February 2013 Newsletter

February 2013 Newsletter

News & Commentaries by Ron Robins


Finding the Value in ESG Performance. – [COMMENTARY] “In its winter edition of the semiannual Deloitte Review, Deloitte LLP released a study of the impact of environmental, social, and governance (ESG) issues on business performance and investor behavior. ’Finding the Value in Environmental, Social, and Governance Performance’ reviews evidence showing that environmental, social, and governance (ESG) issues can result in fundamental shifts in a company′s financial health, management, and culture. Companies that are demonstrably prepared for ESG shocks are better positioned to mitigate the downside risks.”

There is useful information in the above-cited report. It supports the theme that sustainable and responsible companies’ stock prices can outperform.
Finding the Value in ESG Performance, by Tyler Collins, February 14, 2013, First Affirmative Financial Network, LLC, USA.

Breakthrough Regarding Legal Liability of Canadian Mining Corporations for Abuses Overseas. – [COMMENTARY] “In an important precedent-setting development for the accountability of Canadian mining companies for alleged overseas human rights abuses, victims of rape and murder at a Guatemalan mine are now able to sue a Canadian mining company in Canadian courts.” This is precedent setting. It could have a powerful effect on encouraging miners to fully engage and cooperate with communities in the developing world.
Breakthrough Regarding Legal Liability of Canadian Mining Corporations for Abuses Overseas, February 25, 2013, SRI Monitor, Canada.

The Deplorable Ethics Of US Regulators & Government Exposed By Elizabeth Warren–New Member Of The Senate Banking Committee. Ms. Warren asks, ’why have too big to fail [financial institutions] become too big to trial?’ It’s obvious from the testimony that US financial regulators and the federal government have put financial interests above ethics and morality. The moral hazard created by this total neglect of ethics and justice will lead to even bigger financial crisis in the years to come.
Elizabeth Warren EMBARRASSES Bank Regulators At First Hearing, February 14, 2013, You Tube, USA.

Why The Fracking Boom May Actually Be An Economic Bubble.– [COMMENTARY] “Fracking proponents like to use an evocative economic metaphor in talking about their industry: boom. The natural gas boom. Drilling is exploding in North Dakota and Texas and Pennsylvania. Only figuratively so far, but who knows what the future holds. The Post Carbon Institute, however, suggests in a new report [PDF] that another metaphor would be more apt: a bubble, like the bubbles of methane that seep into water wells and then burst.”

The Wall Street hype around fracking is totally self-serving. But that’s what you expect from Wall Street. The report cited here offers some alternative facts and opinions. I think that most ethical investors are quite sceptical and concerned about fracking for a whole host of reasons–particularly those associated with the environment.
Why the fracking boom may actually be an economic bubble, by Philip Bump, February 19, 2013, grist, USA.

SRI Performance Still Very Difficult To Measure–Novethic.– [COMMENTARY] “Novethic, a French research centre focused on Socially Responsible Investment (SRI) and Corporate Social Responsibility (CSR), has concluded after analysing SRI funds across Europe that a consistent standard for performance measurement still needs to be agreed and implemented across the sector.” Absolutely right! Furthermore, with the standards for reporting should be independent auditing of how the data is collected, interpreted and reported, similar to how financial reports are prepared, etc.
SRI performance still very difficult to measure – Novethic report, by Caroline Allen, February 19, 2013, Investment Europe, France.

UN Principles For Responsible Investment (UNPRI) Publishes Two New Important ESG Related Reports.
1)Integrated Analysis, on “how investors are addressing ESG factors in fundamental equity evaluation.”
2)Aligning Expectations, offering “guidance for asset owners on incorporating ESG factors into manager selection, appointment and monitoring.”
February 2013, UNPRI.

Despite Growing Engagement, Corporate Environmental Impacts Continue To Grow, Says Study. – [COMMENTARY] “The most comprehensive assessment of corporate sustainability activity to date shows that while companies around the world engage in a wide range of sustainability initiatives, the costs to the environment continue to grow. The sixth annual “State of Green Business” report (download free at greenbiz.com/stateofgreenbusiness), published by GreenBiz Group in association with Trucost, measures the environmental efforts and impacts of 500 U.S. companies and more than 1,600 of their global counterparts. It tracks more than 30 metrics … some never before reported on a global basis.”

This is a terrific report for all ethical investors. Getactual report and a greatwrite-up.
Despite Growing Engagement, Corporate Environmental Impacts Continue To Grow, Says Study – 2013 “State Of Green Business,” February 12, 2013, mondovisione, UK.

US Consumers Interest In Buying Green Products Declines.– [COMMENTARY] “NMI′s annual LOHAS Consumer Trends Database… (LCTD) keeps a pulse of how consumer sentiment and behavior change on a yearly basis. One noticeable trend from the 2012 LCTD is that negative perceptions of environmentally-friendly products is keeping an increasing number of consumers out of the market, even while more people know about them, and know where to buy them.” We have here fascinating insights into consumer purchasing behaviour of green products. Anyone investing in companies making green consumer products might want to read this article and related references.
One Step Forward, Two Steps Back, by Gwynne Rogers, February 5, 2013, LOHAS Online, USA.

Climate Policy Could Knock Off Half The Value Of Fossil Fuel Companies. – [COMMENTARY] “A recent (subscriber-only) report from HSBC Global Research helps shed some light on what′s at stake in the fight over climate policy. Short answer: a hell of a lot, especially if you′re invested in fossil fuels.”

I support a completely level playing field and the elimination of ALL financial supports and subsidies for energy. That includes everything from governments insuring nuclear facilities (which would be totally uneconomical left to market forces) and everything in between. On that basis, studies I’ve read would make wind and even solar incredibly competitive!
Attention investors: Climate policy could knock off half the value of fossil fuel companies, by David Roberts, February 8, 2013, grist, USA.

Featured New Book

Conscious Money: Living, Creating, and Investing with Your Values for a Sustainable New Prosperity, by Patricia Aburdene, Atria Books/Beyond Words 2012.
“Conscious Money does for individuals what Conscious Capitalism did for corporations: it articulates a simple, brilliant framework for achieving sustainable financial results, while espousing the highest ideals. Read it, get inspired, and prosper.”—John Mackey, co-CEO and co-founder of Whole Foods Market.

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