December 2024 Newsletter
News & Commentaries by Ron Robins
————————————————————-
New December Podcast:
————————————————————-
Should companies take a stand on social issues? “More than 60% of US consumers want companies to stay out of politically charged conversations, up 10% from 2022. Interestingly, political conservatives are most likely to say they wish brands would remain mum—though even liberals are also growing tired of corporate activism.”
[COMMENTARY] If companies believe that ‘speaking out’ on a particular topic affects their operations, they should speak out.
Should companies take a stand on social issues? ByAubree Smith, December 19, 2024, Sprout Social, USA.
————————————————————-
Comparing the resilience of socially responsible and SIN investment during the COVID-19 pandemic. “This study offers investors actionable insights into the benefits of SRI ETFs, demonstrating their ability to provide stable returns and reduced risk during economic downturns.”
[COMMENTARY] Anti-ESG proponents love to tell you that SIN stocks outperform ESG stocks, particularly in rough economic circumstances. Well, this study says the opposite is true: ESG stocks outperform SIN stocks in rough times.
Comparing the resilience of socially responsible and SIN investment during the COVID-19 pandemic, by David Meehan and Shaen Corbet (both at Dublin City University), Research in International Business and Finance Volume 73, Part A, January 2025, 102537.
————————————————————-
ESG and shareholder value: Making the case for sustainable investment. “Understand the business case for ESG investment, the benefits of sustainability, long-term value creation, and more.”
[COMMENTARY] This is a good overview of the ESG investing case.
ESG and shareholder value: Making the case for sustainable investment, by Thomson Reuters Tax & Accounting, December 17, 2024, Thomson Reuters, USA.
————————————————————-
6 Sustainable-Investing Trends to Watch in 2025. “As sustainability-aware investors look ahead to 2025, six themes are likely to dominate their lists. They include environmental, social, and governance regulations, carbon-transition investing, sustainable bonds, the reshaping of the global ESG fund landscape, biodiversity finance, and the ethics of artificial intelligence.”
[COMMENTARY] The 2025 investment themes expressed in this article come from a great source — Morningstar.
6 Sustainable-Investing Trends to Watch in 2025, by
————————————————————-
US SIF “Trends Report” Documents Sustainable Investment Assets. “US SIF analysis, based on submissions to the SEC, records the US market size as $52.5 trillion, of which $6.5 trillion (12%) was specifically identified or marketed as sustainable or ESG investment, setting a new baseline for the size of the market.”
[COMMENTARY] That “12% specifically identified or marketed as sustainable or ESG investment” has grown significantly in recent years after being less than 3-5% for many years!
US SIF “Trends Report” Documents Sustainable Investment Assets, press release, December 18, 2024, US SIF USA.
————————————————————-
Shift to the social in ESG gaining traction globally. “The shift in focus was triggered by the intensive use of data and artificial intelligence (AI) that came after the Covid pandemic, finds the Sustainability and Climate – Trends to Watch 2025 report, published by US index provider MSCI. And this shift was particularly evident with data security- and supply chain labour management-related issues, which, since the pandemic, have come about more frequently.”
[COMMENTARY] In recent years the ‘S’ — Social — aspect of ESG has always been the laggard concerning investor interest. However, that wasn’t always the case. The principal predecessor to ESG was socially responsible investing. The Canadian Responsible Investment Association (RIA) started as the Social Investment Organization I belonged to for many years.
It’s good to see companies and investors regaining their interest in the social aspect of corporate operations. Particularly with declining working-age populations worldwide, the ‘social’ factor becomes increasingly important.
Shift to the social in ESG gaining traction globally, by Jayde Cheung, December 16, 2024, The Asset, Singapore.
————————————————————-
Busting the top 5 myths about sustainable investing. “Some of the top reasons that people may be reluctant to embrace sustainable investing turn out to be nothing but misinformation, Sarah Sung, head of sustainable investing at J.P. Morgan Wealth Management, argues.”
[COMMENTARY] The myth that sustainable and ESG-based investing is mostly about climate change is the one that most infuriates me. This is where the anti-ESG people get it so, so, so, wrong! The essence of a sustainable or ESG focus is mostly about a company’s profitability and viability!
Busting the top 5 myths about sustainable investing, by Steve Kerch, December 10, 2024, Equities.com, USA.
————————————————————-
What to Expect from SEC Chair Paul Atkins: Potential Reforms and Priorities. “Atkins has expressed skepticism about the SEC’s role in mandating environmental, social, and governance (ESG) disclosures. His preference for a materiality-based framework suggests he may seek to scale back or revise the SEC’s climate-related disclosure rule, which has faced legal challenges.”
[COMMENTARY] Mr. Atkins might be less interested in specific ESG disclosures, but he does seem to favor disclosures that are material to a company’s operations. Also, according to a recent KPMG survey “sustainability reporting has become part of business as usual for almost all of the world’s largest 250 companies and a large majority of the top 100 companies in each country,territory or jurisdiction.”
What to Expect from SEC Chair Paul Atkins: Potential Reforms and Priorities, by Anderson P.C., December 9, 2024, Lexology, USA.
————————————————————-
Investors Care About ESG-Related News—When It Impacts Returns. “A new paper co-authored by Professor Edward Watts examines how retail investors trade after news about a public company’s environmental, social, and governance activity. The findings offer clues about how investors weigh these factors.”
[COMMENTARY] I think this quote from the article (and paper) sums up the findings of this research: “Investors treat ESG information like they do any other information that might affect their returns. Quoting Alex Edmans of the London Business School, the authors write that “ESG is both extremely important and nothing special.” They conclude that bans on considering ESG may be “misguided” and “violate fiduciary obligations.”
Investors Care About ESG-Related News—When It Impacts Returns, by Rebecca Beyer, December 5, 2024, Yale Insights, USA.
————————————————————-
Newsweek: America’s Most Responsible Companies 2005. “For the second year in a row, the top spot was awarded to Merck, with an impressive overall score of 97.83, up from 91.98 last year. Other notable names on this year’s list include Adobe, PayPal and HP.”
[COMMENTARY] This is a good ranking, though its findings are unremarkable.
Newsweek: America’s Most Responsible Companies 2005, editorial by Nancy Cooper, December 8, 2024, USA.
————————————————————-
Sustainable Investing: Evidence From the Field. “We survey 509 equity portfolio managers from both traditional and sustainable funds on whether, why, and how they incorporate firms’ environmental and social (“ES”) performance into investment decisions.”
Sustainable Investing: Evidence From the Field, FEB-RN Research Paper No. 18/2024, November 2, 2024, Alex Edmans, Tom Gosling, and Dirk Jenter — all based at the London School of Economics, UK.
————————————————————-
When economists agree – the role of central banks in the green transition. “As a central bank, our objective is to maintain price stability and to safeguard financial stability. Climate change and nature degradation have an impact on both and, hence, fall squarely within our mandate.”
[COMMENTARY] This is a good article on the role of central banks in the green transition. However, it does not discuss whether central banks should engage in directly financing it.
When economists agree – the role of central banks in the green transition, by Olaf Sleijpen, November 27, 2024, Bank for International Settlements, Switzerland.
————————————————————-
Featured Book
Note: Ron Robins is an Amazon Associate. He thus earns fees from qualifying book or merchandise purchases referred from this website.
The Social Justice Investor: Advance Your Values While Building Wealth, Whether a Few Dollars or Millions. “Money is a lever with which you can change the world. The Social Justice Investor is a treasure chest of valuable insights for readers who want to finance a more just society.” –Joanne Gan, head of Impact Investing & ESG, Treasury, PayPal”
For more information, visit The Social Justice Investor: Advance Your Values While Building Wealth, Whether a Few Dollars or Millions, by
