December 2022 Newsletter
News & Commentaries by Ron Robins
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New Podcasts:
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Latest Podcast: The Most Ethical US Companies Includes coverage of the following articles: “22 Most Ethical Companies in the US,” by Habib Ur Rehman at Insider Monkey’ “Top 15 Infrastructure Companies in the US,” by Ty Haqqi, also at Insider Monkey; and “Caterpillar Leads 5 Stocks To See Infrastructure Spending Boost,” by Harrison Miller. Plus much more…
— By Ron Robins
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ESG investing faces challenges from all sides. Can it survive? “The problem with ESG as an investment approach is the lack of standardized criteria for what makes an investment sustainable… A recentpaperfrom researchers at MIT and the University of Zurich, for instance, found very little consistency in the assessments of ESG rating agencies, making it tricky to evaluate the ESG performance of companies, funds, and portfolios.”
[COMMENTARY] I agree that company reporting of ESG information and metrics needs standardization. However, ESG raters should be free to develop their own evaluative techniques — and ratings –concerning the reported data. Similarly, investors should feel free to use whatever ESG raters they feel reflects their goals and objectives.
ESG investing faces challenges from all sides. Can it survive? By Laurie Clarke, December 19, 2022, FORTUNE, USA.
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The Coming Wave of “Natural Capital” and Biodiversity Shareholder Activism and Stewardship Pressure on Boards. “With natural capital depletion and biodiversity loss estimated to result in adeclinein global GDP of $2.7 trillion annually by 2030, institutional investors are increasingly defining and grappling with these issues, forming organized coalitions, and deciding to press public companies for action, enhanced board oversight and new disclosures.”
[COMMENTARY] Since the earliest days of my investing career, circa the 1970s, I’ve been concerned that the pricing-in of natural capital into product and economic costs had to occur someday. Finally, it looks like it’s beginning to happen.
The Coming Wave of “Natural Capital” and Biodiversity Shareholder Activism and Stewardship Pressure on Boards, by Sabastian V. Niles, Carmen X. W. Lu, and Allison Rabkin Golden, December 17, 2022, Harvard Law School Forum on Corporate Governance, USA.
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Follow the Demographics: Why ESG Investing Wins. “The up-and-coming workforce of today is simply not interested in aiding and abetting the very industries that threaten their health, their safety and the welfare of the planet.”
[COMMENTARY] Since younger people care more about the long-term health of the planet — and their ability to live comfortably on it — the opposition to ESG and sustainability is a losing proposition.
Follow the Demographics: Why ESG Investing Wins, by Tina Casey, December 14, 2022, Triple Pundit, USA.
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Why ESG Investing Is ‘a Mess’ and What to Do About It. “The world of investing with environmental, social and governance factors is in a shakeup.”
[COMMENTARY] The author of this article cites the recent announcement of the big reduction in US sustainable assets given by the US SIF Foundation. The big takeaway for me in their announcement is something I’ve long desired: segregating the real sustainable funds from the rest.
Why ESG Investing Is ‘a Mess’ and What to Do About It, by Janet Levaux, December 14, 2022, Think Advisor, USA.
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How Devoted Is Your Fund Manager to Sustainable Investing? “The ESG Commitment Level is a qualitative measure that aims to help investors better understand which asset managers are committed to delivering the sustainability outcomes that best meet investors’ preferences.”
[COMMENTARY] This Morningstar article is important reading for all ethical and sustainable investors. It provides insight into the commitment to sustainability of many fund managers.
How Devoted Is Your Fund Manager to Sustainable Investing? By Alyssa Stankiewicz, December 12, 2022, Morningstar, USA.
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A Suggested Corporate Target For House Hearings On ESG: NextEra Energy. “I’ll bet a breakfast at that West Village cafe that NextEra Energy will be publishing an ESG Report and getting a Perfect 10 Woke Score in the years to come. And continuing its excellent financial performance while helping America get to net zero.”
[COMMENTARY] Professor Eccles at the University of Oxford pokes fun at the right-wing criticism of ESG!
A Suggested Corporate Target For House Hearings On ESG: NextEra Energy, by Robert G. Eccles, December 10, 2022, Forbes, USA.
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At least 40 UCITS ETFs exposed to Uyghur repression. “A minimum of 40 European-listed equity ETFs, including ESG and SRI products from BlackRock, Amundi, BNP Paribas Asset Management, Vanguard and DWS, are exposed to Uyghur imprisonment and forced labour, research from ETF Stream has found.”
[COMMENTARY] There are probably numerous ESG funds in the US, Canada, and other countries that are likely having the same issue. Also, as you may know, the new EU ESG fund regulations are requiring many hitherto labeled ESG funds to change their ‘labels’ and marketing presentations! Increasingly, ESG fund greenwashing is gaining attention.
At least 40 UCITS ETFs exposed to Uyghur repression, by Jamie Gordon, December 7, 2022, ETFstream, UK.
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The Flaw in Anti-ESG Logic: Financial Interests of Companies Like Meta Don’t Always Align with Those of Its Shareholders. “In the last few months, there has been an organized effort to falsely argue that companies and institutional investors are inappropriately prioritizing social and environmental responsibility over financial returns.”
[COMMENTARY] This is a fascinating article in regard to emphasizing the importance of ESG for maximizing portfolio returns.
The Flaw in Anti-ESG Logic: Financial Interests of Companies Like Meta Don’t Always Align with Those of Its Shareholders, by Frederick Alexander, December 5, 2022, Harvard Law School Forum on Corporate Governance, USA.
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Sustainable mine design starts with a cultural shift. “In overcoming negative historical perceptions, mine operators recognize that stakeholders want to see a positive return. This return is not just on financial performance, but also on what is called the triple bottom line: people, planet, and profit. The growing consensus is that companies with a strong triple bottom line are more resilient and reliable investments.”
[COMMENTARY] Mining companies are increasingly adopting ESG/sustainability into their operations. This should encourage ethical and sustainable investors to invest in them. Without a vast increase in minerals and metals mined there will be no carbon-free world. Now that mining companies are getting serious about ESG bodes well for the climate — and for investors!
Sustainable mine design starts with a cultural shift, by Nicolette Taylor, December 4, 2022, Canadian Mining, Canada.
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Featured Book
Making Money Moral: How a New Wave of Visionaries Is Linking Purpose and Profit, by Judith Rodin and Saadia Madsbjerg, Wharton School Press 2021.
“Anyone who wants to understand the link between capital markets and progress towards a more sustainable, peaceful, and prosperous world should put this book at the top of their reading list. Through real-life examples and in-depth conversations with experts, Making Money Moral demonstrates the power of bringing together the world of finance and the world of impact.”–Jeff Skoll, Founder and Chairman, Skoll Foundation, Co-Founder, The Rise Fund.
