October 2024 Newsletter
News & Commentaries by Ron Robins
————————————————————-
New October Podcasts:
————————————————————-
Greenwashing Under Pressure as Regulators Turn to Passive ESG Funds. “WisdomTree settles with the SEC on its ESG process for three ETFs.”
[COMMENTARY] Finally, the SEC is cracking down on funds that misrepresent what they do. Expect this trend of ESG funds, particularly, to come under much greater scrutiny globally for their claims.
Greenwashing Under Pressure as Regulators Turn to Passive ESG Funds, by
————————————————————-
Want to save ESG from irrelevance? Financialise it. “Rodrigo Tavares writes that the best way to save the environmental, social and governance framework from irrelevance is to strip it from all elements that don’t impact a financial asset. This way, ESG can become a textbook requirement for investment and banking professionals.”
[COMMENTARY] Mr. Tavares advocates what I have been forcefully behind for about fifty years. Too much has crept into what comes under what we now call ‘ESG’, which should be called something else!
Want to save ESG from irrelevance? Financialise it, by Rodrigo Tavares, October 23, 2024, London School of Economics and Political Science, UK.
————————————————————-
The Biggest ESG Risk You May Not Know About. “Only 34 funds target biodiversity. The single US fund closed down.”
[COMMENTARY] Biodiversity funds will likely gain more prominence in years to come as investors realize they are gaining in value.
The Biggest ESG Risk You May Not Know About, by
————————————————————-
Expectations for the real-world impact of sustainable investing are unrealistic. “The asset management industry has shown support for sustainable investing, but do they follow sustainability principles in their investment decisions? Together with two colleagues, Dirk Jenter surveyed 509 equity portfolio managers on how much firms’ environmental and social performance feature in their investment decisions. He writes that most investors wouldn’t sacrifice profitability only to advance environmental and social goals. And funds marketed as sustainable aren’t that different from traditional ones.”
[COMMENTARY] This is a timely critique of what asset managers do as opposed to what they infer in sales literature.
Expectations for the real-world impact of sustainable investing are unrealistic, by Dirk Jenter, October 19, 2024, London School of Economics and Political Science, UK.
————————————————————-
U-M business law expert’s research on the ethics of financial advisers cited in US Senate investigation. “Based on the industry’s practices, Muir and her collaborators advocate for regulation that holds all those who provide advice to retirement savers to the same standard of fiduciary responsibility.”
[COMMENTARY] There are huge financial educational differences between many that offer retirement financial advice. My concern is that the public does not know that. Hence, rather than mandate a costly and bureaucratic straight-jacket financial educational approach governed by the ‘banks,’ I advocate a public that is much better informed about the academic status of all ‘financial advisors.’
U-M business law expert’s research on the ethics of financial advisers cited in US Senate investigation, by Faculty Q and A, University of Michigan, USA.
————————————————————-
Climate beliefs and asset prices. “Climate-related risks, both those related to the warming of the planet and those related to our actions to mitigate it, are a factor in asset pricing. This column argues that the nature of these risks is quite different from that of other shocks commonly considered in asset pricing models.”
[COMMENTARY] This article is a discriminating and somewhat academic look at how climate beliefs relate to asset prices. It’s a worthwhile reading for investors.
Climate beliefs and asset prices, by Galina Hale and Bhavyaa Sharma, October 6, 2024, CEPR, Europe.
————————————————————-
Key wind industry metals facing supply deficits this year — BloombergNEF. “Of immediate concern is the supply of several key metals, including copper, lithium and aluminium, that face supply deficits within this decade – “some as soon as this year”, according to the latest Transition Metals Outlook report.”
[COMMENTARY] In countries like Canada, building a new mine usually takes 12-17 years after ore body discovery. Well-considered environmental and land ownership regulations and disputes are frequently the reasons for this.
In many developing countries, it takes less time but there’s often the issue of political risk — such as mine confiscation! Who wants to build mines with such risks and timeframes? That’s why, for instance, we are ‘happy’ with child labor being used in the Congo for our cobalt supplies, etc. Should ethics be discarded for net zero attainment? It is presently and looks to continue!
————————————————————-
Top ESG Risk Factors by Industry: Consumer Goods, Tech, Energy, and Finance. “In this post we’ll examine the specific ESG risks faced by the following industries: Consumer and Industrial Goods, Technology, Energy, and Risk and Financial Services.”
[COMMENTARY] This article contains some useful information for ethical and sustainable investors.
Top ESG Risk Factors by Industry: Consumer Goods, Tech, Energy, and Finance, by Antea Group, October 3, 2024, Yahoo Finance, USA.
————————————————————-
Are ‘green bonds’ just another way for banks to greenwash? “Major banks were underwriting bonds by energy giants that failed to meet climate goals.”
[COMMENTARY] This is a good article on how some banks engage in greenwashing with green bonds.
Are ‘green bonds’ just another way for banks to greenwash? By Jeffrey Rothfeder, Capital & Main, FASTCOMPANY, USA.
————————————————————-
Featured Book
Note: Ron Robins is an Amazon Associate. He thus earns fees from qualifying book or merchandise purchases referred from this website.
Higher Ground: How Business Can Do the Right Thing in a Turbulent World. “Finally, a book about business and ethics that’s fit for the twenty-first century. Every executive should pay attention to this book.” — R. Edward Freeman, UDA Darden School of Business.
For more information, visit Higher Ground: How Business Can Do the Right Thing in a Turbulent World, by Alison Taylor, ©2023 Harvard Business School Publishing Corporation (P)2024 Ascent Audio.
