News & Commentaries by Ron Robins

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GRI Standards Push Momentum for Global Sustainable Development. “On Wednesday, the GRI announced the launch of the world′s first Global Reporting Standards for sustainability reporting. These new standards give businesses large and small a common language for reporting non-financial information.”

[COMMENTARY] A long held dream of mine and for many in the responsible-ethical investing community has been for sustainability (and ESG/CSR) reporting standards! Now it’s coming true.
GRI Standards Push Momentum for Global Sustainable Development, by Thomas Schueneman, October 21, 2016, TriplePundit, USA.

New Research Reveals Opportunity, Methods for Engaging Investors on Long-Term Value Creation. “New research by Corporate Citizenship, in association with S&P Dow Jones Indices … entitled Getting on the Right Track: How to Demonstrate the Value of Sustainable Business to Investors – reveals that long-term thinking is still not the norm for many businesses.”

[COMMENTARY] For companies to think long-term, compensation throughout the organization must be long-term based. However, this is difficult as work becomes increasingly transitory and contract hiring a big factor in many companies. Even the median tenure of today’s CEOs is only 4.9 years among S&P 500 companies, says Fortune magazine. This suggests these CEOs don’t necessarily have a long-term horizon for sustainable investments and their potential returns.
New Research Reveals Opportunity, Methods for Engaging Investors on Long-Term Value Creation, October 26, 2016, Sustainable Brands, USA.

PwC′s 2016 ESG Pulse — Investors, corporates, and ESG: bridging the gap. “For the past decade, investors have expressed interest in ESG issues, including their importance in investment decision-making. Corporates have paid attention, and many are responding to investor demands. But there still isn′t alignment between these two groups on why, what, where, and how often to report on ESG issues.”

[COMMENTARY] Hopefully, somehow, they’ll be some integration of the new GRI standards and those of SASB. Certainly, all groups working on such standards need to come together before we can have ESG reporting standards satisfying most companies and investors.
PwC′s 2016 ESG Pulse — Investors, corporates, and ESG: bridging the gap, press release, October 27, 2016, PwC, USA.

2016 Global Cleantech 100 Ones to Watch. “The GCT100 Ones to Watch list seeks to highlight a group of upcoming companies that are catching the eye of leading investors and corporates in the market. They are companies that have yet to become a Global Cleantech 100 company, and that did not have quite enough market support to make the 8th edition of the Global Cleantech 100 list itself (which will be published on January 23, 2017).

However, the companies were part of the top 250 nominated and carry pockets of strong support among the GCT100′s expert panel. As such, these companies represent this year′s Ones to Watch.”

[COMMENTARY] This list will interest many ethical investors.
2016 Global Cleantech 100 Ones to Watch, press release, October 26, 2016, Cleantech Group, USA/UK.

The CFA Exam Is Going Green. “CFAs are ’telling us loud and clear that investors are demanding ESG, and there’s increasing academic evidence that sustainable companies are better-managed companies and have higher risk-adjusted returns,’ Steve Horan, managing director of credentialing for the Charlottesville, Virginia-based institute, said in an interview.”

[COMMENTARY] We need no more proof that ESG has become mainstream and recognized for its materiality for corporate profitability than that quote above.
The CFA Exam Is Going Green, by Emily Chasan, October 20, 2016, Bloomberg, USA.

Green Power Leadership Awards. “[The US Environmental Protection Agency] EPA presented the awards in conjunction with the Center for Resource Solutions (CRS) Exiton Monday, October 17 during the Renewable Energy Markets Conference (October 16-18, 2016 in San Francisco, California). The awards serve to recognize the leading actions of organizations, programs, and individuals that significantly advance the development of green power sources.”

[COMMENTARY] Companies receiving the award Excellence in Green Power Use, included: Biogen, Inc., BNY Mellon, Forest County Potawatomi Community, Goldman Sachs, Government of the District of Columbia (Washington, DC), Intel Corporation, and SC Johnson.
Excellence in Green Power Use, press release, October 17, 2016, EPA, USA.

Which Stock Market Will Deliver Sustainable Profits? “ESG Scores represent the degree to which companies in a portfolio have transparent policies and management systems in place to address their ESG-related challenges. Denmark tops the global ranking with a Portfolio ESG score of 69. Portugal and the Netherlands are next. The top half is again dominated by European, and in particular Eurozone, countries.”

[COMMENTARY] A new fascinating ESG country-company-ESG-portfolio analysis! As usual, European countries top this list. Many ethical investors will want to read this article as it provides a unique perspective on many issues.
Which Stock Market Will Deliver Sustainable Profits? By Francesco Paganelli, October 17, 2016, Morningstar, UK.

Impact Investment is Growing Rapidly in Canada: New Study. “The 2016 Canadian Impact Investment Trends Report reveals tremendous growth in Canada′s impact investment industry. The survey, which represents data as at December 31, 2015, was conducted between April and August 2016. Eighty-seven organizations responded to this year′s survey. The RIA uses the Global Impact Investing Network′s definition of impact investment: “Impact investments are investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social and environmental impact along with a financial return.”

[COMMENTARY] This is great news. Impact investing in Canada has grown from $4.13 to $9.22 billion between 2013 and 2015. It still has the potential to grow much, much more.
Impact Investment is Growing Rapidly in Canada: New Study, press release, October 13, 2016, Responsible Investment Association, Canada.

Moody’s: Sustainable investing an opportunity for asset managers to generate value and sustain active management fees. “Global assets under management (AUM) linked to firms that have become signatories to the PRI rose 195% to $62 trillion in April 2016 from $21 trillion in 2010. Investor expectations and regulations are driving demand for sustainable investing, says Moody’s Investors Service.

“Integrating ESG criteria into investment decisions should limit risks within portfolios and contribute to lower volatility and better performance in the long run. The effectiveness of these strategies however will have to manifest through the cycle, as well as across teams and strategies,” says Marina Cremonese, a Vice President at Moody’s. Moody’s subscribers can access this report via the link provided at the end of this press release.”

[COMMENTARY] Further elaboration on Moody’s new, positive, ESG stance.
Moody’s: Sustainable investing an opportunity for asset managers to generate value and sustain active management fees, press release, October 6, 2016, Moody’s, USA.

Moody’s: Investors today are more sensitive to climate change. “Interest in climate change and sustainable investment among institutional investors has expanded rapidly in recent years and is only likely to increase in importance following the ratification of the Paris Agreement. hat is the conclusion of a new report from influential ratings agency Moody’s.”

[COMMENTARY] Moody’s is stating the obvious. However, it’s pleasing to see them acknowledge and report it.
Moody’s: ’Investors today are more sensitive to climate change,’ by James Murray, October 6, 2016, BusinessGreen, UK.

New Report Finds Slow Growth in Canadian Green Bonds Market Despite Provincial and Federal Government Commitments. “Key highlights include: Canada’s climate-aligned bond market has grown to C$32.9bn – making Canada’s markets the 5th largest in the world; both the full climate-aligned universe and the C$2.9bn labelled green segment of the Canadian market have grown over the past year, though less quickly than had been expected; 2016 remains an important opportunity for the federal and provincial governments to take action and show the leadership necessary to accelerate market growth.”

[COMMENTARY]That Canada’s green bond market is the fifth largest in the world is pretty good considering the size of its bond market. However, as the report indicates, much more can be accomplished.
New Report Finds Slow Growth in Canadian Green Bonds Market Despite Provincial and Federal Government Commitments, press release, October 3, 2016, Smart Prosperity Institute and Climate Bonds Initiative, UK/Canada.

Luxembourg Launches World’s First Green Stock Exchange: LGX, ’The Full Green Monty’. “Today, less than six weeks before COP22 , the Luxembourg Stock Exchange (LuxSE) becomes the first stock exchange globally to introduce a platform for green financial instruments. Luxembourg Green Exchange (LGX) is for issuers who dedicate 100% of the raised funding to green investments. It will restrict access to those issuers who comply with stringent eligibility criteria.”

[COMMENTARY]This is a fascinating development. It’ll likely be copied in many places if it works.
Luxembourg Launches World’s First Green Stock Exchange: LGX, ’The Full Green Monty,’ by Dina Medland, September 27, 2016, Forbes, USA.

Featured Book

Impact Investment: A Practical Guide to Investment Process and Social Impact Analysis, by Keith A. Allman, Wiley Finance 2015.
“A detailed guide which is a ’must read ’ for new and seasoned investors as well as those seeking investments to support entrepreneurial, social, and environmental ventures that aim to generate financial returns. The manual describes every step of a rigorous investment journey … from investment analysis and valuation, to preparation of a term sheet, to closing the deal and post-investment monitoring and exit. In that sense, it is a primer for anyone wishing to understand what a thorough financial investment process looks like, whether an investor or an entrepreneur seeking investment.”—Pamela Hartigan, Director, Skoll Centre for Social Entrepreneurship, Sa…d Business School, University of Oxford, UK.