“The right of pension administrators in the United States to consider environmental, social and governance (ESG) factors in their investment decisions could be thrown into jeopardy by the same Trump-appointed judge who ordered a hold on the abortion drug mifepristone last week.” [COMMENTARY] Just as a US court banned an abortion drug, so the same…

“Their findings led Cakici and Zaremba to conclude: ‘Investors’ hopes of the superior performance of responsible companies are futile. By buying ESG companies, investors typically take substantial exposure to big companies. Therefore, they sacrifice the small-cap premium that otherwise could be earned. To implement successful ESG strategies, investors should control the size structure and exposure…

“‘Sometime during this century, it is highly likely that worldwide depletion of natural resources will force an entire reorganization of social and economic structures, perhaps violently.’” — Walter Youngquist, ‘Our Plundered Planet‘” [COMMENTARY] The quote says it all. From what I observe, few people understand the amount of natural resources that will be needed by…

“Companies may not be able to mute all of their critics, but being proactive on ESG reporting can help them distinguish themselves from peers and potentially take advantage of the ESG asset flows.” [COMMENTARY] This is a great informative piece for boards concerning the handling of ESG matters for both internal and external purposes. What…

“‘Most [faith-based fund companies] are trying to screen out things like [companies involved with] abortion and pornography,’ says Chris McMahon of Aquinas Wealth Advisors, a Catholic advisory firm in Pittsburgh. ‘It’s an enormous lift for these firms to pivot and then add this kind of environmental stuff.’ Part of the problem is that the intense…

“As regulators around the world push businesses for more disclosures related to their performance on environmental, social and governance matters, they naturally run the risk of flooding the public marketplace with too much information. In fact, we’ve already reached that point, according to the head official for corporate governance in the UK.” [COMMENTARY] Hopefully, the…

“Corporate Knights newly launched Sustainable Economy Intelligence (SEI) Database* ranks more than 2,800 public companies primarily by the percentage of revenues and spending derived from the green economy (as defined by Corporate Knights’ Sustainability Economy Taxonomy). In the most recent three-year period, the companies in the top 20% of the SEI outperform the most prominent index of…

“Unpublished BlackRock research also reveals thousands more will be downgraded in wide-ranging MSCI shake-up.” [COMMENTARY] It’s likely that other index providers — as well as ESG raters — will change their sustainable, ESG, and green ratings of funds. Hence, there could be a massive re-rating of funds ahead! Hundreds of funds to be stripped of…

“Implementing their suggestions could force Canadian financial institutions to divest their fossil fuel company loans or refuse to insure oil and gas companies. But this would not likely create major financing difficulties for these companies (at least in the short term) since they could turn to foreign banks and insurance companies unaffected by the Canadian…

“We document statistically significant excess returns in ESG portfolios from 2014 to 2020 in the U.S. and Japan. We propose several statistical and voting-based methods to aggregate individual ESG ratings, the latter based on the theory of social choice. We find that aggregating individual ESG ratings improves portfolio performance.” [COMMENTARY] This paper is worthwhile reading…

“As regulatory oversight of ESG tightens in the EU and U.K., with additional disclosure and more substantive requirements in this area coming online, the U.S. landscape is becoming increasingly fractured.” [COMMENTARY] This is a great overview of what is happening among US States. ESG Battlegrounds: How the States Are Shaping the Regulatory Landscape in the…

? “We explore the feasibility and performance of more targeted investment strategies based on specific ESG categories, by deconstructing ESG scores into their granular components.” [COMMENTARY] This is a fascinating academic approach. Deconstructing ESG Scores: How to Invest with your own Criteria? By Torsten Ehlers (IMF), Ulrike Elsenhuber (BIS), Anandakumar Jegarasasingam (BIS), and Eric Jondeau…

“As Bob Eccles, sustainability researcher and founder and president of investment company Advisory Capital Partners puts it: ‘ESG is about the material environmental, social and governance risk factors that matter to enterprise value-creation. Impact is about the positive and negative externalities created by a company’s products and services.’” [COMMENTARY] Bob Eccles makes a brilliant distinction between…

“The European Union said on Wednesday it had reached a deal on the world’s first set of comprehensive rules for issuing green bonds to meet the bloc’s net zero goals, although compliance will be on a voluntary basis.” [COMMENTARY] This is great news. These green bond requirements may well become a global standard. It’ll be…

“In this guest commentary, Alejandra Padin-Dujon proposes a new kind of carbon tax, building upon recent EU legislation, that would penalise financial institutions’ ‘dirty’ investments.” [COMMENTARY] In Canada, advocates of such a tax are already proposing it for Canadian banks. The case for a Scope 3 carbon tax for financial institutions, by Alejandra Padin-Dujon, February…

“The importance of environmental, social and governance performance in business has become the subject of growing skepticism and pushback. But recent research has come out squarely in favor of ESG as a decisive factor for both sustainability and profitability.” [COMMENTARY] This article outlines some recent findings about high ESG-performing companies.Contradicting Skeptics, New Research Links ESG…

“Financial advisers are not optimistic about the future of including environmental, social and governance attributes to investing, in part due to growing political tension around the subject, according to a Cogent Syndicatedreport from Escalent.” [COMMENTARY] The results of this US survey are unsurprising. Most people who use financial advisors in the US tend to be…

“In October, Kentucky’s attorney generalorderedsome of the nation’s biggest banks and investment firms to turn over piles of documents that had the word ‘climate’ or ‘environmental’ in them. The bankers went to court to fight him.” [COMMENTARY] I suspect that when US ‘red’ states promoted anti-ESG regulations, they never suspected that teams of bank lawyers…

“Last week at the inaugural IFRS Sustainability Symposium in Montreal, the International Sustainability Standards Board (ISSB) wrapped up deliberations on its first two sustainability standards aimed at creating a global baseline,announcing plansto release IFRS S1 and IFRS S2 in June with an effective date of January 2024.” [COMMENTARY] This is exciting news. It’s taken decades…

“The Clean200 lists the 200 major corporate players from 35 countries around the world that are at the forefront of the energy transition and put sustainability at the heart of their products, services, business models and investments, helping to move the world onto a more sustainable trajectory.” [COMMENTARY] The Clean 200 is one of my…