Global Sustainable Investments Rise 34 Percent to $30.7 Trillion, by Emily Chasan, April 1, 2019, Bloomberg, USA.
Greenwashing purge sees sustainable funds lose share in Europe, by Siobhan Riding, April 1, 2019, FT, UK.
[COMMENTARY] Both the above stories reveal data from the same Global Sustainable Investment Alliance study released April 1. However, they each have rather different messages. It might be that institutional sustainable investing in Europe is maturing while still growing in other geographic regions. Even at the retail level though, Europe — as in most regions — still has a lot of room to grow.
Ignore the Myths: Factor and ESG Investing Work Together. “One firm looked inside ’conventional wisdom’ of socially responsible investing and found the real story.”
[COMMENTARY] MSCI has done some interesting original research here trying to decipher the pure role of ESG in returns. I’m sure MSCI did careful work, however, unless a study gets published in a peer-reviewed journal or is similarly verified by other studies, I always have some skepticism as to its reliability.
Ignore the Myths: Factor and ESG Investing Work Together, by Ginger Szala, March 27, 2019, ThinkAdvisor, USA.
British investors more worried about the planet than Brexit. “The UK’s leading peer-to-peer ethical investment platform, Abundance Investment, today publishes the results of its sixth Great British Money Survey revealing the key ethical and environmental issues people care about and which motivate investors.
’Reducing plastic waste’ is the issue of greatest concern, with 81% saying they are extremely or somewhat concerned about this, followed by ’levels of waste’ at 78%. Brexit came fourth (73.5%) after air pollution (74.5%).”
[COMMENTARY] Fascinating! I wonder if such findings can be corroborated? Abundance is known for doing a good job with their surveys. Anyhow, read the article as there are other interesting numbers — particularly for advisors.
British investors more worried about the planet than Brexit, by Stuart Fieldhouse, March 28, 2019, The Armchair Trader, UK.
Why ESG Is Too Nuanced for Index Investing. “Active management brings deeper analysis and nimbler choices into building socially responsible portfolios.”
[COMMENTARY] The article makes a strong case for active management!
Why ESG Is Too Nuanced for Index Investing, Frances E. Tuite, March 26, 2019, ThinkAdvisor, USA.
What Are Green Bonds and How ’Green’ Is Green? “Because investors face the challenge of judging whether a note is truly green, regulators are working on standards to help guard against greenwashing, or misleading claims about just how good a friend to the environment an issuer is.”
[COMMENTARY] A great review article on green bonds for ethical investors.
What Are Green Bonds and How ’Green’ Is Green? By Lyubov Pronina, March 24, 2019, Bloomberg Businessweek, USA.
The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership. “The authors reviewed eight rankings by evaluating the methodologies that these systems have published online and that are available to the public. They assessed whether companies′ policy engagement activities were considered in the rankings, and how, if considered, they were tabulated as part of the companies′ overall rankings or scores…
Most corporate sustainability rankings do little to encourage companies to engage in climate policy, as they neither recognize support for nor penalize opposition to climate policy.”
[COMMENTARY] Only two of the eight corporate sustainability rankings in this study qualify under in this regard: Corporate Knights’ Global 100 and InfluenceMap. The Blind Spot in Corporate Sustainability Rankings: Climate Policy Leadership, March 2019, Environmental Defense Fund, USA.
Ethical Funds Have Never Been Cheaper As Vanguard Spurs Fee War. “The price war has come to socially conscious investing. BlackRock (BLK), Vanguard Group and Deutsche Bank’s (DB) DWS Group have slashed fees for exchange traded funds that track companies performing well on environmental, social and governance criteria.”
[COMMENTARY] Finally, ethical fund fees are coming way down with the advent of new players.
Ethical Funds Have Never Been Cheaper As Vanguard Spurs Fee War, by Bloomberg News, March 21, 2019, USA.
Also, an insightful writeup on Vanguard’s new Global ESG Select Stock fund by Morningstar’s Jon Hale is worthy of a read.
How to Evaluate Funds that Invest in Women. “Because data around gender was so thin, Andrew Behar, CEO of As You Sow, a California-based nonprofit shareholder advocacy group focused on ESG, says his group worked with Equileap to compile more information about corporate gender policies, including policies like training, career development, safety at work, human rights and other issues…
His group recently created a gender-equality funds tool that analyzes mutual funds and ETFs, taking into account these different gender attributes and giving each fund a score.”
[COMMENTARY] Good article on this subject. Behar and colleagues’ work sounds most interesting. It’ll be fascinating to watch how they’re able to execute their findings and the returns they achieve.
How to Evaluate Funds that Invest in Women, by Debbie Carlson, March 21, 2019, US News, USA.
Large fund firms’ support for combating climate change is all talk, as proxy voting record shows bottom performance. “A data analysis released by Ceres in early March shows that when BlackRock and Vanguard are measured on their up-or-down votes on climate change resolutions at stockholder annual meetings, they have among the worst voting records in the fund industry.”
[COMMENTARY] The data would appear irrefutable that the largest American fund companies don’t ’walk the talk.’ However, I tend to believe — and hope — that senior manager’s prognostications of incorporating ESG analysis throughout their organizations perhaps hadn’t yet filtered down to the managers making the proxy decisions who are likely engaged with other concerns. I expect that the 2019 and 2020 proxy seasons will show much-improved results.
Large fund firms’ support for combating climate change is all talk, as proxy voting record shows bottom performance, by Eric Rosenbaum, March 19, 2019, CNBC, USA.
Investors Lose a Major Justification for Holding Tobacco Stocks. “In recent years, a flurry of European pension funds and insurers have begun divesting their holdings, putting pressure on the share prices. BAT had its worst year on record last year, slumping 50 percent, as the U.S. Food and Drug Administration toughened its stance toward the tobacco industry. Philip Morris slumped 37 percent.”
[COMMENTARY] I’ve been arguing for many, many years, that the days were numbered for big tobacco. In July 2010, I wrote an editorial, Sin or Ethical Investing: Which Pays Best? There, I said, “Over the next five to ten years, and with the effects of the sovereign debt crises upon us, I suspect that ethical stock portfolios could outperform both the sin and conventional variety.”
Investors Lose a Major Justification for Holding Tobacco Stocks, by Lisa Pham, March 13, 2019, Bloomberg, USA.
Who runs the world? The global status of women in leadership. “Regardless of progress at the board level, the glaring reality is that the world′s largest corporations are stalled in second gear when it comes to hiring women in C-suite leadership roles. Top senior executive officers with the letter C in their title (CEO, CFO, CIO, COO, CSO) lag behind on gender in all markets.”
[COMMENTARY] Although several reputable studies have shown that having women and diversities on boards and in management generally leads to superior financial performance, corporations generally have been slow to include them. The study published by Corporate Knights provides terrific insight into this reality.
Who runs the world? The global status of women in leadership, by Sophie L’Helias & Adria Vasil, March 9, 2019, Corporate Knights, Canada.
EU agrees on new rules to counter investment ’greenwashing’. “The European Union agreed on Thursday on a new law that forces asset managers, insurers and pension funds to disclose environmental risks in their investments. The law is meant to spur green investment and to curb ’greenwashing’, a practice whereby companies claim to be more environmentally friendly than they really are.”
[COMMENTARY] Europe again is at the forefront of what inevitably will be followed by other jurisdictions. Companies and asset managers are now warned to be truthful in their environmental assessments and risks posed. Since many of those affected are global in nature, they’re likely to extend these guidelines to their activities well beyond Europe.
EU agrees on new rules to counter investment ’greenwashing’, by Francesco Guarascio, March 7, 2019, Reuters, Belgium.
Is your ethical investing app upselling greenwash? “Animal welfare′ funds heavy in animal testing? Low-carbon funds dripping in oil? Your BS-free green guide to 9 SRI apps.”
[COMMENTARY] Corporate Knights have produced one of the few really good analytical studies on ethical investing apps for North Americans. They believe there are some good robo apps for Americans, but not so for Canadians. Anyone interested in such apps should also enroll in my 1-hour DIY Ethical-Sustainable Investing Pays Tutorial.
Is your ethical investing app upselling greenwash? by Adria Vasil, March 5, 2019, Corporate Knights, Canada.