July 2024 Newsletter
News & Commentaries by Ron Robins
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New Podcasts:
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Opinion: Why investors want to see an ‘I’ in ESG. “ESG is due for a rebrand. Instead of the tired controversy over its relevance, the debate has now moved on to how to measure the impact of investment decisions on people’s real lives. Increasingly what investors – professional and private – want to see is ‘I’, real impact, independently verified.”
[COMMENTARY] This article is a good commentary on the state of ‘S’ in ESG. It should be noted that Corporate Knights has a ranking of companies that attempts to measure the percentage of a company’s revenues that have a sustainable and healthy effect on the environment. This is the type of impact measurement that is missing in almost all ESG rating methods.
Opinion: Why investors want to see an ‘I’ in ESG, by Klara Kozlov, Pioneers Post, July 26, 2024, UK.
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You don’t need to give up gains to pursue an ESG strategy in the stock market. “Brian Burrell of Thornburg explains how combined ESG and financial analysis can identify companies whose improved profitability is directly tied to their efforts to make the world a better place”
[COMMENTARY] Strictly speaking, companies adhering to rigorous ESG principles should perform optimally and thus outperform in operational, financial, and stock market metrics.
You don’t need to give up gains to pursue an ESG strategy in the stock market, by Philip van Doorn, MarketWatch, USA.
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Beyond the SEC: Why ESG Reporting is Here to Stay. “The CSRD was finalized by the EU in December 2022 and is widely considered the most comprehensive ESG regulation ever, bringing together financial data, ESG information, and assurance for the first time. And they aren’t the only country doing so, the U.K., New Zealand, Japan, China, Brazil, South Korea, Hong Kong, and the European Union (EU) have all proposed or passed similar regulations.”
[COMMENTARY] Public — and even private companies in some cases — who operate internationally will be required to incorporate and report on internal ESG info metrics if they want to continue functioning internationally. This is regardless of what happens in the US. Long-term these ESG reporting requirements are likely to not only benefit corporate profitability but also to improve our environment.
Guest Post – Beyond the SEC: Why ESG Reporting is Here to Stay, by Mark Mellen, July 22, 2024, ESG Today, USA.
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How Trump’s Potential Re-election Could Shake Up Green Bonds. “The future of green bonds remains optimistic, driven by the global push towards sustainability and increasing focus on ESG criteria. Investors must navigate political risks but can find opportunities in the green bond market’s underlying stability.”
[COMMENTARY] I largely agree with this assessment of a post-Trump effect on green bonds.
How Trump’s Potential Re-election Could Shake Up Green Bonds, July 22, 2024, The Global Treasurer.
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‘When it comes to sustainable investing, it pays to be active‘. “Data from Morgan Stanley found sustainable funds outperformed their traditional peers across all major asset classes and regions in 2023, with sustainable equity funds in particular providing a median return of 16.7 per cent – more than two percentage points higher than traditional equity funds”
[COMMENTARY] I first thought this headline compared passive and active investing. However, it was more about comparing sustainable and traditional funds. Nonetheless, it was good to see sustainable funds outperforming their conventional peers.
‘When it comes to sustainable investing, it pays to be active’, by Claudia Quiroz, July 16, 2024, FT Advisor, UK.
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How oil barons and right-wing billionaires are manipulating the free market to extend fossil fuels. “The House Judiciary Committee has delivered a clear message to the free market: shut up about climate change or pay the price. The Committee’s Chairman sent threatening letters and filed subpoenas to intimidate 14 mainstream investor organizations with a combined $105 trillion in assets under management, including As You Sow, the nonprofit that I lead.”
[COMMENTARY] This is clear interference in free markets. It says investors cannot invest in ways they deem best for profits! And this is from ‘free market’ advocates? No, there’s an agenda here to manipulate markets in ways benefiting the few.
How oil barons and right-wing billionaires are manipulating the free market to extend fossil fuels, by Andrew Behar, July 15, 2024, IMPACT ALPHA, USA.
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Comment: Why climate-related shareholder resolutions are vital for markets. “Key to the functioning of the U.S. financial system, the proxy system is a cornerstone of how investors help guide and gain insight into the companies they own.”
[COMMENTARY] The two-way flow of information between boards and shareholders that is enabled concerning climate-related issues would be greatly hampered were they not allowed. That would be to the detriment of the company and its shareholders.
Comment: Why climate-related shareholder resolutions are vital for markets, by Kirsten Snow Spalding, July 15, 2024, Reuters, USA.
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The Costs of India’s Mandatory Corporate Social Responsibility Rule. “In new research, Jitendra Aswani finds that India’s mandatory corporate social responsibility contribution for large firms increased corporate borrowing costs, but transparency and clear communication to investors about these contributions reduced the additional costs.”
[COMMENTARY] At the time it was implemented there was considerable discussion around the world about its effects on affected Indian companies and the Indian economy. Now, with this study, we gain some insight into those effects.
The Costs of India’s Mandatory Corporate Social Responsibility Rule, by Jitendra Aswani, July 11, 2024, Promarket, University of Chicago Booth School of Business, USA.
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It’s Time to Change How ESG Is Measured. “Our research shows that ESG ratings — and thus the investments associated with these ratings — are suffering from a “measurement trap” that occurs when a metric used as part of the ESG rating is systematically biased toward certain industries or certain types of companies.”
[COMMENTARY] This is an insightful article on ESG measurements and how they might be changed to assist in investment analysis and selection.
It’s Time to Change How ESG Is Measured, by Lauren Cohen, Umit G. Gurun, Quoc Nguyen, July 10, 2024, Harvard Business Review, USA.
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ESG Is Simply Not Enough To Drive Needed Change. “To truly address the existential threats facing our planet and society, we need a shift that goes beyond the limitations of the ESG paradigm. We need a values-based revolution that redefines the very purpose of business and the role of leaders within it.”
[COMMENTARY] The ideas expressed in this article are probably nearer the mark as to what is required of business today. However, it will require a higher consciousness in society generally. And that will require much work. Incidentally, it’s the type of work I’ve been associated with for over fifty years. See my bio.
ESG Is Simply Not Enough To Drive Needed Change, by Rajeev Peshawaria, July 3, 2024, Chief Executive, USA.
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Featured Book
Note: Ron Robins is an Amazon Associate. He thus earns fees from qualifying book or merchandise purchases referred from this website.
Climate Capitalism: Winning the Race to Zero Emissions and Solving the Crisis of Our Age. “‘An important read for anyone in need of optimism about our ability to build a clean energy future.’—BILL GATES.’
‘Illuminating, incisive, and deeply reported.”—DAVID WALLACE-WELLS, New York Times-bestselling author of The Uninhabitable Earth.'”
For more information, visit Climate Capitalism: Winning the Race to Zero Emissions and Solving the Crisis of Our Age, by
Hi, I’m Jack. Your blog is a treasure trove of valuable insights, and I’ve made it a point to visit daily. Kudos on creating such an amazing resource!