Regulatory rollbacks, along with proposals to cut the budget of the regulating EPA by 24% and its staff by one-fifth, have energized values-driven investors. Since the November election, ESG investors have put $383 million into ESG stock funds, according to EPFR Global, quoted in a recent Barron’s article. Barron’s says ESG factors “could prove especially useful in evaluating companies if the administration rolls back regulation.” Transparency could be another issue.
From the Editor
How is mandated CSR working in India? In 2013, it became the first country to require CSR from corporations with revenues of more than $130 million in the form of giving two percent of their profits to charities.
Can you identify the area of finance that assumes as a basic principle “the just, fair, and equitable distribution of income and wealth?” If you guessed Islamic finance, you’re right. What's more, global Islamic finance in predominately Muslim countries throughout Africa and Asia now represents $1.9 trillion in assets, according to ImpactAlpha. This treasury was acquired through asset-based financing of tangible assets and communal risk sharing.
The good news in the European Commission’s “Second Report on the State of the Energy Union” has almost been lost amid the angst over the future of the European Union.
US retailers are concerned about a potential “border adjustable” tax that could dramatically affect business. CEOs and executives of Target, Best Buy, Gap, J.C. Penney, Walgreens Boots Alliance, Autozone, Jo-Ann Fabric, Craft Stores, and Tractor Supply, among others, have met with President Trump to argue that a tax on imports under discussion by the House would cause serious damage to their bottom lines. The retailers believe that the proposal would result in a rise in prices for US consumers, according to the Wall Street Journal. Mr. Trump’s position on the idea is not clear.
As socially responsible investing grows in popularity, experienced investors are looking deep into the details of investing in values without sacrificing performance. A recent article on Seeking Alpha by TDP Research outlines an investment professional’s experience with SRI, including a description of some very detailed criteria. One tip: this advisor focuses on stocks included in a handful of exchange traded funds, including the MSCI KLD 400 Social ETF.
Prominent conservatives have issued a call for a carbon tax to address climate change.
Here’s the good news: women and minorities have achieved the highest level of seats yet on Fortune 500 boards: 31%, according to the latest edition of a study that has tracked board diversity for the last six years. Thirteen years ago, that percentage was 28.8%, which underlines the slow rate of progress.
President Trump's immigration order has caused a dramatic rise in the number and kind of businesses that have issued statements about values. The shift includes companies that have rarely, if at all, made declarations about public policy. The tech sector, notably globalist and peppered with founders and CEOs who are immigrants and/or refugees, took the lead: Google, Apple, Microsoft, and Facebook spoke up. Expedia, Amazon, Uber, Lyft, eBay, Etsy, Starbucks, and Airbnb also piped up.
When India passed the Companies Act in 2013, a law that required large companies to spend at least two percent of their average net profit of the past three years on CSR activities, the jury was out on whether a CSR mandate could produce results. Now, the numbers for 2016 are in—and they’re encouraging. Spending rose by 22% over the previous year; total FY ‘16 spend was over $2 billion, a rise of $368 million. 1,505 companies—30% of the 4,887 firms listed on the Bombay Stock Exchange—met the standard for mandatory spending.
If there were any question about the continuing momentum of the move to clean energy despite the fossil-fuel friendly attitude of the new administration, Moody’s just provided a strong answer. The rating agency now projects that green bond issuance worldwide could top $200 billion in 2017. That number would double that of 2016, a record $93.4 billion, according to Reuters. Historically, Moody’s reports that green bond issuance has increased every year between 2011 and 2015 by an annual average of 163 percent.
The real growth in US wind power is taking place in red states. The numbers tell the story. Three of the five states with the most installed wind capacity are Republican-led: Texas, Iowa, and Oklahoma. All of the top five states by percentage of generation by wind are red: Iowa, South Dakota, Kansas, Oklahoma, and North Dakota. Eight of the 12 states that now get 10 percent or more of their electricity generation from wind power are red states.
It’s that time of year, when forecasters issue lists of trends to look out for in coming months. Susan McPherson, CEO of McPherson Strategies, has polled some noted CSR professionals to collect six trends to watch for in 2017 for a Forbes blog.
The initial news from the World Economic Forum, now taking place in Davos, Switzerland is different, for a change.
Rising demand for sustainable investing advice has resulted in new, specialized digital platforms that match values with analytic data. Three firms—OpenInvest, Earthfolio, and Grow Invest—offer easy entry into socially responsible investing with minimum amounts ranging from $1 to $25,000, according to Investment News.
The current debate over the Affordable Care Act feels like déjà vu, all over again. The debates echo those back in 2010 in the run up to passage of the law—except now, there are some facts that should be considered. So argues Rep. Sander Levin (D-MI), Chairman of the House Ways and Means Committee when the ACA was passed.
China has answered President-elect Trump’s claim that it is the creator of the “hoax” of climate change with a multi-billion dollar bet on renewable sources as its energy future. The country has just announced plans to invest $361 billion dollars in solar, wind, hydro, and nuclear power projects by 2020, according to Reuters. By then, renewables will make up half of all its electricity generation.
From my editorial desk, I see a lot of news and many reports from companies about their programs. The articles and reports are variously headlined as corporate responsibility, corporate social responsibility, sustainability, and/or corporate citizenship. However titled, the terms can cover a wide range of topics under whatever general categorization is chosen.
“Supply chain” is a relatively bland term to describe an incredibly important part of the sustainability puzzle. It sounds wonky, but its operations in producing goods, from extracting resources to manufacturing, from packaging to transporting to market, are a basic component of modern commerce. Tracking the various components of sustainability—transparency, workers rights, safe workplaces, sustainable sourcing, energy efficiency—throughout complex global supply chains has been a major obstacle to achieving sustainability goals.
Corruption in business around the world is a very big item on business expense sheets, according to recent data. Estimates are that the total is more than five percent of global GDP—$2.6 trillion—and that the cost of doing business globally is increased by up to 10 percent, according to the World Economic Forum and the World Bank. To fight corruption, The B Team and its partners have launched an online tool to reveal the true owners of companies.