Amidst the discussion of H1N1 flu and drug cartels, some interesting news for socially responsible investors came out of the North American Leaders Summit in Guadalajara. In addition to a general joint statement, a North American Leaders’ Declaration on Climate Change and Clean Energy issued yesterday laid out some specific ideas and goals.
A key paragraph stated, “We underscore the importance of developing and strengthening financial instruments to support mitigation and adaptation actions and welcome in this regard the proposal by Mexico of a Green Fund. We will conduct further work on the proposal and will consider other views presented for scaling-up financing from both public and private sources.” Mexico has been proposing a Green Fund for over a year now, saying at the UN last September “Climate change is not a problem to be faced by nations according to their degree of development. It is a task that requires the translation of words into deeds that are to be substantiated by concrete proposals that are based on the principles of common but differentiated responsibilities.”
Contributions to the fund would be agreed upon by all and could be determined by criteria such as greenhouse gas emissions, population and GDP. If the Green Fund becomes a reality, it will be a significant source of public funding for projects that help combat the effects of climate change. It will also be a mechanism that helps address the rift between the developed countries and developing countries on this issue.
As is to be expected in a political document, there was no shortage of motherhood statements, beginning with the clichéd opening sentence, “We, the leaders of North America, reaffirm the urgency and necessity of taking aggressive action on climate change.” In addition there were 8 instances of ‘working together’ and ‘co-operating’, as well as one ‘we will work co-operatively’,
But one area where all this cooperation is necessary is in our infrastructure, and that was noted. “We will collaborate on climate friendly and low-carbon technologies, including building a smart grid in North America for more efficient and reliable electricity inter-connections, as well as regional cooperation on carbon capture and storage.” Mention is also made of reducing the use of HFCs, protecting and enhancing forests, wetlands, croplands and other carbon sinks, and reducing transportation emissions.
The leaders claim ‘We share a vision for a low-carbon North America’. Overall, enough particulars were included in the Declaration to turn this vision into reality.
Tuesday, August 11, 2009
Monday, August 10, 2009
The Fair Way
We SRI types are an earnest bunch. We worry about things like ‘is it ok to play golf?’ Those of you who read the entertainment section as well as the business section will know that Justin Timberlake recently opened an eco friendly golf course. The Mirimichi Golf Course just outside of Memphis, Tennessee features irrigation systems that maximize the use of rainwater, native landscaping and electric golf carts powered by solar panels. The buildings have been constructed with a goal of attaining Platinum LEED Certification, the first golf course to do so.
The Mirimichi is also the first golf course in the US to be designated as an Audubon International Classic Sanctuary. Audubon International works with developers to integrate wildlife conservation, habitat restoration and enhancement, water conservation and water quality protection, with the other objectives for the development. Their long-term goal is to “foster a stewardship ethic that leads landowners and managers, consultants, and the community to internalize environmental, rather than just economic, costs and benefits in their decision making and to apply those environmental values routinely in land management.”
Many people feel that eco friendly and golf are inherently contradictory. However, given the impact that golf courses have on their immediate environment, any initiatives, particularly in reducing water use and restricting pesticides by naturalizing the courses, must be welcomed. In the spirit of SRI, we recognize that if golf courses, like corporations, aren’t going to go away, we might as well get involved in improving them.
An article in the New York Times last week, ‘Thirsty Golf Courses as Model for Water Thrift’, has this to say “Since he took charge of the two courses in 2005, Mr. Williams has cut water consumption by 45%, he said, and witnessed the return of some wildlife species like the red tailed hawk. The changes have come with a price, like the occasional large brown spot on the fairway. But Mr. Williams says the golfers do not mind. ‘I just stand out there on the greens and explain, we are doing this so your grandchildren can come out here and play, ‘he said ‘People understand that.’.”
The Mirimichi is also the first golf course in the US to be designated as an Audubon International Classic Sanctuary. Audubon International works with developers to integrate wildlife conservation, habitat restoration and enhancement, water conservation and water quality protection, with the other objectives for the development. Their long-term goal is to “foster a stewardship ethic that leads landowners and managers, consultants, and the community to internalize environmental, rather than just economic, costs and benefits in their decision making and to apply those environmental values routinely in land management.”
Many people feel that eco friendly and golf are inherently contradictory. However, given the impact that golf courses have on their immediate environment, any initiatives, particularly in reducing water use and restricting pesticides by naturalizing the courses, must be welcomed. In the spirit of SRI, we recognize that if golf courses, like corporations, aren’t going to go away, we might as well get involved in improving them.
An article in the New York Times last week, ‘Thirsty Golf Courses as Model for Water Thrift’, has this to say “Since he took charge of the two courses in 2005, Mr. Williams has cut water consumption by 45%, he said, and witnessed the return of some wildlife species like the red tailed hawk. The changes have come with a price, like the occasional large brown spot on the fairway. But Mr. Williams says the golfers do not mind. ‘I just stand out there on the greens and explain, we are doing this so your grandchildren can come out here and play, ‘he said ‘People understand that.’.”
Friday, August 7, 2009
GRI Reporters: Growing but still a minority
The latest numbers from the Global Reporting Initiative show that while GRI Reporters are increasing at a rapid pace, the total numbers are still extremely small. “If sustainability data was just something that was ‘nice to know’ about a company - providing niche investors with data for short-term investment decisions or helping employees feel good about their company - then this wouldn’t be so much of a problem. However this information is more important than that. As we face a sustainability crisis that could ultimately even threaten our very existence as a species, we need to know how our companies are positioned to rise to the challenges, provide solutions and adapt to coming changes,” said GRI Chief Executive Ernst Ligteringen.
The GRI G3 Guidelines set out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance. The Board of Directors of the Global Reporting Initiative this year issued the Amsterdam Declaration on Transparency and Reporting in which they called on governments to introduce policy requiring companies to either report on their sustainability performance or explain why they won’t.
Canadian companies may need that kind of encouragement, given that there are 1503 companies listed on the TSX, a scant 36 of which are GRI reporters. However, compared to other countries, our GRI performance is not too bad, with Canada ranking tenth in terms of number of companies filing GRI reports.
The introduction of LEAD Canada as a provider of GRI training may also speed the process. Since being selected as a provider of GRI training in mid 2008, LEAD Canada has delivered 10 courses across Canada, with a full schedule ahead. In July the GRI announced that 1000 people had now attended a GRI Certified Training Program, a further portent of growth.
The GRI G3 Guidelines set out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance. The Board of Directors of the Global Reporting Initiative this year issued the Amsterdam Declaration on Transparency and Reporting in which they called on governments to introduce policy requiring companies to either report on their sustainability performance or explain why they won’t.
Canadian companies may need that kind of encouragement, given that there are 1503 companies listed on the TSX, a scant 36 of which are GRI reporters. However, compared to other countries, our GRI performance is not too bad, with Canada ranking tenth in terms of number of companies filing GRI reports.
The introduction of LEAD Canada as a provider of GRI training may also speed the process. Since being selected as a provider of GRI training in mid 2008, LEAD Canada has delivered 10 courses across Canada, with a full schedule ahead. In July the GRI announced that 1000 people had now attended a GRI Certified Training Program, a further portent of growth.
Wednesday, August 5, 2009
MPT vs SRI
Avner Mandelman’s column in last Saturday’s Globe and Mail, ‘Investing by math alone doesn’t add up’, is worth reading. In it, he excoriates Modern Portfolio Theory, and it’s latest iteration, PostModern Portfolio Theory. MPT has long been a thorn in the side of socially responsible investors due to it’s view that placing constraints on the investable universe of stocks will result in less efficient, and therefore underperforming, portfolios. We respond to that criticism by saying that all managers reduce their universe by some means, and that human rights violations or GRI reporting are no more or less valid than P/E multiples or market capitalization.
Mr. Mandelman’s concern is that “…Modern Portfolio Theorists and other pure math investors continue to insist that math is sufficient to describe the greed and striving and courage that is business.” He feels, as do socially responsible investors, that much of what is important is not always reflected in the financial statements. “How, then, to invest? Research your investments thoroughly, and if at all possible, physically: Step over the Internet’s Turing wall and talk to humans in the company directly.” Hmm, sounds like something most SRI managers do.
Mr. Mandelman’s concern is that “…Modern Portfolio Theorists and other pure math investors continue to insist that math is sufficient to describe the greed and striving and courage that is business.” He feels, as do socially responsible investors, that much of what is important is not always reflected in the financial statements. “How, then, to invest? Research your investments thoroughly, and if at all possible, physically: Step over the Internet’s Turing wall and talk to humans in the company directly.” Hmm, sounds like something most SRI managers do.
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