More than Green: Sustainable and Responsible Investing will Become the New Standard

Is your investment portfolio positioned for a future that may look vastly different from the past?

Some of the world’s largest investors are asking this very question.  They are rightly concerned that large trends such as climate change, surging population growth, and resource scarcity will negatively impact their returns over time...  Click here to read more 

Why Sustainable Investing is Critical to Your Retirement Plans

There once was a time when most American workers had a defined benefit pension plan. Today, it is more likely that you are responsible for your own retirement plan. Whether or not you are covered by a traditional “pension plan”, someone is charged with managing risk. Risk is more than market volatility. It is company specific, as well.  “Could carbon legislation be one of those risks?” investors ask. “How could a company’s reputation and brand be damaged from environmental or social missteps?” Many large pension managers are trying to mitigate risks by building sustainable and responsible portfolios.

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Betting on Siemens with Offshore Wind

A late comer to the wind turbine manufacturing industry, Siemens AG entered the wind business six years ago when it purchased the veteran Danish wind turbine manufacturer Bonus Energy. Europe’s largest engineering firm, Siemens is also one of the world’s primary suppliers of transmission infrastructure equipment.

In 2010, the company’s 3 and 3.6 MW wind turbines emerged as the top choice for offshore wind projects. Currently ranked 6th in the world in terms of total wind turbine sales, Siemens is expected to creep up to among the top three wind turbine suppliers by the end of 2012. While other turbines have reported weak sales over the past year, Siemens is showing strong sales in both onshore and offshore wind arenas. Click here to read more

China is GM’s Number One Market

Where are the most Buicks in the world sold? Not in the US, but China. This year, sales of American-based General Motors (GM) cars in China outpaced that same consumption in the US. This development has ramifications for the auto industry and international climate policy.

USA Today reports that in 2010, Chinese consumers bought 2.35 million cars from GM. Demand in the US was about 136,000 less over that same time period. The total cars sold for 2010 represent a 29% increase over the year before. In comparison, US sales rose just 6%... Click here to read more

Markets and Earnings Commentary -- Mid-January 2011

Thus far, the 2011 earnings season has been decent for US companies. While only a small number (57, as of this writing) of the S&P500 have reported thus far, nearly 3/4 of them (73.6%) have beaten analysts' estimates.  Before you say that the analysts have set the "bar" too low, consider the level of earnings at this point in the cycle. That level is higher than you might expect.  Analysts project S&P500 operating earnings of $95 for 2011.  With the S&P still trading below 1300, this equates to a P/E of less than 13.5 times, versus a long term average of 15.

Does this mean that the rally in US stocks has further to run?  We'd prefer to conclude that valuations are supportive of current index levels.  It will likely take further earnings advances to convince investors that breakeven levels are lower than before (thanks to aggressive cost cutting), and that companies can actually grow the top line (i.e., sales).  Given that a disproportionate share of sales growth is coming from outside the US, we'd wager that top line growth will also surprise analysts for a while longer.

One positive to consider is recent "flow of funds" data.  The mindless buying of bond funds has finally reversed itself, leaving stocks as a likely beneficiary of more inflows.  For investors with longer time horizons, we continue to see high dividend shares as superior investments to most fixed income categories.

Principal Global Investors joins UN Principles for Responsible Investment

Principal Global Investors, the Des Moines, Iowa-based asset manager with $227.4bn (€170bn) in mostly pension fund assets under management, has become the latest “mainstream” firm to sign up to the United Nations Principles for Responsible Investment.

The firm – which runs assets for 10 of the 25 largest pension funds in the world – says the appropriate consideration of environmental, social and governance (ESG) issues is part of delivering superior risk adjusted returns.

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Dodd-Frank mandates "Conflict Minerals" reporting

The Dodd-Frank Act has gotten a lot of attention, mostly for its sweeping new regulations affecting the financial industry. But buried in all those pages is also a small provision aimed at addressing the problem of conflict minerals originating from the Democratic Republic of Congo (DRC). Dodd-Frank requires companies under the jurisdiction of the SEC to report annually on whether they are using minerals from the DRC or its nine immediate neighbors. All companies must also report on the due diligence they have undertaken to verify their supply chain and avoid tainted metals. This reporting will especially affect chipmakers and other electronics firms who use ores such as tungsten, tantalum, gold and tin in their manufacturing processes. Major firms like Dell, Intel, Hewlett-Packard and others have been proactively managing their supply chains to meet this challenge. Read More...

Global Reporting Initiative (GRI) launches transparency push

The case for greater transparency got a push today, with the announcement that the Amsterdam-based Global Reporting Initiative (GRI), is launching a U.S. effort to guide more American corporations to adapt GRI's framework to disclose environmental, social and governance performance. Advocates make the case that increased transparency not only tends to boost profitability, but that such details are legally material to corporate financial statements.

Dubbed Focal Point USA, GRI's US initiative debuted today at a breakfast meeting at NYSE Euronext on Wall Street. Pointing out that only hundreds of tens of thousands of US companies strive to document their broader impact, GRI Chief Executive Ernst Ligteringen asked the 230 attendees, 'Why is America letting the world lead in sustainability reporting?" Click here to read more

Creating a Sustinable and Responsible Investment Portfolio

"Beauty is in the eye of the beholder.”

The same can be said for Sustainable and Responsible Investing. Your portfolio can be a reflection of your values. In this article we will outline some ways in which an investor can customize an investment plan to reflect those views while retaining the potential for competitive returns...

Read More at The Daily Energy Report

Equity manager divests Cisco shares over human rights

Boston Common Asset Management, the US-based sustainable asset manager, has dumped Cisco Systems’ shares over the Internet technology firm’s weak human rights risk management and poor response to investor concerns... Read more at Responsible Investor

U.S. Clean Power Sector Could Attract $342 Billion By 2020

The United States could attract $342 billion in clean power project investments over the next decade, according to a report released today by The Pew Charitable Trusts. The U.S. is among the three G-20 members with the most to gain by implementing strong clean energy policies. Additionally, strong policies could better position the U.S. to compete more effectively for a share of the $2.3 trillion that could be invested globally in clean power projects over the next 10 years... Read More

2010 Clean Energy Investment Hits a New Record

Bloomberg New Energy Finance released 2010 investment figures this week. Although certain sectors like wind and biofuels had a rough year in some countries, the overall trends in project finance, venture capital and supply-chain investments were very positive.

According to BNEF, new global investment in clean energy reached $243 billion in 2010, up from $186.5 billion in 2009. Last year's investment figures double those from 2006. The main factors in this growth were the massive Chinese market, the expansion of offshore wind, hot European solar markets and global R&D ...  Read More

Empire State Building Turns to 100% Green Power

Already the nation's largest green retrofit project, the Empire State Building has achieved another distinction -- this as New York's largest green power purchaser.

"Everything that we're doing at the Empire State Building is about business and, bottom line, that's the first and most important thing," said Anthony Malkin, CEO of real estate management firm Malkin Holdings. "We're not about paying more to do something qualitatively different; we're about market-ready solutions. We didn't know we were doing green power until the bid was won by Green Mountain..." Read more at GreenBiz.com

Is the End of Coal Already Here?

"Coal is a dead man walking. Banks won’t finance them. Insurance companies won’t insure them. The EPA is coming after them. . . . And the economics to make it clean don’t work," says Kevin Parker, head of asset management for Deutsche Bank. The industry began work on 19 plants between 2000 and 2008. They started with plans to start twice that many new ones last year, but dropped them all, plus they announced that they would retire 48 more aging plants. It almost seems like it doesn’t pay to pollute anymore. Read more at Triple Pundit.com

Pension giant challenging Apple over corporate governance

The California Public Employees' Retirement System is seeking to change the policies of Apple and 57 other large companies that make up a portion of its nearly $200 billion U.S. portfolio. By lobbying for new rules requiring a majority vote for directors, CalPERS is hoping to bring about higher board member accountability to shareholders. Read more

Positive signs from Cancun despite US institutional investor absence

The absence of U.S. institutional investors at the UN’s Cancun climate change talks was a telling sign that there wasn’t much hope for a major treaty that would dramatically shift the risk/reward equation for climate-related investing. While their European counterparts advocated for a strong carbon-reducing accord in Cancun, U.S. investors largely stayed at home, where lackluster returns and long-term pension obligations are their more immediate concerns.

Though there were silver linings in the negotiations involving nearly 200 nations, they still failed to produce a legally binding agreement for reducing global greenhouse gas emissions. That means there will continue to be only limited opportunities for low-carbon green investing worldwide. “I can’t do anything unless it serves the best interests of my membership,” says Ole Beier Sorensen, chief of strategy and research at the $90 billion Danish pension fund ATP, bemoaning the lack of an international climate accord during a Cancun panel discussion. “We need clear and sustained long-term policy commitments.”
Read more at Responsible Investor.com