July 2014

The carbon taxes we’re already paying. “The world’s 3,000 biggest companies, according to a U.N. Environment Program report, cause $2.15 trillion in annual environmental costs, most of which are not accounted for in their profit/loss statements.”

[COMMENTARY] This is a good article describing the carbon ’taxes’ that we’re already paying and asks who should pay them!
The carbon taxes we’re already paying, by Mark Shapiro, July 29, 2014, Justmeans, USA.

Benchmarking Utility Clean Energy Deployment 2014, Ceres. “Benchmarking Utility Clean Energy Deployment assembles data from more than 10 sources, including state Renewable Portfolio Standard (RPS) annual reports, U.S. Securities and Exchange Commission 10-K filings and Public Utility Commission reports, to show how 32 of the largest U.S. investor-owned electric utility holding companies stack up on renewable energy and energy efficiency.”

[COMMENTARY] This is a terrific review of the major public US energy utilities concerning their clean energy development and performance. As we know, many investment advisors regard energy utilities as one of those basic holdings, but for ethical investors they are often a problem because of their carbon footprints. This review should help ethical investors gain a better perspective on these utilities. You have to register for the free report.
Benchmarking Utility Clean Energy Deployment 2014, July 2014, Ceres, USA.

9 key trends in corporate sustainability reporting. “Nearly three-quarters of sustainability professionals ranked CSR above seven out of 10 in relation to their business objectives (with one being low and 10 being high.) Meanwhile, most organizations dedicate between $34,000 and $84,000 of their budget to CSR reporting activity.”

[COMMENTARY] For investors, this provides an interesting perspective on how sustainability professionals within corporations rate who and what’s important to them. Interestingly, 45% said that the most important stakeholder group for their CSR strategy was customers, while investors and boards were a distant 20%.
9 key trends in corporate sustainability reporting, by Victoria Knowles, July 23, 2014, GreenBiz, USA.

Survey: Increasing number of professionals value sustainability as reason to invest. “A survey of more than 360 international investment professionals on sustainable investment has outlined how environmental, social and governance (ESG) policies are becoming increasingly fundamental for the sector. The survey, by Thomson Reuters and the UK Sustainable Investment and Finance Association (UKSIF), assessed 179 buy-side firms and 14 brokerage firms and research houses.”

[COMMENTARY] See my commentary for the post immediately below.
Survey: Increasing number of professionals value sustainability as reason to invest, by Ilaria Bertini, July 17, 2014, Blue & Green Tomorrow, UK.

Fixed income managers shift focus to ESG. “A majority of global fixed income managers are now taking environmental, social and governance (ESG) factors into serious consideration, according to a JANA survey. The JANA ESG in Fixed Interest Survey, which recorded the responses of 63 of the largest fixed income managers, found 88 per cent of respondents believe ESG factors influence the financial outcomes of fixed income investments.”

[COMMENTARY] The good news confirming the mainstreaming of ESG in investment analyses continues. However, according to other more in-depth research (I believer by Mercer, particularly), analysts who say they consider ESG factors in their work generally only utilize it in a peripheral manner. They have yet to fully systemize and integrate it in their research work.
Fixed income managers shift focus to ESG, staff reporter, July 15, 2016, Investor Daily, Australia.

US corporate polluters are almost never prosecuted for their crimes. “More than 64,000 facilities are currently listed in [EPA] databases as being in violation of federal environmental laws, but in most years, fewer than one-half of one percent of violations trigger criminal investigations, according to EPA records.”

[COMMENTARY] Before investing in a company, I’ve always advocated that ethical investors might want to check what environmental regulations a company might’ve broken and understand the possible legal penalties. Well, now we know that in the US the likelihood of costly environmental penalties are mostly nil. What a farce! And this is a nation that boasts about its ’rule of law.’

Unfortunately, it seems that US legislators purposely starve its regulatory agencies of funds (SEC, CTFC, EPA, etc.) due to the successful lobbying and manipulative efforts of potentially affected corporations–who just happen to be significant contributors to their political campaigns. There are names for this style of government–but I won’t offend my US readers by using them.
Corporate polluters are almost never prosecuted for their crimes, by John Upton, July 15, 2014, GreenBiz, USA.

World Council of Churches pulls fossil fuel investments. “An umbrella group of churches, which represents over half a billion Christians worldwide, has decided to pull its investments out of fossil fuel companies. The move by the World Council of Churches, which has 345 member churches including the Church of England but not the Catholic church, was welcomed as a ’major victory’ by climate campaigners who have been calling on companies and institutions such as pension funds, universities and local governments to divest from coal, oil and gas.”

[COMMENTARY] This is a terrific step forward for coping with climate change. It will make many of their followers do the same and possibly even more. Exxon, Shell and other major oil and gas companies have been downplaying any possibility of carbon use restrictions ever happening. This is one of the first indications that a groundswell of public opinion to limit first, investments, and then carbon use, can and will happen. This is continuing good news for renewable fuels and bad news for carbon-based companies. Thank you, Desislava Dechkova, for bringing this article to my attention.
World Council of Churches pulls fossil fuel investments, by Adam Vaughan, July 11, 2014, The Guardian, UK.

New Vatican bank chief vows focus on ’Catholic, ethical investments.’ “The newly appointed head of the Vatican’s bank, the Institute for Religious Works, pledged on Wednesday to focus on ’Catholic, ethical investments,’ as part of plans to clean up the scandal-plagued institution. Over the decades, the Vatican bank has been involved in a long list of financial scandals, allegedly offering safe haven to the funds of Italian mobsters, politicians and entrepreneurs, going beyond its prime remit of assisting worldwide church operations.”

[COMMENTARY] Of all the religious institutions that should invest according to spiritual and ethical principles, you would think that the Vatican Bank would’ve been in the forefront. I guess it’s better late than not doing it at all. Hopefully, the Vatican Bank will become a major force for spiritual and ethical investing. If it’s able to influence Catholics everywhere to invest similarly, then it’ll help create a better world for everyone, both Catholics and non-Catholics alike.
New Vatican bank chief vows focus on `Catholic, ethical investments,’ by Alvise Armellini, July 9, 2014, The Record, Canada.

Millenials favour impact investing, real assets. “The number of Millennials that own or employ socially responsible investments is significantly higher than in any other age group, according to a study that explores family dynamics in wealthy families. US Trusts′ Insights on Wealth and Worth 2014 found that 63% of Millennials, those born between 1980 and 2000, own or are interested in socially responsible investments compared with 40% of Generation X. Generation X is defined as people born between 1960 and 1980.”

[COMMENTARY] Perhaps it is that millenials–who are now starting careers and families–think more about the long-term for themselves and their kids and realize that they want a better, future world. If so, it offers promise for improved societal ethics, a better climate change response and the mainstreaming of ethical investing.
Millenials favour impact investing, real assets, by Michael Finnigan, July 2, 2014, CampdenFB, UK.

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