New York State Common Retirement Fund Divests From Companies Doing Business In Sudan. – [COMMENTARY] “New York State Comptroller DiNapoli announced the withdrawal of investments in a set of companies operating in Sudan from the New York State Common Retirement Fund (Fund). DiNapoli also announced the decision to continue to monitor and engage another set of companies with Sudan-related operations. The actions to be undertaken by the Comptroller, particularly the latter, were developed in coordination with the Conflict Risk Network (CRN), a project of Genocide Intervention Network (GI-NET).” Expect more actions like this as global collective consciousness rises and becomes more concerned about social, environmental, and governance (ESG) issues. Increasingly, stocks that are good to invest in will be those that have passed quality ESG screens.
New York State comptroller withdraws state investments from companies in Sudan, press release, June 30, 2009, Genocide Intervention Network, USA.
New Global Shariah Index Launched By Russell & Saudi Arabia’s Jadwa Investment. – [COMMENTARY] “Launching in mid-summer 2009, the Russell-Jadwa Shariah Index offers investors an accurate and complete global-equity market index that reflects established Shariah investment guidelines.” This index breaks new ground in that it is based on companies around the globe that conform to Shariah ethical investment values. Up until now, I believe all previous Shariah screened indexes were country or regionally based.
Introducing the Russell-Jadwa Shariah Index, June 24, 2009, Russell Investments, USA.
86% Of American Consumers Believe Profitable Businesses Can Address Social Issues. – [COMMENTARY] “A new study finds that 86 percent of consumers believe that profitable businesses can address social issues. The poll, conducted May 18-28, 2009, among a sample of 511 consumers and 320 marketing professionals nationwide, highlights the current state of key consumer perceptions in the area of corporate social responsibility.” There are many other interesting findings for businesses in this poll, including, “[That] more than 70 percent of consumers and marketing professionals believe there are companies that are making a positive change in society through the products and services they sell today.”
Eighty-Six Percent of Consumers Believe Profitable Businesses Can Address Social Issues, But Want Efforts to Be In Keeping With Core Business Strategy, press release, June 23, 2009, by RT Strategies/Waggener Edstrom Worldwide, USA.
Poor ESG Disclosure In Emerging Markets Deters Major Investors: Survey. – [COMMENTARY] “Approximately 70% of a sample of 67 major asset managers and institutional investors collectively representing $130bn of emerging market investment, told the Emerging Markets Disclosure (EMD) Project, that they wished to see the development of national sustainability indices, ESG listing requirements and greater incorporation by emerging markets companies of global ethical standards and norms before they could commit more money.”
A major issue is highlighted here with respect to ethical investors finding stocks that are good to invest in emerging markets. However, S&P, Dow Jones and other index providers are increasingly offering ESG/sustainability oriented indices in these markets. For these indices see my links page, Ethical Investing Stock and Bond Indices.
ESG disclosure holding back 70% of responsible investors from upping emerging markets assets, by Hugh Wheelan, June 22, 2009, Responsible Investor, UK.
Interfaith Center On Corporate Responsibility Marks 40th Anniversary With Podcasts Chronicling Its History Of Shareholder Advocacy. – [COMMENTARY] “Anticipating the celebration of its upcoming 40th anniversary, the Interfaith Center on Corporate Responsibility (ICCR) is telling its story through a year-long series of monthly audio podcasts. The series, entitled The Arc of Change, relates how ICCR pioneered the practice of shareholder activism, which has significantly shifted widespread corporate practices to be more in line with the tenets of environmental and social sustainability. ICCR is a coalition of nearly 300 faith-based institutional investors representing over $100 billion in invested capital.”
Interfaith Center on Corporate Responsibility Marks 40th Anniversary With Streaming Audio Podcasts Chronicling the History of Faith-Based Shareholder Activism, June 18, 2009, press release, Interfaith Center on Corporate Responsibility (ICCR), USA.
Jantzi Research & Maclean’s Magazine Pick Canada’s Top Socially Responsible Companies. – [COMMENTARY] Jantzi’s analysis is always top-notch. Anyone interested in investing in Canada’s best socially responsible companies should review this list.
Jantzi-Macleans 50 Most Socially Responsible Corporations, June 18, 2009, Macleans.ca, Canada.
SociÃ©tÃ© GÃ©nÃ©rale, UBS, & Cheuvreux Named As Tops In European SRI & Sustainability Research In 2009 Thomson Reuters Extel Survey. – [COMMENTARY] This survey is always interesting to look at, most particularly in the light of recent cuts to SRI/ESG research by financial institutions.
Soc Gen named best European sustainability research house for 2009: full Thomson Extel rankings, by Hugh Wheelan, June 18, 2009, Responsible Investor, UK.
Three New Indexes Focusing On Sustainability. – [COMMENTARY] “Three index providers this week announced new products focused on companies that address environmental issues or show class-leading efforts on sustainability reporting.” The expansion in such products again underlines the increasing interest in green and sustainable investing.
More indexes to address sustainable investment, June 18, 2009, Environmental Finance, UK.
UK’s Multi-Faith Spiritual Community & Investment Industry Promote Higher Investment Values At Conference In UK Mosque. – [COMMENTARY] “In a rare collaboration between faith institutions and investment managers, the Three Faiths Forum and The International Interfaith Investment Group-3iG teamed up with CCLA Investment Management and the Fortune Group and an audience of over 100 City professionals to work out new paradigms for responsible investment.” I believe that moral, spiritual, and religious values will play an increasingly important part in investors’ investment decisions. The age of the ’spiritual investor’ is just beginning and is bound to play an integral part in reshaping our world towards a brighter ethical and economic future.
Faith in Capitalism Conference in London’s Central Mosque, press release, June 17, 2009, 3iG, UK.
Review Articles On Socially Responsible & Ethical Investing In Canada. – [COMMENTARY] “… a compilation of stories reported from the Social Investment Organization’s conference recently wrapped up in Winnipeg, as well as other events concerning governance. These articles probe the future of an investment model built on principles other than returns.” These articles are a worthwhile read for anyone interested in ethical investing.
Is SRI sustainable in a downturn? June 16, 2009, advisor.ca, Canada.
EU Governments Seen Lagging In Green Investment. – [COMMENTARY] “’”EU states spent three to 13 percent of recovery aid on what we would call green activities,” he [Karl Falkenberg, head of the EU executive arm’s environment department] said. “On the U.S. side we come up with about 14 percent … but we see China in the upper 30s.’” Clearly, and generally speaking, I believe the emphasis on green investing is still in its early stages.
EU seen lagging U.S. and China on green investment, by Pete Harrison and Jan Strupczewsk, June 15, 2009, Reuters, Belgium.
European SRI Fund Sales Up In April. – [COMMENTARY] “Total sector sales of European screened SRI funds in April turned positive again at â‚¬682.5m following a black month in March when â‚¬25.3m was pulled from the SRI funds universe. Confidence in equity SRI funds was still muted, however, with money market funds remaining the best sellers and securing the top three sales slots.”
SRI and green fund sales turn positive in April after March dip, by Hugh Wheelan, June 15, 2009, Responsible Investor, UK.
Institutional Investors Target Fortune 500 Companies For Deforestation Risks. – [COMMENTARY] “Investors running assets of US$1.3 trillion have signed up to a new initiative backed by the United Nations and HRH Prince Charles′ Rainforests Projects that will ask 150 companies in the Fortune 500 index as well as 50 other companies to report on risks that they could be contributing to dangerous deforestation.” This type of initiative is important to get companies to realize how they might improve their practices, not only in regard to deforestation, but in many other areas of environmental, social and governance concerns as well.
Investor-backed, UN/DFID supported project targets Fortune 500 companies on deforestation risks, by Hugh Wheelan, June 15, 2009, Responsible Investor, UK.
Harvard Study Shows How Investors Can Determine Long Term Portfolio Risks Due To Labour & Human Rights Activities Of Global Corporations. – [COMMENTARY] “This paper explores how pension funds and other investors can obtain data on the long- term sustainability risks posed by the labor and human rights (LHR) activities of global corporations, with a specific focus on supply chains.” This is a precedent setting study and is something that all ethical investors need to pay attention too.
Quantifying Labor and Human Rights Portfolio Risk, by Aaron Bernstein, June 2009, The Labor & Worklife Program at Harvard Business School, USA.
Pew Study Finds Green Jobs In US Growing Twice As Fast As Other Jobs. – [COMMENTARY] “While traditional jobs grew by only 3.7 percent between 1998 and 2007, Pew found that jobs in the clean energy economy grew at a national rate of 9.1 percent. There were similar trends at the state level, where job growth in the clean energy economy outperformed overall job growth in 38 states and the District of Columbia during the same period. The report also found that this sector is poised to expand significantly, driven by increasing consumer demand, venture capital infusions, and federal and state policy reforms.” The Pew study adds further fuel to green investing and that some of the best socially responsible stocks to invest in over the longer term will have a definite green flavour.
Pew Study: Green Jobs Growing More Than Twice as Fast as All Other Jobs, by Tracey de Morsella, The Green Economy Post, USA.
Five Industrial Sectors Risk Losses & Reputational Risk Due To Damaged Ecosystems: EUROSIF. – [COMMENTARY] “The report, entitled Biodiversity Theme Report, addresses risks to the agricultural, extractive, paper and forestry, real estate and infrastructure, and tourism industries. It considers both companies that depend on biodiversity and ecosystem services, and companies whose activities have an impact on biodiversity and ecosystems. The business risks associated with species loss and the restricted functional capacity of ecosystems include decreased availability of resources, the likelihood of regulatory action to protect environmental resources, increased prices and limited access to capital and insurance, an increase in trends toward ecologically responsible purchasing, legal action, and reputational damage.” This report is useful reading for all ethical investors.
Damage to Ecosystems Can Lead to Financial Losses and Reputational Risks for Companies, by Robert Kropp, June 10, 2009, SocialFunds.com, USA.
Some Banks Cutting Back On SRI Coverage: Survey. – [COMMENTARY] “Several banks are cutting back their analysis of companies′ socially responsible policies, according to Thomson Reuters, which does a regular survey of equity analysts… Steve Kelly, global head of surveys at Thomson Reuters Extel, said Citigroup, JP Morgan and Bank of America Merrill Lynch were among the banks to have cut back in the past few months. Merrill Lynch′s specialist, Zoe Knight, was one of about 20 analysts to be let go in January, as a result of the merger with Bank of America.”
Some perspective on these cuts must be noted. Though unfortunate, they were not disproportionate to the layoffs made generally in the industry.
Banks move to scale back socially responsible investing, by Mark Cobley, June 8, 2009, Thomson Extel article appearing in Wealth Bulletin, USA.
Big Companies Still Showing Poor Awareness Of Climate Change Impacts On Their Operations. – [COMMENTARY] “Two new studies from investor group Ceres, the Environmental Defense Fund and the Center for Energy and Environmental Security assess the major impacts climate change could have on global companies, and calls on the U.S. Securities and Exchange Commission to set standards for climate-related risk reporting. The two new studies, one an in-depth look filings from 100 global companies in 2008, and another a longitudinal look S&P 500 companies’ reports over the past 13 years, detail how slowly some of the world’s largest companies are in recognizing and forming a plan to mitigate the impacts of climate change on business operations.”
In reviewing these reports, ethical investors might glean some insight as to whom they feel they are comfortable investing in. It seems that many companies still do not really understand the advantages of using corporate social responsibility. The Ceres and Environmental Defense Fund report actually reviews and comments on individual companies.
Companies Show Little Awareness of Climate Change Risks, Report Finds, GreenBiz, USA.
Interest In SRI Rising Significantly In Mid-East. – [COMMENTARY] “Economic downturn has increased Middle East investors’ inclination towards socially responsible investments (SRIs), with interest rising four times in the past six months… The SRIs are particularly appealing to investors seeking diversification or opting for investments that are socially responsible or follow certain criteria in line with Shariah-compliant products, said Firas Mallah, Head of Middle East, Dexia Asset Management.” It is encouraging to see the interest in ethical stocks and bonds rising in one of the most troubled regions of the world.
Interest in SRI rises four fold, by Shveta Pathak, June 8, 2009, Business24/7, United Arab Emirates.
Carbon Cap Could Wipe-Out Many US Companies’ Earnings. – [COMMENTARY] “American Electric Power Co., Allegheny Energy and Ameren Corp′s future earnings potentially could be more than wiped out by costs under a cap-and-trade program requiring purchase of carbon emission credits, according to a report released today by the Investor Responsibility Research Center Institute and Trucost, a provider of data and analysis on corporate environmental impact.” A reminder–not only for ethical investors, but for all investors–of the need to take into account the future of carbon emission caps when evaluating a company’s prospective financial performance.
US carbon cap and trade could wipe out some US companies future earnings: report, by Barry B. Burr, June 3, 2009, Responsible Investor, UK.
US Pension Shareholder Activism Has No Economic Value, May Breach Fiduciary Duty: Chamber of Commerce. – [COMMENTARY] “Shareholder proposals filed by union-sponsored and public pension plans at US corporate AGMs show no clear evidence of short- or long-term improvements in operating or stock market performance of the target firms and may be placing trustees in breach of their fiduciary duty under ERISA guidelines, according to a study commissioned by the US Chamber of Commerce… The consultant [Navigant Consulting] said its research found no statistically significant overall short-run or long-run improvement and said there was actually some indication of a long-run decrease in market value for target firms in the sample.” I will be fascinating to see if these findings affect future shareholder resolutions! My guess is that the pace of such resolutions will only increase until whole industries change.
US pension shareholder activism has no economic value, may breach fid duty: Chamber of Commerce, by Hugh Wheelan, June 3, 2009, Responsible Investor, UK.
Investment In Clean Energy Tops 2007 Record, Despite Market Crash: United Nations. – [COMMENTARY] “Emerging markets allocations soar as crisis dampens US investment… Investors put $155bn into clean energy companies and projects worldwide in 2008, not including large hydro â€“ a four-fold increase since 2004 â€“ according to a report prepared for the UN Environment Programme′s (UNEP) Sustainable Energy Finance Initiative.”
Investment in clean energy tops 2007 record, despite market crash: United Nations, by Hugh Wheelan, June 3, 2009, Responsible Investor, UK.
UK Study Says Ethical Investing Far More Important Today Than In The Past. – [COMMENTARY] “The Friends Provident study showed nearly three quarters of Brits (74%) agree it is important that companies take social, ethical and environmental issues seriously. Further to this over half (54%) think ethical investing is far more important than it was 25 years ago when the UK was emerging from a recession.” Again, the Brits show leadership concerning their desire for ethical investing.
Brits determined to make profit without compromising principles, June 1, 2009, Easier Finance, UK.
Dell, Procter and Gamble, Hewlett-Packard, Better Place & Tririga Win 2009 AMR Research Leadership Awards In Sustainability & CSR. – [COMMENTARY] “To determine the list, AMR Research surveyed roughly 50 companies, many of which are part of the Fortune 500. Leaders where chosen based on the following categories of environmental and social stewardship: corporate social responsibility, supply chain innovation, and sustainable leadership including sustainability and innovation, operational sustainable performance, and clean technology.” The report makes clear some of the interesting strides that the winning companies have made to sustainability. Ethical investors might want to review AMR’s findings.
Dell, Better Place and HP Net Sustainability Awards, by Andrea Nocito, June 1, 2009, Matter Network, reported in Reuters, USA.