Conscious Capitalism In The News is a weekly curation of articles from around the web about conscious capitalism, socially responsible investing, impact investing, and how consumers and investors are changing the world.
Socially Responsible Investing (SRI) allows investors to align their values with their investments by investing in firms that improve the quality of life, be it through advancement in medicine, technology or education. Investors no longer need to choose between performance and SRI. Interest in and demand for sustainable investment will only continue to grow as consumers increasingly expect the companies they use to be socially responsible.
A reflection of the investment preferences of millennials, SRI accounts for 18 per cent of assets in the wealth and asset management spaces, and areas such as environmental, social and governance investing. A recent study by Mercer has shown that SRI is either a positive or neutral influence over performance. Thus, allocation to SRI strategies needs not be seen as any different to the rest of a portfolio.
There has been a sea of change in how large investors approach their role in pushing for corporate change. Mutual fund and ETF complexes like BlackRockBLK -1.66%, State StreetSTT -0.77%, VanguardVTI +NaN%, Fidelity and others, which control trillions of dollars in stock holdings, have become increasingly intent on holding public company boards of directors and management teams accountable to higher environmental, social and governance standards.
What’s new is the emphasis on environmental and social issues, like sustainability and diversity, with a growing belief among major institutions that such issues are directly tied to stock performance. Boards and managements of America’s corporations would be wise to prepare themselves for a rising tide of ESG proposals with strong backing from very large shareholder groups. Being able to articulate to shareholders how each of these issues is addressed will be extremely important for every corporate board who wants to remain in their jobs.
Ethical funds have changed over the last 30 years. Where previously they were focused on avoiding bad, now they are being tailored to reflect the values of millennial investors who are more interested in being proactive. Asset managers are trying to decide what is important to millennials in order to offer opportunities that reflect the values of a new generation.
There are some 100 ethical and sustainable funds. Some examples of companies asset managers are looking at are companies like cardboard box maker DS Smith, which recycles its own packaging rather than cutting down trees, Safaricom, a Kenyan business that provides financial services through mobile phones to populations with no other access to banking, Motability, which provides finance for carers of disabled people so they can adapt their cars, and Transport for London, which is for spending on transport infrastructure such as the Cycle Superhighway and improvements to ticket halls.
But while ethical funds are evolving, still only around 1 per cent of the money that investors hold in funds is put into them. Laith Khalaf, a senior investment analyst at Hargreaves Lansdown, says: ‘I think the problem you get if you only invest in companies which have a positive impact is that you narrow down the number of firms you can invest in considerably and that can make it more difficult to generate returns.’
The Second Largest Global Reinsurer in The World Moves to Track Its Liquid Holdings with ESG Indices – Financial Standard
Swiss Re, the second largest global reinsurer in the world, has been integrating ethical indices into its investment portfolio since the beginning of the year. It now says that ESG makes economic sense and has decided to make ESG considerations an integral part of its investment process rather than an add on.
The MSCI indices rate companies against various ethical criteria. The score is combined with market capitalization weight, which means that companies with a greater ethical performance have a greater weight in the index. The MSCI ESG indices address the evolving needs of institutional investors, who increasingly aim to incorporate ESG considerations into their strategic asset allocation.
Swiss Re group chief investment officer Guido Furer believes they have a unique opportunity to make the world more resilient. “Imagine the impact we can have if long-term investors succeed in fully integrating ESG considerations into our combined USD $75 trillion in institutional assets.”
Founder of the up-and-coming CCCoin, Lucas Coffey, is an ex-Air National Guardsman whose military career was spent primarily serving humanitarian aid missions during Operation Iraqi Freedom before an injury cut his aviation career short. Coffey discovered blockchain technology when studying coding and business administration.
The Mission of the CCCoin-Team is to run a sustainable profitable business while still donating 75% of all exchange sale proceeds to trusted notable charities. CCCoin proposes to create a charitable cryptocurrency that raises capital through currency exchanges and donates the proceeds to notable trusted charities, chosen through a democratic voting process using secure transparent blockchain technology.
CCCoin is hoping to ICO at CCCoin.io on Aug, 21st, 2017.
Socially Responsible ETF’s Have Almost Doubled in the Past Year. Here Are The Top 10 Performers – ETF
At this time last year, there were only 22 socially responsible or ESG exchange-traded funds available. Currently, there are nearly 40 such strategies on the market with a total of $3.1 billion in assets under management.
Also known as ethical investing, impact investing, principles-based investing, sustainable investing and others, these strategies consider “environmental, social, and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact,” according to the Forum for Sustainable and Responsible Investment.
“Socially Responsible” is a very general term, however, and can include focuses that are adverse to investors values, so investors do need to do their research. For example, “biblically focused” funds might exclude anything related to LGBT rights. Whereas other socially conscious funds may focus on uplifting LGBT rights.
Clearly, ESG ETFs come in many forms. Some don’t stray far from the market, while others do. Some target a specific cause, while others focus on many. It’s up to each investor to look under the hood to see what principles and selection criteria these ETFs are adhering to before buying.
B Corp Best for the World Award Winning New Resource Bank Reports Growth in Q2 2017 – Globe News Wire
For five consecutive years, New Resource Bank has earned the ‘B Corp Best for the World’ award. This list honors businesses that earned an overall score in the top 10% of more than 1,200 Certified B Corporations from over 120 industries on the B Impact Assessment, a rigorous and comprehensive assessment of a company’s impact on its workers, community and the environment.
New Resource Bank reports higher earnings in the second quarter of 2017 compared to a year ago, reflecting strong growth in revenues, loans and deposits, and solid asset quality. President and CEO, Vince Siciliano, attributes this growth to loan demand from green builders, organic producers, clean energy providers and not-for profit enterprises. He adds that “more and more business owners and consumers are looking to make a positive impact in their communities and the planet by aligning their savings and deposits with their values. These trends continue to fuel our growth and profitability.”