May 2025 Newsletter
News & Commentaries by Ron Robins
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New March Podcast:
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Is ESG a Sideshow? ESG Perceptions, Investment, and Firms’ Financing Decisions. “Our findings are consistent with the hypothesis that changes in ESG scores neither affect a firm’s opportunity cost of capital for new investment projects nor relax financing constraints, although firms behave as if the changes in ESG ratings (particularly environmental scores) change the relative prices of issuing different types of securities.”
[COMMENTARY] This is a unique study on the effects of changing ESG ratings on a firm’s behaviour.
Is ESG a Sideshow? ESG Perceptions, Investment, and Firms’ Financing Decisions, by Roman Kräussl (Bayes Business School), Joshua Rauh (Stanford), and Denitsa Stefanova (University of Luxembourg). May 27, 2025, Harvard Law School Forum on Corporate Governance, USA.
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Materiality Matters: The ESG Factors That Count. “For many investors, whether fixed income or equity, the process of integrating ESG factors into their strategies begins with correlating the relevance of each factor to individual industries.”
[COMMENTARY] This is a good knowledge article on applying ‘materiality’ (ESG issues) to corporate profitability and stock returns.
Materiality Matters: The ESG Factors That Count, by AllianceBernstein, May 22, 2025, Advisor Perspectives. USA.
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Three good reasons to not lose faith in green bonds. “Is there not a risk that governments’ backlash against climate and environmental issues will stop the previously promising green bond market in its tracks? In our view, this is unlikely, as sustainable finance is set to play an increasingly important role in the future, for at least three reasons.”
[COMMENTARY] I concur with the three reasons in this article why green bond issuance will continue climbing. and for investor returns to be rewarding.
Three good reasons to not lose faith in green bonds, by BNP Paribas Team, May 21, 2025, FXSTREET, USA.
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The Rise of Sustainable Investing: Why It Is Winning Over Young Investors (and Big Money)/ “A recent Morgan Stanley report shows that 84% of U.S. individual investors are interested in sustainable investing. Among Millennials and Gen Z, this interest jumps to 85%.”
[COMMENTARY] In their formal education and life experience, younger people see that if the world is to provide for their well-being, they have to apply their values to their investments. Older generations who gained the fruits of prosperity more easily did not see such a need.
The Rise of Sustainable Investing: Why It Is Winning Over Young Investors (and Big Money), by Carbon Credits, May 7, 2025, USA.
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Stock Buybacks: Show me the Money! “In the past decade, share repurchases have drawn the ire of many, with critics arguing that they line the pockets of executives at the expense of long-term shareholder value. However, in our view, share repurchases often accomplish the very purpose for which a public corporation exists: increasing shareholder wealth. Share repurchases serve to increase the ownership of each individual investor and boost the stock price while avoiding the income tax that accompanies a dividend.”
[COMMENTARY] Those favouring share buybacks say that it increases shareholder wealth. But is that an excuse to avoid deep thinking about long-term corporate development and investment — in favour of short-term shareholder financial gains? This paper explores this subject in detail, but I disagree with many of its premises. Stock Buybacks: Show me the Money! By Allison Wyderka and Wickham Egan, May 11, 2025, Harvard Law School Forum on Corporate Governance, USA.
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Testimony in House Hearing: “Exposing the Proxy Advisory Cartel: How ISS & Glass Lewis Influence Markets”. “The lack of regulation and accountability of proxy advisory firms, their conflicts of interest, ongoing objective errors in their reports, as well as unfounded biases and presumptions underlying their proxy voting positions, demonstrate the need for these participants in the U.S. proxy system to be subject to reasonable, common-sense regulation.”
[COMMENTARY] Shareholders today do not hold stocks for long periods like they did years ago and are thus usually only interested in short-term results. They also typically don’t have the time or expertise to delve into the nuances of proxy positions. Hence, their reliance on proxy voting services, which, as described in this report, can sometimes be problematic. Testimony in House Hearing: “Exposing the Proxy Advisory Cartel: How ISS & Glass Lewis Influence Markets”, by Elizabeth Ising, May 5, 2025, Harvard Law School Forum on Corporate Governance, USA.
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The Rise of Sustainable Investing: Why It Is Winning Over Young Investors (and Big Money). “A recent Morgan Stanley report shows that 84% of U.S. individual investors are interested in sustainable investing. Among Millennials and Gen Z, this interest jumps to 85%.”
[COMMENTARY] In their formal education and life experience, younger people see that if the world is to provide for their well-being, they have to apply their values to their investments. Older generations who gained the fruits of prosperity more easily did not see such a need. The Rise of Sustainable Investing: Why It Is Winning Over Young Investors (and Big Money), by Carbon Credits, May 7, 2025, USA.
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Making sense of a rough quarter for ESG funds. “Europe saw negative outflows for the first time, but it’s important to keep a sense of perspective.”
[COMMENTARY] The writer makes a case for ‘keeping one’s head’ about ESG fund outflows. They’ve now turned around in many markets, and positive flows are showing up. Making sense of a rough quarter for ESG funds, by Simon Mundy, April 28, 2025, Financial Times, UK.
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Morgan Stanley Sustainable Signals: Individual Investors Continue to Show High Levels of Interest in Sustainable Investing in New Survey. “Majority of investors globally (88%) show interest in sustainable investing, including nearly all surveyed Gen Z (99%) and Millennial (97%) investors.”
[COMMENTARY] If it were not a renowned investment firm like Morgan Stanley reporting this data — I’d be very suspicious of the results shown. They seem too good to be true. Morgan Stanley Sustainable Signals: Individual Investors Continue to Show High Levels of Interest in Sustainable Investing in New Survey, press release, April 30, 2025, Morgan Stanley, USA.
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Global Poll Shows Business Leaders Support Rapid Transition Away From Fossil Fuels. “A landmark global poll of business executives across 15 countries shows overwhelming support for a rapid transition away from fossil fuels to renewable electricity. “
[COMMENTARY] The results of this survey seem too good to be true. Nonetheless, I believe that globally, most business executives favour the phasing out of fossil fuels and replacing them with renewables. Global Poll Shows Business Leaders Support Rapid Transition Away From Fossil Fuels, by Savanta, press release, April 28, 2025, Spain.
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Featured Book
Note: Ron Robins is an Amazon Associate. He thus earns fees from qualifying book or merchandise purchases referred from this website.
Activate Your Money: Invest to Grow Your Wealth and Build a Better World. “As women, we care deeply about our families, our communities, and the world we will leave our children and grandchildren. Our money is too often an afterthought. Activate Your Money brings these worlds together. It offers a completely different way of thinking about our money, our power, and our potential.”–Marci Shimoff, #1 NY Times best selling author, Happy for No Reason and Chicken Soup for the Woman’s Soul.
For more information, visit Activate Your Money: Invest to Grow Your Wealth and Build a Better World, by Janine Firpo, Wiley 2021.
© Investing for the Soul, Ron Robins 2025
