January 2020 Newsletter
News & Commentaries by Ron Robins
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Latest Podcast:
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Helsinki Stock Exchange tops sustainability disclosure ranking while most flatlined. “The world’s largest companies are under-reporting sustainability policies and performance, hampering investors’ access to data that will allow them to play a full role in the transition to a low-carbon economy, according to a new stock exchange report released by Corporate Knights and Aviva.”
[COMMENTARY]This is a fascinating report and provides a snapshot of the state of ESG reporting globally. Well worth reading the article.
Helsinki Stock Exchange tops sustainability disclosure ranking while most flatlined, January 22, 2020, Corporate Knights, Canada.
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Greta Versus the Greedy Grifters. [In the post, Mr. Krugman uses reputable data to show fossil fuels are a huge net cost to US economy.] “For the U.S., the subsidies amounted to $649 billion, which is about $3 million for every worker employed in the extraction of coal, oil and gas… “
In another post by Mr. Krugman — sent by email to me — he says that, “Another comparison, which I didn’t make [referring to above post], is with the market value of fossil fuel production, which in 2017, the comparison year, was less than $300 billion. So the U.S. fossil fuel industry destroys several hundred billion dollars of value every year.”
[COMMENTARY]I made the case almost two decades ago that if all the subsidies for fossil fuels were included in its price, even then there would be a case for renewables!
Greta Versus the Greedy Grifters, by Paul Krugman, January 27, 2020, The New York Times, USA.
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Green QE on the cards as sovereigns get ready. “Investors are expecting a new green quantitative easing programme to start the new decade as the ECB seeks greener investment opportunities and more sovereigns ready green bonds for late 2020 to finance multi-billion euro clean infrastructure projects.”
[COMMENTARY]This could mark a whole new beginning of central bank largess and potentially massive new profits for the renewable energy and green business sectors! And, significantly help with climate change.
Green QE on the cards as sovereigns get ready. by Tessa Walsh, January 25, 2020, IFR, UK.
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Church sets 2050 net zero target for companies. “The Church of England’s national bodies will invest only in companies working towards net zero carbon emissions by 2050, it was announced on Wednesday.”
[COMMENTARY]The target the Church of England is setting might well become a common theme among institutions with high moral convictions.
Church sets 2050 net zero target for companies, by Adam Becket, January 22, 2020, Church Times, UK.
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A Decade of Sustainable Funds Investing: 10 Years/10 Charts. “The total net assets of mutual funds and exchange traded funds (ETF) (1) sourced to sustainable investing approaches expanded dramatically in the last decade, adding almost $1.5 trillion in the last ten years. Assets increased from $113.5 billion at the start of the decade to reach $1.6 trillion at the end of 2019, fueled largely by fund re-brandings, followed, but to a much less significant extent, market movement and net new money.”
[COMMENTARY]This article has some insightful data and charts concerning the growth of sustainable investing.
A Decade of Sustainable Funds Investing: 10 Years/10 Charts, January 23, 2020, Sustainable Research and Analysis LLC (SRA), USA.
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Sustainable Investment Options in Bond ETFs. “We take a closer look at the European passive ESG bond fund market and its opportunity for growth in the coming years.”
[COMMENTARY]Though this article has a European focus, it’s of global interest.
Sustainable Investment Options in Bond ETFs, by Jose Garcia Zarate, January 23, 2020, Morningstar UK, UK.
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Corporate Knights 2020 Global 100 ranking. “An index of the Global 100 most sustainable corporations in the world.”
[COMMENTARY]I always look forward to this annual review! For the 100 list click here. Corporate Knights also provides insightful articles on methodology and its observations on many facets of the 100.
2020 Global 100, press release, January 21, 2020, Corporate Knights, Canada.
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Nearly two-thirds of Canadian retail investors are interested in allocating more funds to responsible investment, RBC Global Asset Management survey finds. “73% of Canadians believe responsible investment portfolios are the way of the future; 81% believe that responsible investment offers the same or better returns than traditional investing; 61% rely on their financial advisor for information about responsible investment; 86% believe it is important that companies they invest in act in a socially responsible way”
[COMMENTARY]Though good, the number of Canadians wanting to invest ‘responsibly’ really hasn’t changed much over the years. As always, the fact that 61% rely on financial advisors — who mostly steer these investors to ‘non’ responsible products — is why ethical and sustainable funds still represent probably less than 5% of Canadian retail investment assets.
Nearly two-thirds of Canadian retail investors are interested in allocating more funds to responsible investment, RBC Global Asset Management survey finds, press release, January 15, 2020, RBC Global Asset Management, Canada.
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ESG Matters. “A link exists between a company’s ESG performance and its financial performance, according to a study published Thursday from ISS ESG, the responsible investment arm of Institutional Shareholder Services. — Pensions&Investments“
[COMMENTARY]ESG improves corporate financial performance. Good corporate financial performance allows for enhancing ESG action. Which comes first? Or are they creating a virtuous feedback loop? This is what this study tackles.
ESG Matters, by Dr. G Kevin Spellman, CFA, January 2020, Institutional Shareholder Services Inc., USA.
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There Are 2,698 Signatories to the United Nations’ ESG Code. Has It Changed Anyone’s Behavior? “Most of these codes, particularly the UN PRI, are meaningless. — Alicia McElhaney”
[COMMENTARY]I agree. If there’s no detailed definition of the code’s criteria and noenforcements mechanism, they’re largely a PR stunt.
There Are 2,698 Signatories to the United Nations’ ESG Code. Has It Changed Anyone’s Behavior? By Alicia McElhaney, January 8, 2020, Institutional Investor, USA.
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ESG future-proofing can help to defy market risks. “The European Insurance and Occupational Pensions Authority (Eiopa) found in its most recent stress tests of European pension funds that sustainable investments would help them to withstand an adverse scenario.”
[COMMENTARY]In the market crash of 2008, subsequent studies showed that sustainable investmentsoutperformed.
ESG future-proofing can help to defy market risks, by Elena Johansson, January 6, 2020, Expert Investor, UK.
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Proposed SEC rule changes could impede investor activism. “The Securities and Exchange Commission (SEC) is considering rule changes that could undermine investors’ ability to push for better environmental performance at publicly traded companies by creating new restrictions on who is eligible to file shareholder proposals and how much support they need to make it onto the proxy statement.
A network of corporate oil and gas interests appears to be behind the new proposals, partly by manipulative means, according to an extensive Bloomberg investigation.”
[COMMENTARY]It seems another step by established fossil fuel groups to contain criticism of their businesses.
Proposed SEC rule changes could impede investor activism, by Sara E. Murphy, January 7, 2020, GreenBiz, USA.
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[US] Advisers welcome potential regulatory scrutiny of ESG investing. “Investment advisers say regulatory scrutiny of socially responsible investing could provide a stronger foundation for a way of constructing portfolios that is becoming increasingly popular with clients.”
[COMMENTARY]My initial reaction wasn’t positive that the SEC was looking into this. However, I concede that it could be a positive development.
Regulatory authorities in the UK and the EU are already establishing standards of various terms that investment industry players would have to abide by. Perhaps this SEC investigation would create similar rules as to the use of terminology to that of the Europeans?
Advisers welcome potential regulatory scrutiny of ESG investing, by Mark Schoeff Jr., January 3, 2020, Investment News, USA.
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Featured Book
Low-Carbon Investing: Defending the Climate/Emphasizing Performance, by Patrick Costello, GreenWorld Publishing 2018.
“This book is for people who understand that carbon emissions are driving the dangerous phenomenon of global warming, and who wish to do their part in mitigating this risk by lowering the carbon footprint of their investments – without sacrificing investment performance.”
