Toyota, 3M, Siemens Top List Of Best Green Brands. – [COMMENTARY] “At the top of a list that focuses on both are Toyota, 3M and Siemens. Each of these firms have managed to align how they walk the green walk with how they talk the talk, according to ’Best Global Green Brands 2011,’ the inaugural ranking from consultancy Interbrand.” What is really interesting and probably unique about this study is that it linked a company’s green reputation with its real green/sustainability performance. The rankings are interesting, but probably unremarkable to those in the SRI ratings industry.
Toyota, 3M, Siemens Top List of Best Green Brands, by Tilde Herrera, July 28, 2011, GreenBiz, USA.
Sustainability Tied To Mining Companies Shareholder Value, Says Report. – [COMMENTARY] “A new study by Sustainalytics finds strong links between sustainability performance and shareholder value for companies in the mining sector. Sustainability and Materiality in the Natural Resource Sector: Mining looks at whether environmental and social practices impact competitiveness for companies within the mining sector. The study finds that effective management in four key areas of sustainability was positively linked to shareholder value.”
This is the kind of study that needs to be done, most especially, in the resource sector. Ethical investors who have avoided mining stocks might possibly reconsider their views after reviewing this report.
Sustainability Performance Linked to Competitiveness in Mining Sector, July 28, 2011, Sustainalytics, Canada.
Country’s Sustainability Linked To Their Sovereign Bonds’ Performance. – [COMMENTARY] “The performance of government bonds issued by countries living within their ecological means has been better than those pursuing unsustainable policies, according to research by Bank Sarasin.” This is intriguing information for ethical investors! How many investors have considered a country’s sustainability in reference to their bonds?
Sovereign bond returns linked to sustainability – Sarasin, by Mark Nicholls, July 25, 2011, Environmental Finance, UK.
Nasdaq To Launch Water Based Equity Indexes. – [COMMENTARY] “The Nasdaq OMX Global Water Index will track companies worldwide that produce products that conserve and purify water. A separate index, the Nasdaq OMX US Water Index, will do the same for US-listed water sector companies.” These indexes are timely and likely to be widely followed by environmentally oriented investors.
Nasdaq to launch water indexes, by Charlotte Dudley, July 22, 2011, Environmental Finance, UK.
Ron Robins Interviewed On The Green Leader Radio Show by Robert Thompson concerning green investing on July 25, 2011. It’s a great interview on a great show. I hope you can listen to it!
France Requiring Large Companies To Report Their Carbon Footprint & Planned Carbon Reduction Measures. – [COMMENTARY] “Originally outlined in the 2009 Grenelle 2 bill, the GHG reporting law requires companies with more than 500 employees to disclose their carbon footprint and outline emission reduction measures by 31 December 2012. The new piece of legislation will support France′s long-term goal of achieving a 75% reduction in GHG emissions below 1990 levels by 2050.”
Congratulations to France on this move! Hopefully, all countries will follow France’s lead. Such disclosure is important to investors too, for they need to know how exposed to the problems–both financially and environmentally–the companies they invest in are to carbon related matters.
Large organisations subject to mandatory carbon reporting in France, July 27, 2011, Hydrocarbons, Belgium.
Is The US Chamber of Commerce A Friend Or Foe To Ethical Investors? – [COMMENTARY] Two items crossed my screen today on the Chamber. One indicated the Chamber’s successful court challenge to abolish the proposed SEC rule that would have given investors the power to nominate individuals to company boards–clearly an unfriendly act towards ethical investors. See US court overturns proxy-access rule, by Raquel Pichardo-Allison, July 25, 2011, Global Pensions, USA.
The other, which is more positive, is that the Chamber is getting a little proactive on corporate sustainability. See 5 Reasons Why the Chamber of Commerce Can Be a Force for Green, by Alex Hahn, July 19, 2011, GreenBiz, USA.
Environmental Protection Agency (EPA) Mandates New Direction For US Utilities. – [COMMENTARY] “New rules on sulphur dioxide (SO2) and nitrogen oxide (NOx) emissions from US power plants are set to drive a substantial shift from coal to natural gas, shutting down coal plants and having a ’significant impact’ on US power, gas and coal markets from next year, according to research from Bank of America-Merrill Lynch (BoAML).”
As the US government is ’missing in action’ on the environmental front, the US is lucky to have the EPA be its real environmental guardian. Investors in US utility stocks might want to see how the EPA rulings could affect companies they are invested in.
EPA emissions rule ‘a game changer′ for US gas, coal, power markets – analysts, by Mark Nicholls, July 20, 2011, Environmental Finance, USA.
Christian Brothers Investment Services Mounting Campaign To Split CEO & Chairman Positions At Rupert Murdoch’s News Corp. – [COMMENTARY] “Christian Brothers filed a petition with News Corp. on July 15 that seeks to permanently split the CEO and chairman positions.” Virtually all observers in corporate governance believe that no one person should hold both CEO and chairman positions in any public company. This avoids potential abuse of power and too much of a one-sided viewpoint.
Murdoch Refusal to Take Responsibility May Dent Credibility (3), by Cesca Antonelli, July 20, 2011, Bloomberg, USA.
European Ethical Investors Favouring Active, Themed, Environmental Funds. – [COMMENTARY] “European retail investors have moved away from screened SRI funds to a more active themed and environmental slant over the last year, according to an annual breakdown of fund flows compiled for Responsible Investor by Lipper FMI, the investment data group. The breakdown of fund sales the year from May 2010 to April 2011 shows that green themed and norms-based European RI retail funds took in €4.8bn in assets over the twelve months.” Personally, I believe that this is taking place due to a new type of investor entering the ethical investing space. Ultimately, this is good news for all ethical investors.
Gradual shift from screened to themed SRI funds, show Lipper fund flow stats for the year, by Hugh Wheelan, July 19, 2011, Responsible Investor, UK.
Private German Pension Funds Embracing SRI, Government Funds Lag. – [COMMENTARY] “Socially responsible investment (SRI) is on the rise in most German municipal funds and professional pension funds (Versorgungswerke), but it has failed to take off with federal and state funds, according to a study by SD-M and Allianz Global Investors.” In general the retail market for socially responsible investments in Germany has lagged that of Western European countries. It is inspiring to see that at least German private pension funds are adopting SRI.
German pension schemes embracing socially responsible investment, by Barbara Ottawa, July 19, 2011, IPE, UK.
A New Trend? Swiss Bank Offers Investors Carbon Offsets For Their Portfolios. – [COMMENTARY] “Customers of Swiss bank Julius Bär will be able to calculate the carbon footprint of their equity portfolio and offset the emissions using carbon credits, through a service launched this week.” This is an approach that many ethical investors might welcome. It will be interesting to see if other investment firms begin offering such benefits.
Swiss bank to help investors offset portfolio emissions, by Jess McCabe, July 14, 2011, Environmental Finance, UK.
Australian Companies Found Lacking In ESG Reporting. – [COMMENTARY] “More than half of Australia’s 200 largest listed companies still fail to provide meaningful disclosure on their environment, social and governance (ESG) performance and related risks, research from the Australian Council of Superannuation Investors (ACSI) has found.” Since resource companies are generally laggards in ESG reporting, the finding that many of Australia’s largest listed companies–a large number of them resources based–is therefore not unexpected in my view.
ACSI considers ESG name and shame measure, by Wouter Klijn, July 15, 2011, Investor Daily, Australia.
Blacklist Of Least Transparent Companies Includes DreamWorks, NASDAQ and Madison Square Garden. – [COMMENTARY] “DreamWorks, NASDAQ and Madison Square Garden are among the well-known American brands that have appeared on a ’black list’ of companies with poor transparency and corporate citizenship. The Black List, by Corporate Responsibility magazine, comprises 58 Russell 1000 companies that tie for bottom ranking on these measures.” Companies that hide things need to be exposed. Corporate Responsible magazine is performing an important service in exposing them.
DreamWorks, Nasdaq ‘Black Listed′ for Lack of Transparency, July 13, 2011, Environmental Leader, USA.
Chinese Factories Beset With Labor Abuses, Says Report. – [COMMENTARY] “From October 2010 to June 2011, through an investigation of ten global brand supplier electronics factories, China Labor Watch discovered multiple violations of China′s Labor Law, which was recently instituted in 2008, and brand companies′ Corporate Social Responsibility Codes of Conduct, who contract production out to the Chinese factories. The majority of these violations fall under five general categories: overtime, wages, labor intensity, contracts, and discrimination.” Our modern lives are almost dependent on the output of these factories. Perhaps our best response is to continue to pressure the Apple’s and HP’s of this world to adequately enforce their purported ’high’ CSR standards on their supplier factories in China and elsewhere!
Tragedies of Globalization: The Truth Behind Electronics Sweatshops, July 12, 2011, China Labor Watch, USA.
Study Finds Screening Intensity Has No Effect On Fund Returns, But Does Effect Risk. – [COMMENTARY] “… screening intensity has no effect on returns but has a curvilinear (inverted-U-shaped) effect on risk. This means that funds with the least amount of screens have lower risk; this risk increases with the number of screens but then again decreases at high screening intensity. My findings suggest that the performance debate will continue to go on as inconclusive.” This study adds some new insights into ethical fund returns and risks, but I prefer meta analysis–that of compiling the data from many studies–before I would draw any conclusions.
Socially Responsible Investments in Europe: The Effects of Screening on Risk and the Clusters in the Fund Space, by Daniela Laurel, July 11, 2011, Politecnico di Milano, Italy.
Fossil Fuel Producers’ Stock Valuations At Risk, Says Study. – [COMMENTARY] “The world′s stock markets are over-exposed to fossil fuels, putting investors at risk of a ‘carbon bubble′, according to a report by research group Carbon Tracker Initiative which calls for an overhaul of the way capital markets value risk. The report looks at how fossil fuel reserves held by listed companies are assessed by the market and argues that up to 80% of the world′s fossil fuel reserves will be unusable if average global temperatures are to be limited to a 2°C rise, the level at which scientists believe global warming can be stablised.”
This study’s findings are important to investors everywhere. However, it might take extreme weather events to force governments to act on climate change–such as the recent experience in Australia.
Fossil fuel-heavy stock market a risk to investors – report, by Charlotte Dudley, July 11, 2011, Environmental Finance, UK.
Indian Government Likely To Mandate Companies Disclose CSR Spending If More Than 2% Of Net Profit. – [COMMENTARY] “Indian companies may have to collectively spend close to $2 billion (about Rs 8,700 crore) a year on CSR programmes if the government makes it mandatory for them to spend 2% of profits on social responsibility programmes, a study said today… The [Indian] government last week said it would be mandatory for corporates to disclose to shareholders whether they have made a contribution of 2% of net profit toward corporate social responsibility activities.”
Though I strongly believe that well designed and implemented CSR programmes are integral and necessary to enriching corporate activities and expanding profits, I do not believe mandating a certain percentage of profits to CSR is the way to go.
Mandatory CSR spend to cost India Inc Rs 8,700 cr a yr., Press Trust of India, July 11, 2011, Business Standard, India.
Church Of England Threatens To Sells Its Newscorp Holdings Over Scandal. – [COMMENTARY] “The Church said in a statement its Ethical Investment Advisory Group (EIAG) wrote to News Corp on Friday, saying the behavior of the paper, accused of illegally accessing countless voicemail messages and making payments to police, had been utterly ’reprehensible and unethical.’” Valued at $32 billion, News Corp could see many ethically oriented investors divest their holdings in the company. This is another warning shot to companies that unethical practices can cost them dearly and that our focus on companies with exemplary ESG is the best policy, ethically and financially.
Church of England threatens to pull News Corp investment, by Jodie Ginsberg and Olesya Dmitracova, July 9, 2011, Reuters, UK.
US Stockholder Activism On Sustainability Makes Gains In 2011. – [COMMENTARY] “From fracking by companies such as Chevron, Exxon Mobil and Ultra Petroleum to greater use of recyclable cups by McDonald’s and Starbucks, a host of CSR issues captured shareholders’ attention and support this year, according to reports on the 2011 proxy season from As You Sow and Ceres.” A good review of what 2011 means for stockholder sustainability activism.
How Shareholder Activism Moved the Needle on Sustainability in 2011, by Leslie Guevarra, July 8, 2011, GreenBiz, USA.
Global Green Energy Investment Up 32% In 2010 To $211 Billion Says UNEP. – [COMMENTARY] “The main growth drivers were backing for wind farms in China and rooftop solar panels in Europe, it said. It also found that developing nations invested more in green power than rich nations for the first time last year.” Contrary to what most Westerners think, developing countries are BIG on green energy. Furthermore, many analysts believe oil prices will continue to climb higher, thus making green energy ever more competitive and attractive.
Green energy investment hits record global high, by Mark Kinver, July 7, 2011, BBC, UK.
By Focusing On Fuel Efficiency, Europe’s Airbus Trounces Boeing At Paris Air Show. – [COMMENTARY] “Most underplayed economic story of the week: European aircraft manufacturer Airbus “trounced” the traditional U.S. behemoth Boeing at the Paris Air Show, booking a record $50 billion more in orders for new planes. The reason: commercial plane buyers’ demands for high fuel efficiency and low emissions.” The same mistakes that sent the US auto manufacturers into bankruptcy are being repeated by Boeing: a failure to focus on fuel efficiency and lack of R & D.
How America just lost 1 million green(ish) jobs to Europe, by Glenn Hurowitz, June 29, 2011, Grist, USA.
GreenBiz Survey Suggests Corporate Environmental, Health & Safety Spending Is Stalling. – [COMMENTARY] “We recently conducted our sixth semi-annual “Green & the Economy” survey and the results have sent us scurrying to find a pony buried in all the data. We asked our more than 3,000-member GreenBiz Intelligence Panel for their views on key green economic indicators (you can join our panel here). Our most recent survey, conducted in mid-June, garnered 309 responses with 51 percent from companies with revenues of more than $1 billion (which we′ll refer to as ’large companies’)… As with the rest of the economy, growth in green seems to have stalled, if only temporarily.”
Perhaps the mostly likely reason for this slowdown is related to generally slowing economic activity. It is a cause for concern, but not over the long term.
Searching for Good News in the Sputtering Green Economy, by John Davies, July 5, 2011, GreenBiz, USA.
Water Shortages Threaten Renewable Energy Production, Says Study. – [COMMENTARY] “The study shows the reliance on large amounts of water to create biofuels and run solar thermal energy and hydraulic fracturing – a technique for extracting gas from unconventional geological formations underground – means droughts could hamper their deployment.” Ultimately, societies everywhere will come to accept the hard truth that energy and resource conservation is by far the best way forward. Otherwise, we’ll be like lemmings going over the cliff!
Water shortages threaten renewable energy production, experts warn, by Suzanne Goldenberg, June 27, 2011, The Guardian, UK.
Thomson Reuters & IdealRatings Create Islamic Finance Index. – [COMMENTARY] “Thomson Reuters IdealRatings Islamic Indices will be available on Thomson Reuters Eikon and some of the company’s other services. The joint venture will cover over 60 countries and global equity markets in nine regions, as well as individual sectors. The index will be reviewed on a quarterly basis to ensure Sharia-compliant standards, which will be assessed using proprietary algorithmic searches run by a team of dedicated researchers.”
Islamic finance has much in common with ethical finance and investments. Whereas ethical investments are common in the Western world, the rough equivalents in the Muslim world are Shariah-compliant investment products.
Thomson Reuters and IdealRatings Team for Islamic Finance Index, by James Rundle, July 5, 2011, Waterstechnology, UK.
ESG Criteria Found To Improve Investing Performance. – [COMMENTARY] “’Research conducted by CFSGAM revealed that the top-rated ESG stocks in its global listed infrastructure portfolio outperformed the bottom-rated stocks by more than 20 per cent over a three-year period to May 2010, demonstrating the connection between ESG factors and performance,’ CFSGAM chief executive Mark Lazberger said at the launch of the company’s responsible investment report yesterday.” The research concerning ESG continues to show its utility in investment analysis.
Top-rated ESG stocks outperform: Colonial by Walter Klijn, July 1, 2011, Investor Daily, Australia.