Green Confidence Index Shows US Shoppers More Upbeat About Green Products & Services. – [COMMENTARY] “The Index, which is derived from a monthly online survey of approximately 2,500 Americans aged 18 and over, now registers 104.5, representing a near 5 percent gain since its inception 9 months ago. The Index measures Americans’ attitudes towards and confidence in how leaders and institutions are perceived to be addressing environmental issues, the adequacy of information available to them to make informed decisions, and their past and future purchases of green products.”
How much of this improvement is due to ’improving’ economic conditions? Nonetheless, it is a good sign that green is gaining ground if we are to have a better world. Of course it is also beneficial news for green and ethical investors.
Shoppers Feeling More Positive Toward Green Purchases, Corporations, April 28, 2010, GreenBiz, USA.
Regulation Driving Sustainability Practices In Companies. – [COMMENTARY] “Companies say that regulatory requirements are now a more important factor driving corporate sustainability initiatives while the competitive advantage provided by such initiatives are viewed as less important, according to a new report. AMR Research surveyed 189 employees that handle decisions on sustainability initiatives for the report, which also looks at business risks, the largest sustainability challenges and what companies are doing to reduce emissions and increase energy efficiency.”
It is unfortunate that it takes increased regulation to drive companies to do the right thing. It is this attitude why we are unlikely to see any major changes in environmental or financial regulations until we have either an environmental catastrophe (and I am not talking about the BP oil spill in the Gulf) or another financial meltdown. In my opinion, both scenarios are likely to occur sooner than most people think.
Regulation Eclipses Innovation as Main Driver in Sustainability, April 27, 2010, GreenBiz, USA.
SHARE Canada Issues 1Q/10 Shareholder Engagement Report. – [COMMENTARY] “10 of 12 ‘Say on Pay′ proposals filed by Meritas were implemented… SHARE wrote letters to 41 companies about the Carbon Disclosure Project (CDP).” SHARE continues to excel in getting shareholders engaged in proxy voting.
Shareholder engagement activity report Q1/10, April 29, 2010, SHARE, Canada.
Only 40% Of UK Staff Say Their Companies Are Ethical. – [COMMENTARY] “While employers that adhere to corporate social responsibility and environmentally-friendly business practices show better rates of employee engagement and retention, only two out of five UK staff believe that the organisation they work for behaves ethically.” The numbers are probably similar throughout the developed world and probably apply equally–at least–to the employees themselves. People, generally, need to reach into their inner values before a better business environment is able to blossom.
Only 40% of employees say their business is ethical, by Cath Everett, April 28, 2010, HRZone, UK.
Two US Government Reports Show Green Investments Spur Growth, Reduce Pollution. – [COMMENTARY] “Green investments are spurring significant growth across the U.S economy while decreasing industry’s overall emissions per dollar of goods and services, according to two reports released Wednesday by the federal government.” This is the kind of news ethical investors want to hear.
Do Green Investments Spur Growth or Emission Cuts? By Douglas Fischer, April 22, 2010, Scientific American, USA.
Major Pension Funds Pressuring Companies To Reveal Their Policies Concerning Bribery & Corruption. – [COMMENTARY] “A coalition of 20 pension fund investors and fund managers with assets of $1.7 trillion – all signatories to the United Nations Principles for Responsible Investment – is pressuring major companies, notably in the defence and construction sectors, to reveal their management policies on bribery and corruption.” I fear that what these companies say, versus what they actually do, might not be the same. For ethical investors, this poses a real dilemma.
Huge investor coalition demands bribery policy clarity from 21 major companies, by Hugh Wheelan, April 28, 2010, Responsible Investor, UK.
Vatican Backs First Christian Stock Index–Stoxx Europe Christian Index. – [COMMENTARY] “Investors are being invited to put money into a new Catholic equities index that is being backed by the Vatican, which will not invest in companies connected to gambling or birth control, among other activities.”
I have been wondering for sometime when something like this this might happen. We should note that Islamic investments have from their inception religious oversight. I believe the Vatican involvement is positive for ethical investing generally, as it brings more attention to ethics in finance.
Vatican backs new equities index, by Phil Craig, April 26, 2010, Financial News, UK.
55% Of US Advisors Allocating Portion Of Client Portfolios To Green Investments. – [COMMENTARY] “’To think, not five years ago, probably fewer than 10% of the financial advisors stewarding America′s private and institutional wealth even knew what it meant to invest in alternative and clean fuel solutions,’ said Richard Bookbinder, Managing Member of TerraVerde Capital Management and author of Fund of Funds Investing: A Roadmap to Portfolio Diversification.”
Finally, advisors are getting the message to invest in green. This is good news for ethical investors as it may mean that advisors will give more consideration to their concerns.
The “Greening” of America′s Investment Portfolios: Financial Advisors Embrace Renewable Energy Investments, TerraVerde Capital Survey Shows, press release, Business Wire, April 26, 2010, USA.
SHARE Canada’s 2009 Proxy Vote Survey Shows Some Progress. – [COMMENTARY] Slowly, but surely, fund managers are taking a more active stance regarding proxy voting.
SHARE 2009 Key Proxy Vote Survey, April 26, 2010, SHARE, Canada.
What Should Ethical Investors Do About Nanotechnology? – [COMMENTARY] This subject will come to the fore in the years ahead. So far, it is an area completely unknown to most ethical investors. The following discussion provides some insight for us.
Nanotechnologies and socially responsible investment, by Hilary Sutcliffe, April 23, 2010, Matter for All, UK.
US States Begin Offering Legal Protections For Socially Responsible Companies. – [COMMENTARY] “When Ben Cohen and Jerry Greenfield sold Ben & Jerry’s to Unilever (UN) for $326 million a decade ago, they did so reluctantly. They liked the payout but feared the new owners would ignore the social goals famously embraced by the ice cream maker. The board, though, felt it had no choice but to accept Unilever’s offer. ’The legal advice was that the primary concern for the directors was the financial interests of the shareholders,’ says Greenfield.”
It seems that some US states are likely to offer “benefit corporations” which would have greater legal protections from the type of suit that Ben & Jerry were concerned about in the above quote.
New Legal Protections for Social Entrepreneurs, by John Tozzi, April 22, 2010, Bloomberg/Businessweek, USA.
Sustainable Investing Report Concerning Canadian Companies. – [COMMENTARY] “Major issues covered in the specific program areas for 2009 included: climate change; biodiversity; safeguarding water; human rights; eliminating sweatshop conditions; respecting Indigenous Rights and engaging communities; and building transparency.”
The report is very useful reading for ethical investors interested in Canadian companies. Northwest & Ethical Investments are doing a fine job in analysing the Canadian scene.
Sustainable Investing Program Annual Report 2009, April 2010, Northwest & Ethical Investment, Canada.
Oxford University Says Investing In Arms Is Fine. – [COMMENTARY] “Oxford University released documents this week showing it believes its investment in the arms trade is ‘socially responsible’.” I have known ethical investors to be on either side of this issue. Where do you stand?
University: now arms investment is ’ethical, by Sophie Core & Natalya Segrove, April 22, 2010, Cherwell.org, UK.
New Site: Climate Bonds Initiative. – [COMMENTARY] “… the Climate Bonds Initiative is an international network which promotes the development and use of Climate Bonds. These bonds provide for large scale issuance of long-term debt to overcome medium term investment barriers preventing the achievement of economies of scale in low-carbon industry sectors. The bonds can thus finance that global transition at speed and at scale.”
I just came across this site, courtesy of Responsible Investor. Anyone interested in green or climate related debt should research this site. Climate Bonds Initiative.
New World Bank Green Bond Issue. – [COMMENTARY] “The World Bank yesterday issued its latest round of “green bonds”, releasing a $200m fixed-rate bond designed to raise funds for investment in low carbon projects in developing countries. The four year bond were issued for the first time through the bank’s subsidiary, the International Finance Corporation (IFC), and will be managed by financial group SEB, which has worked closely with the World Bank on previous green bond issues.”
Still relatively small in size, but it is anticipated these bond issues will get much larger. However, it is strange that the World Bank is encouraging green energy while it still funds dirty coal plants too! Much like the record of the big banks where they say they are green–just do not look at their loan portfolios.
World Bank issues latest round of green bonds, by Jessica Shankleman, April 16, 2010, BusinessGreen, UK.
ConocoPhillips and ExxonMobil Next Targets Of Oil Sands Campaigners. – [COMMENTARY] “An institutional investor campaign which is challenging oil giant BP (AGM) to improve its reporting on financial, environmental and social risks associated with oil sands investments in Canada at today′s (April 15th) annual general meeting, is being extended to similar resolutions at oil majors, ConocoPhillips and ExxonMobil. The investors have already lodged a resolution at Shell′s AGM on May 18th in a campaign that is gathering momentum, but seriously dividing shareholder opinion.”
With increasing environmental and water costs, oil sands producers may not be as profitable as many hitherto thought.
Oil sands campaign targets ConocoPhillips and ExxonMobil ahead of today′s BP showdown, by Hugh Wheelan, April 14, 2010, Responsible Investor, UK.
A ’Data Engine’ To Analyze Corporate Social Impacts. – [COMMENTARY] “A new group [GIIN] is aiming to revolutionise the standard maths used to select investments for billions of dollars worth of assets by constructing a data engine that contrasts – and quantifies – the tangible social benefits of investing opportunities… A formidable array of organisations joined forces last year to form GIIN and propel the effort, including the Rockefeller Foundation, Deloitte, PwC, Hitachi, Citigroup, Deutsche Bank, JPMorgan, and the Bill & Melinda Gates Foundation.”
The value I see in these efforts is that they are likely to bring huge new funds into ethical investments. The problem with such efforts is like that of economists trying to model the economy–there are just too many variables to model and account for. Nonetheless, it is wonderful they are attempting to create such a model.
Architects of a ‘social investment data engine′, by Tom Stabile, April 11, 2010, Financial Times, UK.
New Global Sustainability Ratings Initiative. – [COMMENTARY] “Global Initiative for Sustainability Ratings (GISR), is a swipe at the profusion of sustainability ratings providers and the ’proliferation of tools and methods’ which GISR says has created confusion for the market. The founders say the rapid consolidation of the ratings field and the proliferation of new raters are undermining confidence and trust in the quality of ’available ratings frameworks’. It′s argued that it′s not uncommon for a single company to annually complete a dozen or more disparate questionnaires – with equally disparate outcomes.”
The desire to create a single ratings system to analyze corporate sustainability efforts on the surface seems good. However, just as two analysts can evaluate a single income statement and arrive at different conclusions as to a company’s prospects, so, I’m sure will there be continued variability in assessing outcomes using a system such as the one proposed by GISR.
New global sustainability ratings initiative set to launch, by Daniel Brooksbank, April 12, 2010, Responsible Investor, UK.
$16 Trillion Investor Coalition Quizzing Companies On Water Use. – [COMMENTARY] “A group of 137 financial institutions globally with a combined $16trn (€11.9bn) in assets have sent out questionnaires to more than 300 of the world′s largest companies on their water use as part of the Carbon Disclosure Project′s Water Disclosure initiative. The institutions include names such as Allianz Group, CalSTRS, HSBC, ING, Mitsubishi UFJ Financial Group (MUFG) and National Australia Bank.”
Water is fast becoming the new oil in terms of importance to economic activity. It will be rewarding for investors to follow which companies use extraordinary amounts of water and how they are able to reduce its usage. It just might significantly affect their bottom line in the future as water becomes increasingly more costly.
$16trn investor coalition to quiz companies on water, by Daniel Brooksbank, April 9, 2010, Responsible Investor, UK.
German Investors Favour Ethical Investing. – [COMMENTARY] “Almost two thirds of German retail investors would prefer investing in ethical SRI products rather than other, potentially more profitable, opportunities, according to a survey commissioned by German asset management firm Union Investment. The survey, carried out by market research institute Forsa, revealed that investors between 20-29 years old were also the most likely to opt for a sustainable investment with 45% of them considering it an attractive option.”
The news continues to be positive for ethical investing. However, and I am not aware of the exact figures for Germany, but in North America and the UK, ethical/SRI mutual funds have less than three per cent of the mutual funds market. This is the perennial problem for the ethical/SRI industry–how to get retail investors putting their money where their values are.
German retail investors value SRI over profit, by Atholl Simpson, April 8, 2010, Citywire, UK.
As Resource Stocks Boomed, UK Ethical Funds Lagged. – [COMMENTARY] “So why have fund managers been unable to turn this sentiment [interest in ethics, sustainability, etc.] into profit over recent years. In one word: resources. In the fourth quarter of 2009 oil and mining stocks flied ahead of the rest of the market as beta begun to attract a higher multiple than defensive growth stocks.” This demonstrates the characteristics of numerous ethical funds and indexes: significant over or under exposure to different industries.
Why are UK ethical funds doing so badly? By Charlie Parker, April 6, 2010, Citywire, UK.
Global Renewable Energy Market Predicted To Grow Seven Fold Within Five Years: KPMG. – [COMMENTARY] “The global renewable energy market is set to grow seven times over the next five years to about US$560 billion. This is according to an expert from KPMG, who was speaking at the sidelines of Eco World 2010.” Predictions for renewable energy growth are bright indeed.
Global renewable energy market to grow seven-fold to US$560b: KPMG expert, April 8, 2010, channelnewasia.com, Singapore.
Shareholders Pressuring BP To Provide Full Environment Report On Tar Sands Development. – [COMMENTARY] “Large shareholders will be pitted against each other this week in a row over oil giant BP’s involvement with tar sands in a battle that is set to dominate this year’s round of company annual meetings. A special resolution has been filed by 143 shareholders for BP’s annual meeting on 15 April, demanding the company provide a full report by next year about the risks of its planned tar sands development in Canada.” Though the dissident shareholders are unlikely to win the vote, they could really shame BP. The company should do the right thing. They should create and publish such a report.
Shareholders at loggerheads over vote on BP’s tar sands development, by Ruth Sunderland, April 4, 2010, The Observer, UK.