News & Commentaries by Ron Robins

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Shareholder support for environmental resolutions hits 10-year high.– [COMMENTARY] “It wasn’t too many years ago when sustainable investors would be happy with just enough support for a shareowner resolution addressing environmental, social and corporate governance (ESG) for it to qualify for the following year’s proxy ballot. The degree to which the landscape has changed is made evident by a review of the 2013 proxy season compiled by Jackie Cook of Fund Votes. Cook’s Proxy Season Roundup summarizes the votes on 502 resolutions submitted by shareowners in 2013. Two-thirds address corporate governance concerns, while the remaining focus on environmental and social issues.”

I believe such shareholder proxy resolutions will continue to increase as the effects of climate change mount. Companies not gearing-up for sustainability will be hounded at stockholder meetings and their stock prices punished.
Shareholder support for environmental resolutions hits 10-year high, by Robert Kropp, August 22, 2013, GreenBiz.com, USA.

Index of socially responsible mining companies being released. – [COMMENTARY] “The index showcases Canadian junior mining companies that are excelling both in social responsibility and are ranked in the top 100 based on market capitalization, according to PricewaterhouseCoopers annual junior mine report. Through financial analysis, the MacCormick index details how these companies are financially outperforming their peers as a result of their social responsibility efforts. This is a good idea. No matter how much many ethical investors disparage the mining sector, mining still has to go on, and so we might as well encourage mines to optimize their ESG practices.
Index of socially responsible mining companies being released, press release, August 28, Cape Breton Post, Canada.

Trust in the financial industry plummets more in the UK than in all other English-speaking countries, reports CFA survey. – [COMMENTARY] “The CFA Institute′s ‘Investor Trust′ study revealed that only a third of British investors had faith in the financial services industry, compared with 45 per cent in the US and 68 per cent in Hong Kong.” This might be because of the numerous financial scandals that keep rocking the UK financial industry–probably more than even in the US. Nonetheless, the financial industry, together with governments particularly, has become increasingly unpopular everywhere due to their opaque and unethical behaviours.
Trust in UK financial industry plummets, reports CFA survey, by Iona Bain, August 21, 2013, FT Advisor, UK.

Where Are The Most Socially Conscious Consumers? – [COMMENTARY] “In Nielsen′s latest Global Survey on Corporate Social Responsibility of 29,000 Internet respondents in 58 countries, the density of respondents willing to spend more on products and services from companies that give back varies considerably across the 58 countries Nielsen examined… What makes consumers in India nearly three times more likely to reward companies that give back than those in Estonia and Belgium? It might be because consumers in India already have high corporate social responsibly (CSR) expectations.”

Apparently, India leads in having the world’s most socially conscious consumers! In most developed countries the scepticism towards companies is great and hence lessens people’s trust that companies will act in a socially conscious way. The page linked to below has a table of the survey results for most countries.
Where Are The Most Socially Conscious Consumers? Press release, Nielson, August 19, 2013, USA.

Sweden named world′s ‘most sustainable′ country after ESG analysis.– [COMMENTARY] “A new report by Swiss investment group RobecoSAM, which scores countries on sustainability based on their environmental, social and governance (ESG) policies, has hailed Sweden as the world′s most sustainable country… The scores demonstrate great success for Scandinavian countries, with Sweden topping the list with a sustainability score of 8.25 out of 10, closely followed by Australia, Switzerland, Denmark and Norway. The UK came in at sixth in the list, scoring 7.57 out of 10, then Canada, Finland, the US and the Netherlands.”

The Scandinavian countries always top such lists. Some ethical investors might want to consider country specific investments in the light of such results.
Sweden named world′s ‘most sustainable′ country after ESG analysis, by Nicky Stubbs, August 19, 2013, Blue & Green Tomorrow, UK.

CFA Institute/Edelman Study: Only Half of Investors Trust Investment Firms to do what is Right. – [COMMENTARY] “Investors worldwide have little trust in the investment profession and believe there is much that can be done to restore trust, according to the CFA Institute/Edelman Investor Trust Study. The study reveals that just 53 per cent of investors in the U.S., U.K., Hong Kong, Canada and Australia trust investment firms to do what is right. Retail investors are less trusting of the industry (51 per cent) than their institutional counterparts (61 per cent), and investors in the U.S. (44 per cent) and UK (39 per cent) are less trusting than those in Hong Kong (68 per cent).”

Though pitiful, the survey results are unsurprising given past events. The type of individuals the industry demands and attracts is a key problem. However, what would’ve been useful would have been to segment-out the responses of ethical investors with ethical brokers! I believe they would show a better result and perhaps point the investment industry towards a better direction.
CFA Institute/Edelman Study: Only Half of Investors Trust Investment Firms to do what is Right, press release, August 14, 2013, CFA Institute/Edelman, USA.

India passes law requiring companies to spend 2% of net profits on CSR. – [COMMENTARY] “Companies qualifying are required to form a CSR Committee with at least one independent director. The CSR spend of a company which meets the aforementioned threshold is required to be 2% of the average net profits for the preceding three financial years.”

As far as I know, India is the first country to create a law requiring companies to allocate a portion of their profits to CSR. I think it’s a terrific idea that companies spend on CSR because they realize its inherent value for all their stakeholders, and most importantly, for their shareholders. However, I’m not keen on crystallizing a set percentage of net profits to enable it. The profit case alone could dictate much higher spending for many companies. Nonetheless, I admire the Indian government’s motivation to do what it can to inspire CSR in the country and hope other governments become more proactive too in motivating their business sector towards CSR.
What you need to know about the new Company law and CSR, by Dev Chatterjee, August 9, 2013, Business Standard, India.

A Majority of Consumers Willing to Spend More for Socially Responsible Products. – [COMMENTARY] “Sixty percent of consumers are willing to pay more for a product that is believed to have benefits for environmental or social concerns, according to a study by New York University′s Stern School of Business. The study went so far as to say consumers would be willing to pay an extra 17 percent on average to buy a product that was believed to have some sort of positive social effect.”

This is the second study in as many days to suggest consumers will pay more for socially responsible products! These surveys offer great encouragement to companies selling socially responsible/green products–and to investors in those companies too!
A Majority of Consumers Willing to Spend More for Socially Responsible Products, by Kent McDill, August 7, 2013, Millionaire Corner, USA.

’Impact’ Trumps SRI Among Wealthy Investors. – [COMMENTARY] “In a recent Spectrem Group survey, investors with between $5 million and $25 million in liquid net worth expressed less interest in socially responsible investing than they did five years earlier. The survey results did not come as a surprise to officials at a leading SRI investment firm Calvert Investments, who said wealthy families and foundations are moving away from legacy SRI vehicles.”

This is interesting news! “Lynne Forde, Calvert′s executive vice president for distribution [said,] ’They′re much more interested in impact investing, where they can put larger sums of money to work for both financial return and social impact.’
’Impact’ Trumps SRI Among Wealthy Investors, by Leila Boulton, August 6, 2013, Private Wealth, USA.

Is it time to divest from fossil fuels? – [COMMENTARY] “The unthinkable is starting to happen in the financial services sector: a movement to divest from oil and gas companies that affect climate change. Norway′s Storebrand, which holds more than $30 billion in assets, recently announced that it would exclude 13 coal and six oil sands companies from all investments ’to reduce Storebrand’s exposure to fossil fuels and to secure long-term, stable returns for our clients.’” The logic of divesting from carbon-based companies is now being based on solid financial grounds!
Is it time to divest from fossil fuels? By Sissel Waage and Edward Cameron, August 2, 2013, GreenBiz.com, USA.

Growing corporate Interest in ESG and the need to report on it. Elaborating on corporate interest in ESG is this interesting article,Five Global Trends Leading a Growing Corporate Interest in ESG, by Dinah Koehler and Chris Park, August 2, 2013, CSR Wire Talkback. Demonstrating the time is now for companies to provide ESG disclosure is this post,Increasing Sustainability Disclosure for Shareholders, bySue Reisinger, August 2, 2013, in the Corporate Counsel.