“94 funds had ‘ESG’ in their names yet 60 of those earned a ‘D’ or an ‘F’ on one or more ESG criteria.” [COMMENTARY]As You Sow and a team from the University of California did the study. So it’s a quality study. This study provides more ammunition for the SEC to act aggressively on ESG…

“What should the S in ESG refer to? It is logical to assume that it refers to social outcomes associated with our individual welfare or with thriving communities, and measures things like mental or physical health, education, and learning, or elements of subjective well-being like personal dignity or community cohesion. However, as currently conceived, the…

“The ESG mobilisation of capital faces the Sisyphean challenges of political loggerheads and the slow crawl towards commercial-scale data.” [COMMENTARY]The issue of whether to include nuclear and natural gas in the new green EU Taxonomy has provoked significant discussion about what is ‘green’, etc. Similarly for companies, how do you measure their ‘greenness’?There is no…

“In ourannual survey of attitudes towards responsible investment, institutional investors cited fiduciary duty as the top reason for incorporating ESG in their investment approach.” [COMMENTARY]There’s still much confusion concerning the role of ESG and sustainability in fiduciary duty. However, many experts in the field are arguing that with increasing climate change upon us and dramatically…

“Active share is a measure of how much a fund’s holdings deviate from its benchmark index, and funds with the highest active share tend to have the best performance. Thus, while there’s no doubt that, in aggregate, active management underperforms and the majority of active funds underperform every year (and the percentage that underperform increases…

“The Clean200TM is an educational tool intended to give individuals the ability to research companies that are effectively balancing people, planet, and profit.” [COMMENTARY]The Clean 200 is one of the best lists around. What I especially like about this ranking is that the ‘greenness’ of a company’s revenues is given high priority! This is not…

“ESG accounting is a mess. Competing initiatives mean there’s no uniform set of standards for measuring a company’s progress on sustainability. The good news is that a new initiative, the International Sustainability Standards Board, promises to do for sustainability reporting what the International Accounting Standards Board (IASB) does for financial reporting — develop standards for…

“ESG ratings should place increased emphasis on CO2 intensity and emissions rather than the current focus on disclosing corporate policy and objectives, according to an Organisation for Economic Co-operation and Development (OECD) report on the Asia Pacific region.” [COMMENTARY]I see this issue could become big in the years ahead as climate-warming increases. Investors might want…

“The shift to the shadows is problematic for two main reasons. First, the claims being made by listed firms (and esg funds) that they are helping to decarbonise the planet are questionable. Selling a polluting asset does not, in itself, reduce emissions at all, if it keeps pumping oil or digging up coal. Second, as…

“I’ve worked with hundreds of advisors across Canada to help them get comfortable and proactive in the space and, from what I’ve heard, they’ve never lost a client by bringing it up. In fact, they’ve gained clients. However, some who haven’t brought it up have said they’ve lost clients.” [COMMENTARY]I’ve argued this point for decades.…

“The fear 20 years ago that a green investment label could itself enable greenwashing is now playing out two decades later in Europe.” [COMMENTARY]An old colleague, Eugene Ellmen, who authored this article has unique insights into the EU positioning on this matter. His article is well worth reading.EU ‘green’ label for gas and nuclear sparks…

“The NerdWallet survey of more than 2,000 U.S. adults — including 1,608 who currently have investments — conducted online by The Harris Poll asked investors about their thoughts on socially responsible investing, including whether they invest this way and how much of their portfolio aligns with their value systems.” [COMMENTARY]At least the numbers are moving…

“The batteries in electric cars like the ones Tesla manufactures require cobalt, a mineral found in abundance in the Democratic Republic of Congo (DRC). While electric vehicles are important in the effort to combat climate change, there are credible reports of serious human rights violations at informal cobalt mines in the DRC, including widespread exploitation…

“The SEC’s 2021 report, which is based on exams of ratings firms, said that by adding ESG factors, ratings firms may deviate from their usual methodologies, policies or procedures which may not be properly disclosed to investors, the SEC said. Adding ESG ratings also raises the risks of new conflicts of interest if firms feel…

“Firms with high sustainable investing scores earn rising portfolio weights, leading to short-term capital gains for their stocks — realized returns rise temporarily. However, the long-term effect is that higher valuations reduce expected long-term returns. [COMMENTARY]The phenomenon of high ESG performing stocks having relatively high prices and thus not performing as well as rising ESG…

“Auditors need to stay abreast of the evolving issues and reporting requirements connected to ESG or they risk leaving themselves vulnerable to charges of professional negligence.” [COMMENTARY]Environmental groups in many countries are taking governments to court to force them to not only meet their climate change commitments but also to ensure a clean future environment.…

“Sustainable investing is hardly a ‘craze,’ asThe Wall StreetJournalheadline called it. Crypto is a craze; SPACs are a craze; day-trading meme stocks during the pandemic is a craze. Sustainable investing is part of a long-term shift in the way people approach their investments, and it is helping bring about a systemic shift toward stakeholder capitalism.”…

“Both Citi and BlackRock see potential downsides to withdrawing their funds from fossil fuel companies. And it’s not all about profits, but rather having a say over how those firms navigate what may be arocky clean energy transition, they said.” [COMMENTARY]I’ve been agreeing for some time now with the opinion that engaging in dialogue with…

“Not all professional fund buyers are happy with passive funds being repurposed as sustainable.” [COMMENTARY] When funds switch their goals, it’s easy to understand that current holders of those funds might feel cheated. Ethically, shouldn’t the fundholders have a voice in such matters? Switch to ESG indices has not pleased all European investors, by Ed…

“Some advisors appear to be overestimating their knowledge. Advisors’ demonstrable knowledge was similar regardless of their self-assessed knowledge levels. Of those advisors who said their RI knowledge was excellent or very good, one-fifth did not correctly identify 3 true statements out of 10 statements about RI.” [COMMENTARY]The good news is that most Canadian advisors are…