January 2011

UNEP Finance Initiative Issues Study On Passive Responsible Investing. – [COMMENTARY] “The following report presents eight case studies that demonstrate how asset owners and investment manager signatories are meeting the challenge of responsible investment within passive management strategies for equities.” This is more useful reading for ethical investors, courtesy of Responsible Investor.
Responsible Investment in Passive Management Strategies: Case studies & Guidance, (PDF) January 2011, UNEP Finance Initiative, UK.

54 Global CEOs Launching & Promoting New UN Sustainability Programme. – [COMMENTARY] “Chief executives from 54 companies around the world have joined forces with the United Nations to launch a new program aimed at raising the bar for corporate environmental, social and governance performance. Members of the new platform, called Global Compact LEAD, will work to implement the newly unveiled Blueprint for Corporate Leadership, a roadmap released by the UN Global Compact last year.” The growth of corporate interest in sustainability mirrors that of the number of investors desiring to invest sustainably too.
54 CEOs Help Launch UN Program to Ramp Up Sustainability, January 31, 2011, GreenBiz, USA.

S&P To launch First Middle Eastern Equity Markets ESG Index. – [COMMENTARY] “[The index] will rank and track the transparency, performance and disclosure of more than 100 of the largest listed companies in the Middle East on Environmental, Social and Corporate Governance (ESG) issues. The index is a joint initative of Hawkamah, the Institute for Corporate Governance, and Standard & Poor’s, with the support of the International Finance Corporation, part of the World Bank Group.” This index will help spur Middle Eastern companies to integrate ESG into their operations, who until now have lagged Europe, the US, and other parts of the world in these activities.
Standard & Poor’s to launch first ESG index covering Middle East equity markets, press release, January 30, 2011, appeared on AMEinfo.com, UAE.

Sustainalytics Report Links Sustainability Performance To Shareholder Value. – [COMMENTARY] “A new study by Sustainalytics highlights links between sustainability performance and shareholder value. The report, ’Sustainability and Materiality in the Natural Resources Sector’ looked at environmental and social practices in the forestry, mining and oil and gas sectors and found positive correlation to competitiveness in each sector.” This type of research is vitally needed. Congratulations to Sustainalytics!
Sustainability Key Competitive Driver in Natural Resources Sector, press release, January 27, 2011, Sustainalytics, Switzerland.

Finance Industry Group Calls For Greater Transparency On Climate Change Reporting By Financial Institutions. – [COMMENTARY] “There has been a call for greater transparency about the results of financial institutions′ engagement on climate change issues. The remarks come in the latest progress report on the Climate Principles, the finance industry climate change group which includes Credit Agricole, HSBC, Standard Chartered, Swiss Re, F&C Asset Management and BNP Paribas.” In a way this is good news as it is leading members of international financial organizations calling for disclosure.
Call for greater transparency on climate change engagement, by Daniel Brooksbank, January 26, 2011, Responsible Investor, UK.

’Say On Pay’ Rules For Companies Now Official US SEC Policy. – [COMMENTARY] “The Securities and Exchange Commission today adopted rules concerning shareholder approval of executive compensation and “golden parachute” compensation arrangements as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act.” At last they are official.
SEC Adopts Rules for Say-on-Pay and Golden Parachute Compensation as Required Under Dodd-Frank Act, press release, January 25, 2011, Securities & Exchange Commission (SEC), USA.

Nine US Companies To Be Challenged On Hydraulic Fracking. – [COMMENTARY] “Shareholders file resolutions with Cabot Oil & Gas, ExxonMobil, Chevron, and other energy companies to spur more responsible ’fracking’ practices.” The process of fracking to recover oil needs much more study, especially concerning how it affects fresh water supplies.
Investors challenge nine oil and gas companies on hydraulic fracturing practices, press release, January 21, 2011, Ceres, USA.

Dow Jones Again Named Best Islamic Index Provider At Fifth Annual Islamic Business & Finance Awards. – [COMMENTARY] “Dow Jones Indexes, a leading global index provider, today announced it was named ’Best Islamic Index Provider’ at the fifth annual Islamic Business & Finance [Magazine] Awards. Nearly 300 distinguished regional and global industry professionals attended the monthly magazine’s ceremony in Dubai, one of the Gulf region’s most prominent financial industry events.” Congratulations to Dow Jones who obviously recognise the global potential of Islamic finance.
Dow Jones Indexes, press release, January 21, 2011, USA.

WWF Canada Reports On Carbon Risk In Canadian Institutional Portfolios. – [COMMENTARY] “WWF-Canada released a ground-breaking report highlighting climate change as a new risk for institutional investors…The study found that the S&P/TSX Index has the third-largest carbon footprint among major global indices, measured by carbon emissions per USD 1 million sales. Only the Indian and Emerging Markets global indices have larger footprints…”

It is Canada’s resource sector that primarily accounts for the high carbon counts. The report is important reading for anyone investing in Canadian stocks. It also provides a carbon footprint analysis for various Canadian funds.
WWF-Canada Report Shows High Cost of Carbon to Investors, January 19, 2011, WWF, Mercer & Trucost, Canada.

SHARE Canada Issues Its Q4/2010 Shareholder Engagement Report. – [COMMENTARY] “Inmet Mining Corporation, Nexen Inc. and Talisman Energy Inc. told SHARE that they will adopt a say on pay vote within the next two years.” Anyone interesting in investing ethically in Canada should read these reports.
Shareholder Engagement Report Q4 2010, January 2011, SHARE, Canada.

Financial Institutions Find Climate Change Information Insufficient. – [COMMENTARY] “Overall, less than half of the respondents feel they are sufficiently well-informed. Just one-third feels ’sufficiently informed’ on climate change. Even for historical weather data, less than half (43%) feel adequately informed.” Personally, I feel what is largely said in this study is self-evident. It makes for interesting reading though, particularly for anyone significantly invested in financial firms.
Advancing adaptation through climate information services, January 2011, UNEP Finance Initiative/Sustainable Business Institute, Switzerland.

Michigan Court Ruling Aids Development Of Islamic Finance In USA. – [COMMENTARY] “Lawyers said a U.S. court decision to dismiss a case alleging AIG’s (AIG.N) sharia-compliant businesses promoted religious doctrine, will boost confidence in the industry and lift sales of Islamic products in the longer term.” Islamic finance has met with many obstacles in the US. Slowly though, the legal challenges to it there are being resolved.
US legal win to boost Islamic finance -lawyers, by Shaheen Pasha, January 18, 2011, Reuters, Dubai.

Shareholder Proxy Access Improves Firm’s Value, Harvard Study. – [COMMENTARY] “We use the SEC′s October 4, 2010 announcement that it would significantly delay implementation of its August 2010 proxy access rule as a natural experiment. Because firms with substantial institutional ownership would have been most affected by the SEC′s now-delayed changes, we use the share and composition of institutional investors to sort firms into those more and less affected by the October 4 news. Firms that would have been most affected by proxy access, as measured by institutional ownership, lost value on that day.”

Continuing, “The value drop was 55 basis points for a 10 percentage point change in activist institution ownership. These results suggest that financial markets placed a positive value on shareholder access, as implemented in the SEC′s August 2010 Rule.” Ethical investors take note!
Does Shareholder Proxy Access Improve Firm Value? Evidence from the Business Roundtable Challenge, by Bo Becker, Daniel Bergstresser, and Guhan Subramanian, November 22, 2010, Harvard Business School, USA.

Report Evaluates Climate Change Reporting By Small US Companies. – [COMMENTARY] “Pax World Management LLC… and Clean Air-Cool Planet (CA-CP)… released a new report, ’Risk and Opportunity in a Low-Carbon Business Climate: Small & Mid-Caps and Climate Change.’ The report notes that reporting on any of several types of climate-related risk is generally inadequate among smaller companies, and that what reporting is done is generally limited to only regulatory risk, while ignoring other potential risks (e.g. physical, business interruption or supply chain, etc.).”

This report discusses the climate change reporting in a number of different US industry sectors and specific companies.
Risk and Opportunity in a Low-Carbon Business Climate: Small & Mid-Caps and Climate Change, January 5, 2011, Pax World Management LLC and Clean Air-Cool, USA.

First Indian Responsible Investing Organization Launched. – [COMMENTARY] “The New Delhi-based Responsible Investment Research Association (RIRA) has recently received its license to function as a nonprofit organisation. RIRA told www.responsible-investor.com that it will aim to build dialogue on responsible investment and environmental, social and governance (ESG) mainstreaming in the region.” This is extremely welcome news. India’s equity markets are growing fast and this organization there is greatly needed. Congratulations to RIRA!
India′s new Responsible Investment Research Association gets OK, by Daniel Brooksbank, January 14, 2011, Responsible Investor, UK.

Major US Pension Funds Call For Banks To Conduct Independent Examinations Of Their Mortgage & Foreclosure Practices. – [COMMENTARY] “A coalition of seven major public pension systems called on the boards of directors of Bank of America (NYSE: BAC), Citigroup (NYSE: C), JP Morgan Chase (NYSE: JPM), and Wells Fargo (NYSE: WFC) to immediately undertake independent examinations of the banks′ mortgage and foreclosure practices.”
The recent court ruling in Massachusetts against the banks has opened-up the possibility of mammoth fraud charges against them. Investors in the entire US financial space remain clueless as to the potential financial losses to the US financial system resulting from such unethical behaviour.
$432 Billion pension fund coalition demands bank directors immediately examine foreclosure practices, press release, John C. Liu, New York City Comptroller, January 6, 2011, USA.

Ontario Canada Could Lead In Shareholder Rights. – [COMMENTARY] “The OSC′s [Ontario Securities Commission] staff notice states that staff is reviewing three areas related to shareholder democracy: slate voting and majority voting for uncontested director elections; shareholder advisory votes on executive compensation; [and] effectiveness of the proxy voting system.” It is good news that the OSC is leading in these matters.
Ontario regulator seeks input on shareholder rights, January 11, 2011, SRI Monitor, Canada.

Greenpeace Publishes Survey Of Greenest Electronics Manufacturers. – [COMMENTARY] “In seven categories of electronics, Asus led with two products at the top of the heap, as well as the highest-scoring product surveyed, the Asus VW-247H-HF monitor. Among the other categories, Asus also led with the greenest notebook computer, while HP can boast the greenest desktop and Acer landed the greenest netbook computer. Samsung’s Blue Earth mobile phone led that category, Sony Ericsson made the greenest smartphone, and Sharp took the top spot in the television category.”

This is Greenpeace’s third annual survey. Of course electronics is an area where many toxic materials are used.
Asus Sits Atop Green IT Product Survey from Greenpeace, by Matthew Wheeland, January 7, 2011, Greener Computing, USA. Also see the CES Sustainability Report, January 5, 2011.

LOHAS Publishes Research On 2011 Food, Health & Wellness Trends. – [COMMENTARY] LOHAS is Lifestyles of Health and Sustainability. This will be useful information for many ethical investors.
LOHAS Trends for 2011 – Health and Wellness Trends, and LOHAS Trends for 2011 – Food, LOHAS, USA.

Turkey’s Istanbul Stock Exchange Launches Islamic Finance Stock Index. – [COMMENTARY] “Turkey’s Istanbul Stock Exchange on Thursday launched an index comprised of 30 listed companies that comply with Sharia banking principles as the country seeks to attract interest in its burgeoning Islamic finance sector. The Participation Index .KATLM will include discount retailer BIM (BIMAS.IS), Turk Telekom (TTKOM.IS), the main landline operator and builder Enka Insaat (ENKAI.IS), said Avsar Sungurlu, deputy CEO of Bizim Securities, which is consulting for the index.”

With investor interest surging in both emerging markets and ethical investment products, stock exchanges all over the developing world are seeing the possibilities for such indexes.
REFILE-Istanbul stock exchange launches Islamic-style index, by Seda Sezer and editing by Ayla Jean Yackley and Hans Peters, January 6, 2011, Reuters, Turkey.

New Year Wishes & Resolutions From Top Ethical Investing Figures–Responsible Investor. – [COMMENTARY] “To kick off the year, Responsible Investor has put together a review of 2010, a look forward at the year ahead and a selection of New Year′s resolutions from figures from the RI World: Philippe Desfossés, ERAFP (France); Peter Chapman, SHARE (Canada); David Russell, USS (UK); Remy Briand, MSCI (US); Erik Breen, Robeco (Netherlands); Stephen Viederman (US); Alexandra Tracy, ASRIA (Hong Kong); Louise O′Halloran, RIAA (Australia); Amit Bouri, Global Impact Investing Network (US); Matt Christensen, Eurosif (France); Eugene Ellmen, SIO (Canada); Mindy Lubber, Ceres (US).”
RI Review of 2010 & Resolutions for 2011, January 2011, Responsible Investor, UK.

Leave a Reply

Your email address will not be published. Required fields are marked *