March 2013

NYSE Euronext And Vigeo Launch ESG Indices. – [COMMENTARY] “To promote and support responsible investment (RI), NYSE Euronext (NYX), the world’s largest exchange group, and Vigeo, the leading European expert in responsible performance, have teamed up to launch a range of indices focusing on the three pillars of RI: the environment, social issues and governance (ESG).” I’m unsure whether to report the creation of such indices anymore. There are so many of them now–and that’s great!
NYSE Euronext and Vigeo launch ESG indices, press release, March 20, 2013, NYSE Euronext and Vigeo.

Is the U.S. Insurance Industry Prepared For Climate Change? – [COMMENTARY] “Analysis of first-ever industry-wide survey finds that only 23 of 184 companies have comprehensive climate change strategies, yet some leaders are emerging. 2012 was the warmest year on record in the lower 48 states and the second most extreme weather year in United States history. Insurers are increasingly acknowledging that extreme weather has become the new normal, yet a new report from Ceres finds that many in the industry are only just beginning to think about how to address the effects climate change may have on their business – while a small group of companies is leading the way.”

Considering that many US financial industry leaders are ’climate change deniers,’ it isn’t surprising that some major insurers aren’t willing to acknowledge or plan for it.
Is the U.S. Insurance Industry Prepared for Climate Change? Press release, March 7, 2013, Ceres, USA.

Do Investors Care About Companies’ Climate Change Disclosure? – [COMMENTARY] “A wide gap exists between investor commitment and action to reward transparency and ESG performance. Unless companies engage with and help their investors see that ESG issues should be integral to their analysis and decision-making process, investment funds will likely not correlate to sustainable business. Likewise, investors need to listen to the whole story and integrate ESG criteria into company performance valuations.”

There is generally a small premium to the stock prices of those companies with great ESG credentials relative to peers with lesser ESG credibility. However, the differential should be greater. I believe as climate change becomes increasingly an issue, that premium for companies with higher ESG performance will increase.
Do investors care about companies’ climate change disclosure? By Christopher Thomas, March 6, 2013,, USA.

One Third Of Britons Want To Boycott Companies Who Avoid Paying UK Taxes. – [COMMENTARY] “According to new research millions of Britons are using consumer power to boycott companies seen to be avoiding their fair share of UK tax. A ComRes survey about public perceptions around tax avoidance, commissioned by Christian Aid, found a third of Britons say that they are currently boycotting the products or services of a company because it does not pay its fair share of tax in the UK. Almost half (45 per cent) say they are considering a boycott.” It might not be much longer that companies can shift around their profits to low tax jurisdictions to escape paying the full share of taxes in the countries where those profits were earned!
Audio: One third of Britons consider boycott over tax, March 8, 2013, Ethical Consumer, UK.

Half Of UK Investors Want Greater Shareholders’ Voting Transparency. – [COMMENTARY] “Forty-seven per cent of Britons who have savings or investments managed by an intermediary want to see greater transparency when it comes to shareholder voting. The figures have been released as part of the inaugural Ownership Day – an event co-ordinated by the UK Sustainable Investment and Finance Association (UKSIF) to promote active ownership and stewardship among investors. On top of nearly half of respondents who want their investment managers to be clearer on how they cast clients′ votes, one in three (33%) also called for better guidance on how to access voting details.” It’s probably a similar situation throughout most of the developed world.
Ownership Day: half of investors want better voting transparency, by Alex Blackburne, March 12, 2013, Blue & Green Tomorrow, UK.

What Is The Real Financial Impact of Sustainable Investment? – [COMMENTARY] “Cary Krosinsky of the Network for Sustainable Financial Markets produces a white paper that argues the actual amount of assets devoted to sustainable investment strategies is considerably lower than reported by the world’s largest sustainable investment forums.”

I’m inclined to agree with Cary that the reported numbers concerning the proportion of global portfolios invested in sustainable companies–as recently reported by the sustainable investment forums–is probably too high. The forums claim 21.6% of global portfolio assets invested in sustainable companies. This is a good article by Mr. Kropp on the subject.
What Is the Real Financial Impact of Sustainable Investment? By Robert Kropp, March 6, 2013, Social Funds, USA.

Green Transition Scoreboard® Finds Over $4.1 T In Private Green Investments. – [COMMENTARY] “The year 2013 promises long strides away from the fossil-fuelled Industrial Era as illuminated by the Ethical Markets Green Transition Scoreboard® (GTS) which tracks private investments growing the green economy worldwide since 2007, finding $4.1 trillion invested or committed as of Q4 2012. The year 2012 was an inflection point for the green transition worldwide. Technology and innovation such as in electricity generation and transport began forcing structural changes and rethinking of business models, urban design and development toward integrated systemic approaches.” This is up $1 trillion from a year ago! Read the press release. There’s some fascinating information there!
Green Transition Scoreboard® Finds Over $4.1 T in Private Green Investments, press release, March 4, 2013, Ethical Markets, USA.

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