News & Commentaries by Ron Robins

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DOL Gives Green Light For ESG Investments In Retirement Plans. “The Department of Labor gave its blessing Thursday for socially responsible investments in retirement plans for the first time.

DOL′s permission to plan fiduciaries covers everything from environmental, social and governance (ESG) investments to the ability to put money into community development funds and other types of economically targeted investments (ETI) without the worry of being penalized for ERISA violations.”

[COMMENTARY]This is a big development for many American retirement plans. It sets a great precedent and over the long-term will further boost the opportunities for ethical investment returns.
DOL Gives Green Light For ESG Investments In Retirement Plans, by Ted Knutson, October 22, 2015, FA Magazine, USA.

Top 10 Best Corporate Citizens Ranked. “Ecolab, Campbell Soup and Microsoft are among the Top 10 Best Corporate Citizens, according to Corporate Responsibility Magazine′s fifth annual ranking.”

[COMMENTARY]I understand these ratings come from insiders who are mostly concerned with corporate disclosure and not necessarily with real corporate performance. You might want to view these findings that perspective.
Top 10 Best Corporate Citizens Ranked, October 26, 2015, Environmental Leader, USA.

World’s largest banks guilty of ignoring climate risks, warns report.“The world’s largest banks are failing to take a strategic approach to climate-related risks, with a huge divide remaining between current practices and the potential to support the transition to a low-carbon economy.

That is the finding of a new report from investment managers Boston Common Asset Management, which examined the management of climate-related risks at 61 of the world’s largest banks.”

[COMMENTARY]These banks need to read the speeches of Britain’s Bank of England Governor,Mark Carney! That’ll perhaps give them the wake-up call they need.
World’s largest banks guilty of ignoring climate risks, warns report, by Jocelyn Timperley, October 23, 2015, Business Green, USA. (Free trial subscription required to view article.)

Major U.S. Companies Join White House Climate Action Pledge. “As key international climate negotiations near, 81 additional companies today joined the White House-led American Business Act on Climate Pledge. Companies making the pledge have set significant greenhouse gas reduction and renewable energy sourcing goals for 2020 and beyond, and are focusing on increasing energy efficiency, boosting low-carbon investing and making sustainability more accessible to low-income Americans.”

[COMMENTARY]The momentum is building for hopefully an historic climate pact at COP21Paris! Well done Ceres for bringing all this together.
Major U.S. Companies Join White House Climate Action Pledge, press release, October 19, 2015, Ceres, USA.

Plan Participants and Social Responsibility. “While 61 percent of participants with less than $10,000 in their retirement account do consider the social responsibility of a company before making an investment, only 36 percent of those with $100,000 or more in their account take the same approach.”

[COMMENTARY]There’s a lot of data in this short article. I suggest ethical investors read it in its entirety.
Plan Participants and Social Responsibility, by Kent McDill, October 15, 2015, Millionaire Corner, USA.

Women want to make a difference with their money. “New research from Standard Life shows that women want to make a difference when they invest. Women investors are 10% more likely than men to want to invest in companies that achieve positive social outcomes (41% vs 31% respectively) and 9% more likely than men to want to invest in companies that minimise environmental damage (48% vs 39%).”

[COMMENTARY]More data to support the importance of women to ethical investing. It’s good such research is being done as it sharpens the focus of ethical investing advisors and fund managers as to who their target markets are.
Women want to make a difference with their money, press release, October 15, 2015, Standard Life, UK.

Companies Led by CEOs with Daughters More Committed to Social Responsibility says University of Miami Study. “Among the nation’s largest U.S. firms, those led by CEOs with daughters spend 13 percent more of their net profits on corporate social responsibility (CSR) efforts than those with CEOs who do not have daughters, according to a new study by the University of Miami School of Business Administration. This adds up to an average of nearly $60 million more in CSR spending per year by firms that have CEOs with a daughter.”

[COMMENTARY]This is interesting not only because of its findings — and that CSR spending often correlates with higher profits — but when added to the body of evidence that women on boards tend to make companies more profitable — well gentlemen, make way for the women!
Companies Led by CEOs with Daughters More Committed to Social Responsibility says University of Miami Study, press release, October 14, 2015, University of Miami School of Business Administration, USA.

Consumer Goods Brands That Demonstrate Commitment To Sustainability Outperform Those That Don’t. “Committing to sustainability might just pay off for consumer brands, according to the 2015 Nielsen Global Corporate Sustainability Report. In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%.”

[COMMENTARY]Those in the 1% group should be thinking hard about the business and profits they’re missing! It’s this kind of data that will eventually bring the world ever closer to sustainability, higher profits for ethical investors, and a better future for all of us.
Consumer Goods Brands That Demonstrate Commitment To Sustainability Outperform Those That Don’t, press release, October 12, 2015, Nielsen N.V., USA.

Many ’ESG’ Managers Fail To Explain How They Screen Investments, Report Says. “Disclosures of the type of standards used were not made for 62 percent of the assets being invested using ESG criteria, the SIF Foundation says. ESG integration is defined as the systematic inclusion by investment managers of environmental, social and governance factors into financial analysis and is one of several sustainable, responsible and impact investing (SRI) strategies, according to the organization.

The study looked at 16 of the nation’s largest ESG money managers, and only eight of them at least partially disclosed the criteria they consider, according to the report.”

[COMMENTARY]The survey results are unsurprising at this juncture. In time, many more will disclose their criteria.
Many ’ESG’ Managers Fail To Explain How They Screen Investments, Report Says, by Karen Demasters, October 8, 2015, Financial Advisor, USA.

ESG Still Not a Priority for CIOs. “A new survey by Hermes Investment Management found that 90% of respondents believed fund managers should price in corporate governance risks as a core part of their investment analysis.

Despite this show of ESG awareness, 47% still said pension funds should focus exclusively on maximizing retirement incomes—a goal the majority believed would not be met by focusing on ESG issues. Just 46% believed ESG-focused investing would produce better long-term returns.”

[COMMENTARY]It appears that many investors and fund managers are unaware of how a focus on ESG can enhance returns. What is good news though, is that this knowledge among investor groups has improved immeasurably in recent years!
ESG Still Not a Priority for CIOs, by Amy Whyte, October 5, 2015, Chief Investment Officer, USA.

Major U.S. banks call for leadership in addressing climate change.“Bank of America, Citi, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo … have issued a joint statement calling for cooperation among governments in reaching a global climate agreement. The statement, published today by the sustainability advocacy nonprofit Ceres, voiced support for policy frameworks that ’will provide greater market certainty, accelerate investment, drive innovation in low carbon energy, and create jobs.’”

[COMMENTARY]It appears to me that there’s little doubt the COP21 Paris climate talks will come up with a significant agreement. I’m sure most investors heard Bank of England’s Governor,Mark Carney, commenting on the extreme risks that climate change poses to humanity. From his position, representing the financial elites, only adds momentum to a successful climate agreement. Fossil fuel companies will face severe challenges in the years ahead.
Major U.S. banks call for leadership in addressing climate change, press release, September 28, 2015, Ceres, USA.

Featured New Book

The Routledge Handbook of Responsible Investment, by Tessa Hebb, James P. Hawley, Andreas G.F. Hoepner, Agnes L. Neher, David Wood, Routledge 2015.
“Comprehensive and very timely, this handbook provides helpful insight and analysis on the geographical reach and significance of what is becoming a global movement in responsible and sustainable investment.”—Colin Melvin, Chief Executive Officer, Hermes Investment Management, UK.