By: Alan Petrillo | Monday, June 22nd, 2009
As the Obama Administration seeks to overhaul financial regulation, a multi-trillion-dollar coalition of investors has argued that the government should require corporate disclosure of climate change-related risks. Climate Risk Disclosure in SEC Filings – a deceptively modest title – calls for replacing the current hodgepodge of voluntary disclosure with a federally mandated reporting regime.
Ceres, the Environmental Defense Fund, and other sponsors of this Corporate Library-produced study formally presented their findings to the Securities and Exchange Commission (SEC) in a June 12 letter.
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By: Peter Kinder | Thursday, June 11th, 2009
The Madoff Madness and the Banking Crisis: At one extreme, trustees must dodge sociopathic fraudsters; on the other, they must avoid the hubris of “the smartest guys in the room.”
Modern Portfolio Theory and the legal thinking it’s influenced address the problem by means of risk analysis and diversification. This approach has limits, as Investments & Pensions Europe reported recently: “Dutch pension funds have lost €166m to the Ponzi scheme run by Bernard Madoff, Wouter Bos, the Dutch finance minister has claimed.”
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By: Alan Petrillo | Wednesday, May 13th, 2009
Only 24% of voters know that “cap and trade” describes an environmental policy proposal, according to a new Rasmussen poll. Matthew Yglesias at ThinkProgress cited the results this week, and also noted that 46% of respondents guessed that cap and trade involves Wall Street regulation or health care.
The KLD Blog is not typically concerned with opinion polls, but this survey hits close to home. As stated on our “About” page, “KLD analysts stay apprised of economic, financial and political developments worldwide, and the KLD Blog shares our expertise with you.”
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By: Alan Petrillo | Wednesday, May 6th, 2009
The British journal Responsible Investor has published an interview with Gro Nystuen, chair of the Norwegian state investment fund’s Council of Ethics. Norway’s government is a leading advocate and practitioner of sustainable/socially responsible investing (SRI).
Ms. Nystuen speaks frankly about how the Norwegian state pension fund puts its good intentions into practice. “The Council consists of five persons who are all experts in the different areas covered by our guidelines,” she says. “This expertise means that we know what we are talking about. It is not a ‘prominent-persons-have-been-politicians’ kind of council, as it could easily have been.”
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By: Alan Petrillo | Monday, April 20th, 2009
Carbon Counts USA, a new report from research firm (and KLD partner) Trucost, studies the “carbon intensity” of 91 major mutual funds. Trucost found wide variation in funds’ carbon footprint, as the highest-carbon fund they studied was 38 times as carbon-intensive as the best performer.
Perhaps due to the Obama Administration’s stated commitment to a national carbon emissions market, Carbon Counts USA (available here) has attracted attention from the business press. Dow Jones’ Daisy Maxey writes that major fund managers are “responding cautiously” to the implication that they should consider companies’ carbon footprints:
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By: Alan Petrillo | Tuesday, March 24th, 2009
The Social Investment Forum has posted a list of thoughtful answers to the “Top 10 Questions about SRI.” I especially like SIF’s responses to some skeptical questions about our industry, such as:
Is the performance of SRI funds competitive with mainstream funds and with their benchmarks?
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By: Alan Petrillo | Wednesday, February 25th, 2009
In January, KLD Indexes entered into a strategic partnership with FTSE Group, a London-based firm that “calculates over 120,000 indices covering more than 77 countries and all major asset classes.”
You see our problem. Trans-Atlantic business partners can turn dollars into pounds, exchange labor for labour, and enjoy both kinds of football – but what is the plural of index? Tom Kuh, Managing Director of KLD Indexes, put the question to some of us at KLD world headquarters in Boston. On one side: FTSE. On the other: my New York Times style guide, which says simply: “indexes (not indices).”
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By: Alan Petrillo | Thursday, January 29th, 2009
In his first week in office, President Obama proposed major overhauls of environmental and financial regulations. These changes have long been championed by investors concerned with companies’ environmental, social and governance (ESG) performance, and few were surprised that a new regime has brought a new policy agenda.
In this time of recession and scandal, however, some familiar faces in American business – including former SEC Chairman Harvey Pitt and Wal-Mart’s Lee Scott – are also setting a different tone. Mr. Pitt has announced ten lessons that investors should learn from the current crisis, while Mr. Scott has committed the world’s largest retailer to “a sustainability program to remake the entire company.” These are welcome moves, but ESG investors should ask whether this new attitude will outlast today’s crisis mentality.
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By: Alan Petrillo | Wednesday, January 14th, 2009
Sustainable Investing: The Art of Long-Term Performance, a collection of articles from 22 contributors including co-editors Cary Krosinsky and Nick Robins, was released in the fall of 2008. SI challenges investors to look beyond what contributor Steven Lydenberg calls “the fast-paced speculative nature of today’s financial markets.” Socially responsible investors (SRI) have been striving to meet this challenge for decades, and now current events have exposed the financial system’s myopia as an urgent global crisis.
If it had been released last year, this book would have been a valuable primer on how some investors integrate environmental, social and governance (ESG) factors into their strategies. In the winter of 2009, however, Sustainable Investing now offers answers to questions the whole world is asking. Consider this diagnosis from a January 3 New York Times article by Michael Lewis and David Einhorn:
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By: Peter Kinder | Tuesday, November 25th, 2008
On October 17, 2008, the Employee Benefits Security Administration (EBSA), an agency within the US Department of Labor, issued two Interpretive Bulletins dealing with the application of considerations other than investment return by ERISA fiduciaries.
This note places one of the two Bulletins in context and suggests what the boundaries on its application may be.
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