News & Commentaries by Ron Robins
Huge US Funds Manager TIAA-CREF To Engage In Effort To Avoid Companies With Ties To Genocide. – [COMMENTARY]“In an important victory for the cause of genocide-free investing, Investors Against Genocide has announced it withdrew its shareholder proposal from the proxy ballot for TIAA-CREF’s July shareholders’ meeting. This announcement follows TIAA-CREF’s decision to vigorously engage PetroChina and other problem companies partnering with the Government of Sudan and to divest from those companies if they continue to substantially contribute to genocide or crimes against humanity. TIAA-CREF’s policy applies to the ongoing genocide in Darfur, Sudan, as well as to future genocides.”
As was the case with funds and banks boycotting apartheid South Africa, so divesting from companies with ties to regimes associated with genocide could gain real momentum.
TIAA-CREF Announces Escalation in Efforts to Avoid Investments in Companies with Ties to Genocide, press release, March 26, 2009, Investors Against Genocide, CSRwire, USA.
TARP Banks Rebuff Shareowner Request to Create Economic Security Committees. – [COMMENTARY]“Shareowner proposal introduced by Harrington Investments is excluded from proxy ballots by the SEC, and Bank of America and Citigroup refuse a direct request from Harrington to form a board-level committee.” After reading this item, a reader has to conclude that the financial elites will go to any lengths to protect their interests–even if it is at the expense of the public interest.
TARP Banks Rebuff Shareowner Request to Create Economic Security Committees, by Robert Kropp, March 26, 2009, SocialFunds.com, USA.
Useful, Brief Primer On Shariah Stock Screening. – [COMMENTARY] “Sharia-compliant investment management is concerned with investments in assets that are in compliance with Islamic law. An Islamic investor is not allowed to invest in companies that derive most of their revenue from non Sharia-compliant business activities, or that use interest in operating or financing their business. In the context of investing in equities, screening for Sharia compliance is ensured using two main screens: business activities and financial ratios.” Many ethical investors and analysts might like to read this article for insights they could apply to their own investment analysis.
Sharia stock screening gains ground, by Zaineb Sefiani, March 26, 2009, Emirates Business 24/7, United Arab Emirates.
’Say On Pay’ Non-Binding Shareholder Resolutions Becoming A Feature At Canadian Company Annual General Meetings. – [COMMENTARY] “Over the past month, 10 of Canada’s largest companies have agreed to give investors a non-binding annual vote on chief executive officer pay – a practice known as say on pay – and Mr. Hawton anticipates many more will voluntarily adopt the practice as it enters the mainstream.” The furor surrounding the AIG bonus situation may well change senior level compensation packages in public companies for years to come. But special compliments need to be paid to Gary Hawton for pioneering say on pay resolutions in Canada for the past several years. Companies with declining revenues yet with executive compensation hundreds of times the annual pay of company employees, is simply unethical and irresponsible.
Amid Wall Street bonus furor, Canadian boards pay heed, by Janet McFarland, March 24, 2009, The Globe & Mail, Canada.
US Insurance Regulators Requiring All Insurance Companies With More Than $500 Million In Annual Premiums To Disclose Climate Change Risks & Plans To Deal With It. – [COMMENTARY] “The National Association of Insurance Commissioners (NAIC) today adopted a mandatory requirement that insurance companies disclose to regulators the financial risks they face from climate change, as well as actions the companies are taking to respond to those risks.” Great news for policyholders as well as for ethical investors looking for insurance stocks that are good to invest in.
Insurance Regulators Adopt Climate Change Risk Disclosure, March 17, 2009, press release, National Association of Insurance Commissioners, USA. Also,Insurers Must Reveal Climate Change Risks, March 19, 2009, ClimateBiz, USA.
MBA Students Seek Long Term Focus In Curricula (2). – [COMMENTARY] “Nine out of ten respondents say that a focus in business on short-term rather than long-term results has been one of the contributing factors to the global financial crisis. Just 24% of respondents strongly agree that they are learning how to make business decisions that will help avert similar crises. In addition, a majority of the students surveyed strongly agree that there is a need for business schools to introduce other financial models into the curriculum, specifically models that take long-term social impacts into account.” Wow, what a change in a few short years! Another example that the short-term anything goes mentality is giving way to a new higher holistic consciousness.
New Leaders: New Perspectives. A Survey of MBA Student Opinions on the Relationship between Business and Social/Environmental Issues. By Net Impact in partnership with the Aspen Institute Center for Business Education, USA.
US Population Less Convinced About Global Warming. – [COMMENTARY] “Although a majority of Americans believe the seriousness of global warming is either correctly portrayed in the news or underestimated, a record-high 41% now say it is exaggerated. This represents the highest level of public scepticism about mainstream reporting on global warming seen in more than a decade of Gallup polling on the subject.” This will be an important trend to watch!
Increased Number Think Global Warming Is “Exaggerated.” Published on lohas.com. Source: Gallup Polling, USA.
Norway’s Giant Oil Fund Bars China′s Dongfeng Motor Group Co. Ltd.; Is Reviewing Siemens AG For A Possible Ban. – [COMMENTARY] “The $297 billion fund will be barred from investing in Dongfeng Motor on a recommendation from the Council on Ethics because of sales of military trucks to Myanmar, the Finance Ministry said in Oslo today… Germany′s Siemens AG, Europe′s largest engineering company, was put under observation because of the ’gross and systematic corruption the group has been involved in over many years,’ Norway said.” Norway’s giant fund continues to demonstrate leadership in its selection of ethical stocks and bonds. It is worthwhile for ethical investors to always take not of what this fund does.
Norway Bans Dongfeng From Oil Fund; Siemens on Watch (Update3), by Marianne Stigset, March 13, 2009, Bloomberg, Norway.
Survey: Business Students Want Companies To Address Environmental & Social Issues (1). – [COMMENTARY]“… 77 percent of MBA students view acting responsibly as a way to increase corporate profits, a figure that has grown since 2006, when 60 percent of students saw the correlation between CSR and profitability in Net Impact’s first study.” It seems that business students really appreciate the advantages of using corporate social responsibility.
MBA Students Say Businesses Should Address Green and Social Issues, March 12, 2009, GreenBiz, USA.
Recession Slowing Corporate Social Responsibility Initiatives. – [COMMENTARY] “The [Booze & Co.] survey reveals that 40 percent of respondents expect green and other corporate social responsibility (CSR) initiatives to significantly slow due to the downturn, while 29 percent of respondents don′t believe it will delay green projects. The pullback will be especially evident in transportation and energy industries, with, respectively, 51
percent and 47 percent of respondents in those industries saying CSR agendas will be delayed.” While business students (see above) understand the advantages of using corporate social responsibility, it seems many companies still view it as an expense that can be cut when times get tough.
Survey: Recession Slows Corporate Sustainability Efforts, March 11, 2009, Environmental Leader republished at lohas.com, USA.
New Index Series Tracks Gender Equality. – [COMMENTARY] “’What we found to be especially interesting in our research was the positive correlation between gender diversity in Boards of Directors and senior management and the quality of earnings reported by companies,” Gorte continued… The Index series will include large and mid cap companies that recruit, retain, and promote women.’” This will be a fascinating index series to watch and to see how it influences both corporate management and investor behaviour. Will the best socially responsible stocks to invest in be led by women?
Goal of New Index Series Is to Advance Gender Equality, by Robert Kropp, March 11, 2009, Social Funds, USA.
Investors With $55 Trillion In Assets Want More Corporate Action On Carbon Emissions Reductions & Strategies. – [COMMENTARY] “Investors that are signatories of the Carbon Disclosure Project (CDP), a nonprofit organization which acts as an intermediary between shareholders and corporations on climate change issues, want the companies in which they invest to do more than just disclose climate and carbon information. The CDP signatories, who manage $55 trillion in assets, want companies to take such additional actions as adopting emissions reductions targets and developing low carbon solutions as well.”
The survey of institutional investors supports the view that analysts are increasingly incorporating climate change factors in their analytical methodologies. The survey results were compiled by Mercer.
Investors Want More Disclosure of Climate Risk Data from Corporations, by Robert Kropp, March 10, 2009, Social Funds, USA.
CRO Magazine Says Bristol Myers-Squibb, General Mills, Inc., & IBM Corp. Are 2009’s Top Corporate Citizens In Its Top 100 List. – [COMMENTARY] “… the methodology used to compile this year′s 100 Best list was debated and voted on in open session by 27 leading corporate responsibility practitioners representing nine major industry segments October 2008 at the CRO Conference in Chicago.” Of course, in such lists, one has always to pay attention as to how they are compiled. Most of these companies are considered among the most popular stocks that are good to invest in by SRI funds.
100 Best Corporate Citizens 2009, March 9, 2009, CRO Magazine, USA.
Christian Brothers Survey: Human Trafficking & Abortion Top Issues Of Concern Among Catholic Institutional Investors. – [COMMENTARY] Other issues of concern are, “… companies that support governments engaged in genocide or terrorism… environmental justice, sweatshops/contract supplier standards, and access to water and responsible use of water resources… 85% of Catholic institutional investors believe that active ownership has a positive impact on corporations.” Morally conscious investing is huge. In America, one dollar in nine is invested in portfolios that screen-out investments engaged in activities such as those cited above. Spiritual investors will find the results of this survey useful.
Christian Brothers Investment Services Announces Results of New Catholic SRI Survey, press release, March 9, 2009, Christian Brothers Investment Services, USA.
New US Low Carbon Index Launched By S&P. – [COMMENTARY] “The S&P U.S. Carbon Efficient Index is composed of a subset of constituents in the S&P 500 with a relatively low Carbon Footprint while maintaining at least 50% of the original weight representation for every GICS… sector in the S&P 500. The Carbon Footprint is calculated by Trucost PLC and is defined by the company′s annual greenhouse gas (GHG) emissions assessment,
expressed as tons of carbon dioxide equivalent (CO2e) divided by annual revenues.” With its emphasis on capturing large-cap, low carbon, S&P 500 companies, this index could prove useful to many green and ethical investors. No doubt various ETFs and index-based funds will be created from it.
S&P U.S. Carbon Efficient Index, March 9, 2009, Standard & Poor’s, USA.
European Study Shows No Outperformance Of SRI Funds During 2002-7. – [COMMENTARY]“’None of the socially responsible investment equity funds available to European investors produced alpha or outperformance, according to an EDHEC Risk and Asset Management Research Centre study released today… ’SRI security selection in itself does not lead to outperformance,’ the report said. ’Our results show that SRI fund performance is accounted for instead by style biases and market cycles.’”
This author is just saying that there are still no magic SRI formulae for stock market outperformance. However, as I have argued many times we can at least invest according to our values and still likely enjoy conventional returns. But I still believe that investment analysis incorporating ESG (environmental, social and governance) and ethical factors will over the long-term provide superior market returns.
EDHEC: No alpha from SRI funds for Europeans, by Barry B. Burr, March 9, 2009, Pensions & Investments, USA.
SIRAN: Corporate Responsibility Gaining Ground In Emerging Markets. –[COMMENTARY] “By using a subset of EIRIS′ assessment methodology and publicly available documentation, 40 leading companies in ten emerging markets were examined and each company was assessed against key environmental, social and governance (ESG) criteria… This study′s findings indicate that the majority of the 40 emerging market companies have shown evidence of addressing at least some ESG issues in their public disclosures.”
SIRAN is a network of 150 investment analysts in North America, supporting the ESG research work in more than 30 investment related firms. It’s terrific to see companies in emerging markets seeing the advantages of using corporate social responsibility.
A Review of ESG Practices in Large Emerging Market Companies, March 2009, SIRAN, USA.
Pollution Cap Could Boost 1,200 US Companies. – [COMMENTARY] “Legislation that puts a cap on greenhouse gas pollution will spur job expansion in a dozen manufacturing states in the U.S., according to the Environmental Defense Fund. The environmental group published on Friday an onlineinteractive map identifying more than 1,200 companies that stand to benefit from future climate change legislation.” Indeed, a re-alignment of dollar flows from carbon producers to green and greener companies could soon take place.
EDF Maps 1,200 Companies Poised to Benefit from Climate Laws, March 2, 2009, GreenBiz.com, USA.
The Sunday Times (UK) Publishes ’The Rich Green List.’ – [COMMENTARY] “This first Sunday Times Green Rich List shows that the enthusiasm among the world′s wealthiest for investments in areas as diverse as electric cars, solar power and geothermal energy is unaffected by the recession.” It’s inspiring to read how the world’s richest people are putting their money into green and sustainable investments.
The Green Rich List, by Philip Beresford, March 1, 2009, The Sunday Times, UK.
The Uptime Institute Publishes Its List Of The World’s 100 Greenest Companies. – [COMMENTARY]“The list highlights the significant energy efficiency achievements of global corporations operating major data centers. It includes exemplary FORTUNE 500 and InformationWeek 500 organizations with a demonstrated board-level policy and governance commitment to increasing energy efficiency and reducing the carbon footprint of their enterprise IT and data center operations.” These are certainly among the world’s most environmentally conscious major corporations. You have to suspect that there is a correlation between a company’s focus on green IT and their commitment to sustainability.
The 100 Top Green IT Companies, February 27, 2009, Uptime Institute press release on lohas.com, USA.
Can SRI Ratings Predict Stock & Portfolio Performance? By Ron Robins, March 13, 2009.
Can SRI Ratings Predict Corporate Behaviour? By Ron Robins, March 13, 2009.