August 2020 Newsletter
News & Commentaries by Ron Robins
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Latest Podcasts:
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Academics Attack ESG for Failure to Outperform During Crisis. “‘These results suggest that innovation-related assets rather that social capital investments offer the greater immunity to sudden, unanticipated market declines,’ the authors wrote.”
COMMENTARY] I believe I understand the study’s main contention. However, ESG funds generally are full of ‘innovation-related assets.’ Such assets frequently have high ESG ratings too! That’s why the ESG funds outperformed.
Academics Attack ESG for Failure to Outperform During Crisis, by Amy Whyte, August 20, 2020, Institutional Investor, USA.
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Vast majority of comments oppose ESG proposal – analysis. “More than 95% of the firms, groups and individuals who submitted comment letters or signed petitions in response to the Department of Labor’s proposal on environmental, social and governance investments in ERISA plans opposed the initiative, an analysis published Thursday from several investor organizations and financial industry firms found.”
[COMMENTARY] I suspect that despite the overwhelming opposition to this rule the Department of Labor will not back down. Trump’s base is likely highly supportive of it.
Vast majority of comments oppose ESG proposal – analysis, by Brian Croce, August 20, 2020, Pensions & Investments, USA.
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Investors continue to align with SDGs. “Five years on since the SDGs were launched, an increasing number of investors are putting capital to work to earn returns alongside helping solve global scourges like the climate crisis, poverty and inequality.”
[COMMENTARY] Investments that align with the UN’s SDGs that make good returns are the ideal of ethical and sustainable investing!
Investors continue to align with SDGs, by Sarah Rundell, August 18, 2020, Top 1000 Funds, USA.
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Barclays Launches Systematic Study of ESG-Focused US Equity Funds. “Barclays’ Quantitative Portfolio Strategy (‘QPS’) team finds that ESG-labelled funds do not necessarily provide more ESG exposure than conventional funds.”
[COMMENTARY] This is interesting research. Of course, everything is in the details and I’d love to get some expert ESG opinion on Barclays’ findings.
Barclays Launches Systematic Study of ESG-Focussed US Equity Funds, August 13, 2020, BusinessWire on Yahoo! Finance, USA.
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Why ESG ratings need an overhaul. “Under certain ESG standards, the ratings of fossil-fuel giant Exxon Mobil and electric car maker Tesla could well be the same.”
[COMMENTARY] Such an anomaly as cited above has to do with ESG company raters not rating the ESG characteristics of a company’s products or services and issues with cross-industry scoring. ESG raters typically rate only the ESG performance of a company’s ‘operations’.
Why ESG ratings need an overhaul, by Jim McClelland, August 9, 2020, Raconteur, UK.
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Ethical CSR focus triggers hostile investor activism, study finds. “This is because some activist investors view CSR as a sign that a company is wasting money rather than focusing on shareholder returns, according to research conducted by Pennsylvania State University’s Mark DesJardine, Erasmus University’s Emilio Marti and HEC Paris business school’s Rodolphe Durand.”
[COMMENTARY] Note this study included years as far back as 2000. Attitudes have changed recently and I wonder if the propensity for investor activism of this type is still occurring at the same rate?
Ethical CSR focus triggers hostile investor activism, study finds, by Laurence Fletcher, August 3, 2020, Financial Times, UK.
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Featured Book
You Are The Change: A Beginner’s Guide To Socially Responsible Investing,by Stephan Kerby, New Sphere Publishing LLC, 2019.
“This guide is a worthwhile read for any investor regardless of income level, religion, or political affiliation. The strategies presented in these pages are versatile and broadly applicable in the movement toward greater social responsibility. Here is where financial security meets global accountability.”
