Warren R. Baltimore has died at age 74.
In KLD’s earliest years, Warren provided much-needed financial advice and encouragement. He oversaw KLD’s insurance needs well after he had retired to Nantucket.
I first met Warren in Columbus, Ohio where his wife of 44 years, Judy, and I worked on an ill-fated primary campaign.
Dollars and Sense has published an examination of why supply and demand factors may not be the only cause of global food price inflation. In an article entitled “Hot Commodities, Stuffed Markets, and Empty Bellies,” KLD Research Analyst Ben Collins considers how some investors may be influencing commodities prices:
“…[The] growing presence of buy-and-hold investors in commodity markets has prompted heated debate among commodity traders, economists, and politicians over other possible causes of higher commodity prices. … [The] quantity and liquidity of money flowing through today’s global markets is unprecedented in human history.”
Collins’ commentary includes a recap of how U.S. commodity markets have evolved since they were deregulated in 2000. Since then, new classes of speculators have come to dominate commodities trading. He cites one fund manager’s Senate testimony that commodity index investors’ holdings on traditional U.S. exchanges have increased from $13 billion in 2003 to nearly $260 billion as of March 2008. And as of April 2008, index investors held approximately 35% of all corn futures contracts on traditional exchanges in the United States, 42% of all soybean contracts, and 64% of all wheat contracts, compared to minimal holdings in 2001.
A thought-provoking article at EUobserver.com considers how the European Union’s approach to regulation affects American companies and consumers. Leigh Phillips interviews Mark Schapiro, author of Exposed: The Toxic Chemistry of Everyday Products and What’s at Stake for American Power, which studies consumer product regulations in the context of “the massive global economic power shift” driven by “the eclipse of the United States by the European Union.”
I’ll leave aside the question of which side of the Atlantic is waxing or waning, but Schapiro does make some interesting points about the EU’s impact on corporate social responsibility (CSR) practices. He argues that the EU regulates more aggressively because government directly pays the price for corporate activity:
“There’s a really interesting distinction about how the EU and the US approach the basic idea of economics and profitability. One of the principles at the core of many European ideas is the question of externalized costs that make something appear economically possible….The key difference here is that you have a public healthcare system in Europe, so the costs of illness that come from chemicals or environmental degradation are borne by governments. Thus the state is looking at this and thinking: “Wait a minute - we’re paying the cost for this so-called low-cost production. Let’s shunt that cost back onto the producers and deliver an accurate rendering of the costs.”
Al Gore recently challenged America to generate all of its electricity from carbon emissions-free sources by 2018. The Boston Globe has reported that John McCain and Barack Obama agree that Gore’s is a worthy goal. How can it be achieved?
Energy efficiency may be the biggest piece of the puzzle. “Efficiency is often referred to as the ‘fifth fuel’ for electricity generation. Coal, natural gas, nuclear, and renewables are the other four,” explains KLD Senior Research Analyst Andrew Brengle.
A new report entitled “The Size of the U.S. Energy Efficiency Market: Generating a More Complete Picture” (available for purchase here) details just how important the fifth fuel is to our economy. Andrew and KLD intern Ben Steinberg alerted me to the study, and they’ve analyzed the 60-page document in depth – thanks to both of them for providing assistance with this article. The report’s author, the American Council for an Energy Efficient Economy (ACEEE), is a non-profit “dedicated to advancing energy efficiency as a means of promoting economic prosperity, energy security, and environmental protection,” according to its website.
In a recent post on Harvard Business’ “Leading Green” blog, Ceres president Mindy Lubber issued a “warning to U.S. companies: Just because national lawmakers are dawdling on global warming, don’t think your business can dawdle, too.”
Lubber explained that while the European financial services sector has a head start in addressing climate change, their U.S. counterparts are now offering investable products that focus on carbon mitigation and reduction. She cited KLD’s Global Climate 100 (GC100), which includes a mix of 100 global companies that pursue promising approaches to renewable energy, alternative fuels, clean technology and efficiency.
Investable products based on the GC100 include mutual funds and others as listed on the Product Fact Sheet at the GC100 FAQ page.
The July 30th Boston Globe reported on a new initiative from the Rabbinical Assembly and the United Synagogue of Conservative Judaism (USCJ). Hekhsher Tzedek is a food product certification program that is being developed in partnership with KLD. Certification “indicates that a kosher product was made in compliance with a set of social justice criteria, in keeping with the teachings of the Jewish faith,” as explained by working guidelines listed at the USCJ website.
Reports of abusive labor practices at a large kosher meatpacking plant in Iowa helped inspire the new certification program. In a release from Hekhsher Tzedek, founder and director Rabbi Morris Allen explains:
“Hekhsher Tzedek is a holistic celebration of Jewish tradition, uniting ethical practice with ritual observance in the production of Jewish food. Jewish law is concerned not only about the smoothness of a cow’s lung, but also about the safety of a worker’s hand as well as the impact that kosher food production has on the environment. Hekhsher Tzedek grows out of Jewish tradition; it does not seek to redefine kashrut [the body of Jewish law that involves food] as much as enhance it.”
The Oregonian reports that Oregon might add a socially responsible investment (SRI) option to its menu of 529 tuition savings products.
So-called “529 plans,” named after the relevant section of the federal tax code, differ significantly from funds held directly by states on behalf of their own employees. 529 savings plans are administered by state governments, but they are in fact private accounts held by individuals. Any American can invest in and receive tax benefits for participating in any state’s plan, although there may be additional tax advantages for investing in one’s home state.
As The Oregonian’s Bill Graves explains, the broad reach of state government – investing in companies that it regulates, protecting citizens while seeking returns with their money – can lead to contradictions. Some objected to Oregon’s simultaneously fighting Big Tobacco while investing in a cigarette company: (read more…)
