August 2008 Newsletter

August 2008 Newsletter

News & Commentaries by Ron Robins


Another US Socially Responsible Investing (SRI) Study Confirms That SRI Delivers As Good Or Better Returns Than ’Conventional’ Investing. [COMMENTARY]The study compares the performance of many US SRI funds from their inception up until June, 2006, with various other funds. You can download it from the following link, though you must first click ’choose download location.’
Socially Responsible Investments, by Meir Statman, Glenn Klimek Professor of Finance, Santa Clara University, California, USA.

First US SRI Corporate Bond Indexes Launched. Created By KLD Research, Analytics, Inc, Ryan ALM, Inc. & Mergent, Inc. [COMMENTARY]“These investable indexes are the first to apply environmental, social and governance (ESG) performance factors to a U.S. fixed income asset class.” Finally, we see an ESG US corporate bond index! This is good news for ethical investors. Hopefully, such indexes will soon be created elsewhere too.
KLD, Ryan ALM and Mergent Launch Family of U.S. Environmental, Social and Governance (ESG) Corporate Bond Indexes, August 7, 2008, MarketWatch, USA.

Xcel, Biggest US Builder Of Coal Powered Power Plants Ordered To Disclose To Investors Global Warming Risks. [COMMENTARY]“The agreement Wednesday between [New York’s] attorney general, Andrew M. Cuomo, and the company, Xcel Energy of Minneapolis, is the first of its kind in the country. It could open a broad new front in efforts by environmental groups to pressure the energy industry into reducing emissions of the greenhouse gases that contribute to global warming.”

There is a powerful reason why this is happening. Major greenhouse gas emitters could be liable to lawsuits by investors and others by not disclosing climate change risks posed by their activities. Furthermore, with potential costly restrictions on carbon production possible, investors must be warned about these risks too. Here we see an example of the importance and the advantages of using corporate social responsibility proactively.
Xcel to Disclose Global Warming Risks, by Nicholas Confessore, August 28, 2008, The New York Times, USA.

Investors Get Major Companies To Act On Climate Change. [COMMENTARY]“[In 2008] A record 57 climate-related shareholder resolutions were filed with U.S. companies, of which nearly half were withdrawn after the companies agreed to positive climate-related commitments. Remaining resolutions that went to a vote received record high average voting support of 23.5 percent, including 39.6 percent support for a resolution filed with coal company CONSOL Energy, the highest vote ever on a global warming shareholder resolution.” The number of environmentally conscious major corporations grows rapidly. This is good for the world – and great for ethical investors. Well doneCeres and the Interfaith Center on Corporate Responsibility (ICCR) for promoting these proxy fights.
Investors Achieve Major Company Commitments on Climate Change, Ceres/ICCR press release, August 26, 2008, Accountability Central, USA.

American Website For ’Biblically Responsible Investing’ Launched. [COMMENTARY]“Biblically Responsible Investing is the act of building an investment portfolio consisting only of companies that do not participate in or promote lifestyles that are offensive to Christian values.” Also, the site mentions a biblically responsible stock index it calls Integrity I-DEX.
Moral Money, USA.

Business For Social Responsibility (BSR) Publishes New Report On The Mainstreaming Of Environmental, Social, & Governance (ESG) Issues By Financial Institutions.[COMMENTARY]“This report looks beyond socially responsible investors and explores how mainstream financial institutions can advance the use of ESG criteria to maximize financial performance.” The report cites the following points to making ESG issues being considered commonplace among financial institutions: more ESG data linking it to financial returns; the need to regulate the reporting of ESG information; convincing shareholders to think long-term where ESG factors become increasingly critical; larger numbers of investment professionals knowledgeable about ESG criteria; and dealing with cynicism about ESG criteria. This report is useful reading for all investment professionals and ethical investors alike.
Environmental, Social and Governance: Moving to Mainstream Investing? August 20, 2008, Business for Social Responsibility, USA.

Human Rights Watch Critical Of Olympic Corporate Sponsors. [COMMENTARY]“The major corporate sponsors of the Beijing Olympics have failed to uphold their own principles of corporate social responsibility, Human Rights Watch said today… The 12 TOP (“The Olympic Partner”) sponsors of the Beijing Games are Atos Origin, Coca-Cola, General Electric, Manulife, Johnson & Johnson, Kodak, Lenovo, McDonald’s, Omega (Swatch Group), Panasonic, Samsung, and Visa. Over the last 12 months, Human Rights Watch repeatedly contacted all TOP sponsors and met with five of these companies, off the record. The other seven failed to respond to repeated requests to meet with Human Rights Watch.”

Many of these Olympics sponsors have hitherto been among the best socially responsible stocks to invest in. It will be interesting to see if socially responsible investing research organizations change any of their ratings of these companies as a result of the Human Rights Watch accusations.
TOP Sponsors Should Back Introduction of a Permanent Olympic Rights Monitor, edited by Kandy Ringer, August 18, 2008,, USA.

Environmental Markets Rankings Survey. [COMMENTARY]“Respondents were asked to vote for their preferred companies covering a range of categories including: emissions; renewables; renewables supply & investment; biofuels; clean technology; carbon sequestration; energy efficiency; and finance… Emissions trading was identified as the green market that will provide the best return on investment over the next ten years, with energy efficiency coming second, wind power third and clean tech and solar power both fourth.” Energy Risk, a UK specialist in tracking and reporting on energy markets, completed and published this survey. It provides an overview on ’insider’ thinking as to what firms perform the best in various energy markets.
Environmental markets rankings survey, summer 2008, BizResearch, August 15, 2008, UK.

Great Report On China’s Prospective Sustainability & Corporate Governance Situation Post Olympics. [COMMENTARY]Any ethical investor with holdings in China, or considering to invest there, will want toread this report. F&C who wrote the report, are a top-ranked UK ethical investing firm. The advantages of using corporate social responsibility are just beginning to be recognized by Chinese companies.
Preparing for the post-Olympics hangover … governance and sustainability in China, July, 2008, F&C Investments, UK.

Want To Invest In Green Fast Food? [COMMENTARY]This is a good review article on the beginnings of a green US fast food industry.
Green Fast Food: Really Here or a Green Dream? By Anne Moore Odell, August 4, 2008, originally from, published on, USA.

New Index Measures Performance Of Green Initial Public Offerings (IPOs). [COMMENTARY]“The Renaissance Green IPO Index captures the performance of newly public companies whose products and services offer solutions to environmental problems.” ’Dotcom’ IPOs were the craze at the height of the tech stock bubble about eight years ago. There has not been a lot in the way of IPOs since then. However, with the worldwide interest in solving our environmental problems, new green IPOs are likely to gain momentum. This unique index attempts to track their performance.
The Renaissance Green IPO Index, Renaissance Capital, USA.

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