June 2013 Newsletter

June 2013 Newsletter

News & Commentaries by Ron Robins


The 21st Century Investor: Ceres Blueprint For Sustainable Investing.– [COMMENTARY] “This Blueprint is written for the 21st Century investor— institutional asset owners and their investment managers—who need to understand and manage the growing risks posed by climate change, resource scarcity, population growth, human and labor rights, energy demand and access to water—risks that will challenge businesses and affect investment returns in the years and decades to come.” The blueprint is good reading for all ethical investors. Download ithere.
The 21st Century Investor: Ceres Blueprint for Sustainable Investing, press release, June 26, 2013, Ceres, USA.

Review Of Evidence: Database of SRI Academic Studies, Commissioned By Calpers, Compiled By UC Davis Graduate School Of Management. – [COMMENTARY] “CalPERS has commissioned this review of evidence as part of its Sustainable Investment Research Initiative (SIRI). It is a searchable database of over 700 academic studies on sustainability factors spanning four decades of research, which examine the impact of these factors on investment risk and return.” This is a great comprehensive review of SRI research that many ethical investors might want to look at.
Review of Evidence: Database of SRI Academic Studies, Compiled by UC Davis Graduate School of Management, June 2013, USA.

Insurers Inflating Books, New York Regulator Says. – [COMMENTARY] “New York State regulators are calling for a nationwide moratorium on transactions that life insurers are using to alter their books by billions of dollars, saying that the deals put policyholders at risk and could lead to another taxpayer bailout.” Here we go again with yet more unethical behaviour among the financial elites!
Insurers Inflating Books, New York Regulator Says, by Mary Williams Walsh, June 11, 2013, DealBook, The New York Times, USA.

The 2013 Best Green Global Brands. – [COMMENTARY] “The 2013 Best Green Global Brands is produced by Interbrand and “powered by” Deloitte, according to the study′s — well, branding. The study measures the environmental perception of 100 global brands and compares it to those companies′ actual environmental performance. This year′s ranking shows Toyota maintaining the No. 1 spot, with Ford, Honda, Panasonic, Nissan, Johnson & Johnson, Volkswagen, Danone, Nokia and Dell rounding out the top 10.” What is useful is not so much the ranking as how the survey is explained in the linked article.
Why are Toyota, Ford and Honda the ‘best green global brands′? By Joel Makower, June 12, 2013, GreenBiz, USA.

Barclays, MSCI Launch Fixed Income ESG Indices. – [COMMENTARY] “Barclays and MSCI Inc. (NYSE: MSCI) today announced the launch of a global family of Environmental, Social & Governance (ESG) fixed Income Indices, the first fixed income benchmark indices based primarily on ESG factors. The indices are co-branded “Barclays MSCI” and will be independently marketed by both firms.” This is milestone development. It demonstrates that large investors are showing interest in fixed income ESG products. Fixed income ESG products could see more rapid growth now. For a good description of the green bond market see,Painting the Bond Markets Green at yourSRI.com
Barclays, MSCI Launch ESG Indices, press release, June 11, 2013, Barclays/MSCI, USA.

Private Equity Adopting ESG, Says Malk Sustainability Partners Survey. – [COMMENTARY] “’Our study shows that ESG management is growing up. Over the past year, more private equity firms have initiated ESG efforts. Those with programs are pushing further. As a relatively young concept in private equity, ESG management is catching on as an important area to align GP performance with LP interests,’ said Andrew Malk, Managing Partner of MSP.” Private equity and limited partnerships can be more entrepreneurial and nimble–better able to adopt new trends they find profitable. Thus, you see the interest of these asset managers in ESG.
Malk Sustainability Partners′ Second Study Reveals ESG′s Drivers, Communication Mechanisms, and Effective Management Programs, press release, June 10, 2013, Malk Sustainability Partners, USA.

Top 50 Canadian Socially Responsible Companies 2013. – [COMMENTARY] “For the fifth year in a row, Maclean′s has partnered with Sustainalytics, a global leader in sustainability analysis, to select 50 leaders in corporate social responsibility…companies who know that doing good is just good business. Canada′s Top 50 Socially Responsible Companies were selected on the basis of their performance across a broad range of environmental, social, and governance indicators and rank at the top of their industry groups.” For ethical investors investing in Canada, this is a good review to read.
Top 50 Socially Responsible Companies 2013, Maclean’s Magazine/Sustainalytics, June 6, 2013, Canada.

CFO Survey: Corporate Social Responsibility Lags in U.S., Optimism About U.S. Economy Grows. – [COMMENTARY] “U.S. businesses trail their global counterparts in terms of how much importance they place on corporate social responsibility (CSR) and sustainability. Nearly half of U.S. chief financial officers rate CSR and sustainability as moderately important or very important items in their business strategies. By contrast, the rating in Europe is 63 percent, 67 percent in Asia, 76 percent in Latin America and 83 percent in Africa.” The data revealed here is nothing new. The US has lagged for many years. In some European countries and elsewhere, government mandates promote corporate awareness and interest in CSR and sustainability.
CFO Survey: Corporate Social Responsibility Lags in U.S., Optimism About U.S. Economy Grows, press release, June 6, 2013, Duke University/CFO Magazine Global Business Outlook Survey, USA.

WattzOn Survey: U.S. Workers Want Their Companies to Take More Action to Protect the Environment, Perception and Participation Is Low. – [COMMENTARY] “Three out of four (76 percent) U.S. workers say it’s important that their employer takes action to protect the environment. While recycling and waste reduction programs are the most prevalent programs employers utilize in and outside the workplace (66 percent and 44.4 percent, respectively), only 27 percent of U.S. workers are very satisfied with their employer’s efforts to help the environment.”

I’m curious, were many senior managers included in this survey? I wonder what their response was? I’m sure that privately, many managers respond to such questions similarly to the mass of employees, but, with financial constraints and other priorities, environmental activities just aren’t a priority.
WattzOn Survey: U.S. Workers Want Their Companies to Take More Action to Protect the Environment, Perception and Participation Is Low, press release, WattzOn, June 4, 2013, USA.

Public Backing for Going Beyond GDP Remains Strong: Global Poll. – [COMMENTARY]“The public around the world remains strongly in favour of replacing GDP with a broader way of reporting national progress, according to a new global poll released today. The study, conducted by GlobeScan on behalf of Ethical Markets, business think tank Tomorrow′s Company and the ICAEW, surveyed 10,845 adults across 11 countries. It shows that more than two-thirds – 68 percent of citizens on average – in the countries surveyed favour replacing GDP with a broader indicator embracing health, social and environmental statistics as well as economic ones. Twenty-three per cent would rather retain a focus on money-based economic statistics.”

There are presently a number of good alternative indices. The real question though, is how to wean the global business community away from the ridiculously flawed GDP concept? See my editorial,GDP is a Bad Statistic. Alternatives Coming.
Public Backing for Going Beyond GDP Remains Strong: Global Poll, press release, May 28, 2013, polling by GlobeScan and associates, UK.

Morningstar 2013 Global Fund Investor Experience Survey. – [COMMENTARY] “The Global Fund Investor Experience report was designed to encourage a dialogue about global best practices for mutual funds from the perspective of fund shareholders. This biennial report measures the experiences of mutual fund investors in 24 countries in North America, Europe, Asia, and Africa. Morningstar researchers evaluated countries in four categories—Regulation & Taxation, Disclosure, Fees & Expenses, and Sales & Media—with greater weight given to factual, empirical answers as well as the high-priority issues of fees, taxes, and transparency.” This survey is worth reading for all investors.
2013 Global Fund Investor Experience by Morningstar, May 31, 2013, Morningstar, USA.

UK Pension Fund Trade Body Launches Responsible Investment Guide. – [COMMENTARY] “The National Association of Pension Funds (NAPF) has launched a guide to responsible investment, which encourage its members to take factors other than financial returns into account when investing.” This guide is not only useful for UK pension funds, but for asset managers everywhere. The guide demonstrates the increasing relevance of ESG/responsible investing.
Pension fund trade body launches responsible investment guide, by Ilaria Bertini, May 23, 2013, Blue & Green Tomorrow, UK.

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