February 2009 Newsletter

February 2009 Newsletter

News & Commentaries by Ron Robins


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Alcoa, Hess & Time-Warner Rated As Tops In Environmental & Sustainability Reporting Among New York Based Firms. [COMMENTARY] “The Roberts Environmental Center of Claremont McKenna College (CMC) today released a detailed analysis of the
social responsibility reporting efforts of New York’s top corporations. Titled ’Analysis of Sustainability Reporting in New York Public Companies,’ the report contains a compilation of Pacific Sustainability Index scores evaluating the environmental and social reporting of the 91 New York companies on the 2008 Fortune 1000 list… The report scores companies based on the reporting, intent, and performance of environmental and social sustainability efforts. The research, based entirely on material released on the firms’ Web sites…”

The report makes fascinating, detailed reading, and demonstrates to all companies the advantages of using corporate social responsibility.
New Report Grades Sustainability Reporting of New York Fortune 1000 Companies, press release, February 24, 2009, Claremont McKenna College, USA.Download full report (PDF 8MB)

Europe’s December SRI Fund Sales Hit 1-Billion Euros For The First Time. [COMMENTARY]“… figures compiled for Responsible Investor by Lipper Feri, the investment data group. Total sales for the SRI sector for December, 2008 were …999.4m ($1.3bn) to take its overall value of to …35.4bn. Significantly, total SRI fund sales came out at 10% of the total European equity fund sales figure of just over …10bn in December, which suggests SRI fund sales are holding up well and increasing in comparison to their mainstream peers during the current economic market crisis. SRI funds typically represent around 1-2% of the total European equity fund market, which is valued at just over …1 trillion as measured by Feri.”Increasingly, investors are coming to believe that the best stocks that are good to invest in have an ethical and green hue to them.
SRI fund sales hit 1 billion euro mark in December, green sales positive, by Hugh Wheelan, Responsible Investor, UK.

Hampshire College States Fund Divestment Related To KLD’s SRIAnalysis Of its Holdings. [COMMENTARY]“In sum, what KLD found was that of the fund’s 455 holdings,
well over 200 raised significant concerns relative to Hampshire College’s socially responsible investment policy and were in violation of values of socially responsible investing. It was on this basis that the investment committee voted as it did to exit from the fund when an alternative fund has been identified. The decision was entirely unrelated to Israel or the Israeli-Palestinian conflict.”

It seems to me that Hampshire College has set an excellent example of what all endowment and foundation funds should be doing — looking for ethical stocks that are good to invest in.
An open letter to Alan Dershowitz, by Ralph Hexter, president, Sigmund Roos, chair of the Board of Trustees Hampshire College, USA, published in The Jerusalem Post, Israel.

India’s First Shariah Compliant Mutual Fund Launched. [COMMENTARY] “Introducing a newer concept in Indian mutual fund industry, [the] Taurus Ethical Fund, India′s first equity oriented Shariah compliant mutual fund, wherein investment will be made only in a universe of 152 companies in compliance with Shariah norms.” With its huge Muslim population as well as the growing interest in ethical investing, this fund could fill an important niche in the Indian mutual fund industry.
Taurus MF launches Taurus Ethical Fund, February 18, 2009, The Economic Times, India.

Consumers Rate America’s Greenest Brands. [COMMENTARY] Companies with high scores include, “Whole Foods, Trader Joe’s, Wegmans, Fresh & Easy, Publix, MOMs, Tom’s
of Maine, Burt’s Bees, Green Mountain Coffee, Odwalla and Kashi, among others.”
As these companies demonstrate, a green and ethical business environment continues to grow.
Whole Foods, Google, Trader Joe’s Among Consumers’ Greenest Brands: Report, February 17, 2009, GreenBiz, USA.Click here for actual survey results.

Report Reviews Social & Environmental Disclosure Using Case Studies In Brazil, France, South Africa & Sweden. [COMMENTARY] “The initiatives in the five case studies presented provide models for similar regulatory action by U.S. agencies or stock exchanges to promote transparency and efficiency in U.S. markets.” An ethical business environment demands full disclosure and transparency. Because of the lack of this and to supposedly ’safeguard’ the system, unethical behaviour has been allowed to flourish. Only a new higher consciousness with some of the examples outlined in this report will turn the tide. Fortunately, some signs of this are appearing.
Innovations in Social and Environmental Disclosure Outside the United States, November 2008, Domini Social Investments and The Social Investment Forum, USA.

KKR, The Blackstone Group, & The Carlyle Group, Among Leading Global Private Equity Funds Agreeing To Incorporate ESG In Research Analysis. [COMMENTARY]“The member firms of the Washington, DC-based lobbying group Private Equity Council [PEC] have signed on to a set of socially responsible investment guidelines. Member firms include Bain Capital Partners, TPG, Permira, The Blackstone Group, Apollo Global Management, The Carlyle Group, Apax Partners, Hellman & Friedman, Kohlberg Kravis Roberts, Madison Dearborn Partners, Providence Equity Partners, Silver Lake and Thomas H Lee Partners.”

This is a big breakthrough for ethical investing! Read the article and believe that short-sighted, short-termism that lead to so many of our financial difficulties today, is dying, and now being replaced by the longer term inclusion of environmental, social, and governance (ESG) factors. The PEC themselves also appear to believe that this new orientation can lead to greater profits — which is what ethical investors have long maintained will be the inevitable consequence of including ESG in investment analysis.
Mega-firms embrace socially responsible investing, by Christopher Witkowsky, February 10, 2009, Private Equity Real Estate, USA.

Islamic Funds Outperforming Benchmark Indices. [COMMENTARY] “Dow Jones Islamic Market Indexes, which represent benchmarks for Islamically correct investment
categories, have been outperforming their non-Islamically compliant counterparts by 3 to
4 percent in key indexes. The two Amana Income and Growth funds, the largest Islamic mutual funds in the country [USA] with $1.2 billion in combined assets, have been outperforming the S&P 500 in the past year by 13 and 7 percent, respectively. (Both Amana funds also outperform the S&P index on 5- and 10-year comparisons.)”

Investments in Islamic funds have to meet strict ethical and spiritual guidelines. Thus they have avoided the worst excesses of the current financial disaster. Values-based investors also might want to look into the ethics and theoretical underpinnings of Islamic finance to help them in their investment decisions.
Muslim investors profit by adhering to faith, by Matthai Kuruvila, February 9, 2009, San Francisco Chronicle, USA.

Morningstar’s Guide To Green & Socially Responsible Investing (SRI). [COMMENTARY] This is a useful overview of green/SRI investing with particular reference to SRI mutual funds in the US.
The Morningstar Guide to “Green” and Socially Responsible Investing, Morningstar, USA.

Forbes Magazine Features Advisor’s Choice Of Ten Top Green Stocks. [COMMENTARY] His choices include GE and United Technologies. Some ethical investors may certainly argue the merits of these companies. However, there are others among the chosen ten that ethical investors could live with.
Green your portfolio, by Charles Carlson, February 3, 2009, Forbes.com, USA. (Click on the “In Pictures: 10 Green Dividend Reinvestment Plans.”)

2nd Annual Survey Of The State Of Green Business By GreenBiz Shows Little Change. [COMMENTARY] The report has some interesting statistics concerning US energy use, green patents, etc.
State of Green Business 2009: Green is Growing, But Not Fast Enough, February 2, 2009, GreenBiz, USA.

At Davos, UN & GRI Launch New ESG Reporting Guidelines For Financial Services.[COMMENTARY] “A set of best-practice sustainability reporting criteria for financial services companies has been launched at a high-level dinner at the World Economic Forum in
Davos by the United Nations and the Global Reporting Initiative (GRI)… hosted by
Innovest, the SRI research company, expected [were] Lord Nicholas Stern, author of the Stern report, Joseph Stiglitz, the Nobel Laureate Economist, George Soros, the financier and philanthropist.”

This initiative is worth watching as it integrates and represents views of those devoted to ESG as well as established financial interests.
Davos launch of UN-backed ESG reporting guidelines for financial services companies, by Hugh Wheelan, January 29, 2009, Responsible Investor, UK.

From An Investors Perspective, F&C Looks At Corporate Governance In Emerging Markets. [COMMENTARY] Investing in emerging markets poses many difficulties for ethical investors, including poor laws, lack of enforcement, and frequent use of bribes, amongst other impediments. This is a useful overview of the subject.
Research Review: Corporate Governance in Emerging Markets: An Investor’s Roadmap, December 2008, F&C Investments, UK.

Corporate Knights Publishes Its Canadian 2009 Responsible Investment Guide. [COMMENTARY] Canadian ethical investors, particularly, will want to read this guide.
2009 Responsible Investing Guide, February 2009, Corporate Knights, Canada.

New Book Release

Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered, by Woody Tasch, Chelsea Green Publishing 2008.
“I have great hope that sustainable, locally based food systems will help us all in more ways than we imagine. Slow Money can play a huge role in doing this and Woody′s book is an inspiration to all of us working in sustainable agriculture. I can′t wait to live in a world supported by Slow Money.”—Tom Stearns, President, High Mowing Organic Seeds.

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