August 2010 Newsletter

August 2010 Newsletter

News & Commentaries by Ron Robins


Faith-Based Funds Outperform Market & Most SRI Funds Says New Study. [COMMENTARY]“[The study] examines the performance of these faith-based funds over three different five-year periods from May 2001 to February 2008. By applying a comprehensive set of tests, the authors find evidence that faith-based funds mostly outperform the market. The results also suggest that faith-based funds do better than socially responsible investing funds in general.”

This looks like a fascinating study. It has been my contention for four decades that investments based on ethics and higher values will eventually demonstrate the best long term returns. But to get a copy of this study costs $45.
The Impact of Faith-Based Screens on Investment Performance, by Esmeralda O. Lyn and Edward J. Zychowicz of the Frank G. Zarb School of Business, Hofstra University, Hempstead, NY, USA.

Virtue May Now Trump Vice.[COMMENTARY]“’Up until now, probably the evidence might lean towards the ’sin’ category doing a bit better, but I’m not sure going forward that would still be the case,’ says Ron Robins, a former investment analyst and founder of the ’Investing for the Soul’ website.” Out today, a Wall Street Journal article quotes me extensively on my thoughts about sin versus ethical investing. However, you do need a subscription to the Journal to see the full article. Individual copies of the article can also be purchased though.
GETTING PERSONAL CANADA: Virtue May Now Trump Vice, by Monica Gutschi, August 11, 2010, The Wall Street Journal, USA.

Shareholders With 3% Or More Shares Can Nominate Directors, Says US SEC. [COMMENTARY]“The Securities and Exchange Commission today adopted changes to the federal proxy and other rules to facilitate the rights of shareholders to nominate directors to a company’s board… Under the rules, shareholders will be eligible to have their
nominees included in the proxy materials if they own at least 3 percent of the company’s shares continuously for at least the prior three years.”

This is great news for all those interested in environmental, social and governance (ESG) issues. It means it will be easier to get ESG oriented directors nominated, and hopefully on the boards of companies.
SEC Adopts New Measures to Facilitate Director Nominations by Shareholders, August 25, 2010, U.S. Securities Exchange Commission, USA. Also,New US proxy access rules a “win-win”, says CalPERS, by Daniel Brooksbank, August 26, 2010, Responsible Investor, UK.

Apple Refuses to Participate In UK Cell Phone Green Ranking. [COMMENTARY]“The UK has started up its own green ranking system for mobile handsets, but Apple wants no part of it. The company has refused to allow the iPhone to be included in the system by O2, but its reasons for declining the opportunity aren’t exactly clear… But Apple doesn’t want to take part. A spokesperson from Apple wouldn’t clarify the reasons, either, only citing
Apple’s online environmental reports for its products (which provide very, very limited information about the products life cycle analysis).”

Does Apple have something to hide? Do they fear their iPhone would show poorly in the rankings?
Apple Refuses To Take Part In UK’s First Green Cell Phone Ranking System, by Jaymi Heimbuch, August 25, 2010, Treehugger, USA.

Climate Counts Updates Its Corporate Sustainability Scores. [COMMENTARY]“The latest update to the Climate Counts scorecard, released today by the nonprofit group launched in 2007 with support from Stonyfield Farm, reflect general improvement in sustainability issues, but huge differences remain sector by sector, and industry as a whole is failing to meet the climate challenge.” For ethical investors, these findings are always useful to look at.
Pharma Leads, Toy Makers Lag in Latest Climate Counts Scores, by Climate Biz, August 19, 2010.

Ceres Leads 50 Institutional Investors Asking Oil & Gas Companies To Disclose Their Emergency Plans For Oil Rig Disasters. [COMMENTARY]“A coalition of mostly institutional investors is demanding oil and gas companies disclose their existing safeguards and plans
of action in the event of another offshore rig disaster and possible oil spill like the one experienced by BP PLC and other companies in the Gulf of Mexico.”
The responses to this request will be watched by the entire investment world. The companies have a duty to be fully transparent and ready for criticism concerning their plans.
Investors Ask Oil, Insurance Groups to Disclose Safety Plans, August 5, 2010, Nathanial Gronewold, Greenwire in The New York Times, USA.

India May Institute Mandatory CSR Reporting. [COMMENTARY]“Corporate social responsibility (CSR)… will now be made mandatory for corporate India, sources in the Ministry of Company Affairs told CNBC-TV18. If approved, companies will have to spend 2% of the average net profit on CSR.” I have been calling for mandatory CSR reporting for many years. It is great to see both developed and developing countries getting with it. See:A Call for Mandatory Corporate Social Responsibility Reporting andWe Need Mandatory Corporate Social Responsibility (CSR) Reporting.
Mandatory CSR not a great idea, feels India Inc., August 5, 2010,, India.

The International Integrated Reporting Committee (IIRC) Plans To Develop Company Annual Reports That Integrate CSR. [COMMENTARY]“The IIRC′s remit is to create a globally accepted framework for accounting for sustainability. A framework which brings together financial, environmental, social and governance information in a clear, concise, consistent and comparable format – put briefly, in an ’integrated’ format. The intention is to help with the development of more comprehensive and comprehensible information about an organization′s total performance, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economic model.”

This initiative is extremely timely and led by some outstanding individuals and organizations. What they aim for is something I have desired to see accomplished for two or three decades. I wish them great success!
Formation of the International Integrated Reporting Committee (IIRC), press release, August 2, 2010, IIRC, UK.

Something Different: The Quest For Gross National Happiness. [COMMENTARY]“In Bhutan, the economic challenge is not growth in gross national product, but in gross national happiness (GNH). I went to Bhutan to understand better how GNH is being applied. There is no formula, but, befitting the seriousness of the challenge and Bhutan’s deep tradition of Buddhist reflection, there is an active and important process of national deliberation.” This is the kind of debate all societies need. Human induced climate change, excessive debt, and resulting recessions and depressions, are the result of not first finding lasting fulfillment within ourselves.
Happy growth in a Buddhist economy, by Jeffrey D Sachs, August 28, 2010, TODAYonline, USA.

Recent Commentaries by Ron Robins on

Unethical Statistics Lead us Astray, August 3, 2010.

The Coming 21st Century Global Trade War? August 6, 2010.

The Ethics of Gold, August 24, 2010.

Leave a Reply

Your email address will not be published. Required fields are marked *