March 2021 Newsletter
News & Commentaries by Ron Robins
Latest Podcast: Top Infrastructure Stocks. And More… “Top Infrastructure Stocks And More. They include Vulcan Materials, Martin Marietta Materials, Vale, Caterpillar, Deere, United Rentals, Freeport-McMoRan, Brookfield Infrastructure Corporation, Eaton, Crown Castle International, American Water Works, Brookfield Renewable Partners, Vanguard FTSE Social Index Fund, Trillium ESG Global Equity Fund, Shelton Green Alpha Fund, Vert Global Sustainable Real Estate Fund, TIAA-CREF Green Bond Fund.”
— By Ron Robins
Is harmonization of reporting standards possible or even desirable? “If harmonization means consensus on a single standard, then the answer is most likely no. Why? Let’s consider four major components of the context in which this ecosystem operates.”
[COMMENTARY] I agree with the writer. For instance, how can you quantify, as the writer says, “culture; values; processes; strategies; product responsibility; quality of management, among others.” However, metrics that can be quantifiable and uniformerly used across and within industries– should be. Thus scores by ESG rating agencies will still differ even with many uniform metrics.
Is harmonization of reporting standards possible or even desirable? By Antonio Vives, March 24, GreenBiz, USA.
Sustainable agriculture is the next way ESG investors can fight climate change. “7 ways for ESG investors to profit from sustainable agriculture.”
[COMMENTARY] There are huge possibilities for sustainable practices and ESG among agricultural companies. This area is only now beginning to be addressed in the public markets.
Sustainable agriculture is the next way ESG investors can fight climate change, by Debbie Carlson, March 24, 2021, MarketWatch, USA.
Financial world greenwashing the public with deadly distraction in sustainable investing practices. “The financial services industry is duping the American public with its pro-environment, sustainable investing practices. This multitrillion dollar arena of socially conscious investing is being presented as something it’s not. In essence, Wall Street is greenwashing the economic system and, in the process, creating a deadly distraction. I should know; I was at the heart of it.
As the former chief investment officer of Sustainable Investing at BlackRock, the largest asset manager in the world with $8.7 trillion in assets, I led the charge to incorporate environmental, social and governance (ESG) into our global investments.”
[COMMENTARY] This is quite an indictment. However, there’s more detail in the article which expands on the fact that ESG itself is needed!
Financial world greenwashing the public with deadly distraction in sustainable investing practices, by Tariq Fancy, March 16, 2021, USA Today, USA.
CFA Institute Launches Global Certificate in ESG Investing. “The CFA Institute has announced that it will market a certificate in environmental, social and governance (ESG) investing, created by the CFA Society of the United Kingdom, in financial hubs across the globe.”
[COMMENTARY] They’ve been a long time in getting around to this! It’s a great step forward though for the financial profession.
CFA Institute Launches Global Certificate in ESG Investing, by Amanda Umpierrez, March 17, 2021, planadvisor, USA.
Ratings Agencies Punish Companies That Try To Do Good. “In their study, Lioui and his co-authors compared the data of several ratings agencies: Asset4 (Refinitiv), MSCI KLD, MSCI IVA, Bloomberg, Sustainalytics (Morningstar) and RobecoSam. Fitch, Moody’ MCO +0.2% and S&P also provide thousands of ESG data scores…
How do the ratings agencies decide how good or bad a company is at ESG? Mostly their assessment is based on a company’s own reporting with some other metrics thrown in from trade journals, news articles or other sources.”
[COMMENTARY] This situation continues to describe the need for standardized ESG reporting formats AND formal independent auditing of those reports by qualified professionals akin to chartered accountants or CPAs.
Ratings Agencies Punish Companies That Try To Do Good, by Ollie Williams, March 7, 2021, Forbes, USA.
Bank of England given new mandate to buy ‘green’ bonds. “The Bank of England will change its approach to buying corporate bonds after the government said environmental and climate goals should now be explicitly considered part of monetary policy. In Wednesday’s Budget, Rishi Sunak, the chancellor, said the BoE should support the government’s efforts to make the UK economy greener and achieve zero greenhouse gas emissions by 2050, and updated its mandate.”
[COMMENTARY] Will US Treasury Secretary Janet Yellen issue the same order to the US Fed? It’s possible. Though the Fed says it’s ‘independent.’ Nonetheless, in recent statements, the chair of the US Federal Reserve Jerome Powell has said that central banks need to take a much more active role in assisting green financing! And what about the ECB?
Should such things happen, it could give a massive impetus to green bond issuance and the green bond market generally!
Bank of England given new mandate to buy ‘green’ bonds, by Camilla Hodgson and Valentina Romei in London and Nathalie Thomas in Edinburgh, March 3, 2021, Financial Times, UK.
Values at Work: Sustainable Investing and ESG Reporting, by Daniel C. Esty and Todd Cort, Palgrave Macmillan 2020.
“In an effort to better understand the current status and movement of this dynamic field and to provide a practical reference for the growing pool of investors, financial advisors, companies, and academics seeking information on sustainable investing and ESG reporting, this edited book covers the latest trends, tools, and thinking.”