESG Edge product, promises growth in the sector, but balancing returns and sustainability remains key.”
[COMMENTARY] The article partly focuses on the role that AI can play in ESG investing.
The ESG Investment Surge: A 2023 Retrospective and What Lies Ahead in 2024, by Safak Costu, February 19, 2024, BNN, Hong Kong.
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DEI initiatives ‘not supported by the empirical evidence,’ Canadian researcher says. “Haskell’s report argues that DEI initiatives often undercut their expressed mission of bringing people from diverse backgrounds together. ‘What they are teaching has been shown to divide society: the empirical proof for that is clear,’ Haskell said.”
[COMMENTARY] So, how do we get to the goals of DEI without DEI and making ‘whites’ racist and jealous?
DEI initiatives ‘not supported by the empirical evidence,’ Canadian researcher says, by Ari Blaff, February 14, 2024, National Post, Canada.
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Morgan Stanley Sustainable Signals: New Survey Shows High and Rising Individual Investor Interest in Sustainability. “Individual investors globally continue to be interested in sustainable investing (77%), with 54% planning to increase sustainable investments in the next year.”
[COMMENTARY] The acronym ESG could disappear yet make little change in what companies and investors do! That is, to invest in companies that improve upon their ESG and sustainability fundamentals to increase their long-term financial performance.
Morgan Stanley Sustainable Signals: New Survey Shows High and Rising Individual Investor Interest in Sustainability, press release, January 29, 2024, Morgan Stanley, USA.
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Investing for social justice. “Advisors should ask how and why clients want to address racial equity in their portfolios.”
[COMMENTARY] The article offers a good description of why ‘investing for social justice’ is having a difficult time.
Investing for social justice, by Emile Hallez, February 12, 2024, InvestmentNews, USA.
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Should ESG Investing be Criminalised? “It sounds like an absurd question, but one US house of representatives has already pondered it, so is there method in the madness?”
[COMMENTARY] The author of this article provides a good overview of the thinking behind the anti-ESG US movement.
Should ESG Investing be Criminalised? By John Rekenthaler, February 5, 2024, Morningstar, UK.
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Just eight asset managers achieve Morningstar’s top ESG rating. “Only eight global asset managers out of 97 have met Morningstar’s highest ESG commitment level rating in its latest analysis.”
[COMMENTARY] So are most managers who purport to encompass ESG really greenwashing? No wonder securities regulators around the world are toughening their rules about the claims fund managers can make with their ‘ESG’ products!
Just eight asset managers achieve Morningstar’s top ESG rating, by Laura Miller, February 2, 2024, ESG Clarity, USA.
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Just Capital’s 2024 Overall US Corporate Rankings. “Our annual Rankings reflect the performance of America’s largest publicly traded companies on the Issues that matter most in defining just business behavior today. The Issues, and their weights in our model, are determined by our polling of the American public.”
[COMMENTARY] Just Capital’s methodology is intriguing, particularly from an ethical perspective. However, it’s difficult to assess the results from a stock market perspective.
Just Capital’s 2024 Overall US Corporate Rankings, by JUST Capital, February 5, 2024, USA.
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Comparing the Resilience of Socially Responsible and Sin Investment During the Covid-19 Pandemic. “The study diverges from the conventional narrative of SIN stocks’ superiority by illustrating the resilience and out-performance of SRI ETFs in terms of returns and volatility stability during the pandemic.”
[COMMENTARY] The anti-ESG lobby should make note of the findings of this study.
Comparing the Resilience of Socially Responsible and Sin Investment During the Covid-19 Pandemic, by David Meehan, Dublin City University; and Shaen Corbet, Dublin City University, University of Waikato – Management School, February 2, 2024, Ireland.
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Hero: The energy-storage pioneers creating mind-bending solutions. “From falling weights to compressed air, start ups around the world are taking on the challenge of building the energy-storage capacity we need to power the future.”
[COMMENTARY] Fossil fuel proponents are constantly reminding us that due to the intermittency of the sun, wind, hydro, etc., that for baseload power gas-powered plants, especially, can fill the gap. However, what is becoming clear is that technologies are rapidly developing to overcome the intermittency-storage issues associated with renewables!
Hero: The energy-storage pioneers creating mind-bending solutions, by Rick Spence, Winter 2024, Corporate Knights, Canada.
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Featured Book
Beyond the ESG Portfolio: How Wall Street Can Help Democracies Survive. “It is easy to unintentionally finance autocrats by using benchmark indices, which often include bonds and stocks of countries slipping down the democracy rankings. Despite best intentions, an investor may be investing in Russia’s invasion of Ukraine or supporting a leader like Hugo Chavez without realizing it. This is the kind of situation Beyond the ESG Portfolio sheds clear light on.”
For more information, visit Beyond the ESG Portfolio: How Wall Street Can Help Democracies Survive, by
