Thomson Reuters Buys ASSET4, The Swiss Based ESG Research Powerhouse. – [COMMENTARY] “The global credit crisis, climate change, new regulation and other issues have highlighted the need for financial firms to assess the environmental, social responsibility, governance and reputational risks attached to the firms in which they invest. Through the acquisition of ASSET4′s leading ESG information and tools, Thomson Reuters clients worldwide will benefit from having direct access to this increasingly important information as part of their investment process.” It is fascinating to watch the consolidation of the SRI/ESG research industry. It is even more fascinating to see giants in the financial media industry get in the takeover game. Generally, I believe this is good news in that it will further thrust ESG analysis into the mainstream financial media.
Thomson Reuters Invests in Environmental, Social Responsibility and Governance Content Through the Acquisition of ASSET4, press release, November 30, 2009, Thomson Reuters, Switzerland.
EIRIS Reviews Stock Exchanges’ Role In Adopting & Promoting Corporate ESG Disclosure. – [COMMENTARY] “This briefing explores the evolving role of stock exchanges, giving an insight into both their current and future role in responsible investment. In addition, this briefing analyses the current positioning of exchanges and the business drivers for promoting greater ESG disclosure in the market.” EIRIS is one of the foremost organizations to conduct such a review. Worth reading for ethical investors and anyone interested in ESG matters.
Taking stock: how leading stock exchanges are addressing ESG issues and the role they can play in enhancing ESG disclosure, November 2009, EIRIS, UK.
Major Institutional Investors Call On SEC To Require Companies To Disclose Their Risks & Opportunities Concerning Climate Change. – [COMMENTARY] “It’s impossible for investors to adequately assess the risk to their investment money if companies don’t tell them how much climate change and its impacts might affect their financial performance… The 20 signatories to the petition include leading U.S. and Canadian institutional investors managing more than $1 trillion in assets, including the California Public Employees’ Retirement System (CalPERS), British Columbia Investment Management Corporation of Canada, Pax World Management Corporation, state treasurers from Oregon, North Carolina, Connecticut, Maryland and Vermont and Florida’s Chief Financial Officer.”
Though this will be difficult for many companies to do, it is something they should be doing anyway. And it is absolutely necessary for them to inform their stakeholders about! If the SEC values its credibility, it has to act on this. Only when such information is given can ethical investors really know the stocks that are good to invest in for the longer term.
Major Investors Call for SEC to Require Disclosure of Companies′ Climate Risks and Opportunities, press release, November 25, 2009, by Ceres & The Environmental Defense Fund, USA.
Investors Not Focusing On Incremental Climate Costs. – [COMMENTARY] “Companies and their investors are missing the potential impact of climate change on share prices by focusing on the risks of extreme weather events rather than examining more relevant incremental costs and opportunities, according to research by four of the UK′s largest institutional investors.” These reports are timely, especially in the light of just released research indicating that global warming by the end of this century could be up by 6C –at the very high–end of the UN Intergovernmental Panel on Climate Change’s projections.
Investors failing to see incremental climate change costs because of ‘extreme′ event focus, by Hugh Wheelan, November 23, 2009, Responsible Investor, UK.
Guide To Canadian Mutual Fund Companies Produced By The Social Investment Organization (SIO). – [COMMENTARY] A very helpful new guide for Canadian ethical investors.
Your Guide to Socially Responsible Mutual Fund Companies in Canada, November 2009, Social Investment Organization, Canada.
Boston College Report Examines Stakeholder Influences Concerning Corporate Social Responsibility (CSR). – [COMMENTARY] “The research reflects dynamics such as the spread of market capitalism, increasing wealth and power of business, the mounting pressure for companies to take on greater social and environmental responsibilities and the growing public distrust of business… The U.K. government appears to be the most supportive of CSR, while the U.S. government is much less involved.” Though not directly related to ethical investing, the report does offer some insight into the way governments and other stakeholders view or support CSR.
Global Stakeholder Influence Examined in New Boston College Report, press release, November 19, 2009, Boston College Center for Corporate Citizenship, USA.
Mercer: Specific Environmental, Social, & Governance (ESG) Factors Can Positively Impact Investment Performance. – [COMMENTARY] “Academic research continues to support the hypothesis that specific environmental, social and corporate governance (ESG) factors can make a positive contribution to investment performance. This report summarizes and comments on sixteen academic studies—ten of which show a positive relationship between ESG factors and financial performance.” Mercer has done great work here in compiling the data of sixteen new studies on ESG measures and their relationship to investment performance. A positive relationship was found in ten of the studies, two were found to have a negative-neutral effect and four a neutral association.
Shedding light on responsible investment: Approaches, returns and impacts, November 17, 2009, Mercer, UK.
EIRIS UK Survey Finds British Investors Wanting To Invest Ethically. – [COMMENTARY] “The survey finds that three-quarters of those interested in finding out more about the ethical credentials of a financial product or service said they are likely to take this into consideration when next buying a financial product or service… Only 15% of those surveyed agree that ethical products and services ’are less likely to perform as well as similar standard products’.” Britain, in many ways, seems to be leading the global thrust into ethical investing. This survey is a pioneering work in understanding how British investors view green and ethical products, services, and investments.
Ethical Finance: Does Britain Care? November 28, 2009, Ipsos MORI /EIRIS, UK.
UK Climate Funds Outperforming Market: Holden & Partners. – [COMMENTARY] “Holden & Partners, the ethical financial advisers, published data this week showing that climate change funds have outperformed the MSCI world index over two and three years, with some â€“ such as Schroders Global Climate Change and F&C Climate Opportunities â€“ outperforming over one year as well.” One idea for finding environmental stocks that are good to invest in is to review what the leading climate change funds have in their portfolios. Then discuss your findings with your advisor.
Changing climate shifts ethical investors, by Alice Ross, November 13, 2009, Financial Times, UK.
Studies Aim To Guide & Promote Responsible Investing Among Canada’s Pension Funds, Foundations, & Endowments. Important Reading For Those In Other Countries Too. – [COMMENTARY] “Two seminal reports commissioned by the Social Investment Organization (SIO) and funded by Environment Canada set the stage for enhanced adoption of responsible investment practices in the Canadian foundations and pensions sectors.” Congratulations to the SIO on sponsoring these strategic reports.
Best Practices in Responsible Investment for Canadian Pension Funds, and Education and Training on Responsible Investing for Canadian Foundations and Endowments: An Inventory and Needs Analysis, November 2009, Social Investment Organization, Canada.
Barclay’s Global Investors Developing Genocide Free ETF. – [COMMENTARY] “Barclays Global Investors, a leader in the exchange-traded fund industry, said investors’ appetite for socially responsible investments is growing and it plans to develop a genocide-free ETF.” It was only a question of time before some investment manager did this. Again this is another boost for ethical stocks and bonds.
BGI to develop genocide-free ETF, by Svea Herbst-Bayliss; editing by John Wallace, November 13, 2009, Reuters, USA.
US Faith Based Investor Group Presses Companies On Health Care Reform. – [COMMENTARY] “As the health care reform debate in Congress shifts to the U.S. Senate, leading faith-based institutional investors are pressuring 36 major companies â€“ including Merck, Wal-Mart, McDonald′s, AT&T, IBM and General Electric — to state publicly if the U.S. Chamber speaks for them in its aggressive campaign to kill efforts to overhaul the U.S. health care system. Significantly, all of the companies had previously agreed at the urging of shareholders to embrace health care principles that are now inconsistent with the anti-reform stance of the U.S. Chamber of Commerce on health care legislation.”
The US Chamber of Commerce found itself at odds with many of its members by opposing the new climate bill. Now a similar story seems to be unfolding with regard to the Chamber’s stand in opposing health care reform. It seems to me that perhaps the Chamber may need to split itself into two groups, since it obviously cannot find a common stand among its members.
Faith-Based Investors Press Dozens of Top Companies to Say if U.S. Chamber of Commerce Speaks for Them in Opposing Health Care Reform, press release, November 10, 2009, Interfaith Center on Corporate Responsibility, USA.
Canada’s SHARE Publishes Its 3Q/09 Corporate Engagement Report. Governance Issues Top Its Agenda. – [COMMENTARY] “This quarter, SHARE engaged with a total of 34 companies on ten ESG issues: child labour, precarious employment, the Carbon Disclosure Project, sustainability reporting, oil sands land reclamation, toxic chemicals, riverine tailings disposal, sustainable forestry, oil tanker traffic and the advisory vote on executive compensation (‘say on pay′).” SHARE continues its great work in Canada.
Shareholder Engagement Activity Report Q3/09, SHARE, Canada.
UN Encouraging Stock Exchanges In Promoting ESG Practices. – [COMMENTARY] “The potential role of stock exchanges in promoting corporate transparency on environmental, social, and governance (ESG) issues gained overdue prominence in recent days, when a meeting was held at the UN on November 2 in which institutional investors and CEOs of stock exchanges explored how they might work together with regulators and business to encourage responsible long-term approaches to investment. The meeting at the UN was co-hosted by the Principles for Responsible Investment (PRI), the UN Global Compact, and the United Nations Conference on Trade and Development (UNCTAD).”
The above quote by Robert Kropp from his article (link below) reviews the behind the scenes activities among global stock exchanges at promoting ESG practices. It is worthwhile reading for everyone interested in ethical investing.
Role of Stock Exchanges on Corporate ESG Disclosure Gains Traction, by Robert Kropp, November 4, 2009, SocialFunds, USA.
RiskMetrics Formerly Announces KLD Acquisition. – [COMMENTARY] “Traditionally a provider of risk management and corporate governance services to the global financial community, RiskMetrics has, through its purchase of KLD, gained access to one of the most prominent names in the ESG research arena. Founded in 1988, KLD published the first research designed to evaluate the risks and opportunities associated with corporate social and environmental performance, according to the press release announcing the acquisition. Currently, more than 400 clients, including 31 of the 50 largest institutional investment managers globally, use KLD’s research to inform their investment decisions based on ESG considerations.”
Apparently, when RiskMetrics acquired Innovest Strategic Value Advisors earlier this year, they decimated Innovest’s research staff. One wonders exactly what the game-plan of RiskMetrics might be?
RiskMetrics Acquires KLD, by Robert Kropp, November 3, 2009, SocialFunds, USA. Press release by RiskMetrics.
Breakthrough: SEC Will Allow Shareholder Resolutions Looking At Companies Environmental And Social Risks! – [COMMENTARY] “A major policy reversal by the Securities and Exchange Commission (SEC) to allow shareholder resolutions looking at companies′ environmental and social risks has been welcomed by SRI investors. Similar resolutions had previously been blocked under policies dating back to the Bush administration. The re-interpretation is timely for the 2010 proxy season, given that most resolutions are filed in November. The move was unveiled in new guidance by the SEC′s Division of Corporation Finance under new director Meredith Cross.” A slew of good news for ethical investors is out today. This particular piece of news is liable to spur ESG policies and activities at numerous companies.
SEC reverses position on environmental and social shareholder resolutions, by Daniel Brooksbank, November 1, 2009, Responsible Investor, UK.
BMW & Toyota Create Most ’Sustainable Value,’ Says Study. – [COMMENTARY] “Toyota and BMW use their economic, environmental and social resources more efficiently than other worldwide automakers, a new study has found, while General Motors and Fiat significantly lagged behind their industry peers. The study, from Belfast’s Queen’s University Management School, the Euromed Management School Marseille and Berlin’s Institute for Futures Studies and Technology Assessment (IZT), measures the sustainable performance of worldwide auto manufacturers from 1999 to 2007, comparing resource use efficiency of production for factors such as emissions, work accidents, waste generation and water use.”
If you are looking for automobile company stocks that are good to invest in, you will want to read this study. It is likely one of the most authoritative studies on automobile manufacturers’ sustainability practices.
BMW and Toyota Create Most ’Sustainable Value,’ Report Finds; GM, Fiat Among Laggers, November 2, 2009, GreenBiz, Ireland.
UN Backed Principles For Responsible Investment Continues To Sign-Up New Members. New Member Bloomberg Launches Dedicated ESG Coverage For Trading Screens. – [COMMENTARY] “The $19 trillion United Nations-backed Principles for Responsible Investment has signed up 55 new institutional members since the end of August, including a number of financial markets heavy-hitters such as Bloomberg, the information provider and APG Asset Management, which runs the money for the giant â‚¬180bn Dutch ABP civil servants pension fund. The rapidly growing number of signatories suggests that appetite for responsible investment has not been hit by the financial crisis and is increasingly becoming a mainstream financial consideration.”
This shows that the financial world is continuing to see that ESG matters. And Bloomberg’s dedicated ESG coverage will bring greater interest to ethical investing.
PRI sign-ups buck financial crisis – Bloomberg joins and launches ESG data on screens, by Hugh Wheelan, November 1, 2009, Responsible Investor, UK.