New Corporate Sustainability Reporting Platform Proposed. – [COMMENTARY] “The 88-page From Transparency to Performance: Industry-Based Sustainability Reporting on Key Issues has been backed by The Hauser Center for Non-profit Organizations at Harvard University and the Initiative for Responsible Investment. The authors are Steve Lydenberg, Chief Investment Officer at Domini Social Investments, Jean Rogers, Principal at consulting firm Arup and David Wood, Director of the Initiative for Responsible Investment.” This could be a breakthrough corporate reporting platform document! It will be truly interesting to see who gets behind it.
New proposal for sustainability indicators published, by Daniel Brooksbank, July 30, 2010, Responsible Investor, UK.
Environmental & Social Shareholder Resolutions Make Big Gains So Far In 2010. – [COMMENTARY] “The season was marked by record-breaking investor approval for corporate policies that protect LGBT rights, more reporting on sustainability in general and the environment in particular, and increased disclosure of political spending. Results are now available on nearly all the 387 shareholder proposals Si2 is tracking, including votes on the 166 resolutions that came to votes in the first six months of the year.” This is another item of good news. Many companies need to be held to task for their actions more than ever before.
Social and Environmental Proposals in 2010–mid year review, by Heidi Walsh, July 22, 2010, Sustainable Investments Institute, USA. (Courtesy of Responsible Investor, UK.)
US SRI Groups Call On Electronics Manufacturers For More Oversight On Suppliers After Suicides. – [COMMENTARY] “The statement, signed by 45 members of the investment community, condemns abusive workplace conditions in the electronics industry, where a recent spate of suicides at Foxconn — supplier to some of the industry’s largest firms, including Apple, Dell, Hewlett Packard and many others — led to widespread criticism of the company and its customers, and which pressured Foxconn to offer significant raises to its workers.”
I wrote about this in one of my columns for alrroya.com. See: A Call for Mandatory Corporate Social Responsibility Reporting.
Suicides Expose Risks in High-Tech Supply Chain Investments, July 23, 2010, GreenBiz, USA.
Faith Institutions Find Responsible Investing Difficult. – [COMMENTARY] “’The current investment market is not capable of providing all the tools and services that are required by religious investors’ says [Professor Celine] Louche, ’The great majority of religious institutions surveyed said that their religious beliefs are reflected in their investment practices, but 51% say they would invest more if there were reliable tools to do so in accordance with their beliefs.’”
I find the results of this research interesting as I believe that there are now sufficient ethical-socially responsible asset management companies to fulfil religious investment parameters. I wonder if the religious institutions themselves have really done their homework or are locked-in with friendly and cosy relationships spanning decades?
Faith institutions find responsible investment an uphill struggle, July 26, 2010, press release, The International Interfaith Investment Group, Spain.
Intel, Weyerhaeuser & Merck Tops In Green Governance Rankings, Says Governance and Environmental Management Strength (GEMS). – [COMMENTARY] “The GEMS Rating gives companies a score on a 100-point scale, based on their ability to anticipate and manage environmental issues that offer risks and opportunities to their operations. The GEMS Rating assesses companies depending on the presence or absence of 49 indicators in five categories: governance, policy, infrastructure and systems, performance results and transparency and accessibility.” See the top ten companies in the link below.
Intel Comes Out on Top in Green Governance Rankings, July 21, 2010, GreenBiz, USA.
Netherlands Study Examines Why Both SRI & ’Sin’ Stocks Outperform. – [COMMENTARY] “A segmentation of the socially responsible investing (SRI) movement by values-versus-profit orientation solves the puzzling evidence that both socially responsible and controversial [sin] stocks produce superior returns.” This is a fascinating new study discussing ethical -socially responsible investing from an insightful perspective.
A Tale of Values-Driven and Profit-Seeking Social Investors, by Jeroen Derwall, Kees Koedijk, and Jenke Ter Horst, July 13, 2010, School of Economics and Management, Tilburg University, The Netherlands.
New Study Finds SRI Funds Slightly Outperform On A Risk-Adjusted Basis. – [COMMENTARY] “[The study] found that while SRI funds tended to slightly underperform their non-SRI peers (-17 bps per year), they tended to slightly outperform on a risk-adjusted basis (+1 bps year), results that were neither statistically nor economically significant.” Study period was 19 years. It is a useful addition to the already significant body of research on this topic.
Exploring the Cost of Investing in Socially Responsible Mutual Funds: An Empirical Study, by David M. Blanchett, July 21, 2010, The Journal of Investing, USA.
US Congressional Budget Office Report Highly Critical Of Benefits From Ethanol Tax Break. – [COMMENTARY] “In its calm and measured way, the Congressional Budget Office (CBO) just delivered a blistering assessment of the environmental value of corn-based ethanol.” When this subsidy was first announced I, like many others, proclaimed it as a way to buy farm votes and was a terribly expensive method to help the environment. Now it seems the CBO agrees.
Ethanol gets skewered by recent CBO assessment, by Tom Philpott, July 16, 2010, GRIST, USA.
Over 90% Of Institutional Investors Want Green Investments. – [COMMENTARY] “Green private equity is on the agenda of virtually all institutional investors, with more than 90 per cent wanting exposure to the sector, according to a new survey. Over 90% of institutional investors claim they want to have exposure to ’green’ investments… The challenge for green private equity and venture capital managers is to accelerate the current levels of interest and future expectations into actual commitments into their funds sooner rather than later.” This another good sign for ethical investors and for the planet.
Institutional Investors Increasingly Looking at Green Private Equity and Venture Capital, According to New Survey, July 20, 2010, press release by New Energy World Network & AltAssets, UK.
Corporate Environmental Budgets Increasing Despite Economic Woes. – [COMMENTARY] “Our most recent green economy survey shows signs of steady growth in corporate environmental initiatives, a level of optimism that outstrips that of the overall recovering economy, according to the semi-annual ’Green and the Economy’ survey conducted by our GreenBiz Intelligence unit.” This is great news. It seems that it is largely customer driven too.
Green Business Forecast Shows Strong Growth Ahead, by John Davies, July 19, 2010, GreenBiz, USA.
Hong Kong’s Hang Seng Launches Sustainability Indexes. – [COMMENTARY] “Hang Seng Indexes has become the latest to launch a series of sustainability indices, covering Hong Kong and Chinese companies. The aims of the index series is to ’further raise awareness about corporate sustainability’ as well as to meet international demand for socially responsible investment in Chinese companies.”
It will not be long before corporate social responsibility (CSR) reporting becomes mandatory in some form in most countries around the world. See my recent article, A Call for Mandatory Corporate Social Responsibility Reporting,
Hang Seng Indexes Announces Constituents of the Hang Seng Corporate Sustainability Indexes, press release, July 15, 2010, Hang Seng Indexes, Hong Kong.
UK Shelves Green Investment Bank Plan. – [COMMENTARY] “Plans to use money from the sale of government assets to provide the riskiest of equity investment in green energy projects such as offshore wind and carbon capture have been shelved by the government.” I love the idea of more green investment, but tax policies that level the playing field and incentivise innovation might be better.
UK coalition government, by Nicholas Timmins, July 15, 2010, Financial Times, UK.
’Too-Big-To-Fail’ Banks Excluded From US Socially Responsible Mutual Fund. – [COMMENTARY] “Last week Appleseed Fund began tarring ’too-big-to-fail’ banks with the same brush as pornographers, weapons-makers and others… ’Given the failure of regulators to prevent the credit crisis and the subsequent failure of legislators to break up the massive and interconnected banks that helped create the crisis, it’s incumbent on depositors and investors to vote with their wallets,’ co-portfolio manager Adam Strauss said.”
Controversial, but this is a stand I agree with. American and European big bank management attitudes and practices have not changed, and pretty much the same executives involved in causing this mess are still in place. Well done Appleseed!
Socially responsible mutual fund cuts out ’too-big-to-fail’ banks, by Becky Yerak, July 14, 2010, The Chicago Tribune, USA.
Hong Kong Giving Investors Two Days To Change Their Minds On Some New Investments. – [COMMENTARY] “Beginning in January of 2011, the HKMA has mandated that banks allow first-time investors and those over the age of 65 a two-day period in which to think about the investment they′ve just gotten into. Lenders will be looked at in regard to the selling of unlisted securities, futures products and structured deposits but not listed stocks, futures and warrants.” Do you think this will catch-on? I guess they had to leave out listed securities.
Banks cringe at thought of ethical behavior, July 14, 2010, The Dark Side, Hong Kong.
Investor Activism Increases On Climate Change. – [COMMENTARY] “Eighty-eight U.S. and Canadian companies received 101 shareholder resolutions in the 2010 proxy season, a 48.5 percent increase over the year before, according to the Investor Network on Climate Risk (INCR) . Of those, 51 were withdrawn by investors after their demands were met with action or commitments. In comparison, investors filed 68 climate and energy resolution in the 2009 proxy season, 31 of which were withdrawn following corporate commitments.” As investor interest grows in sustainability issues and ESG reporting becomes increasingly important, companies are seeing the light that they must be more vigorous in their actions on climate change.
Investor Activism on Climate Shows No Sign of Slowing, July 8, 2010, ClimateBiz, USA.
Western European CEOs Do Not Believe Decline In Biodiversity A Problem For Business Growth. – [COMMENTARY] “More than 50% of a sample of chief executive officers (CEOs) in Latin America (167 companies surveyed) and 45% (40 companies surveyed) in Africa believe a decline in biodiversity – such as plant and animal habitats – is a challenge to business growth, against less than 20% of peers in western Europe (442 companies surveyed), according to the findings of The Economics of Ecosystems and Biodiversity (TEEB) report released yesterday.” I suspect the numbers might be similar for North American CEOs too. There is a lot of education yet to take place. The increasing focus on environmental, social and governance (ESG) issues should help.
TEEB report: corporations out of step with consumers on biodiversity loss, by Hugh Wheelan, July 14, 2010, Responsible Investor, UK.
There Are Now 410 Asian SRI Funds. Interestingly, Malaysia has the largest number at 146 funds, and they are all faith-based, whereas, all of Japan’s 71 South Korea’s 69 SRI funds are not.
Courtesy of Responsible Investor. Click here forASrIA data.
New Type Of Fund Focuses On Shareholder Activism. – [COMMENTARY] “Australian Ethical Investment (AEI) has launched an index fund that seeks to engage with companies about their policies on climate change and improve their disclosure. The Climate Advocacy Fund (CAF) invests in Australia’s largest companies by economic footprint, which is measured by sales, cash flow, book value and dividends.”
This is a new concept for ethical investors to consider. I remain on the sidelines as to whether this will work or not. It will be interesting to see what the fund actually does and the results it achieves.
Australian Ethical launches climate index fund, by Wouter Klijn, July 8, 2010, Investor Daily, Australia.
The $120 Billion Canada Pension Fund Makes Big Investment In Tar Sands. – [COMMENTARY] “Taking a page from the playbook of overseas investment funds, the managing arm of the CPP on Tuesday made its first foray into the oilsands as a private equity investor by sinking $250 million into Calgary-based Laricina Energy.”
It should be noted that this pension fund prides itself on its ethical investing principles. No doubt this investment might upset some ethical investors.
CPP joins oilsands investment fray, by Shawn Polczer, July 7, 2010, Calgary Herald, Canada.
CSR Programmes Create More Motivated & Committed Employees, says Boston College Center For Corporate Citizenship Study. – [COMMENTARY] “Corporate social responsibility programs are linked to how committed an employee is to an employer… Employee perceptions about corporate social responsibility remained constant during the depth of the economic decline… Corporate social responsibility programs are not a panacea for retention issues.” Here is more justification for ethical investors to seek out companies with good corporate social responsibility (CSR) credentials. It is with such employee characteristics that companies with great CSR policies are usually ’best-in-class’ in financial performance as well as often tops in stock performance too.
Study links corporate social responsibility programs and employee commitment, July 2010, Boston College Center for Corporate Citizenship, USA.
New UK Guide For Charity Trustees. Of Interest To Charity Trustees Globally. – [COMMENTARY] “Jointly launched by the EIRIS Foundation and Charity Finance Directors’ Group (CFDG), the free guide provides practical advice and presents case studies of charities that have adopted a responsible investment approach to help other charities to align their principles with their investment practices.”
Though the UK has a relatively smaller ethical investing footprint than the US, it seems to account for a disproportionate amount of leading edge ethical investment research, studies and news. This guide is typical of the quality of material coming from the UK. As I indicated too, it is worthwhile reading for anyone, anywhere who is engaged in managing charity funds.
New guidance to help more charity trustees invest responsibly, EIRIS Foundation and Charity Finance Directors’ Group (CFDG), UK.
Global Cleantech Venture Capital Investment Up 63% In First Half Of 2010. – [COMMENTARY] “Clean technology venture investment worldwide has soared by 65% in the first half of 2010 compared with the same period last year. According to preliminary results by the Cleantech Group, in collaboration with financial service provider Deloitte, cleantech venture investments came to more than $2bn (€1.6bn) across 140 companies in North America, Europe, China and India in the second quarter.” The ongoing BP oil disaster is fuel for cleantech.
Global cleantech investment soars by 63% in first half, by Nina Röhrbein, July 5, 2010, IPE, UK.
The 2010-2011 Ethics In Finance – Robin Cosgrove Prize For People Under 35. – [COMMENTARY] “Young people aged 35 or less are invited to submit innovative ideas for ethics in finance. Two Competitions for the Prize *The global Prize has been awarded since 2006. For the global Prize papers should be submitted in English or French. *The Ibero-American Prize was initiated with the support of MAPFRE to focus on the special challenges of ethics in finance in the region, with papers to be submitted in either Spanish or Portuguese. The best papers submitted for the Ibero-American Prize will be translated into English or French and they will then be nominated for consideration for the global Prize.”
This is a very worthy endeavour and I encourage those under 35 with an interest in this subject to submit their ideas. See: Announcing the 2010-2011 Ethics in Finance – Robin Cosgrove Prize.