Major U.S. banks call for leadership in addressing climate change. “Bank of America, Citi, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – have issued a joint statement calling for cooperation among governments in reaching a global climate agreement. The statement, published today by the sustainability advocacy nonprofit Ceres, voiced support for policy frameworks that ’will provide greater market certainty, accelerate investment, drive innovation in low carbon energy, and create jobs.’”

[COMMENTARY] It appears to me that there’s little doubt the COP21 Paris climate talks will come up with a significant agreement. I’m sure most investors heard Bank of England’s Governor, Mark Carney, commenting on the extreme risks that climate change poses to humanity. From his position, representing the financial elites, only adds momentum to a successful climate agreement. Fossil fuel companies will face severe challenges in the years ahead.
Major U.S. banks call for leadership in addressing climate change, press release, September 28, 2015, Ceres, USA.

NGO: 45 Percent of Corporations Obstruct Climate Change Policy. “Nearly half of the world′s 100 largest companies, including Procter & Gamble and Duke Energy, are ’obstructing climate change legislation,’ according to a study released last week by the London-based nonprofit NGO InfluenceMap.

And it gets worse: Almost all (95 percent) of these companies are members of trade associations that act in the same obstructionist manner. The recently formed InfluenceMap uses a new research methodology it developed in conjunction with the Union of Concerned Scientists.”

[COMMENTARY] The grading of companies on their ’InfluenceMap’ is important for all ethical investors to view. This UK organization is providing a valuable function. Its methodology seems robust.
NGO: 45 Percent of Corporations Obstruct Climate Change Policy, by Bill DiBenedetto, September 23, 2015, TriplePundit, USA.

New Cone Communications Research Confirms Millennials as America’s Most Ardent CSR Supporters, But Marked Differences Revealed Among this Diverse Generation. “The study, the most comprehensive snapshot of how Millennials engage with CSR efforts in the U.S., reveals more than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average) and two-thirds use social media to engage around CSR (66% vs. 53% U.S. average).

[COMMENTARY] These results demonstrate that CSR will continue to grow and become ever more consequential to consumers and investors.
New Cone Communications Research Confirms Millennials as America’s Most Ardent CSR Supporters, But Marked Differences Revealed Among this Diverse Generation, press release, September 23, 2015, 3BL Media, USA.

NGO Ranks 155 Companies Across 20 Industries Revealing Significant Supply Chain, ESG Risks for Major Brands. “Most U.S. large-cap companies are still lagging in efforts to affect positive change with regard to global humanitarian issues, but existing technology and solutions can quickly reverse this trend. That is among the conclusions expected to be revealed today by a panel of experts participating in a webinar regarding the release of a major research study into corporate social responsibility and conflict minerals filings with the U.S. Securities and Exchange Commission.”

[COMMENTARY] For information on the ESG risks for these companies click here.
NGO Ranks 155 Companies Across 20 Industries Revealing Significant Supply Chain, ESG Risks for Major Brands, September 22, 2015, Responsible Sourcing Network and Source Intelligence, USA.

Corporate responsibility revolution more environmental than social. “Large companies in the US, UK and Germany have made far slower progress in reporting on social responsibility than on their green credentials, a Scottish research project has found.

The three-year study at the universities of Glasgow and Aberdeen, backed by the Economic and Social Research Council, will this week present some of its findings at an Edinburgh seminar staged by Scottish Business in the Community.”

[COMMENTARY] This study confirms what most of us in the ethical investing community have known for sometime. It’s the ’E’ in ESG that garners most corporate and investor interest.
Corporate responsibility revolution more environmental than social, September 20, 2015, The Herald-Scotland, UK.

VW Sets Aside $7.3 Billion as Emissions Probe Widens. “Volkswagen AG plans to set aside 6.5 billion euros ($7.3 billion) in the third quarter to cover the costs of addressing irregularities in diesel engines installed in 11 million vehicles worldwide, as the scandal that started in the U.S. widens.”

[COMMENTARY] I find it extraordinary that senior managers that authorize such unethical practices would not realize that at some point they will be found out. The incentives for them to hide this practice must be substantial. Hence, the real blame for this is likely with senior management in the way the company incentivizes its managers.
VW Sets Aside $7.3 Billion as Emissions Probe Widens, by Chris Reiter and Jones Hayden, September 22, 2015, Bloomberg News, USA.

Green funds finally adding-up, says academic study. “University of Edinburgh Business School academics found green mutual funds, invested in companies with exceptional environmental credentials, now outperform ‘black′ funds – which invest in fossil fuels – by more than 14% over the period 2012 to 2014.

Analysing the performance of more than 1,400 funds between 1991 and 2014, researchers also found green funds delivered no worse returns than ‘conventional′ investment vehicles between 2012 and 2014.”

[COMMENTARY] As the concept of stranded assets becomes an increasing reality for fossil companies — plus the possibility of continuing low prices for their products, fossil fuel stocks could continue to underperform. This is especially true as renewables such as solar and wind gain increasing price competitiveness.
Green funds finally adding-up, says academic study, September 17, 2015, The Economic Voice, UK.

Reputation Institute Announces Top Global Companies for Public Perception of Corporate Social Responsibility. “Reputation Institute today released the Global CSR RepTrak® 100, which highlights the companies that have the best reputations for corporate social responsibility (CSR) among the general public in 15 countries. Google tops the ranking for the second year in a row, with a significant lead over all other companies in the ranking.

The Global CSR RepTrak® 100 reflects public perceptions of corporate performance across three dimensions of reputation: citizenship, workplace, and governance.”

[COMMENTARY] This is always a good ranking by a company with its own good reputation.
Reputation Institute Announces Top Global Companies for Public Perception of Corporate Social Responsibility, press release, September 17, 2015, Reputation Institute, USA.

Sustainability reporting lacking among world′s largest firms. “According to a study by sustainability adviser Corporate Knights and insurer Aviva.

Only 37 percent of the world′s 4,969 largest listed companies disclose their greenhouse gas emissions, one of seven key indicators, according to a 2015 study based on 2013 data. That′s down from 39 percent in the previous study. Meanwhile, only 10 percent of the companies disclose their injury rates, 12 percent their turnover rates, a fifth reveal waste generated per unit of revenue and 22 percent report on their water usage.”

[COMMENTARY] Such lack of data disallows investors from really understanding corporate behaviour and negatively impacts their ability to invest according to ESG principles and factors. Congratulations to Toby Heap and Corporate Knights/Aviva for compiling this important research.
Sustainability reporting lacking among world′s largest firms, by Adam Brown, September 8, 2015, IR Magazine, USA.

Dump CSR Departments, Says BP′s Ex-Chief. “Companies should get rid of their corporate social responsibility and public relations departments, according to Lord Browne, the former chief executive of BP. As PR Week reports, Browne was promoting his soon-to-be published book, Connect, on Radio 4′s Today program. The book says managers should take responsibility for their companies and not hide behind PRs and CSR departments.”

[COMMENTARY] Lord Browne makes an interesting point. Every employee in an organization has to imbibe CSR in everything they do. BP was highly respected by ESG rating organizations before the Gulf crises — largely as a result of its great CSR department. Yet when it came to crunch time the managers in the field behaved badly.
Dump CSR Departments, Says BP′s Ex-Chief, September 11, 2015, Environmental Leader, USA.

Lawyers See ESG Risks as Central to Clients′ Interests. “Our latest research shows a 45 percent growth in the number of ESG-related regulations calling for more robust corporate transparency worldwide since 2012.

As Vanessa Havard-Williams, head of global law firm Linklaters′ sustainability practice and co-head of its risk and governance team, explains: ’Regulatory developments around ESG should be watched closely by business and lawyers alike – we are now making the transition from a normative to a compliance framework. Although the regulatory risks of non-compliance with these regulations are often quite limited, the potential reputational and commercial damage from being seen not to comply can be significant.’”

[COMMENTARY] As regulatory authorities increasingly institute new ESG regulations, lawyers are involving themselves in corporate compliance. It’s terrific to see the legal profession developing ESG specializations to satisfy corporate needs.
Lawyers See ESG Risks as Central to Clients′ Interests, September 10, 2015, TriplePundit, USA.

Sustainalytics to acquire ESG Analytics. “Sustainalytics has agreed to acquire Zurich-based ESG Analytics, a provider of analysis software that helps money managers and asset owners to analyze and manage ESG risk and opportunities.”

[COMMENTARY] Sustainalytics seems unstoppable in its quest of being the global leader in ESG analysis. Again, congratulations to Michael Jantzi and his outstanding team.
Sustainalytics to acquire ESG Analytics, press release, Sustainalytics, September 8, 2015, USA.

Sustainable investing a fiduciary duty for fund managers, says U.N.-backed study. ” U.S. managers were particular laggards in making sure environmental, social and governance (ESG) views were used alongside other financial measures when discussing a company’s investability, in part because of an outdated view of fiduciary duty, or acting in the best interests of customers, it [UN study] said.”

[COMMENTARY] It’s becoming increasingly clear that fund fiduciaries should not only incorporate ESG factors in their investment analysis — but in some cases could be held legally liable for losses incurred by not paying attention to ESG factors!
Sustainable investing a fiduciary duty for fund managers, says U.N.-backed study, by Simon Jessop; editing by Mark Potter, September 6, 2015, Reuters, USA.