December 2008

American Values: ’Secular Spiritualists’ Surpassing ’Traditional Materialists.’ Markets Being Reshaped. – [COMMENTARY] “The Secular Spiritualist view of the American Dream has been adopted by Americans across the nation, in all walks of life. They are Americans who are becoming more satisfied with fewer material assets and less wealth, even as the nation’s harsh economic climate has made living with less a reality for many… The growth of Secular Spiritualism is not simply the result of making do with new personal and national economic realities… it is something more: A growing rejection of a lifestyle obsessed with consumption and too often devoid of deeper meaning.”

This is important research and corresponds closely to Paul Ray’s studies. See my editorial, Everyone Becoming a Cultural Creative. Spiritual and ethical investors see this dramatic change in American collective consciousness. The best corporations to invest in long term are likely to be those that are able to incorporate values associated with the Secular Spiritualist/Cultural Creative consumer. Read this article on a survey by Zogby International and ponder the future as we begin 2009!
The American Dream is now simpler, by John Zogby, December 30, 2008, Ener Pub, USA.

Wind & Solar Energy, Biofuels, Affected By Winter Conditions. – [COMMENTARY] This is a useful article for green-ethical investors to read. It cites the difficulties that renewable energy systems face in becoming alternative energy sources to nuclear and fossil fuels in wintery climates.
Solar Meets Polar as Winter Curbs Clean Energy, by Kate Galbraith, December 25, 2008, The New York Times, USA.

Useful Overview/Review Of Consumption Patterns. – [COMMENTARY] For long term ethical investors, this study will give some insights as to where you might want to invest. Read it over the holidays.
Sustainable Consumption Facts & Trends, (PDF) December 2008, World Business Council for Sustainable Development, Switzerland.

Giving To Green Causes Is Priority for 69% Of Wealthy US Business Owners According To SunTrust Survey. – [COMMENTARY] “In addition, business owners feel confident about investing in environmental funds. Fifty-nine percent believe that a ’green’ investment would generate a rate of return similar to any other fund.” This is good news for environmental charities, green funds, as well as for ethical stocks and bonds.
’Green’ Investing Remains Priority Despite Economic Conditions, According to SunTrust Survey of Wealthy Business Owners, press release, December 22, 2008, Sun Trust, USA.

Shariah Finance Creates Legal Challenges. – [COMMENTARY] Much has been written about the pros and cons of Shariah based financial products for ethical investors. One area that has received less attention though is the legal issues it brings forth. This article outlines some of them.
Analysis: untried courts test Malaysia’s Islamic finance appeal, by Y-Sing Liau, December 19, 2008, Reuters news posted on Exeltra Management blog, Hong Kong.

Taiwan Stock Exchange Regulator Mandates Social Responsibility Disclosure To Listing Rules. – [COMMENTARY] “The FSC [Taiwanese Financial Supervisory Commission] is making disclosure on social responsibility compulsory for Taiwan-listed firms so that investors can better understand the processes and progress that companies are making towards sustainability.” I believe that this is the beginning of a global trend as financial regulators everywhere demand higher ethical, social, environmental, and governance standards. This will also help focus the mainstream investment community to the benefits of ethical stocks and bonds.
Taiwan adds social responsibility disclosure to listing rules, by Liz Mak, December 18, 2008, Asian Investor, Hong Kong.

Deutsche Bank Joins JP Morgan & Citi In Eliminating Dedicated Environmental, Social, & Governance (ESG) Teams. – [COMMENTARY] We continue to see at play the short term orientation of management at the large mainstream financial institutions. It is this attitude that in large part got us into this mess! (See my blog post, Short Term Thinking Created Economic Pain.) ESG is all about looking at corporate long term problems and opportunities. Take this away and investors are in the dark about a company’s real long term viability.
Deutsche Bank joins ESG cuts by ending corporate governance research, by Hugh Wheelan, December 16, 2008, Responsible Investor, UK.

New French Study Says No Difference In Performance Between Socially Responsible (SRI) Funds And Conventional Funds. – [COMMENTARY] That is what this study by France’s Edhec risk and asset management research centre concludes. However, this would not be your impression from reading the first part of the FT article. The article also mentions another French study published earlier this year by Altedia that did show SRI funds outperforming conventional funds.
‘SRI funds not outperforming,′ by Sophie Grene, December 14, 2008, Financial Times, UK.

Norwegian Government & Major Asset Managers Survey Environmental, Social & Governance (ESG) Practices In Norwegian Companies. – [COMMENTARY] “… survey received a 49% response rate from 76 Norwegian companies. On a weighted scoring system based on 100 points, 3 companies came out as top quartile performers: Norsk Hydro, Orkla and Statoil Hydro.” The survey was conducted by Sustainable Value Creation (SVC), a group of major Norwegian asset managers.
Norwegian investors publish ESG company survey results, plan expansion, by Hugh Wheelan, December 11, 2008, Responsible Investor, UK.

Ceres Publishes Its First Report Ranking Climate Strategies Of Major Global Corporations. – [COMMENTARY] “IBM, Tesco and Dell Receive Top Scores in First-Ever Ranking of Consumer & Tech Companies on Climate Change Strategies… Nike and Wal-Mart Post Highest Scores in Apparel and Retail Sectors.” Investors interested in the most environmentally conscious major corporations should look at this report. Ceres is among the world’s foremost entities in this area.
IBM, Tesco and Dell Receive Top Scores in First-Ever Ranking of Consumer & Tech Companies on Climate Change Strategies, December 11, 2008, Ceres, USA.

Corporate Social Responsibility (CSR) Among Hang Seng Listed Companies. – [COMMENTARY] “Companies listed on the Hang Seng Index represent roughly sixty-five percent of total capitalisation in the Hong Kong Stock Exchange… So it is disappointing to note that the majority of Hong Kong top listed companies fail to adopt sound corporate social responsibility (CSR) policies and practices… certain companies with excellent CSR… HSBC ranked first out of all Hang Seng Index-listed companies with a total score of 93 percent, followed by CLP Holdings (84 percent) and China Mobile (82 percent).” It is wonderful to see the interest in CSR in Asia. From the following article, investors can see how all Hang Seng companies are rated. Research was conducted by Oxfam.
Most top Hong Kong-listed companies fail test on CSR, by Jacqui Dixon, December 12, 2008, CSR Asia, Hong Kong.

UNPRI Signatories With $1.5 Trillion In Assets Ask Starbucks, GlaxoSmithKline and Carlsberg Group, And Others, To Disclose Water Use Policies. – [COMMENTARY] “[UNPRI has asked] 100 of the world′s leading corporates to disclose their policies on water use and make structural improvements where possible or necessary…. the investors said they believed that companies that manage the risks and opportunities presented by limited global water availability are more likely to be viable long-term investments.”

UNPRI, the United Nations Principles for Responsible Investment, is an investor alliance which includes some of the world’s largest asset managers. This initiative by the group is commendable. Water shortages loom, water pollution and costs are increasing. Companies must take this issue seriously. Ethical investors looking for the best socially responsible stocks to invest in will want to see how the companies contacted by UNPRI respond.
1.5 trillion dollar investor alliance pushes Starbucks, GSK, Carlsberg and peers on water policies, by Hugh Wheelan, December 9, 2008, Responsible Investor, UK.

JP Morgan, Like Citi, Cuts Dedicated Environmental, Social & Governance (ESG) Research Team. – [COMMENTARY] Though JP Morgan says the research will now be done more generally throughout its research group, it is clear their commitment to ESG research was skin-deep. Since ESG issues frequently involve longer-term factors, it seems to underscore the short term orientation of the firm, which is wholly typical of the mainstream investment industry. (I will soon be posting to my Enlightened Economics blog a post with the title: “Short Term Thinking Created Economic Pain.”)
JP Morgan ends dedicated ESG research coverage, by Hugh Wheelan, December 9, 2008, Responsible Investor, UK.

British, French, & Dutch Institutional Investor Survey Reveals Attitudes Towards ESG Issues. – [COMMENTARY] “In France, more than 70% of surveyed investors believe they are responsible for the corporate ESG policies of the companies in which they are shareholders—nearly as many as in the UK.” This survey, sponsored by Novethic and BNP Paribas, provides fascinating insight into the minds of institutional investors in key European ethical investing markets.
Institutional Investors′ Perspective on their Responsibility for Corporate ESG Policies, December 2008, Novethic/BNP Paribas, France.

Henkel Named As Germany’s Most Sustainable Brand. – [COMMENTARY] Henkel received this award at Germany’s first ever German Sustainability Congress. The advantages of using corporate social responsibility were seen early on by the company.
Henkel Named Germany’s ’Most Sustainable Brand,’ press release, December 8, 2008, PRNewswire, Düsseldorf, Germany.

World’s Largest Database Of Corporate Environmental, Social, & Governance (ESG) Reports To Be Online In Spring of 2009. – [COMMENTARY] “PRI [United Nations Principles for Responsible Investment (UNPRI)] signatories have told the initiative that one of the biggest barriers to the growth of ESG integration into investment is the availability of good quality research.” UNPRI members represent many of the world’s biggest banks and investment firms. They collectively manage $18 trillion in assets. This could represent a landmark development in the use of ESG by the mainline investment community.
PRI launches ESG broker research database, by Hugh Wheelan, December 4, 2008, Responsible Investor, UK.

Canada’s Accountants Promoting Enhanced Climate Change Reporting. – [COMMENTARY] “The Canadian Institute of Chartered Accountants (CICA) has published a new document in response to a growing demand for guidance relating to Management Discussion and Analysis (MD&A) disclosures. The publication, Building a Better MD&A – Climate Change Disclosures (PDF), helps companies provide useful and relevant information to investors.” Hopefully, this will mean greater disclosure by Canadian companies concerning their climate change initiatives and impacts.
Canada′s CAs provide climate change disclosure guidance, December 1, 2008, press release, Canadian Institute of Chartered Accountants, Canada.

Major Banks Sign-On To New Environmental Regulatory Pact. – [COMMENTARY] “Crédit Agricole, HSBC, Munich Re, Standard Chartered and Swiss Re [are among the] first firms to sign up to standards that could see them refuse financing to projects that fail to disclose carbon emissions.” These financial institutions know the advantages of using corporate social responsibility!
Global banking giants sign up to climate principles, by Tom Young, December 1, 2008, Business Green, UK.

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