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Welcome to Mitchell's SRI Blog


Mitchell Kraus

Sustainable, green, and socially responsible investing (SRI) has been a passion of Mitchell's for years. As an advisor, he feels it's critical to understand how to help clients pursue their goals in a manner aligned with their values.

Mitchell's blog offers an opportunity to share some of the knowledge he's gathered over the years on this topic and encourage others to participate by sharing their thoughts.

For my first 15 or so years in the business, I have only discussed with the few clients who bring it up. While it has been a passion of mine for years, I feel it is my role as an advisor to work with my clients on the things that are important to them and not have my values get in the way of what the client is trying to achieve.

This blog is not meant as a place to share hot stock tips or try to judge the market conditions at any particular moment in time. It is meant to share some of the knowledge I've gathered over the years on these topics and add food for thought to the reader's thoughts in this area.  I'll try to keep you informed of any current trends or articles I find of interest. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Third-party posts found on this profile do not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness. 

All investing involves risk including loss of principal. No strategy assures success or protects against loss.  Socially Responsible Investing (SRI) / Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.

March 8, 2024
For the last 20 years, Proxy Preview has come out with their  insider's guide to environmental, social, and sustainable governance shareholder resolutions with over 500 shareholder resolutions to discuss.  This free publication provides the most comprehensive data on hundreds of shareholder resolutions — covering climate change, election spending and lobbying, human rights, fair labor practices, racial justice, diversity, reproductive rights, AI, biodiversity, net zero, sustainable governance, and much more. More than 500 resolutions reflect a wide range of shareholder voices. Over 30 guest authors provide analysis and expert insight to help you navigate the issues and successfully vote your shares. In addition, this year we will also explore new legal challenges to shareholder rights.  If you'd like to watch, please register here.

March 6, 2024
The SEC passed its final rule on climate-related disclosure.  A brief summary of the long report can be found here.

January 11, 2024
ESG investing isn't for everyone.  It has its plusses and minuses.  While matching values to one's investments is still quite popular with younger generations, it is losing momentum.  As like all trends, they tend to ebb and flow.   This is particularly true with investments that too many people are chasing what's hot yesterday and not looking forward to what might work in teh future.  Business insider talks about some of the current trends in "Millennials and Gen Z are giving up on one of their core values and investing more like boomers."

January 3, 2024
The head of US SIF recently had a letter "For millennials, sustainable investing is the sweet spot"published in The Financial Times.  Many investors see ESG as a way to reduce risk, but I think Maria Lettini makes a great point about how it can also open up opportunities for investors.

December 11, 2023
Forbes Business Council member Nicholas Reichenbach recently released his article "Investing In Sustainability: Long-Term Benefits For Businesses."  We often hear from investors who want to make a difference with their wallets, but many business owners do not understand how sustainability can help them grow their business.  He gives several points that might not be applicable for every owner but a good quick read for business who ask themselves why they should bother.

October 23, 2023
The world of ESG investing in constantly changing.  As the world changes, the priorities of its citizens and investors update too.  We're always looking for what might be next and ways to improve our impact for our clients.  Morgan Stanley recently published their "Trends for the Next Decade of Sustainable Investing."  A quick read but the takeaways are:

  • Expect a greater diversity of sustainable investing strategies across assets and themes, partly driven by growth trends among Millennial investors.
  • The net-zero transition will change approaches to land use, in order to satisfy demand for renewable power, metals and minerals and nature-based solutions.
  • A proliferation of regulations and voluntary standards across the world will reshape corporate strategies, disclosures and availability of data

August 28 2023
There has been a big upswing over the last year in Anti-ESG funds.  The idea is there is more profit from companies who only put current profit ahead of any other factors.  They've been running into many issues lately and are facing some strong headwinds.  A few articles that I've seen of late:

August 11, 2023
The two main political parties have pretty consistently been pretty clear with their positions on Free Markets.  If found this article in Politico very interesting talking about how the GOP who has mostly been about free markets, are fighting companies with an ESG/SRI mission.  Many leading Republicans who have traditionally been very clear on their thoughts on Free Markets are taking vary contradictory positions than they have in the past.  Democrats Champion Free Markets as Republicans Target Wall Street.

June 5, 2023
The Orange County Register recently reported on pending California legislation to divest the state of fossil fuels.  I was featured in the article discussing some of the positives and negatives of green investing and how it fits with certain investors and their goals.  Californians step up efforts to halt fossil fuel investments

May 26, 2023
There has been a lot of push back to ESG investing, most vocally from a few Republican leaders.  The Atlantic discusses some of the rationale behind their arguments and discusses how some of it is misguided (and maybe anti-productive) in "The Hottest Trend in Investing is Mostly a Sham"

April 24, 2023
Recently Bain & Company came out with their report "Do ESG Efforts Create Value?"

While the whole article is worth a read (or listen), their overall findings were:

  • Beyond benefiting the planet and society, sustainability measures correlate with financial performance, our research shows.
  • We found connections between sustainability and business results in the areas of sustainable supply chain, renewable energy, employee satisfaction, and DEI.
  • By making three no-regrets moves, companies and private equity funds can realize financial returns while accelerating their ESG transition.

April 10, 2023
I was recently asked to talk to the Investment New regarding how we use ESG investing with clients.  The resulting piece "ESG in advisor's own words." was recently published.  I think the general trend in the article was that clients come first and understanding their needs and desires in paramount in good planning.

March 15, 2023
For those of you who really want to understand how ESG is changing over time, I find one of the best indicators is the Proxies that are filed with public companies each year.  And every year As You Sow, the Sustainable Investments Institute (Si2), and Proxy Impact put together their Proxy Preview.  Per their description, the report compiles data on hundreds of shareholder resolutions — including on climate change, racial justice, corporate political spending and lobbying, human rights, diversity, fair pay and working conditions, reproductive rights, big tech disinformation, sustainable governance, and much more. More than 500 resolutions reflect a wide range of shareholder voices. Over 30 guest authors provide analysis and expert insight to help you navigate the issues and successfully vote your shares.  This year's report will be released on March 22nd.


March 14, 2023
There is a lot going on in the ESG space with a bill that is probably going to be vetoed by President Biden that would bar ESG investing in certain types of retirement plans.  The New York Times just dropped a podcast that discusses some of ESG's history and how we got to this point in the political discussion.  I think it's pretty balanced but one comment is that it talks about ESG as being a philosophy, but for many investors it can be more of a methodology and very scientific and not just based on values.

January 23, 2023
Many investors find the E and G in ESG to be fairly straightforward.   E is for Environment and looks at a company's environmental track record and ongoing plans.  Governance is looking at management and how the company is run.  Social tends to be more vague.  Sustainability looks into it in their article "An Expert Takes a Closer Look At The Meaning of 'S' In 'ESG'." Based in a Q&A format, it's a quick read on some things that money managers look at as far as the social aspects of ESG.

December 13, 2022
The USSIF released their 2022 Report on US Sustainable Income Trends today.  The full report is only for members, but some trends include:

  • Climate Change/Emissions being the top concern of ESG managers.
  • Community Investing had some of the fastest growth.
  • ESG managed assets are down in some areas.  I think a lot has to do with SEC rules trying to reduce greenwashing.
  • The leading issue in Shareholder Advocacy was corporate political activity.

November 22, 2022
Sometimes democracy is not neat.  The US Department of Labor just released their rules removing barriersof having ESG investments inside retirement plans.  Under Obama some preliminary rules were put into motion allowing such investing, but under Trump the rules were reversed.  The new rules are the most clear to date and  "allows plan fiduciaries to consider climate change and other environmental, social and governance factors when they select retirement investments and exercise shareholder rights, such as proxy voting."

November 7, 2022
There has been a lot of pushback against ESG investing recently by certain states and political figures.  While I think much of it is fearmongering, as with most arguments there have been some decent points hidden in the rhetoric.  Morningstar just came out with their article "10 Reasons ESG Won't Be Stopped" which addresses some of the concerns about ESG and counters with some of the reasons it's here to stay.

October 20, 2022
While this blog is about ESG/SRI investing, our other focuses in Legacy Planning are multi-generational wealth management and philanthropic planning.  One can make a huge impact when two or more of these can be used together.  That is why I found the October 18th edition of the Green Money Journal to be so interesting with its focus on "Impact Investing and Philanthropy."  Articles include some leaders in the field discussing what works for them and how they are trying to make the world a better place.

September 15, 2022
The battle between ESG providers and certain states and cities is heating up.  The governments argue that their investments and the companies that provide them with investment services should stay out of politics and just focus on the best returning assets.  Managers counter that using an ESG model can help decide which investments will do best long term.  A brief summary of the argument can be foundhere.  While some ESG investors have a political motive, I think most of the political theater is being done by the elected officials.  But like everything else, ESG has its limitations and understanding them can help you make wiser investment decisions.

August 17, 2022
There has been a concerted effort by a small group of business groups and politicians to attack ESG investing.  While I have said many times below, it's not on it's own going to save the world, there have been many potential benefits over the years for taking an ESG approach to investing.  To counter some of these claims US SIF just launched  No scare tactics.  Just facts.

August 17, 2022
The president recently signed the Inflation Reduction Act.  While I'm not sure how much it will impact inflation, that is not the topic for this blog.  It is the first major national environmental law to pass since 1990 and the first to really focus on climate change.   About $370 Billion will be spent towards lowering carbon emissions, mostly paid for by reduction in drug costs by allowing medicare to negotiate with drug manufacturers.  Most experts I've read believe that the act will seriously reduce emissions and get us close to our pledge to the Paris Agreement.  As with every compromise bill, though, there are some benefits in the law for carbon producers.  As with every piece of legislation there will be winners and losers both in life and in the markets.  Let me know if you want to discuss further.

August 5, 2022
I was thrilled today to get a copy of Climate Action Santa Monica's newsletter which discussed putting solar panels on multi-unit buildings.  They featured a story about me putting in solar in my townhouse in 2009.  Despite misspelling my name, I hope the article encourages others to go solar.

June 25, 2022
Today, the SEC announced two proposed rules that directly impact ESG and SRI investing. The proposals would:

  1. Amend rules and reporting forms concerning funds’ and advisers’ incorporation of environmental, social, and governance (ESG) factors in prospectuses, annual reports and advisor brochures. The intent is to promote consistent, comparable, and reliable information for investors; and   
  2. Propose amendments to the Investment Company Act “Names Rule” to expand the requirements of the 80% rule and add new enhanced disclosure and reporting requirements.

The proposals have  a 60-day comment period before they go into effect and might be changed.  Basically this rule is to stop greenwashing.  In past entries I've discussed how many funds are ESG in name only and these rules will hopefully counteract this practice.

June 10, 2022
I just got back from the US SIF's (US Social Investment Forum) three day annual conference.  I've been trying to go for years, and this was the first time it didn't conflict with something else in my calendar.  Most imporessive was the amount of smart people looking for unquie ways to use investments to make the world a better place.  The conversations at the meals and other breaks got into some deep discussions on subjects such as how do we define impact, what resources advisors use and the best ways to understand clients' underlying goals.  The conference had dozens of speakers such as elected officials, an SEC chair and leaders in teh sapce.  The full agenda can be found here.  Let me know if you want to discuss details.

May 18, 2022
Tesla was removed from S&P 500 ESG Index today "because of issues including claims of racial discrimination and crashes linked to its autopilot vehicle."  Many investors love their holdings in Tesla.  While the stock price has floundered lately, it has produced above-average long-term returns and they are helping lead the charge against fossil fuels.  So what is an ESG investor to do?  I believe this is very much a personal choice.  Many of our clients come to us because their main concern is the environment and in that case Tesla might be a good fit depending on other investment objectives.  On the other hand many of our clients come to us looking for companies that are doing the right thing ovreall and who are looking long term.  For those people these issues might steer them away from any investment in Tesla as it might lead to more systematic risk.

April 29, 2022
ESG/Socially responsible investing is ideal for many clients, but of no interest to others.  I recently talked to a reporter from Investors Business Daily about how I the balance the clients' desires and how to make sure they know that we work for them and create portfolios to reach their goals and not ours.   While almost all of my portfolio has an ESG component, all my clients have different values, goals and objectives than I do.  You can find the article here:"How Advisors Weave Socially Responsible Messaging Into Their Brand"

March 17, 2022
Many states (including California) have used their investment power to cause cahnge and will often avoid investing in certain industries that they believe are against the long term benefit of their citizens and retirees.  But with every action there tends to be a reaction.  Texas is looking to bar further investments with companies that do not invest in fossil fuels.  They are currently in the process of creating a list of companies that the state cannot use as investment advisors.  There are tons of articles dscussing both sides but the NPR "Texas and other states want to punish fossil fuel divestment" gives a good summary.

March 17, 2022
While ESG/SRI investing isn't for everyone, I do get asked if investing in this way can really make a difference.  Wile there are a lot of reasons that investing in or avoiding certain business can change the wrold, the most obvious method to make a difference is through proxy voting.  Proxy Preview had their annual webinar today discussing the types of issues that are being proposed to corporate boards and how that has changed over time.  I find the presentation to be an intersting look at the priorities of both ESG managers and activist investors.  The written report can be found here.

March 8, 2022
Forbes just published their article "Foundations Begin to Embrace ESG" .  For those who know our practice, it is about creating a legacy for our clients and two of the three legacy stools we believe are philanthropy and matching your values to your investment portfolio.  The article discusses a little of the history of how foundations have tradtiionally not used ESG critieria and how that is changing.  While the strategies are not right for every non profit, I think it's a good quick read for any board member who wants to put intention behind their board service.

January 12, 2022
ESG and SRI investing can be very difficult at times.  There is a lot of greenwashing out there.  Different companies report in different ways.  Some issues are more important to certain investors than others.  And of course it's a very political issue in some circles.  The Trump admisistration actively made ESG investing harder for most individuals with limits in certain areas and by slowing down standards that could make comparisons easier.  But, there are a lot of changes afoot.  A good summary was put out recently by The Investment News.  Some of the highlights including new rules on how funds can name and describe themselves, regulations requiring companies to disclose climate risks, and how ESG factors can be used in retirement accounts.

January 5, 2022
Green Money Journal is celelbrating their 200th issue.  Their are articles looking back on their 150th issue, Sustainable Oceans, Investing in Women and others.  If you want to konw the current state of socially responsible investing and current trends, always a good read. 

December 29, 2021
I just finished reading MSCI's "2022 ESG Trends to Watch".  The trends are divided into three big categories: 1) Climate as first among equals - discussing how most ESG followers find E, S and G to be important but E, environment is getting the most attention.  2) The mainstreaming of ESG - this is mostly about how the standards being used are more consistent and easier for investors to follow.  3) Emerging Risks and Opportunities - where some future standards might help and some ongoing problems that might slow us all down. 

November 18, 2021
With the recent superior performance of ESG Investing (this too can change), there is a constant stream of new ESG funds.  Mitchell was quoted throughout the Wall Street Journal article "'Climate Funds': Who's Driving The Increased Demand"  Remember that a lot of these companies are coming out with funds because they're hot right now and not because they care about Climate Change.  Many funds only put climate factors as a small part of their weightings on how to pick underlying investments.  Ask questions before feeling good investing in a fund because it says it is good for the planet.

October 20, 2021
I was recently featured in MoneyGeek's Article "Eco-Friendly Guide to Finance and Savings".  Look for me towards the end in the section "Experts Discuss Green Finance."

October 14, 2021
There has been a back-and-forth over the last few administrations over the use of ESG metrics in ERISA/Retirement plans.  Traditionally the fiduciary standard only allowed for what was thought to be the best performing funds.  The Obama administration made it easier for ESG factors to be involved when deciding fund assets.  To no surprise, the Trump administration started to unwind this rules and made it harder to put ESG funds in a business' retirement plan.  The Biden administration is now working to allow ESG factors again to be considered when picking an investments.  The information is still being sorted out but some information can be foundhere.

September 29, 2021
We recently renewed our Santa Monica Green Business Certification.  It's been an honor to have been certified as a green business since 2013.  The process helps us look at everything we do and bring outside resources to improve our sustainability.  You can see their writeup here of Capital Intelligence and the moves they help us make.

September 13, 2021
There is a great disconnect between how advisors and clients look at ESG investing.  Studies show that most advisors do not understand it well either.  A great summary of some recent polling can be found in the article, "Financial advisors hone their focus on ESG Strategies.".  The truth is that matching your values to your investments isn't as easy as picking a fund that says it's "green" or "ESG."  Look for some quotes from me at the end of the article.

September 10, 2021
The Wall Street Journal had a great article this week "Funds Go Green, but Sometimes In Name Only."  It's one of the constant reminders that matching your values to your investment portfolio is not as easy as picking a fund that says it's green or ESG.    Make sure you ask good questions before investing in any fund.

August 19, 2021
Lots of talk out there about the circular economy.  Per Wikipedia "circular economy (also referred to as "circularity") is an economic system that tackles global challenges like climate change, biodiversity loss, waste, and pollution."  This is as opposed to a linear economy where everything is used once. has a few new videos explaining how the circular economy might work and how to get there.  

August 2, 2021
What is a sustainable investment?  That is a question I often ask myself.  To be sure, to different people it means different things.   Everyone has different priorities that they feel are most important, whether it's stewardship of the environment, good governance or countless other categories.  Most investment managers rely on some sort of ratings system (internal or external) to decide which investments make the most sense.  These ratings are usually made up of hard data such as carbon output or the number of women in leadership positions, and soft data, often made up of what the company says it is trying to do.  Of course all these systems are made by people and have their flaws.  But as ESG investing goes more mainstream these systems are changing too.   I was just referred to a very interesting read "Digging Into ESG Data: Exploring how sustainability ratings and rankings are evolving.

July 5, 2021
AARP's magazine recently ran a very comprehensive piece called "What You Need to Know About Climate Change: How it's already affecting your health, home and safety - and what you can do about it."  It's a pretty comprehensive article discussing finance, health, etc.  You can find me mentioned under the "Your Finances" section.

June 2, 2021
In the spirt of my update from a couple of days ago, I just ran across this paper "How to Avoid Greenwashing When Choosing ESG Investments." The main point is do not trust that a fund is ESG just because it says it is.

May 29, 2021
Clients often think picking a fund that matches their values is easy.  There are hundreds of funds now that are labeled as "ESG", "SRI" or "Responsible."  I often get calls from wholesalers who know that I have my CSRIC designation to tout their newest ESG option.  The first question I always ask is "how do you vote your proxies?"  While many of these funds will try to buy the companies that rate the best from some service on Environmental, Social and/or Governance issues, the true leaders in this field will vote the proxies to support those issues in the companies they own.  The answer I get from most wholesalers (after "I'll get back to you because I'm not sure") is that they vote inline with all their other funds and do not take the ESG focus of the particular fund in mind.  The best example we've seen on the importance of proxy voting is the recent election to the board of ExxonMobil of two individuals who got elected to fight climate change from one of the world's largest greenhouse gas producers.  There are many articles that discuss it, but for a good summary try this one from the WSJ.

May 26, 2021
Along with several other advisors, I was quoted in the AdvisorNews article "Advisors Are Helping Clients Go Green."

May 10, 2021
ESG inside retirement plans has always been controversial.  A recent survey shows that only 0.03% of all retirement plan assets are in ESG investments.  Harvard Law Review has a great review on the history of why ESG has been difficult in the name of protecting workers and how the logic used might be backwards and hurt workers in plans.  "Rethinking Retirement Savings" is a quick read but well worth it.

April 7, 2021
As I've said many times below the Green Money Journal is a must read for those who are interested in ESG investing.  This month's journal focus is on "Women and Investing."  Per their teaser:

According to a McKinsey & Co. survey, women will control $30 trillion in financial assets by 2030. With that transformative information in mind, this month we feature six female leaders, each with unique financial insights – Theresa Gusman of First Affirmative; Malaika Maphalala of Natural Investments; Catherine Berman of CNote; Vicki Benjamin of Karner Blue Capital; as well as Claire Smith of Beyond Investing; and Jessica Robinson, author of the new book, Financial Feminism. Also, we have a special video on Women's Leadership and the Rise of Investing for Impact.

Some very interesting reads.

March 15, 2021 
One of the biggest problem we have trying to match values to investments is there are no real standards on what a green investment is, or a standardized definition on how to figure out which companies are ESG leaders.  Because of that many investments are labeled as green or ESG but do not match what many people would consider to be either green or ESG friendly.  The EU has recently started to require funds in their countries that claim to be green to meet certain standards.  Many US firms will fall under these regulations and with the infrastructure in place, there is talk about requiring US Firms to do the same soon.

Two articles in the Wall Street Journal I think that are helpful in understanding what is happening in the EU and how it might effect the US are "EU to Make Fund Managers Back Up Sustainability Claims" and "The Green Investing Standard That Could Set the Global Bar

February 22, 2021 
For most of you who read this blog, you'll understand that I like studies of studies.  Over the last several years I've mentioned several of these studies that show that ESG investing can produce positive returns.  the NYU Stern school recently published a report to see if the results held up 5 years after the last major mega study.  The article can be found here: ESG and Financial Performance - NYU Stern

The key findings:

1. Improved financial performance due to ESG becomes more noticeable over longer time horizons

We found that our proxy for an implied long-term relationship had a coefficient with a positive sign that is statistically significant. The model suggests that, everything else being constant, a study with an implied long-term focus is 76% more likely to find a positive or neutral result.

2. ESG integration as an investment strategy performs better than negative screening approaches

The sample size of studies on specific portfolio management strategies and asset classes was small, making it challenging to interpret how they would translate into decision-making for an asset manager. The dominant research approach was to find a sample of sustainable funds or indices and compare them to a conventional benchmark.

3. ESG investing provides downside protection, especially during a social or economic crisis

ESG investing appears to provide asymmetric benefits. Investor studies, in particular, seem to demonstrate a strong correlation between lower risk related to sustainability and better financial performance. Recent events have provided unique datasets for researchers.

4. Sustainability initiatives at corporations appear to drive better financial performance due to mediating factors such as improved risk management and more innovation

Sustainability strategies implemented at the corporate level can drive better financial performance through mediating factors—i.e. the sustainability drivers of better financial performance such as more innovation, higher operational efficiency, better risk management, and others, as defined in the Return on Sustainability Investment (ROSI) framework (Atz et al., 2019).

5. Studies indicate that managing for a low carbon future improves financial performance

Research on mitigating climate change through decarbonization strategies is fairly recent, but finds strong evidence for better financial performance for both corporates and investors.

6. ESG disclosure on its own does not drive financial performance

Just 26% of studies that focused on disclosure alone found a positive correlation with financial performance compared to 53% for performance-based ESG measures (e.g. assessing a firm’s performance on issues such as greenhouse gas emission reductions). This result holds in a regression analysis that controls for several factors simultaneously.

January 22, 2021 
In the last couple months leading up to inauguration day there have been a lot of discussions about moves the Biden administration will take to undo many of the Trump initiatives the last four years including re-entering the Paris Climate Accord, oil and gas drilling, and diversity, equity and inclusion.  While many of these moves are to under the belief of creating a better society, they tangentially effect ESG investing.  The most direct rule, though was one affecting ESG investing in retirement plans.  The best article I've seen discussing the rule's history and how it might change was this one from Bloomberg. "Biden Administration Considers Reversing Trump’s ESG Rule Change."

January 11, 2021 
In mid-2020, Blackrock surveyed their clients to better understand their drivers and challenges to sustainable investing, how the pandemic has affected their implementation, and how innovation can spur adoption.  They got responses from 425 investors in 27 countries representing as estimated U.S. $25 trillion in assets under management.  While the resulting report has a lot of interesting data, I think the title really says all that needs to be said: "Sustainability goes mainstream."

December 1, 2020 
Measurabl just ran a piece titled "Investors are Driving the Demand for Greater ESG Disclosure."  The piece talks about how the pandemic has changed some people's views on real estate and ways to look at ESG investing.  Mitchell is quoted throughout the article.

November 20, 2020 
Every two years US SIF, The Forum for Sustainable and Responsible Investing who is the largest trade group for ESG/SRI investing releases their Report on US Sustainable and Impact Investing Trends.  First published in 1995, the biennial Trends report provides extensive data on the numbers of institutional asset owners, money management firms and investment vehicles using sustainable investment strategies. It also distills the range of significant environmental, social and governance (ESG) issues that investors consider.

The report is for sale for $250 for non members on their website, but the executive summary is available for free.  The opening paragraph states:

"Sustainable investing in the United States continues to expand at a healthy pace. The total US-domiciled assets under management using sustainable investing strategies grew from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020, an increase of 42 percent. This represents 33 percent, or one in three dollars, of the $51.4 trillion in total US assets under professional management."

The rest gets interesting on how investors have changed and how specific ESG and SRI areas are trending.

November 11, 2020 
I was quoted in the CNBC article "How advisors figure out which ESG funds are a good fit for socially conscious clients and their portfolios." You'll find what I have to say from the 2nd paragraph to the last one.  The key takeaways:

  • Investing sustainably is a personal experience, and there are multiple strategies under the sustainable-investing umbrella.
  • Advisors can start by asking clients what sustainable investing means — and what’s most important — to them.
  • Some investors see such investing as not only ethical but an exercise in risk-mitigation, avoiding poor corporate actors and other risks.

October 23, 2020 
Most people know that 5G is much faster and individuals can download more on their phone faster.  Others realize it is a game changer as far as the internet of everything and in autonomous vehicles.  What few understand is how much more energy efficient 5G is and how it's part of the plan for many telecon companies to go carbon neutral.  S&P Global just ran a story regarding this and quoted me towards the end regarding sustainability and corporations.  "New tech, 5G push US telcos toward carbon neutral future."

September 29, 2020 
A lot of times I see big companies flaunt their size in order to get away with things that smaller companies would not do.  But occasionally they can use their size and expertise to help with ESG issues.  The Wall Street Journal ran a story today entitled "Blackstone Sets Goal to Reduce Carbon Emissions."   For those who are not familiar with Blackstone, they are one of the largest real estate owners in the world.  The article discusses how the "firm seeks to cut emissions by 15% on new investments across its portfolio."  The article goes into how they have experience using some of their partnerships to buy real estate and reduce the properties' emissions.  This is both good for the environment and helps them create a better bottom line.

August 11, 2020 
The trend for many investors nowadays is passive/index investing.  While I can spend all day talking about the positive and negative attributes of investing in an index, this is not the place to have that discussion.  Until relatively recently ESG/SRI investing and Passive/Index investing were pretty much mutually exclusive besides a couple of notable exceptions.  But with the rise of index investing there has been a rise in ESG investing and a rise of ESG Index Investing.  US SIF has recently published "The Rise of ESG in Passive Investments" which gives a history of the concept and then goes into some of the reasons to and critiques against this manner to invest.  The publication is available on the US SIF website in the ‘Research & Publications’ section.

July 27, 2020 
In this blog, I often talk about The Forum For Sustainable and Responsible Investing (US SIF).   Besides being a member and relying on their research, I have taken their introductory Fundamentals of Sutainable and Impact Investment course and the CSRIC was developed through their partnership with the College For Financial Planning.  Now they are offering  Sustainable Investing: An Introductory Course for Individual Investors.   I have not taken the class, but it includes:

  • A brief overview of the development of sustainable investing
  • A summary of the investment options and strategies available
  • Links to additional resources and ideas for actions individuals can take right away

June 24, 2020 
I'm often asked by clients why they should look at ESG/SRI investing.  They understand that they can use it to vote with their wallet, but wonder if they are better off just investing as they had in the past and donating to causes they care about.  I think a good read to answer that question is McKinsey & Company's report "Five Ways that ESG Creates Value." As MKenzie, does they give some very clear examples and things to look at in a company besides the traditional bottom line.

June 9, 2020 
As I've mentioned several times in this blog, ESG investing is not easy.  There are almost always trade offs.  The January 16th entry talked about BlackRock announced that an ESG lens would be used for all future investment decisions.  But as part of the Federal Reserve's asset buying program because of Covid, these steps aren't always as straightforward as they should be.  I was quoted in BNN's article titled "BlackRock's Green Dreams Got Complicated Fast."

April 28, 2020 
Reuters just released their whitepaper "The Evolution of ESG: Pre, During and Post Coronavirus." A few highlights:

  • Jamie Smith, corporate governance specialist at EY’s Americas Center for Board Matters Investor Outreach, says that investors are particularly interested “in how companies are addressing ESG matters to build resiliency amid continued disruption, accelerating climate risk and other trends shaping the global business landscape. They also want to better understand how boards are evolving their practices to strengthen board composition, enhance perspective and better navigate rapidly evolving risks.”
    The reason for this is that companies that are managing these issues well tend to perform better financially, be more resilient and have higher valuations.
  • Index provider MSCI adds that ESG indexes have outperformed their benchmarks since the start of the year and that companies with high ESG scores have a lower cost of capital, and above-market valuations and profitability
  • Consideration of sustainability has moved from a niche market of religious and socially responsible investors that were values driven to a situation where all the big investment firms have some kind of ESG products in their portfolios.

April 16, 2020 
This month, GreenMoneyJournal has two April editions, both on Women and investing.  I think the highlight was a quote from Sallie Krawcheck, CEO of Ellevest, who stated
"Now more than ever, in this time of market volatility and economic uncertainty, there’s a real opportunity to make the world a better place by aligning our money with our values. And that starts with investing in women — and the companies that support them.”

March 5, 2020 
At the grocery store it's hard to tell if items are really green or they are being greenwashed by companies who know that certain consumers want to make green buying decisions.  The same is true when looking at Socially Responsible Funds as there have been very few regulations on what makes a fund green, socially responsible or ESG.  The SEC is starting to look into this and is currently in the comment period.  Some good background information can be found in the Bloomberg story "ESG funds might soon have to prove to SEC they’re actually ESG"

February 23, 2020 
Morningstar recently released their "2019 ESG Proxy Voting Trends".  It looks into the top 50 mutual fund companies and how they voted in company proxies in Environment, Social and Governance Issues.  While many funds claim to be ESG oriented because they screen for certain criteria such as a company's carbon footprint or the diversity of their board, many of those funds' votes do not match the criteria that they pick the funds with.  That being said, over the last five years the 50 biggest fund companies have increased their support of these issues from 27% up to 46%.  But while there has been an increase the study concludes that "Large fund groups voting against ESG-related shareholder resolutions kept many of these initiatives from achieving majority support. Nineteen of 23 resolutions earning more than 40% support would have passed if supported by just one of the largest two asset managers."

January 16, 2020 
This week, Blackrock,
the world’s largest asset manager (with almost US7 trillion in Assets Under Management) published their annual letter to corporate chief executive officers by Larry Fink, their Chair and CEO.  The opening paragraph ends with "the money we manage is not our own. It belongs to people in dozens of countries trying to finance long-term goals like retirement. And we have a deep responsibility to these institutions and individuals – who are shareholders in your company and thousands of others – to promote long-term value."  

The headline statement was the next line: "Climate change has become a defining factor in companies’ long-term prospects."  The letter goes on to talk about how ESG is important in every investment decision and "Ultimately, purpose is the engine of long-term profitability."  This is a very different approach from traditional money managers and signals in my opinion the mainstream acknowledgment that ESG factors play an important part in long-term investment strategies.

January 10, 2020 
We often work with clients to match their values to their portfolio, but often there are investments that our client's have little control over such as their 401k plan.  When our client is the business owner, it's relatively easy to add some ESG or SRI funds, but of the rest of our clients, there is little we can do.  The New York Times just published an article "How to Get Socially Conscious Funds Into Your 401(k)".  The short story is it takes some work.  But at the end of the day, most of the time, it does not cost the employer much if anything to add some SRI funds and they find the payoff relatively quickly in happier employees.

December 9, 2019 
Harvard Business Review along with UBS published the article "
Is Sustainable Investing Moving Into the Mainstream?"  A few highlights:

December 2, 2019 
December's Green Money Journal is now online.  This month theyare focused on the outlook for ESG and SRI investing in the future.  They include articles such as 
Sustainable Investing: The Enduring Revolution, Positive Impact Bonds Build on Strong Foundations, and The New Capitalism with Patagonia founder Yvon Chouinard.

November 25, 2019 
Business Insider just summarized Bank of America's paper on why investors and more importantly companies should care about ESG.  The article, "
BANK OF AMERICA: These are the top 10 reasons investors and companies should care about ESG investing", goes over issues like ESG can genearate alpha, happy employees equal better returns and Companies with higher ESG scores have access to cheaper capital.

November 18, 2019 
Years ago ESG was a niche market play.  But as studies have come out showing that integrating ESG into portfolio management can potentially help increase returns, it has become more mainstream.  Ethical Corporation has their new 16 page report from some of the top investment companies showing how these changes are taking place.   Some key learnings include:

  • The changing expectations of business: Larry Fink, CEO, Blackrock
  • ESG as a guide to the movement of capital with State Street Global Advisors
  • Extreme weather spurring companies and investors to act: Governor of the Bank of England
  • Defining your transition and physical financial risks
  • Adapt or die: Coalition for Climate Resilient Investment

September 26, 2019 
Just reviewed an article in the Wall Street Journal, entitled "Small ESG Investors Punch Above Their Weight." It discusses how a few ESG focused funds do most of the work getting ESG issues onto company proxies and trying to change corporate policies.  A couple key takeaways:

  • "When it comes to voting the proxies on ESG proposals, these [Small ESG Firm] investors have a much better record compared with the ESG-focused funds at bigger asset management firms, which often cast votes that conflict with their sustainability mandate."
  • "While the large asset managers say they don’t file resolutions on ESG issues or any other topic, they aren’t sitting on the sidelines, either. The firms say they engage directly with management and boards to press them on ESG issues. Direct engagement gives a company a better understanding of the risks and helps it create pathways to address these issues, they say."

August 22, 2019 
For as long as I remember, businesses would defend shady practices with the concept that their only job was to "Maximize Shareholder Value."  In other words, if it was profitable then they did not need to worry about any effects their actions might have to its employees, community, etc.  Well, the Business Roundtable, which is made up of CEO's of some of our country's biggest companies just released their updated "Statement on the Purpose of a Corporation" and it differs greatly from their 1997 version that simply stated "The paramount duty of management and of boards of directors is to the corporation’s stockholders." This is the same group that has for decades have fought any attempt to hold corporations accountable for their actions.  Here is the begging of their new statement:

"Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.

"Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth."

There is a lot of coverage on this and I suggest you do a search to really see what the impact is (or of course reach out to me).

August 7, 2019 
I always find it interesting to see what different industries consider to be sustainable. AdWeek had an article "The Five Truths Needed to Create a Sustainable Brand".  I think the main points are true with any business plan such as the need for clarity, many changes require small steps, and get help if you need it, but the details are important to have a brand that people trust.  There is a lot of greenwashing out there so this is also a good test for consumers looking at brands to see if they are doing the right thing.

July 30, 2019 
Just saw a preview of GreenMoney's August issue titled Sustainable Buildings and Energy.  Having a LEED Certified Architect as a wife, and listening to what she does every day, I find it fascinating to read these articles and see some of the intersections of our careers.

May 21, 2019
I was quoted in a recent CNBC article entitled "What you need to know before you put money in ‘do good’ investments."  It's a good primer for anyone who is looking to start in ESG/SRI investing and do not know the questions to ask.

May 20, 2019
The Governance & Accounting Institute, Inc. just reported that eighty-six percent (86%) of the companies in the S&P 500 Index® published sustainability or corporate responsibility reports in the year 2018.  This is up from just under 20% in 2011 and up a little from last year.  While of course there is green washing going on the fact that this many companies are willing to give a report and  a point for comparison for future years is important.  A link to the full report can be found here:

May 2, 2019
US-SIF just released their guide, Moving Forward with Sustainable Investing: A Roadmap for Asset Owners.  It is designed for institutional investors, but I think the thought process can translate to any interested individual.  There synopsis:

This comprehensive guide can help institutional asset owners get started in sustainable investing or enhance their current level of sustainable investing practice. It is relevant for retirement plans, corporations, educational institutions, philanthropic foundations, family offices, nonprofit organizations and other asset owners. It explains the basics of sustainable investing and includes a series of steps asset owners can take to move forward. Included as well are case studies of three institutions—a public retirement system, a philanthropic foundation and a family office—with rigorous sustainable investment approaches.

April 16, 2019
's GreenMoney Journal is focused on "Women and SRI Investing."  While there are many different points of view, I think some overall themes are how Women look at ESG/SRI issues differently than men and how to make sure your values are expressed in your portfolio.  We have found that more of our women clients are interested in adding an ESG filter to their portfolio.

March 28, 2019
This month's GreenMoney is all about Foundations and SRI.  While we do some investing for foundations, most of our work revolves around investing for individuals.  I believe the articles on incorporating SRI and some facts about impact investing is good for any investor wanting to invest with their values in mind.  Some of the investment making decisions are different but the principals remain true.

March 22, 2019
Mitchell was featured in two articles about ESG investing.  The cover article "ESG options scarce in 401(k) plans" discusses why ESG funds are rare in 401(k) Plans and some things employers and advisors can do to change that.  The second "Lipper plans ESG scoring system for mutual funds" discusses the increased appeal of sustainable investing and the plusses and minuses of ESG scoring systems.  It is important to remember that the ESG ratings are based on one company's decision on what is important to them in sustainability. I find each client has different values and it is important to take the ratings with a grain of salt.

February 28, 2019
As You Sow's annual Proxy Preview 2019 is launching next month. They tout themselves as providing the most comprehensive data on hundreds of shareholder resolutions — including environmentalcorporate political spending, human rightsdiversitysustainable governance issues, and much more. Over 30 guest authors provide analysis and expert insight to help you navigate the issues and successfully vote your shares.  While I don't advice my clients on how to vote their proxies, I'll often lead them to this report to get better insight.     The webinar that highlights the findings is on March 13th and the report is usually released the same day.

February 22, 2019
Morgan Stanley just posted an article entitled "Asset Managers See Opportunity in Sustainable Investing."  They start with a few very simple graphs on how the industry is changed and how various asset managers are changing to keep up.  The full report is much more complex and detailed but the initial page can give a lot of info in a short period of time.

February 5, 2019
This month's Green Money Journal is all written by millennials.  It's a great insight into the thought process of that generation.  I think the most interesting wsa the article titled "How Exxon Taught Me That Shareholders Can Change The World."

January 22, 2019
Lisa Woll from US-SIF was on the Marketplace Morning Report (my favorite business show) this morning discussing the basics of ESG investing..  It is about 5 1/2 minutes in. On a related note, she'll be on the PBS television show "Wealthtrack” this Friday.

October 5, 2018
Last week US-SIF released their "2018 BIENNIAL REPORT ON US SUSTAINABLE, RESPONSIBLE AND IMPACT INVESTING TRENDS."  I find the report gives me great insight on trends that I'm not yet seeing and ways that the industry is changing.  While the report is a little long for a non-ESG geek like myself, here are a few of the highlights:

  • Sustainable, responsible and impact investing (SRI) assets have expanded to $12.0 trillion in the United States, up 38 percent from $8.7 trillion in 2016.
  • Much of this growth is driven by asset managers, who now consider environmental, social or corporate governance (ESG) criteria across $11.6 trillion in assets, up 44 percent from $8.1 trillion in 2016.
  • The top three issues for asset managers and their institutional investor clients are climate change/carbon, tobacco and conflict risk.
  • From 2016 through the first half of 2018, 165 institutional investors and 54 investment managers controlling $1.8 trillion in assets under management (AUM) filed or co-filed shareholder resolutions on ESG issues.

October 31, 2018
One of the biggest issues my clients are concerned about is Climate Change.  We have many ways we work with them in order to have their portfolio match their values.  Often it is excluding the big oil producers and sometimes it's just picking the ones we think are doing the best to head their corporation to a non-carbon future.  The Union of Concerned Scientists just had their latest report on 8 major fossil fuel creators and how they've done to realize that things much change.  "THE CLIMATE ACCOUNTABILITY SCORECARD (2018)" compares these companies on 28 metrics to see how they've progressed over time.  While not a reason alone to buy or not to buy any of these firms, I find it interesting to look for trends, the sad truth is that it doesn't look like things are getting better yet.

October 18, 2018
The article is a little old, but I was just referred to it. Many old school managers will tell you that putting ESG criteria into the investment process can only hurt returns as you limit the choice of investments.  But more recent studies have shown that ESG investing can increase return and/or reduce risk.   "THE FINANCIAL PERFORMANCE OF SUSTAINABILITY: ESG AND RISK" gives a nice brief summary of some of these research reports with links to read more about how ESG can help in portfolio building.

October 16, 2018
With the Intergovernmental Panel on Climate Change (IPCC) report about a week and a half ago, explaining the risks if we do nothing about climate change in the next dozen years, I've had many discussions with clients and friends on what can an individual do to make a difference.   While the discussion can get long and go in many directions, I think one of the most succinct arguments about what one group is doing comes from Calvert.  No individual or company can tackle these problems alone, but I think their piece "WHAT INVESTORS CAN DO IN THE WAKE OF IPCC CLIMATE CHANGE REPORT" goes over some of the steps anybody can take and the mindset one must take to make a difference.

September 18, 2018
There are many companies that provide ESG ratings for companies which allows for money managers and individuals to quickly and cheaply create a portfolio of highly ranked companies.  Most people would argue that this is a simple way to get the best-in-class companies without too much research and work.  But, the rating systems aren't always as straightforward and simple as they seem.  In today's Wall Street Journal article "IS TESLA OR EXXON MORE SUSTAINABLE? IT DEPENDS WHOM YOU ASK" James Mackintosh goes over some of the quirky ratings that companies are given.

The caption under the photo reads "Electric-car maker Tesla is ranked at the top of its industry by one firm that grades environmental, social and governance practices. But another grader puts Tesla at the bottom. "  Later on he writes "The problem here isn’t the ESG ratings, but that they are used as though they were some sort of objective truth. In reality they are no more than a series of judgments by the scoring companies about what matters – and investors who blindly follow their scores are buying into those opinions, mostly without even knowing what they are."

We discuss two main points with clients.  First that there is always give and take.  None of these companies are perfect and very few don't do at least some things well.  Second, spending the time to understand the issues that are most important to you can help us find the companies that best match your values.

September 12, 2018
Newsweek just published a full report entitled "GOING MAINSTREAM: THE FUTURE OF ESG INVESTING".  There are many articles in the report, but below is the start of the executive summary:

"Over the past decade, a quiet revolution has been taking place in the world of investment; now, Environmental, Social and Governance (ESG) investing is going mainstream. At the end of 2016 around a quarter of all professionally managed assets were under ESG investment strategies and our research suggests that figure is only going to grow.

"Though responsible investing has been gathering momentum since the financial crisis in 2008, two landmark accords marked a turning point for the movement: the signing by world leaders of the UN Sustainable Development Goals (SDGs) in September 2015, followed by the Paris Climate Agreement later that year. These ambitious charters that aim to tackle humanity’s most pressing concerns – among them climate change, acute hunger and poverty -- require investments of upwards of USD 7 trn per year (or twice the US Federal Budget) – mostly in developing countries.

"Increasingly, and encouragingly, private finance is stepping up. In the period following the adoption of these agreements the volume of assets covered by the Principles of Responsible Investment (PRI) expanded by 40%. Institutional investors – among them the world’s leading sovereign wealth funds, pension funds and insurance companies – are boosting their ESG- focused investments. Philanthropic foundations are now linking their investments to the SDGs, and in the US, while the current administration has pulled out of the Paris Agreement, close to 2,000 investors and companies have said ‘We’re still in’."

September 1, 2018
Finished skimming The U.S. Government Accountability Office 63 page study on "RETIREMENT PLAN INVESTING: CLEARER INFORMATION ON CONSIDERATION OF ENVIRONMENTAL SOCIAL AND GOVERNANCE FACTORS WOULD BE HELPFUL"  The paper focuses on how some plans are using ESG factors in the US, now those plans compare to those in other countries and what would be helpful to allow more plans to use these tools to help their participants. 

August 9, 2018
The current edition of GreenMoney celebrates their 25th year by publishing their "BEST ARTICLES ISSUE – 25 YEARS IN THE MAKING".  They narrow down the hundreds of articles over the years to what they think is their most impactful 15.  What I noticed is that most of the articles are within the last few years.  I believe that this space is changing so quickly that what was cutting edge a few years ago has already been built upon and improved.  To me the article "THE RESILIENT INVESTOR: A PLAN FOR YOUR LIFE, NOT JUST YOUR MONEY" resonates the most as it mirrors a lot of the issues we discuss with our client.

July 18, 2018
One of the toughest things in ESG investing is understanding the values of our clients and matching them with the right investment vehicles and managers.  The problem is that doing good means so many things to different people.  When talking to clients we try to figure out exactly what they're looking for and it isn't easy.  The CPA Journal recently published the article "ICYMI | ARE SUSTAINABILITY RANKINGS CONSISTENT ACROSS RATINGS AGENCIES?"  The article shows that a pure number rating on sustainability can mean very different things depending on who is counting.  While having a "Good number" in sustainable practices is fine for many clients, others want more specific needs met.

July 2, 2018
The Wall Street Journal posted a column last week entitled "IF YOU WANT TO DO GOOD, EXPECT TO DO BADLY" discussing reasons the author believes ESG investing is foolish.  The response from US-SIF was not published from what I can tell, but feel it is important enough to share:

James Mackintosh’s June 28 article, “If You Want To Do Good, Expect To Do Badly: Investors need to choose between backing their beliefs with dollars, or being profit-minded capitalists” misses the mark and is out of touch with the latest studies, data and trends from BarclaysDeutsche BankMorgan StanleyMorningstarMSCI,Nuveen/TIAA and UBS, among others. MacKintosh’s assertions simply aren’t supported by the facts

We at US SIF: The Forum for Sustainable and Responsible Investment know that the weight of substantive evidence shows that investing using ESG factors does not lead to worse results. US SIF, the leading voice advancing sustainable, responsible and impact (SRI) investing, identified $8.72 trillion in total US-domiciled assets under management using SRI strategies at the start of 2016, an increase of 33 percent since 2014. A growing body of EVIDENCE indicates that ESG investments achieve comparable or even better financial returns than conventional investments. In 2017, Nuveen/TIAA Investments, after assessing the leading SRI equity indexes over the long term, “found no statistical difference in returns compared to broad market benchmarks, suggesting the absence of any systematic performance penalty. Moreover, incorporating ESG criteria in security selection did not entail additional risk.”

A 2015 report by the Morgan Stanley Institute for Sustainable Investing found that "investing in sustainability has usually met, and often exceeded, the performance of comparable traditional investments." This is on both an absolute and a risk-adjusted basis, across asset classes and over time, based on its review of US-based mutual funds and separately managed accounts.

Addressing ESG issues in investment provides additional data to help manage risk and avoid companies that may be affected by major scandals. VOLKSWAGEN’S CHEATING on carbon dioxide emissions testing and BP’S 2010 OIL SPILL in the Gulf of Mexico are two high profile examples of how mismanagement of sustainability issues can have financially material consequences.

In 1970, Milton Friedman wrote that business has a responsibility to make as much money as possible “while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” The world has changed a lot since then, but Friedman was right to point to the critical importance of those “basic rules of society.” We agree with BlackRock CEO Larry Fink that “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” If companies can deliver for their customers and their communities, in the long run, they will deliver for their shareholders.

April 16, 2018
For those of you who think ESG might only be a fad and/or not considered useful in the real world, please read "INVESTMENT GIANTS STEP UP GOVERNANCE OVERSIGHT" in Corporate Responsibility Magazine.  The article goes on to say how some of the world's biggest investment firms such as Vanguard, Blackrock and State Street "are putting the thousands of companies in their portfolios on notice that their governance practices and strategies will be more closely monitored by the funds in the future. And they’re not looking just for traditional governance—that the social relevance of their operations and missions will be evaluated, too." The article goes into looking at some of the steps the companies are taking and how they think it will effect the long-term bottom line.

April 9, 2018
I'm often asked by clients how I think they should vote on various proxy issues.  While I make it a point not to give direct advice, I try to help my clients look at the issues and try to figure out how they align.  For my clients who are into ESG integration in their portfolio, I recommend reviewing As You Sow's "PROXY VOTING GUIDELINES" each year during proxy season.  They have the most in-depth coverage I know about reviewing each proxy for ESG.

March 23, 2018
In addition to last month's quote in the Investment News on gun violence I was quoted in a much more in depth article in Financial Planning Magazine entitled "HOW ADVISORS ARE HELPING CLIENTS DUMP GUN STOCKS."  It is more from an advisor prospective, but I think an interesting read for anyone looking to use their values to drive their investing.

March 20, 2018
The G&A Institute just announced that 85% of the S&P 500 companies published sustainability reports in 2017.    This is up from roughly 20% in 2011.    While of course there is a lot of green-washing going on and one needs to look at each report carefully, it is a sign that companies are taking sustainability seriously and know that investors are grading them not only on current profits but on how well they are built to last.

February 16, 2018
The most common conversations we have with ESG clients are about the environment and fossil free investing.  But other topics come up and one that gets little attention but we try to emphasize is weapons.  After the shootings at Marjory Stoneman Douglas High School, the Investment News ran an article quoting me and some others.   "GUN VIOLENCE HITS INVESTMENT STRATEGIES, SPARKS POLITICAL DEBATES WITH ADVISERS"

February 12, 2018
The current issue of Investment News has an article entitled "IS ESG INVESTING GOING MAINSTREAM?"  Many advisors are featured talking about how the view on ESG investing has changed over the years.  I was quoted near the bottom of the article.

February 1, 2018
The arguement is often made from many people who are fighting to save the traditional power providers is that we need Nuclear and Coal because renewable resources are spotty.  The sun only shines certain hours and the wind isn't consistent.  The arguement goes that we need Nuclear and Coal to supply the base electricity our society consumes when the sun isn't shining and the wind isn't blowing.  The University of Pennsylvania's Knowlege @ Wharton counters that arguement with their article "IS A TRANSITION TO RENEWABLE ENERGY ON THE VERGE OF BEING UNSTOPPABLE?"

January 11, 2018
MSCI (who for 40+ years has been an independent provider of research-driven insights and tools for institutional investors) just released their study on has "HAS ESG AFFECTED STOCK PERFORMANCE?"  While their post is full of statistical terms (they do provide information for institutions) I think their email that announced the findings sums it up best:

"The Results: Our research shows that ESG has affected the valuation and performance of companies both through their systematic risk profile (lower costs of capital and higher valuations) and their idiosyncratic risk profile (higher profitability and lower exposures to tail risk), and that changes in a company's ESG characteristics (ESG momentum) may be a useful financial indicator in its own right.

Of course, don't forget that there is no assurance that sustainable investing companies will meet their objectives and investing involves risks including the possible loss of capital.

January 5, 2018
Harvard Business Review had a column on "THE TOP 10 SUSTAINABLE BUSINESS STORIES OF 2017."  Like the post below I think it's most interesting if you read the article and understand some of the rationale and details behind the choices made.  Only one of the ten had to do directly with ESG (4. Investors woke up about climate risk and benefits of sustainability).  But the other 9 are about choices individuals, companies and countries are making to change the world and knowing these issues will help investors make better choices.  While our government might be doing an about face, most countries and more and more companies are looking long-term.

December 28, 2017
Well, it's that time of year again.  Making lists and checking them twice is good for Santa.  Reading reviews about the best of the past is for the rest of us.  Morningstar just released their "5 BIG THINGS ABOUT SUSTAINABLE INVESTING IN 2017."  I recommend reading the article (free after signing up), but if you want the big picture, the top 5 Big Things were: The Trump Effect, The Fearless Girl, The Big Three Ramp Up Their Engagement Activity and Climate Risk Disclosure.  Probably makes more sense if you read the article.  But these are all big changes in the ESG and general investing space.

November 10, 2017
The number one question I'm asked about Socially Responsible Investing and ESG is "If I put money into these investments, will it hurt my returns?"  US-SIF has a section on their website titled PERFORMANCE AND SRI that links to several studies done over the last decade and their conclusion is "The evidence is clear that sustainable and responsible investors do not have to pay more to align their investments with their values, or to avoid companies with poor environmental, social or governance practices."  I recommend reading some of the studies as they look at different types of investments and do show some negatives along with the positives.  As per always: The return may be lower than if the adviser made decisions based solely on investment considerations.

November 1, 2017
Maybe the most interesting issue of GREEN MONEY JOURNAL I've read.  The articles are all written by leaders in the ESG and SRI fields and all about their personal life-long "Money Stories".  Understanding your history with money, wealth and investments is key to an advisor like me to give proper advice.  Knowing where you come from can help build the bridge to where you want to get to.

September 27, 2017
Always wanted to create a portfolio that you felt matched your value but was overwhelmed where to start?  Want a simple guide of the questions you should be asking and what some possible solution might be?  Well US SIF (The Forum for Sustainable and Responsible Investment) just came out with their GETTING STARTED IN SUSTAINABLE AND IMPACT INVESTING A GUIDE FOR RETAIL INVESTORS.  Of course you can always reach out to us and we're happy to get you started to.

September 13, 2017
As mentioned below last month GREENMONEY JOURNAL celebrated their 25th Anniversary and reviewed their history.  This month they try to look forward at some of the changes they think might be coming down the road.  Some of the stories include ideas on Biomimicry, The Future of SRI, and on Principals of Responsible Investing.

August 28, 2017
One of my favorite radio programs is Marketplace on NPR.  I think they do a great job of looking deeply at the economy from different angles.  While driving in to work last week and listening to the Market Place Morning Report, they had a SEGMENT ON THE 25TH ANNIVERSARY OF GREENMONEY.  For readers of this blog, I recommend their newsletter almost every month for it's insight into ESG investing.  The story goes over a brief history as they see it of SRI/ESG and some of the changes the founder, Cliff Feigenbaum thinks he's made over the years.

August 19, 2017
When most of our clients come to us concerned about how their values match their portfolio, they are talking about the equity portion of their investments.  But, green and other ESG related bonds are a fast growing segment of the marketplace.  To understand a little more about how Green Bonds work and some benefits, I recommend Financial Advisor's "GREEN BONDS NEED MORE FERTILIZER."

August 14, 2017
I usually like to find articles that are light reads or are easy to understand for the reader who doesn't spend have a long background in ESG investing.  But sometimes and article is worth a longer look.  I was just referred to Daniel C. Esty, Hillhouse Professor of Environmental Law and Policy, Yale University; Director, Yale Sustainability Leadership Forum's paper "RED LIGHTS TO GREEN LIGHTS: FROM 20TH CENTURY ENVIRONMENTAL REGULATIONS TO 21ST CENTURY SUSTAINABILITY"  It is a long read but talks about how environmental regulations helped improve the quality of America's air and water, and how it will not be enough moving forward.  He gives several suggestions on what can be done in the 21st Century.

July 17, 2017
Looking to diversify your ESG portfolio oversees, I'd suggest a great place to start is by reading the NY Times piece "AIMING TO DO GOOD, NOT JUST WELL" from last week.  It starts with a good overview of some good places to start and some good questions to ask yourself of what you're looking for.  The article goes over some of the different philosophies of some of the more popular funds.

July 14, 2017
I'll let the intro paragraph do all the talking.  This is the start of GREENMONEY's 25th Anniversary: "This July/August 2017 issue features a variety of insightful writers looking at "The Next 25 Years of Impact Investing and Sustainable Business." That 25-year time frame allows for a calmer sense to prevail, versus the urgency of current events. The opportunity to become more financially and politically savvy is key to aligning our money with our values and using our money to create the sort of world we want to live in."  Several great articles as usual talking about the history and potential future of ESG investing.

July 10, 2017
Need to understand why one should choose ESG investing or what it can do?  A great primer is PAX's 2+ minute video called "INVESTING IS YOUR SUPER POWER".  It's all right there in 2 minutes on the reasons why people choose to create an ESG portfolio with their assets.

June 29, 2017
We were honored today to be given a commendation from Santa Monica Mayor Ted Winterer for our work as a Santa Monica Green Business during their celebration of the 10th anniversary of the program.

June 29, 2017
Nice article in the New York Times entitled "CAN GOOD CORPORATE CITIZENSHIP BE MEASURED?"  I think it is a fairly balanced approach to reason to create an ESG portfolio and reasons why one might not be right for you.  Like any investment technique the article mentions that sometimes it works and sometimes it doesn't and understanding your reasons for considering ESG will help decide if it is the right move or not.

June 1, 2017
Sustainalytics is a company that pops up a lot in ESG discussion groups for their mission "to provide the insights required for investors and companies to make more informed decisions that lead to a more just and sustainable global economy."  They just released this week a thought-provoking piece "FAKE NEWS, SOCIAL MEDIA AND THE VALUE OF CREDIBLE CONTENT."  The article discusses a range of investment risks that can be caused by fake news spreading on social media.

May 23, 2017
We have many clients and prospect come to us and ask about investing in women owned/run businesses.  PAX Investments just came out with a quick VIDEOon why one might want to do this and the investment potential in investing in companies with women leaders.  About 3 1/2 minutes and gives a very quick overview but for those of you who want to help empower women in the workplace, this shows how your investments can do just that.

May 20, 2017
Lisa Woll, who runs the United States Social Investment Forum (US-SIF) was recently interviewed by Morningstar on the topic "WHAT'S DRIVING GROWTH IN SUSTAINABLE INVESTING."  The US-SIF is the trade group for investment professionals using ESG investing.  A couple of the more timely quotes with the current administration in Washington: "...given the growth in sustainable or ESG assets over the last several years, I think no matter who is elected, we would have continued to see that growth. There's just tremendous interest."  And "...the fact that we've already pulled back from the Clean Power Plan that an announcement on pulling back or out of Paris is imminent, we're told, is really going to push more investors into looking at clean energy and alternatives in the investment process..."

April 20, 2017
This year Capital Intelligence Associates was one of four local businesses featured in the Santa Monica Sustainable Quality Awards INTRODUCTION VIDEO.  If you have a few extra minutes, we also uploaded the original DIRECTORS CUT that was produced before being edited for time.

April 1, 2017
It's proxy time again this year.  For those who are wondering how to vote on various ESG issues, As You Sow's PROXY VOTING GUIDELINES are a must read.

March 21, 2017
A camera crew came to our offices today to film Capital Intelligence Associates for the opening video of next month's Sustainable Quality Awards.  As a past grand prize winner, they wanted to know what sustainability meant to us.  If we can get a copy we'll make sure to post it when it's done.

March 9, 2017
We are often asked on how to vote on various proxies for companies our clients own.  While we generally do not make specific recommendations, we'll often go over the plusses and minuses of various proposals.  For those interested in ESG issues, I recommend reviewing PROXYPREVIEW.ORG.  They describe their services as follows:

"This free publication is the #1 resource for shareholders looking to align their values and investments.

"Proxy Preview provides the most comprehensive data on more than 400 resolutions—including corporate political spending, climate change, energy, human rights, diversity, sustainability, and much more.

More than 30 guest authors provide analysis and expert insight to help you navigate the issues and successfully vote your shares."

March 1, 2017
Capital Intelligence Associates was featured in the Sustainable Santa Monica newsletter as the Green Business spotlight for March.  The following is what was written:

"Capital Intelligence Associates (CIA) is a full-service wealth planning firm that helps clients successfully accumulate and preserve their assets before life takes unexpected turns - in a green office environment. Capital Intelligence is an excellent example of how a small office can make a big impact. They implement sustainable practices within the walls of their office - and beyond to the multi-story building they are housed in by involving the property manager in their green business efforts. 

"Capital Intelligence worked with their building manager to increase water and energy efficiency in all restrooms facility-wide. Restrooms were retrofitted with high efficiency toilets flushing 1.28 gallons and occupancy sensors to activate lights. In effort to green the building janitorial products were provided for custodians to sample - which influenced them to procure regularly. Sustainable Earth by Staples eco-conscious products also implements a no triclosan policy for sanitizing agents. 


"Capital Intelligence switched to an Epson Supertank refillable cartridgeless printer - reducing the need to send anything back for recycling. Their printers are default set to print on both sides of paper. Employees refill reusable glasses with water from an onsite filtration system. Kitchen is also stocked with reusable plates, mugs and utensils. As an active member of the Buy Local Santa Monica campaign, and Santa Monica Chamber, CIA supports local businesses and purchase produce directly from the Santa Monica Farmers Market."


February 25, 2017

For those of you who are still relatively new to SRI/ESG investing and want to understand some of the basic themes/vernacular, Forbes just ran an article "HOW TO ALIGN YOUR INVESTMENTS WITH YOUR MORAL COMPASS".  The article goes over the basics and the plusses and minuses of past performance.


February 22, 2017
MSCI RECENTLY ANNOUNCED THEIR ESG INDEXES.  From their press release: "The MSCI ESG Index Families are designed to support common approaches to environmental, social and governance (ESG) investing, and help institutional investors more effectively benchmark to ESG investment performance as well as manage, measure and report on ESG mandates.  MSCI’s ESG Indexes also provide institutional investors with transparency into ESG sustainability and values alignment, together with the ability to compare holdings."


While you can't invest directly in an index, these will be a useful way to track how SRI investments compare to their peers.  Having a major company come out with a diverse group of indices is a big plus to ESG community.  The biggest change I see in these compared to some of the older ones is that they are not all environmental.  They have religious, impact, and values themes among others.

January 31, 2017
For a different prospective on SRI, there was an article posted on the Altegris site entitled "CAN ESG INVESTORS DO WELL WHILE DOING GOOD? " What makes it different is the underlying investments are run by KKR.  KKR is known for the history of buying up companies and getting value anyway they can including layoffs, closing down areas, etc.  This article is about how they've worked with companies to make them stronger in the ESG space to create a better world and make a profit.  While this fund isn't right for most individuals, I think their views in this article show how the world is changing rapidly to look at more than the financial bottom line.

January 7, 2017
Almost every day I have a conversation with a client or friend about what a Trump presidency will do for their investment portfolio.  While there are too many factors to really know for sure, we can take educated guesses.  Many of my clients wonder what it will mean to their ESG portfolio as Trump's administration creates rules that might not be the best for the Environment, Social and Governance issues.  The Wall Street Journal discusses it in their article "TRUMP POLICIES UNLIKELY TO END SUSTAINABLE-INVESTING TREND."  To quote the article: "“The responsible-investment movement in not a movement started by Wall Street and it’s not a social movement,” says John Streur, president and chief executive of Calvert Research and Management, a subsidiary of Eaton Vance Corp. that manages more than $10 billion in ESG investments. “It’s a movement from large asset owners and large operating companies who have essentially said, ‘We need to do a better job with resource efficiency, environmental impact and social justice, and all those things matter to the financial results of companies.’ ” "

January 5, 2017
I'm generally very skeptical about articles (or people) who predict what the markets will do in the future.  There is too much information for anyone to make much more than an educated guess.  Wars, weather, diseases, government actions and such all impact markets on top of the normal economic cycles and individual company performances.  Study after study prove that you can't time the market.  But occasionally I find some of the articles an interesting read.  Today, the New York Times published "2016’S WINNING INVESTORS TALK ABOUT 2017, AND DONALD TRUMP".  The article talks about what some investors who did well last year predict for the 2017.  Why it's relevant in this blog is one of the three individuals they picked was Jerome L. Dodson  who is the founder and president of Parnassus Investments, and lead portfolio manager for the Parnassus Endeavor Fund.  To quote the article "In a highly competitive world where cutthroat capitalists scoff at such values, he’s also emerged on top: His Parnassus Endeavor Fund is ranked by Morningstar as the No. 1 fund in its category (large-cap growth) over one-, three-, five- and 10-year periods — a remarkable feat."  While I doubt the fund will perform the same for the next 10 years, it's good to know that one can do well while doing good.

December 15, 2016
For those of you who want concrete examples about how looking at ESG factors can help add value to a portfolio, you should read "INVESTORS SHARPEN FOCUS ON SOCIAL AND ENVIRONMENTAL RISKS TO STOCKS" in the New York Times.  The article starts with a couple of examples how a pair of stocks were ranked high by traditional analysts, but low by ESG analysts and eventually the stocks performed poorly based on unethical decisions by it's leaders.  The article goes on to show some examples on how ESG analysts look at companies and some of their successes and concerns on why ESG might not be for everyone.

December 8, 2016
I can't tell you how many conversations I've had over the last month about what a Trump presidency means to one's investment portfolio.  While no one can predict the future, Wall Street has generally been optimistic about the next four years.  But, some of the investments that have lagged have been those that are trying to green our future.  Clean Yield had an interesting story today about some of the things that might happen to the environment moving forward.  "THE NEXT FOUR YEARS: FIGHTING FOR A LIVABLE CLIMATE" is both optimistic and shows some real potential problems moving forward.  I have found it a great starting point for many conversations.

December 6, 2016
The Financial Times has a good article with the basics of Gender Lens Investors, entitled "THE BUSINESS OF WOMEN."  The article starts with all the forces behind the upsurge in popularity of this type of investing.  It then goes on to explain the similarity it has to SRI and the growth in opportunities to invest in women with some specific examples.  We have several clients who we position parts of their portfolio in women led businesses and can look to see how it would work in your portfolio.

December 2, 2016
US News recently published online, "HOW TO CREATE A SOCIALLY RESPONSIBLE INVESTMENT PORTFOLIO"  The subtitle is "Aligning personal values with investment portfolios can be a challenge."  This short article gives someone who wants to create this alignment a starting point to try to figure out where to start.  Of course this is a process we walk our clients through all the time, as the process never ends.

December 1, 2016
The title of this month's GREEN MONEY JOURNAL IS 2017 Outlook: The World in Transition.  Several interesting articles on Sustainable Agriculture and Millennials, Sustainable Investing in ones community, and big data's use in impact investing.  None of the articles are too long, and I think all show certain insights to where we might be heading as an industry and a planet.

November 14, 2016
The most respected SRI/ESG report that I know of was released today with the US SIF Foundations 2016 Biennial REPORT ON US SUSTAINABLE, RESPONSIBLE AND IMPACT INVESTMENT TRENDS.  For those of you who've been reading my blog for a  while know that this 135 page report discusses everything that is going right (and wrong) in Environmental, Social and Governance (ESG) investing.  Some highlights:

  • Sustainable, responsible and impact (SRI) investing assets have expanded to $8.72 trillion in the United States, up 33% from $6.57 trillion in 2014.
  • Much of this growth is driven by asset managers, who now consider environmental, social or corporate governance (ESG) criteria across $8.10 trillion in assets, up 69 percent from $4.8 trillion in 2014.
  • The top two issues considered both by these money managers and by their institutional investor clients is conflict risk and climate change.
  • From 2014 through the first half of 2016, 176 institutional investors and 49 investment managers controlling $2.56 trillion in assets filed or co-filed shareholder resolutions on ESG issues

November 1, 2016
I was just referred to a US News article entitled "DOES SOCIALLY RESPONSIBLE INVESTING ACTUALLY WORK?".  It discusses some of why people use SRI and asks if it works.  I think it is a great article talking about some of the plusses and minuses (although a bit shallow in some aspects.)  For those of you who don't want to read it, the conclusion is: "So is SRI perfect? No. But it's making a difference."

October 24, 2016
Interesting NEWS TODAY FROM THE CFA INSTITUTE.  For those who don't know, they are the group that gives out the CFA (Chartered Financial Analyst) Designation that is held by a great percentage of individuals who run mutual funds and other institutional investments.  They announced that they are going to "update its 2017 curriculum to include more focus on corporate ethics, risk management and environmental, social, and governance issues after feedback from its investment management practitioners," AKA ESG issues.  This is further proof that investing with impact in mind is becoming a more prevalent in investment analyses and that more options are going to become available to those who are interested in taking advantage of the value it can give.

October 15, 2016
BARRON's just released a list of "200 mutual funds and ETFs rated above-average or high on Sustainability, Responsibility, Impact and ESG by Morningstar/Sustainalytics, and with strong financial returns over the past year."  Barron's concludes "Sustainable practices predispose companies to outperforms."   Barron's does note that that many of the 200 funds have holdings in companies that may not fit a more "purist" SRI negative screen, and typically follow a more "pragmatist" ESG tilt or weighting.  In addition, several include fossil fuel firms with intensive production and consumption.  Also to note, the published financial ranking did not include risk, volatility, or Sharpe ratios to assess risk adjusted returns, nor include any expense ratios or fees (though fees are discussed in the text articles).  As per my comments below about lists like this, they don't mean their the perfect investments for you to buy but are a good starting point while doing research.

October 5, 2016
Just read through a couple of articles on the SEC's new investigation into ExxonMobil.  While there are a lot of subtle points, the basis is that the SEC is concerned about how ExxonMobil has valued its assets (mostly oil reserves) with the drop in oil prices and many countries having pending regulations to address climate change.  Why I find this important is that the SEC is trying to protect investors against corporations that might either deny climate change is happening or isn't accounting for it properly based on most scientific models and economic projections.

October 1, 2016
The theme for this month's GREEN MONEY JOURNAL is Aligning for Impact: ESG, SRI and CSR.  Always full of interesting and useful articles, my favorite this month is on South Africa.  It goes through how divestment in the 80's led to reinvestment when apartheid ended to today when South Africa is the largest impact investment market on the African continent.

September 20, 2016
Former Treasury Secretary Henry Paulson contributed an Op-Ed to today's NEW YORK TIMES.  His concern was the trillion's of dollars it will take to save our planet from the worst effects of Climate Change.  ($90 Trillion according to the UN).  His answer was using private financing based on a well coordinated effort of governments, their leaders and their tax codes.  While I doubt the leaders of the world will do exactly what he suggests, I do see a lot of growth in green and impact investing that have direct impact on the world we live in.  I expect it to grow steadily for the next couple of decades with many opportunities for investors to build assets while helping the planet.

August 12, 2016
As I've talked about here in many other posts, it's not only about which companies/investments you own, but what you do with the ownership.  One of the most important things an owner can do is to vote on a myriad of issues that come up during proxy season.  While I admit, to the layperson (or even to the seasoned professional) a lot of these votes seem like nonsense and have no real meaning in the shape of the company.  But often these items are placed on the ballot in order to make real change in the company and in the world.  BARRON'S just published an article on the Vanguard Group, whose combined funds are larger than the national net worth of India or Brazil.  They are famous for the low-cost approach to investing.  But, according to the article, the group has failed to support a single sustainability resolution of the 200 that have been filed in companies that they own.

While there is no argument that Vanguard has helped its clients save a fortune in fees they pay to fund companies, it has also acted in a way that many of its clients morally imposed.  While many socially responsible investors I know own stocks in companies they might not believe in, most wouldn't want to vote against their conscience when given the opportunity (or at least every time).

July 28, 2016
Shareholder activism has traditionally focused on trying to remove what was seen as poor management by the board.  I just read a new HARVARD BUSINESS SCHOOL STUDY that the biggest cause for shareholder proposals is now ESG issues.  The times, they are a changing.

July 21, 2016
GREEN BUSINESS JOURNAL just released their July/August newsletter.  This one entitled "The Future of Energy: Unleashing the Power of Innovation, Sustainability and Stewardship."  I always find their articles interesting and topical.

July 20, 2016
KNOWLEDGE@WHARTON stays busy uploading articles and videos regarding hot business topics.  Today they released a video (and transcript) on "A PRACTICAL GUIDE TO IMPACT INVESTING".  It's a good start if you're interested in the topic.  Take this in mind though, there are very few opportunities to get involved directly in this for retail investors.  While there are lot of deals being done, many of for institutions and high-net worth individuals.  Let us know if you have questions on how Impact Investing might fit your needs.

July 1, 2016
The United State Social Investment Forum (US-SIF) just released their report, "THE IMPACT OF SUSTAINABLE AND RESPONSIBLE INVESTING."  The first report came out in 2013 and this updates much of the information.  If you are looking as to why you should use socially responsible investing or want to know some of the actual differences SRI/ESG makes in the world, this report is a great read.

June 28, 2016
The SEC just released the final rule of section 1504 of the Dodd-Frank Act.  This rule requires all public companies to disclose the payments they make to governments for mineral, oil and gas extraction rights.  The US-SIF wrote "US SIF and investors representing trillions of dollars in assets under management believe that the disclosures benefit all investors by yielding material information, which in turn helps to maintain fair, orderly and efficient markets and to facilitate capital formation.  As a result of the rule, investors will be able to compare the payments that resource companies make to governments around the world, and analyze whether these payments or operations pose regulatory, tax, reputational, political and social risks"

June 8, 2016
The SEC Investor Advisory Committee just approved their COMMENT LETTER to the SEC on its Concept Release regarding its disclosure effectiveness review.  The document talks about ways to make investments more transparent, especially to the general public.  Most of the letter discusses how to make the disclosures more accessible and easier to read.  As far as SRI goes, the most interesting part comes on page 7, where they state: "It is clear that a significant, and growing number, of investors utilize sustainability and other public policy disclosures to better understand a company’s long-term risk profile.18 The Committee believes that environmental, social and governance issues should be subject to the same materiality standards as other sources of risk and return under the Commission’s rules."  It will probably be years before the SEC acts on this, but it's good to see their committees moving in this direction.

June 3, 2016
NEWSWEEK JUST RELEASED THEIR LIST OF TOP GREEN BUSINESSES.  The project consists of two separate rankings.  The U.S. 500 ranks the 500 largest publicly-traded companies in the United States by market capitalization, while the Global 500 looks at the largest publicly-traded companies globally by market capitalization on overall environmental performance.  I recommend going through the various pages as there are many interactive charts and graphs.  As I mention each year, this alone is not a reason to buy (or not buy) any specific company, but can be part of an overall investment strategy.

June 1, 2016
This month's GREEN MONEY JOURNAL is on Investing in Sustainable Agriculture.  While this is not a hot area that we see with most of our clients, we have several who are very passionate about GMO's and buying stock in companies that have the long-term best interest of the planet in mind.  Articles include Organic Economics in a World of Industrial Agriculture, Sustainability Through the Kitchen Window of a Coffee Farmer and one on land speculation and farming.  Always well written by guest writers.

May 20, 2016
Just reviewed the MIT Sloane  2016 SUSTAINABILITY & INNOVATION GLOBAL EXECUTIVE STUDY AND RESEARCH PROJECT that looked at investors and corporate executives and their attitude towards Sustainability.  While I think the whole report is fascinating, it can be boiled down to "Seventy-five percent of senior executives in investment firms agree that a company’s good sustainability performance is materially important when making investment decisions. However, only 60% of managers in publicly traded companies believe that good sustainability performance is materially important to investors’ investment decisions."  Much of the rest of the article is pretty obvious to those of us who do this every day, but the numbers show where the disconnect really lies.

May 9, 2016
This month's GREEN MONEY JOURNAL is a video journal (takes me a little more time to find the time to watch a video than to read an article).  The theme is Corporate Social Responsibility. My favorite, if you can find 20 minutes, is the video on Biomimicry.    As per the caption to the video: "BIOMIMICRY produced by Leonardo DiCaprio, premiered at SXSW Eco 2015 to a standing ovation. Biologist/designer, Janine Benyus shares Nature’s solutions for some of humanity’s most pressing problems, from reducing carbon emissions to water conservation."

April 25, 2016
What is a socially responsible company?  That question is always on the top of my mind and those of us in the SRI/ESG space.  No two definitions are exactly the same and each money manager uses their definition in different ways.  The Wall Street Journal just ran an interesting piece entitled "SOCIALLY RESPONSIBLE COMPANIES ARE HARD TO PIN DOWN."  As per one quote in the article "“In one year, a large industrial company was recognized as a top 10 ESG performer by one data provider and a bottom 10 ESG performer by another.”  Our goal is to work with our clients to help them define what is important to them and build a portfolio that matches their concerns.  There is no right or wrong answer in the industry, but each client has answers that are right and wrong for them.

April 21, 2016
Today was the annual SANTA MONICA SUSTAINABLE QUALITY AWARDS luncheon.  Still beaming after winning the grand prize last year, we were proud to be there at lunch to listen to this year's winners and learn what they're doing so we can continue to make our practice better.

April 1, 2016
Another month has begun and another fascinating issue by GREENMONEY EJOURNAL.  This month is on Women & Investing.  It talks about how women invest differently than men and also the benefits of investing in companies that empower women.

March 20, 2016
Sometimes it can make sense in an SRI/ESG world to buy stocks in companies that do bad things.  The main reasons are to be able to vote in proxy fights for causes you care about but also to be able as an owner to talk to corporations and make suggestions for change.  (I've discussed these issues a lot below).  When it comes to proxy voting, it is often harder to figure out if the managers you choose are voting the way you would walk to vote.  EcoWatch just published an article "IS YOUR MUTUAL FUND A CLIMATE CHANGE DENIER OR CLIMATE CHAMPION?"  It lists which fund companies vote for climate change resolutions and which do not and why one might care.

March 15, 2016
It was just reported that 81% of all S&P 500 Companies published a sustainability or corporate responsibility report in 2015.  To put that in prospective 5 years ago the number was under 20%.  While of course there is a lot of greenwashing and the reports aren't always easy to compare, it's a step in the right direction just by the fact that companies know they are going to put out a report and that their teams will be held accountable to a certain level in these areas.

March 4, 2016
As I like to do in the beginning of each month is let people know about the current issue of the GREEN MONEY JOURNAL.  To put it in their words, the "March 2016 issue [is] on Slow Money where we bring our discussion back down to the earth, grounded in the soil where we grow our food and sustain our planet and its many living systems. As we spend our money on a myriad of food products, our dollars can help redirect farming towards a more sustainable and healthier world. You'll read about how people are investing in sustainable agriculture to achieve healthy returns. This issue will help you understand why stewardship of our land and water using sustainable agriculture should not only be part of your shopping and diet, but also a healthy portion of your financial portfolio. "

March 1, 2016
Warren Buffet's annual letter to shareholder is a must-read for many in the investment profession.  Daniel Nielson of Great Lake Advisors put together an excellent piece talking about all the sustainable initiatives that correspond to the ESG/SRI industry in the newsletter.  Most of my posts are short, but I thought the article was so intriguing I'd copy and share the whole thing:

Renewable Energy

Berkshire Hathaway Energy (“BHE”) is a similar story. That company has invested $16 billion in renewables and now owns 7% of the country’s wind generation and 6% of its solar generation. Indeed, the 4,423 megawatts of wind generation owned and operated by our regulated utilities is six times the generation of the runner-up utility.


We’re not done. Last year, BHE made major commitments to the future development of renewables in support of the Paris Climate Change Conference. Our fulfilling those promises will make great sense, both for the environment and for Berkshire’s economics.



Though the pie to be shared by the next generation will be far larger than today’s, how it will be divided will remain fiercely contentious. Just as is now the case, there will be struggles for the increased output of goods and services between those people in their productive years and retirees, between the healthy and the infirm, between the inheritors and the Horatio Algers, between investors and workers and, in particular, between those with talents that are valued highly by the marketplace and the equally decent hard-working Americans who lack the skills the market prizes. Clashes of that sort have forever been with us – and will forever continue. Congress will be the battlefield; money and votes will be the weapons. Lobbying will remain a growth industry.


Productivity Improvement and Outsourcing

A long-employed worker faces a different equation. When innovation and the market system interact to produce efficiencies, many workers may be rendered unnecessary, their talents obsolete. Some can find decent employment elsewhere; for others, that is not an option.


When low-cost competition drove shoe production to Asia, our once-prosperous Dexter operation folded, putting 1,600 employees in a small Maine town out of work. Many were past the point in life at which they could learn another trade. We lost our entire investment, which we could afford, but many workers lost a livelihood they could not replace. The same scenario unfolded in slow-motion at our original New England textile operation, which struggled for 20 years before expiring. Many older workers at our New Bedford plant, as a poignant example, spoke Portuguese and knew little, if any, English. They had no Plan B.


The answer in such disruptions is not the restraining or outlawing of actions that increase productivity. Americans would not be living nearly as well as we do if we had mandated that 11 million people should forever be employed in farming.


The solution, rather, is a variety of safety nets aimed at providing a decent life for those who are willing to work but find their specific talents judged of small value because of market forces. (I personally favor a reformed and expanded Earned Income Tax Credit that would try to make sure America works for those willing to work.) The price of achieving ever-increasing prosperity for the great majority of Americans should not be penury for the unfortunate.


Shareholder Resolution on Climate Change

It’s understandable that the sponsor of the proxy proposal believes Berkshire is especially threatened by climate change because we are a huge insurer, covering all sorts of risks. The sponsor may worry that property losses will skyrocket because of weather changes. And such worries might, in fact, be warranted if we wrote ten- or twenty-year policies at fixed prices. But insurance policies are customarily written for one year and repriced annually to reflect changing exposures. Increased possibilities of loss translate promptly into increased premiums.


Up to now, climate change has not produced more frequent nor more costly hurricanes nor other weather related events covered by insurance. As a consequence, U.S. super-cat rates have fallen steadily in recent years, which is why we have backed away from that business. If super-cats become costlier and more frequent, the likely – though far from certain – effect on Berkshire’s insurance business would be to make it larger and more profitable.


As a citizen, you may understandably find climate change keeping you up nights. As a homeowner in a low-lying area, you may wish to consider moving. But when you are thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.


Investment Risk, Disclosure, and Timing

We, like all public companies, are required by the SEC to annually catalog “risk factors” in our 10-K. I can’t remember, however, an instance when reading a 10-K’s “risk” section has helped me in evaluating a business. That’s not because the identified risks aren’t real. The truly important risks, however, are usually well known. Beyond that, a 10-K’s catalog of risks is seldom of aid in assessing: (1) the probability of the threatening event actually occurring; (2) the range of costs if it does occur; and (3) the timing of the possible loss. A threat that will only surface 50 years from now may be a problem for society, but it is not a financial problem for today’s investor.


February 12, 2016
We have several clients who prefer to own companies with women in leadership roles.  Much of that has to do with their belief in supporting companies that have this philosophy and the belief that it will long-term drive more companies to do the same.  While I've seen studies like this before, just read an article in the NY Times entitled "WOMEN IN COMPANY LEADERSHIP TIED TO STRONGER PROFITS, STUDY SAYS."  This is by far the biggest research study I've seen though.  To quote the article "Having women in the highest corporate offices is correlated with increased profitability, according to a new study of nearly 22,000 publicly traded companies in 91 countries."

February 8, 2016
While it is a bit old I was just given the link to a Wharton/Penn (my alma mater) VIDEO with one of their professors and a leader at Calvert Funds.  It's about 20 minutes and talks about where they think the past, present and future of ESG is going.  For those who don't know, Calvert was one of the leading ESG (back then SRI) fund companies and continue to use innovative ways to use the financial markets to create a better world.  It's a great way to see what is available and what to look for on the horizon.

February 4, 2016
Much like my entry from 3 days ago, there is another set of articles that intersect some of the areas that we specialize in.  I consider the Green Money monthly e-Journal mandatory reading.  February's theme is "MILLENNIALS, MONEY AND MEANING".  They have several articles on the different ways that the current coming-of-age generation sees and relates to money, finances, investing and giving back.  For those of you with kids (or grandkids) in this generation I think this is a must-read series.  For those of you who are millenials, I think it's a good look on how you compare to others of your generation.

February 3, 2016
It is proxy season again... the time each year when thousands of companies ask their shareholders to vote on issues that most feel they are under informed to vote on (which may be true).  I used to ignore them and led most clients to the same conclusion until I realized how much positive change can happen through the corporate resolution process.  Each year the Interfaith Center on Corporate Responsibility (ICCR) comes out with their voting guide on issues that they feel effect ESG investors.  The 2016 GUIDE gives their opinion on 257 resolutions they feel are important to a more responsive corporate environment. 

February 1, 2016
This month's issue of Financial Advisor Magazine had an article that really gets down to a lot of the things we do entitled "AN SRI INVESTMENT COLLABORATION ACROSS GENERATIONS AND GENDERS."  While the article I think is really meant for those in the industry, it gets to the heart of our value added advice - not only SRI, but also multi-generational and philanthropic planning.  While we don't go out of our way to specialize in working with women, I think a lot of the reason we have more women client than men is that we do a good job helping clients with the issues described in this piece.

January 22, 2016
One of the best way for ESG managers to look at how a company is doing is to look at their sustainability report.  A few years ago it was rare to find such a report, but with common standards in place, it is becoming more and more common and the reports are easier to compare to one another.  While I still see a lot of greenwashing, it is getting easier to differentiate the companies that are truly trying to make a difference.  I was just referred to an Australian article entitled "DOES SUSTAINABILITY REPORTING MAKE A DIFFERENCE?"  There are some good insights on how the reporting not only helps investors look at which companies they want to invest in, but going through the exercises of making the reports forces companies to think about these issues and what can be done better for the next report.

January 16, 2016
We have many clients who know they want to be conscientious about where they put their money, but aren't really sure how to narrow down what is important to them.  They want to be "Socially Responsible" but aren't sure the steps they should take.  The New York Times had an article this week entitled "FOLLOW YOUR CONSCIENCE WITHOUT LOSING YOUR SHIRT".  It talks about some of the different ways investment companies look at the SRI/ESG world and different option on how to let your conscience help pick your investments while still getting a competitive return.

January 15, 2016
Trillium Asset Management is one of the oldest SRI managers in the United States.  Each Quarter their Newsletter, INVESTING FOR A BETTER WORLD talks about various issues they're dealing with on behalf of their clients (and in some ways the world).  Their winter issue has several articles on their ongoing engagement with corporate boards to bring about change as shareholders.  Their cover article this quarter is on food waste.  While I've seen many articles on what local organizations are doing to curb waste and feed those who are hungry, I found this article particularly interesting on how they are working with large corporate America to make changes from the top.

January 7, 2015
Happy New Year!  Lots of articles in the sustainable/SRI news about this being a year of increased energy in Socially Responsible Investing.  (But of course, there on those headlines ever year.)  Another great month for the GREEN MONEY EJOURNAL.  January is all about Community Impact Investing.  It's a relatively new area that most people don't understand well.  (And for those who understand it, it isn't appropriate for most average investors.  But, the articles are very informative and a great first step to seeing if it's right for you.

December 30, 2015
Well, it what looks to be my last blog entry for the year (who knows if something juicy comes across my desk tomorrow) is an article in WEALTHMANAGEMENT.COM entitled "Socially Responsible Investing Comes of Age".  It is geared to many in my industry who really haven't looked at Socially Responsible Investing in the near term.  For a very brief article it goes into what ESG is now compared to its history and the plusses and minuses of having an SRI screen on your portfolio.

December 28, 2015
Two interesting LinkedIn articles while I was on vacation last week.  Both discuss the Paris Climate Talks Agreement and how it relates to investing. While nothing earthshattering, I think both are good food for thought.  Check out: "WHAT YOU CAN DO ABOUT CLIMATE CHANGE" by Joe Keefe and "WHAT THE PARIS AGREEMENT MEANS FOR INVESTORS" by Julie Gorte. The articles give a good overview of some of the choices that were made by the nations that signed the treaty.

December 14, 2015
Another great issue of the GREEN MONEY JOURNAL.  The theme of the issue is "Outlook 2016 on SRI, the Economy and the Election".  Several articles by some of the industry's major players of what they see going forward with SRI and how these issues might effect the election. 

December 2, 2015
It has been a very busy week as far as SRI and the Environment is concerned.  Right now the Paris Climate Talks are occurring with leaders from most of the world's countries.  In addition Bill Gates announced that he will be launching a multi-billion dollar clean energy investment fund.  Only time will tell how successful each initiative will be in stopping global warning.  The INVESTMENT NEWS ran an article this morning on investing in clean technology which I was featured with many quotes.

November 4, 2015
I just got the following press release from CERES: "...The World Federation of Exchanges (WFE)—the trade group for all stock exchanges worldwideTODAY ANNOUNCED FORMAL ESG GUIDANCE on how stock exchange members can implement stronger ESG disclosure policies for companies on their exchanges. The guidance highlights 33 specific ESG KPIs for ramping up disclosure, including energy use, water management, CEO pay ratios, gender diversity, etc. While the WFE’s guidance is voluntary, it is a huge step forward in achieving stronger, more consistent corporate reporting across the world on key sustainability trends that US SIF cares about. "

While I don't think this will change much very quickly, it will allow over time easier comparison of global companies on sustainability practices.  The exchanges make it easy now to compare financials and this will add a layer of research that will eventually be consistent across the board.

October 22, 2015
The US-SIF (basically the trade organization in the US for Socially Responsible Investing released the following today:

Secretary of Labor Tom Perez announced this morning in New York City that the Department of Labor is rescinding its 2008 Bulletin on Economically Targeted Investments and reinstating the 1994 guidance on ETIs with a revised preamble that assures that “Fiduciaries need not treat commercially reasonable investments as inherently suspect or in need of special scrutiny merely because they take into consideration environmental, social or other factors.”  

So, what does that mean in English?  Basically if you ran a retirement plan, the old rules stated that you had to invest the assets with the only criteria being to maximize long-term profit.  The new rules say that you can take ESG (Environmental, Social, Governance) issues into play.  The Department of Labor recognized that these factors can be a way to evaluate a company beyond the traditional financial indicators.  While ESG has been used in some retirement plans, it was usually after much debate and caution.  This ruling makes it much easier for employers to move forward.

October 1, 2015
This month's GREEN MONEY JOURNAL is what they called The Solutions Issue.  As always several interesting articles.  My favorite was on Biomimicry.  While it was a topic I've heard of, I never knew the proper term for it.  As they describe it, "Biomimicry is the conscious emulation of nature's wisdom, a methodology that is based not on harvesting nature but on learning from nature. This approach is beginning to shape our cities, our companies, and our social sphere, and has profound implications for investing and for life."

September 30, 2015
I've spent a lot of time thinking over the last week about Volkswagen.  This is a company that was a model for many in the auto industry on creating the next generation of cars and helping the environment.  After Enron and other corporate scandals, many ESG investors came out and said they could see something fishy was going on and stayed away based on their instincts.  This is a different situation.  While looking backwards there might have been some red flags, I have not heard a lot about any signs that kept some of the biggest ESG players to omit Volkswagen from their portfolios.   It will be interesting moving forward if there were signs that could be used to avoid such a corporate scandal in the future.

September 26, 2015
Sometimes SRI seems like a lonely business model.  While it is growing, most of the financial planning and investment articles that make their way across my desk have no mention of matching values to picking investment portfolios.  (And I get many more SRI articles than the average planner.)  That is why I found the article in Plan Sponsor Magazine to be that much more interesting.  Entitled "RETIREMENT PLAN PARTICIPANTS WANT TO BE SOCIALLY RESPONSIBLE: NINE IN 10 WANT INVESTMENTS TO ALIGN WITH VALUES" the article goes on to mention survey that most people want to invest with their values, but are unfamiliar with the concept and don't know what Socially Responsible Investing is.  Like the Chicken and the Egg, it's up to inform more of the public what options they have and to investment providers to make sure those options are available.

September 18, 2015
For those of you who are skeptical of corporations and their green washing efforts, I highly recommend reading the article in Forbes entitled "HOW CAN WE KNOW WHICH COMPANIES ARE SERIOUS ABOUT SUSTAINABILITY?  While the article gives no definitive answers, it gives examples of many different consumer goods manufacturers and tries to break down their sustainability reports relative to what the company actually does.  I think its a great story about needing to look at the whole picture and not getting too caught up in the hype.

September 16, 2015
Bloomberg published an article last week titled "STOCK TIP: TRY BETTING ON COMPANIES LED BY WOMEN".  It's a very simple article while many ESG investors (and investors who care more about a profit than the underlying ESG causes) are looking at building a portfolio around companies with many women in positions of leadership.  From the article "The basic argument, backed up by research, is that companies with a relatively high percentage of women in power perform better than those dominated by men."  While time will tell if the trend lasts it is a theory we put to work for many clients.

September 3, 2015
The September GREEN MONEY JOURNAL is all about Impact Investing.  Several articles on the history of Impact Investing and where some leaders think it's heading.  This is a relatively young investment concept, so be very careful before stepping forward.  While I think this is the future, many of the investments I've seen floating around in this area have a lot of heart (good causes), but might not be good for the head (the investments don't add up).

August 14, 2015
Morningstar announced today that they are going to LAUNCH FIRST ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) SCORES FOR MUTUAL FUNDS GLOBALLY.  For those of you who don't know, Morningstar is one of the biggest ratings of mutual funds and is used by many financial services firms and individuals.  A few points from the press release:

  • "Morningstar will base the scores on ESG company ratings from Sustainalytics, a leading provider of ESG and corporate governance ratings and research."
  • "One of Morningstar’s core values is ‘investors first...Providing fund scores on environmental, social, and governance factors is a natural extension of our work. We want to bring even greater transparency and accountability to the investment industry with ESG research, data, and tools, while helping investors to put their money to work in ways that are meaningful to them."
  • "In a study released in February, the Morgan Stanley Institute for Sustainable Investing found that 71 percent of individual investors are interested in sustainable investing. In addition, just in the past year, there was a 29 percent increase in the number of financial institutions that signed the United Nations-supported Principles for Responsible Investment (PRI) Initiative."

August 3, 2015
President Obama released earlier today "Final Clean Power Plan Establishing Clean Air Act Standard for Reducing Greenhouse Gas Emissions from Power Plants."  The immediate reaction of the markets was to lower the price on most carbon based power companies.  It will be interesting what happens moving forward.  There are already many lawsuits filed against the plan.  Many articles I've read is that this is the beginning of the end for many fossil fuel based companies and time to get out.  Others argue that this is an over reaction and that it will be decades until these changes will hurt bottom lines.

July 27, 2015
Gotta love an article tilted "GIVING HIPPIES KEY TO PORTFOLIO IS NOT SUCH A BAD IDEA AFTER ALL" that was on Bloomberg last week.  The article is on some studies that show ESG investing can lead to higher returns.  While the whole article is short and a good read, I think the main idea can be found in the following paragraph:

"The big question, though, is why would companies with high ESG grades outperform? Researchers at MSCI believe firms that take ESG considerations more seriously are able to dodge things like environmental fines and labor disputes, as well as take advantage of clean technologies. The reduction in potential liabilities is quickly recognized by the market and priced into the shares, MSCI's researchers conclude."

July 24, 2015
Article on EQUITIES.COM about how much disclosure is required on ESG for stocks that exist in various indices around the world (45 indices in 38 countries).  The indices are color coded so you can quickly figure out which give the most and least disclosure.  The authors' argument behind the chart is that you can quickly see which indices give you enough information to account for ESG risks and which ones do not.

July 23, 2015
Got an article forwarded to me today written by Daniel Brooksbank titled "ESG investing has now gone mainstream to become 'minimum requirement' -Goldman Sachs."  Several quotes in the article talking about how Goldman and others think SRI will be a part of most portfolio management in the near future as it shows risks and potential returns of portfolio that traditional analysis can miss and thereby potentially create better risk-adjusted returns.

July 21, 2015
Our philosophy in financial planning is based on Legacy Planning, which we see as having three stools: Multi-generational wealth management, philanthropic planning and SRI.  Often the worlds overlap as people put their values first in the planning process.  Article in this month's Nonprofit Chronicles titled "WHY WON'T FOUNDATIONS DIVEST FROM FOSSIL FUELS."  The discussion focuses on the need many foundations acknowledge to fight climate change, but why they don't invest in a way consistent with their mission.

July 14, 2015
July's GREEN MONEY JOURNAL is A Global Look at SRI.  If you're curious about how SRI is seen and done in other parts of the world there are articles on Sustainable and Responsible Investments in Asia, the UK, Europe and Canada.  In many ways the other nations are ahead in what they do, but in some ways they are behind.  I find it interesting to figure out which trends will come to the US and which ones will never gain appeal.

June 22, 2015
While the Green Money Journal's current issue (see comments below on June 19, 2015), doesn't have many direct ways to impact the world as a SRI investor, the summer edition of GREEN AMERICAN is full of articles specifically related to ESG issues.  Articles include Investing for Change, 3 Strategies to Be a Socially Responsible Investor, and Investing More Than Money, among others.  Most of the articles are short and to the point and a great place to start if you're looking at how to make your investments match your values.

June 19, 2015
June's GREEN MONEY JOURNAL focuses on Sustainable Agriculture.   While I think there is very little for the average ESG investor to put into practice, there are some interesting articles to make one think about where one's food comes from and how one can make better choices about what one puts into their body.

June 18, 2015
Socially Responsible Investing means different things to different people.  Living in Southern California most of our clients are focused on the Environment when building an investment portfolio.  Others are motivated by such things as religion, human rights, governance issues, etc.  I'm curious about how the much anticipated Pope's encyclical on the environment that was released today might help merge a couple of these issues with the same individual. (NEW YORK TIMES ARTICLE Here - Ask me if you want to see more articles).  Most of our Catholic clients who invest based on faith are most worried about birth control.  Many discussions to come I'm sure over the next few weeks.

June 8, 2015
While not on the subject of ESG per se, I'd like to comment that I'm very proud of my wife Cynthia Kraus and the energy Net Zero she designed with her firm OPEN HAUS DESIGN.  They had their open house yesterday where 100's of visitors came by to look at this house that was remodeled from a 1950's Long Beach original.  The house is designed to produce a net positive electricity each year and has many other environmental features. 

June 4, 2015
Today, Newsweek published its latest annual 2015 GREEN RANKINGS, rating 500 US and 500 Global corporations on the environmental results, including Board governance and CEO pay linked to green performance, scored by Corporate Knights, led by Toby Heaps and Michael Yow.   As I said last year, this shouldn't be used as the sole way to pick individual stocks, but gives some good insight on some of the largest companies and what they're doing in environmental circles.  It doesn't also take into account many other factors that some of my clients have such as religion, women's rights, etc.

May 22, 2015
Article today in titled "CALPERS GIVES ITS MANAGERS ESG ULTIMATUM."  CalPERS (the largest pension fund in the country) "will require all of its managers to identify and articulate ESG in their investment processes."  The article goes on to say "CalPERS considers ESG risks as material considerations to its total portfolio due to the characteristics of the fund." It will be interesting to see what other large funds follow suit.  Their basic belief is that this is an important part of evaluating securities.

May 18, 2015
"FOSSIL FUELS SUBSIDISED BY $10M A MINUTE, SAYS IMF" was the headline today in The Guardian.  According to the IMF subsidies will be $5.3 Trillion for 2015.  The article goes on to have this quote by Nicholas Stern of The London School of Economics, “This very important analysis shatters the myth that fossil fuels are cheap by showing just how huge their real costs are. There is no justification for these enormous subsidies for fossil fuels, which distort markets and damages economies, particularly in poorer countries.”  This amount is more than the total health spending of all the world’s governments.

May 4, 2015
Depending on how you look at it, it's another case of the glass being half-full or half-empty.  A new study of US Endowment funds found that 26.5% "have formally adopted responsible investment practices that incorporate at least one of four investment principles: socially responsible; environmental, social and governance; impact; and divestment from fossil fuels."  While I think that this is a long way from where we were 10 years ago, many of the blogs I read have commented on how this is not nearly enough and more needs to happen.  Maybe we're both right.

April 29, 2015
Bloomberg had an interesting article earlier this week called THE BUSINESS CASE FOR SUSTAINABLE INVESTING.  I think it gives a good overview on how SRI has changed over the last decade and how its taken more seriously by many both because of the business case being made and the fact that the performance has not been inhibited by the choice to use ESG models.  Per the article, their study "found that sustainable equity funds met or exceeded median returns of traditional equity funds during 64% of the time periods examined. 

April 17, 2015
Felt fabulous today being onstage winning our Sustainable Quality Award.  (Some articles in our CIA In The News section under resources).  I'm very proud that our team was honored for the work we do with our clients, our world and our community.  The ceremony ran long (over 2 hours) but it was full of great speakers and many businesses that are going above and beyond to make the world a more sustainable place.

April 6, 2015
Was just forwarded an article from the Denver Post entitled MORE DEMAND FOR SUSTAINABLE MUTUAL FUNDS.  The article from last month talks about the increase in demand for SRI Mutual Funds.  The article focuses on how Millennial's invest and some trends that might be coming up. 

April 1, 2015
This month's GREEN MONEY JOURNAL is focused on Women and Socially Responsible Investing.  This will be one of three features on this subject over the next 18 months.  I think its a great read because women, in general, deal with money in a very different way then men.  We have found over the years that the majority of our clients happen to be women.  It is also satisfying to see that 3 of the 4 guest columnists are from companies that we work with to provide SRI investing for clients.

March 31, 2015
Sometimes passions collide.  As someone interested in SRI and a homebrewer, it caught my attention when CERES released their BREWERY CLIMATE DECLARATION signed by 50 top breweries (including some I plan to visit next week on my spring break trip with my family to Portland).  To quote the release:

"Warmer temperatures and extreme weather events are harming the production of hops, a critical ingredient of beer that grows primarily in the Pacific Northwest. Rising demand and lower yields have driven the price of hops up by more than 250 percent over the past decade. Clean water resources, another key ingredient, are also becoming scarcer in the West as a result of climate-related droughts and reduced snow pack. That's why LEADING BREWERIES ARE FINDING INNOVATIVE WAYS TO INTEGRATE SUSTAINABILITY INTO THEIR BUSINESS PRACTICES and finding economic opportunity through investing in renewable energy, energy efficiency, water efficiency, waste recapture, and sustainable sourcing."

March 24, 2015
The press release makes it official.  Here is the official release showing Capital Intelligence Associates as one of the three grand prize winners of the Santa Monica Sustainable Quality Awards.  There should be a couple articles on the subject in the next few weeks that I hope to feature some of the reasons we won.  We will also have an article in our April newsletter about our achievement.  (Look for the CIA Report link under Resources on this website).  WWW.SMSQA.COM

March 17, 2015
Very proud to be a Santa Monica Sustainable Quality Award Grand Prize winner.  More info coming soon.  We just heard the announcement but hope to see you at the lunch on April 17th.

March 16, 2015
For those of you who are subscribers to the Wall Street Journal I recommend reading "Voices: Lisa Woll, on the Rise of Social-Impact Investing" (No link as its subscriber only).  Lisa Woll is the Chief Executive of the US SIF (United States Social Investment Forum) whose research I use often when working with clients.  One sample outtake: "Even investors who aren’t taking part in SRI should be aware that their investments are affected by environmental, social, and governmental factors. For instance, there are growing questions about whether companies that extract and develop fossil fuels are overvalued, given that it is unlikely that they will be able to develop all their reserves as regulations to curb greenhouse gas emissions go into effect. These companies—and their investors—could end up with stranded assets."

March 11, 2015
Washington Jewish Week published their article SOCIALLY RESPONSIBLE INVESTORS SEEK TO CHANGE THE WORLD.  It talks about how the Interfaith Center on Corporate Responsibility, a New York-based coalition of nearly 300 organizations with more than $100 billion in invested capital, looks at shareholder advocacy to make real change.  The article gives some examples of companies that have changed their policies based on pressure from the Center.

March 7, 2015
In their March/April newsletter, California CPA had an article entitled BEYOND THE BALANCE SHEET.  Interesting article written from an accountant's prospective on why evaluating companies by just looking at their books isn't enough and that SRI factors are an important part of a company's value.

February 26, 2015
Just released from the GLOBAL SUSTAINABLE INVESTMENT ALLIANCE (An organization made up of various worldwide SRI organizations) SRI assets under management around the world are up 61% since 2012.  As more and more people understand SRI and what it means today, more and more money is going in that direction.

February 18, 2015
Did our webinar yesterday on 21st Century Socially Responsible Investing.  Hope you were able to make it.  If not the replay will be available soon under our "Seminar Series" on our website.

February 17, 2015
Submitted our application to the Santa Monica Sustainable Quality Awards committee today.  We were close last year and hope a few tweaks in our application will put us over the top.  We think our work with clients and internally (We are a certified Santa Monica Green Business) really is what the award is all about.

February 10, 2015
Article this week in the Economists (print and online) on shareholder advocacy.  While not specifically mentioned in the article CAPITALISM’S UNLIKELY HEROES, many SRI firms do the same tactics as mentioned here to create long-term value for shareholders.  While the mission is sometimes a little different, the end goal is the same.  Many firms fight these shareholders, but I believe that they can create value just like the article mentions.

February 3, 2015
Much of this blog is focused on the E (environmental) in ESG.  Being in Santa Monica, its easy to see stories of how the environment is effecting the world and the investment climate.  But I also realize that what is Socially Responsible to one person, might not be to another.  Our goal is to help clients match their money to their values, no matter if their values match our own.  It is important that each client who is interested in this aspect have a portfolio their fundamental believes and morality.  For those of you who want to match their religion to their investing, I suggest you read this month's GREEN MONEY JOURNAL.  The guest editor, Mark Regier, focuses on the role of faith-based investing in SRI's past, present and future.

January 30, 2015
Morgan Stanley Research Global released a 116 page report this week entitled Embedding Sustainability into Valuation.  Another big player is really jumping into SRI/ESG with two feet.  While they look at it more as a risk factor than a moral factor, the more people looking at it, the more research will be available (and hopefully more companies making the right moral decisions.)  I think my view of the report can be summarized by the following paragraph: 

"Traditional investment analysis requires an assessment of company accounts, industry dynamics and the politico-economic outlook. However, we believe that environmental, social and governance factors should also be incorporated into equity analysis. This should not be done at the expense of financial returns; indeed, we think that, by better understanding the environmental, social and governance (ESG) risks and opportunities that a company faces, investors can improve their investment processes and decisions."

January 27, 2015
Great op-ed article by David Brooks in the New York Times entitled HOW TO LEAVE A MARK.  The rationale is that the stock market suffers from crashes.  Governments and non-profits suffer from inefficiencies and gridlock.  One solution might be Impact Investing.  The article goes on to show why he thinks it has promise and how it is related but different than Socially Responsible Investing.

January 26, 2015
I often hear from individuals that they love ESG investing and love matching their investments to their values, but it doesn't really make much of a difference. ran an article today with the unwieldy title, THE IMPACT OF DODD-FRANK 1502 ON CONFLICT MINERALS: U.S. SUSTAINABLE AND RESPONSIBLE INVESTORS RESPOND.  Good article if you're interested in how changes in rules that effect certain companies and how we invest in them can really make a real world difference.

January 21, 2015
Corporate Knights just released their list of the GLOBAL 100 SUSTAINABLE COMPANIES.  This is definitely not a must-invest list (and according to the article you would have underperformed its benchmark if you invested in it).  But the interesting part that I find is to look at the companies and the things they do to get on the list.  Many of my clients know they want to invest socially responsible but don't know what issues are their most concern.  Looking at a list like this and the explanations why they're put on helps solidify many people's thinking of what the most important issues to them are. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

January 14, 2015
Rolling Stone wrote a new feature this month on divestment from fossil fuel stocks entitled THE LOGIC OF DIVESTMENT: WHY WE HAVE TO KISS OFF BIG CARBON NOW.  I think the first paragraph sums it up the best: "When the fossil-fuel divestment movement first stirred on college campuses three years ago, you could almost hear Big Oil and Wall Street laughing. Crude prices were flirting with $100 a barrel, and domestic oil production, from Texas to North Dakota, was in the midst of a historic boom. But the quixotic campus campaign suddenly has the smell of smart money."

January 6, 2014
Article in this month's INC. MAGAZINE about the future of SRI.  First I find it interesting because a lot of industry publications mention how this is the future, but when a mainstream magazine lists six reasons the growth in ESG investing will continue I find it all that much more interesting.  Second it is who wrote it.  The article is written by the Director of Public Affairs & Sustainability, Pirelli Tire North America.  Most in the auto industry (with notable exceptions) aren't pushing for this sort of investing or acknowledging its future.

January 5, 2014
Proud to have Capital Intelligence Associates nominated again for a SANTA MONICA SUSTAINABLE QUALITY AWARD.  While we came close to winning last year, our scores weren't quite high enough.  And while it is an honor to be nominated we are hoping to improve our application for this year.  I've been told that most organizations don't win in their first year and do better with a year of feedback.

December 31, 2014
To end the year, a very interesting article from The Guardian titled, "POPE FRANCIS’S EDICT ON CLIMATE CHANGE WILL ANGER DENIERS AND US CHURCHES".  It discusses his belief that climate change is man made and it is up to man to do something about it.  He's taking some interesting steps in front of some summits that are taking place next year.

December 11, 2014
Forbes just posted several articles by Devin Thorpe on Impact Investing and SRI.  Don't have time to read them today, but for those of you who have a chance, they look interesting.

December 7, 2014
LA Times had an article this morning entitled "Beyond profits: Millenials embrace investing for social good."  Much of the data was the information created by the US-SIF biannual report (See November 20, 2014 below).  But the focus here was how a new generation sees investing and purpose very differently than those before them.  They are looking at the double bottom line.  (Social good and profits together).

December 6, 2014
Just got Bloomberg article from a couple of days ago, "WEF Offers Impact Investing Road Map for Wealthy Families."  WEF is the World Economic Forum.  The article talks about how important making a difference is for one's investments to many wealthy families but has a couple of warnings.  The first is that many advisors really don't understand it.  They advise to make sure that your advisor not only understands it well, but to make sure the opportunity is actually good.  As people are flooding into the market, there are a lot of offers that are not up to par and without the right advice there is a good chance that one can lose a lot of money. The article does go on to mention that there are more opportunities coming on board every day and to make sure you find the right one.

December 5, 2014
The industry media covers ESG/SRI differently than the mainstream media.  Financial Advisor has an article today on shareholder advocacy.  While the mainstream media focuses on the trends, articles like this talk about what advisors are actually doing and how they differentiate their practices in this case helping clients look at proxy issues.

December 1, 2014
James Montier wrote a very interested article today entitled "The World's Dumbest Idea".  It talks about how the only purpose of corporations is to create value for their shareholders came about and how it doesn't work.  (Basically it started to make sure that executives couldn't use the corporation to only help their bottom line.)  The article was picked up by many different media sources.  For a quick summary I recommend the article from the Economists entitled "No Value."

November 28, 2014
PBS's Frontline had a podcast earlier this month entitled "What’s the Moral Cost of Doing Business Today?"  If you have a chance, listen to it's conversation about the obligations, benefits and costs of doing business as a world citizen.

November 20, 2014
US SIF (The membership organization for SRI professionals), just released their biannual Report on US Sustainable, Responsible and Impact Investing Trends 2014While I haven't had a chance to read the whole thing yet, this is their summary for those who want to read it:

Overall Summary

The US SIF Foundation conducted research from May through August 2014 and documented:

  • $6.20 trillion in US-domiciled assets as of January 1, 2014, held by 480 institutional investors, 308 money managers and 880 community investment institutions that apply various environmental, social and governance (ESG) criteria in their investment analysis and portfolio selection, and
  • $1.72 trillion in US-domiciled assets at the start of 2014 held by 202 institutional investors or money managers that filed shareholder resolutions on ESG issues from 2012 through 2014.

After eliminating double-counting for assets involved in both strategies, the overall total of SRI assets was $6.57 trillion.

Emerging Trends

  • Much of the growth is explained by the expansion of the investment funds offered by money managers that incorporate ESG factors into investment decision-making.  The assets managed at the start of 2014 by investment firms considering ESG issues grew more than three-fold—from $1.4 trillion at the start of 2012 to $4.8 trillion.  
  • Similarly, the pool of assets to which institutional owners—including public pension funds, foundations, educational endowments and religious institutions—apply ESG criteria has grown to $4.04 trillion, up 77 percent since the start of 2012.
  • A subset of 119 money managers responded to a question on why they offer ESG products.  The top factor—cited by 80 percent in this group—is client demand, but more than 70 percent of the subset also said they considered ESG factors in order to fulfill their (or their clients’) mission, to improve returns and to manage risk.
  • From 2012 to 2014, the number of private equity and other alternative investment funds considering ESG factors grew from 301 with $132 billion in assets, to 336 with $224 billion in assets.
  • Following the December 2012 elementary school shooting in Newtown, Connecticut, policies restricting investments in weapons manufacturers have spread.  Since 2012, consideration of these criteria by money managers has grown nearly four-fold in asset-weighted terms to affect $588 billion. Among institutional asset owners, concerns over weapons now apply to $355 billion in assets, a nearly five-fold increase.
  • Sudan remains the leading social issue for institutional investors in terms of the assets affected, with restrictions on investing in companies doing business there affecting $2.7 trillion in assets.
  • For both money managers and institutional investors, climate change remains the most significant environmental factor in terms of assets, affecting $276 billion and $552 billion, respectively. Fossil fuel divestment policies, tracked for the first time in 2014, now affect tens of billions of dollars in assets.  
  • Moreover, shareholders concerned about climate risk filed 72 resolutions on the subject in 2014, more than double the number in 2012, and negotiated a number of commitments from the target companies to disclose and reduce their greenhouse gas emissions.


November 17, 2014
Article in today's LA Times about how a pure electric car could create more emissions than a gas powered car.  In some states, such a big percentage of the electricity comes from inefficient carbon based power plants that charging a car from these plants will be worse for the atmosphere than using a gas engine.  Of course, many of these plants are changing over time and this is the exception, but its important for people on both sides to look at the big picture and not get stuck thinking there is only one solution or right way. 

November 13, 2014
MSCI and Barclays just announced a new index family around green bonds. These indices will track the growing market of bonds issued to fund projects with environmental benefits. While these are not yet funds, it’s another way to track how ESG investing compares to non-ESG investing by tracking the separate indices which is often easier than comparing individual funds.

November 12, 2014
The big ESG news this week was the agreement President Obama made with China over emissions and climate change.  Interesting to hear from one side it doesn't go far enough, and from the other that it went too far.  Probably means that its a step in the right direction.  Of course, climate change law will get interesting over the next couple of years as the presumed new head of the Senate's Environment and Public Works Committee is a climate denier.

November 5, 2014
KMPG has just launched their guide: “‘Sustainable insight: the essentials of materiality assessment”. This guide will hopefully be used by many companies to report the sustainability of their underlying materials and therefore will help those who track SRI issues to better compare public companies in an additional meaningful way.

November 6, 2014
Nice Forbes Article entitled “Style vs. Substance in Corporate Social Responsibility.” Good food for thought discussing some companies that do good because it’s what’s right and some that do it because it’s what’ll make them money.

October 28, 2014
Harvard University just announced last week their five-year sustainability plan.  According to Harvard Magazine, the plan creates "a strategy to build on existing greenhouse gas reduction goals and setting priorities in five core areas: energy and emissions, campus operations, nature and ecosystems, health and well-being, and culture and learning." While not directly having to do with SRI, it will be interesting in how Harvard implements much of its plan and which resources it uses.  Those can have rippling effects throughout the country as many large institutions look to Harvard for leadership.

October 14, 2014
Just received the executive summary of the white paper "How and Why SRI Performance Differs from Conventional Strategies."  While there were many findings two I find the most interesting:

  • "SRI and non-SRI fund performances are nearly identical at the mean, supporting the conclusion by SRI proponents that, on average,socially conscious investing does “no harm” relative to unconstrained, conventional investing."
  •  "SRI funds tend to outperform non-SRI funds for below-the-median outcomes, and this outperformance is especially strong during bear markets."

October 13, 2014
The Department of Defense released their "2014 Climate Change Adaptation Roadmap".  This 20 page report talks about how the DoD considers Climate Change an immediate threat to national security.  One quote of many: "In our defense strategy, we refer to climate change as a "threat multiplier" because it has the potential to exacerbate many of the challenges we are dealing with today – from infectious disease to terrorism. We are already beginning to see some of these impacts." For those who don't think that climate change effects every taxpayer and every American, they should read the report and see some of the potential costs to each of us.

October 8, 2014
The US SIF Foundation (United States Social Investment Forum) just released their guide for individual and institutional investors entitled "Investing to Advance Women."  To quote the US SIF, "This new guide highlights practical strategies that investors can use to increase economic opportunities for women in the United States and around the world.  The guide focuses on a variety of areas including board diversity and corporate performance, gender lens investment strategies and shareholder engagement. "  A very interesting read if this is of interest to you.

October 7, 2014
Fast Company just published an article titled "Why Is Goldman Sachs Advocating For Sustainability?"  I think that title and the subtitle "Even consulting firms and investment banking firms think that better corporate social responsibility equals more money," explains why its an interesting read for anyone interested in ESG investing.

October 6, 2014
Article in today's Wall Street Journal entitled "‘Ethical’ Investing in Emerging Markets?" with the subtitle "Socially Responsible Investing Around the Globe Isn’t Easy."  Boy do they have that right.  Great article on some of the difficulties having an ESG portfolio in the emerging markets.  But, as the article mentions and I've noticed, there are getting to be a lot more choices and the disclosures are coming by easier.  It isn't easy finding good information about some US companies either, but everything is changing.

October 1, 2014
Blue & Green Tomorrow just released the some of the results of the UN survey on global CEO's and sustainability.  They report that "Two-thirds of global chief executives believe that businesses are not doing enough to address global sustainability challenges"  The article goes on to say, "Ninety-three per cent said they consider environmental, social and governance (ESG) issues to be important to the future of their business, while 79% said that they provide a competitive advantage in their industry."  The survey shows that these are some great opportunities, but the benefits might take a little longer to see.  (My take is that its part of the definition of sustainability is that it needs to make sense long-term).

September 24, 2014
The Sacramento Business Journal reported last week that the State of California just bought $250M in green bonds issued by the World Bank that finance renewable energy and other climate change-related projects across the globe.  The bonds will be purchased in the CA Pooled Money Investment Account - this is an account that invests to stabilize the state's cash flow.

September 22, 2014
Seems the focus lately with most clients who have are looing into Socially Responsible Investing lately has been fossil fuels.  While we work with clients to match their personal values to their investment portfolio no matter what those values are, most clients lately have talked about fossil fuels.  (We continue working with clients building portfolios on religious grounds, environmental beliefs, empowering women and other issues such as limiting GMO exposure).  But for those who are interested in climate change, MSCI, a company that creates a lot of the indices for passive investors just announced they are expanding their line-up of Low Carbon Indexes.

September 22, 2014
The NEW YORK TIMES today reported that the Rockefeller's Brothers Fund philanthropic organization will divest its $860 million dollar investments from fossil fuels.  This announcement was made to time with the United Nation Climate Summit that starts today.  For those of you who don't know John D. Rockefeller built most of his family's fortune in the oil business.

September 21, 2014
Today was the People's Climate March in New York.  Many of the investment companies that we do business with were present along with a couple clients.  Glad they took the time to go to NYC and fight for future generations.  Great press not only in the SRI realm and the news networks, but managed to see coverage on the local news.

September 16, 2014

Went to the local National Drive Electric Week at UCLA today.  Always interesting interacting with other EV drivers and catching up on the new technology.  It’s amazing how many new cars have come out in the last year, although the most by far at the event were the LEAF’s.  Of course, being in WLA, electric cars are all over the place.  We’ll have to see how the rest of the world takes on this technology.


September 11, 2014

The Responsible Investor website recently published an article based on a letter from “David Swensen, the renowned chief investment officer at Yale University, to the asset managers of its $21bn endowment fund” to its investment managers. The letter stated “that evaluation of the impact of climate change is now essential when looking at investment opportunities and saying that Yale now expects its managers to engage with companies on the issue. The message from one of the world’s leading investment foundations could be a game changer in prompting fund managers, especially hedge funds and private equity funds, to think about the financial costs of climate change and the potential for serious asset depreciation or stranding as a result of a mooted tighter price on carbon and environmental pollution.”  The big players are moving on this.


September 9, 2014

Green Money Journal just published an article from Barbara Krumsiek, CEO & President of Calvert Investments entitled, “What’s Next for Sustainable Investing? An Individual and Industry Perspective.” It’s interesting to see an industry leader’s thought of what’s coming next.

August 28, 2014

Great article published last week in Entrepreneur.  This is one of the most in-depth articles I've seen in a long time called "Does Social Responsibility Hurt a Company's Bottom Line?"  The article starts discussing vice oriented funds (ones that focus on buying tobacco, firearms, alcohol, etc.).  It talks about their history and then moves to ESG funds and gives some great background and prospective.  I think its a great read if you're thinking of investing in SRI (or avoiding it) as it discusses both sides of the debate. 

August 6, 2014

SEI released this month their 2014 Nonprofit Investment Challenges 2014 survey results of executives and Investment Committee members from nonprofits in the U.S. to gauge their current investment challenges and practices.  While a lot of our practice is focused on the nonprofit world, the interesting part of the survey to this blog is the second to last page which discusses ESG factors when it comes to investment decisions.  One line: "Nearly one-third (32 percent) of the poll participants said the organization either currently does or plans to integrate ESG factors in the investment process.

August 4, 2014

Today’s WSJ had an article entitled, “Men Had Their Chance; New Funds Bet on Women.”  It discusses the various investments that are available that specialize in investing in companies with Women Leadership and why they may (or may not) be successful.  Interesting quick read for those who want to think more about their SRI choices.

July 28, 2014

Just read former Treasury Secretary Robert Rubins op-ed in the Washington Post from last week.  His argument is that by ignoring climate change we could ruin our economy.  Many naysayers argue that preventing global warming will cost too much.  He argues the opposite.  My favorite quote, “To cover those costs, we will have to increase the deficit; raise taxes; or significantly cut spending on defense, our social safety net, and public investment including infrastructure, education and basic research. Which means that, whatever your public policy views, whether you care about our national debt and deficits, our tax rates, or government investment in everything from national security to job creation, you should care about the costs of coping with climate-related damage. By forcing policymakers to recognize likely future expenditures — and the trade-offs required to make them — we may increase the political appetite for policy changes now.”

July 23, 2014

Another NY Times article today on the use of Antibiotics.  What I found interesting was the concept to get the cheapest meat to the marketplace, a widespread use of antibiotics on those animals makes sense.  Cheaper meat for people and more profit for the companies.  But when people get infected with diseases that are resistant to antibiotic because of all the antibiotics in the meat, then the only the people (and the insurance companies and the government) pay for the treatment.  The argument goes on that the biggest profiteers of the use of antibiotics in meat are McDonalds and Walmart who don’t provide insurance for their employees and therefore much of the cost goes to the taxpayers.


July 16, 2014

Article in yesterday’s NY Times entitled “Motivating Companies to do Good.”  Interesting read talking about how many of the most successful companies of the last century made sure their workers were well treated and how that practice has ended with most companies.  Interesting arguments in the article explaining why it might be beneficial for more companies to treat employees well and how it can help both their bottom line and the country’s bottom line.


July 8, 2014

Just sat down to read this month's GreenMoney e-journal.  Always interesting topics.  This one was on how Millennials see the investment world.  There were about a half dozen articles all written by Millennials talking about their perspective.  I thought most of what I read was stated nicely in a few sentences in the article by Liesel Pritzker Simmons:

"We want our work to have meaning for ourselves and the world, and we place a higher value on consumer goods that have some sort of beneficial social or environmental impact. Climate change is not a debate for us, and we probably still nag our parents about separating the trash from the recycling. Although we are generally more conservative in our investment decisions than previous generations (can you blame us?),  we are willing to take on more financial risk if it increases exposure to ESG impact. "

June 30, 2014

CERES just released their Climate Disclosure search tool.  The online tool has data from all 3000 stocks of the Russell 3000 since 2009.  It allows users to filter and customize company 10-K filing excerpts relating to clean energy, renewables, weather risk and climate-related regulatory risks and opportunities. The tool scans filings, automatically identifies climate-related text, and sorts information into renewable energy, physical impacts and other categories. Users can search by industry, and can search for topics such as “climate and fossil fuel extraction”, “energy/fuel efficiency”, and “GHG emissions reduction goals.”  While not the only reason to invest in a company, this makes the research on sustainability much easier to find.

June 20, 2014

Listened to a great presentation today put on by US-SIF on Green Bonds.  Started with the World Bank talking about their Green Bond releases.  Next up was an official from Massachusetts.  They were the first to issue muni Green Bonds.  3rd was a manager from Trillium Asset Management.  They discussed what they looked for in purchasing a Green Bond.  Representatives from Calvert and Bloomberg also gave a follow up on sustainable finance.

June 16, 2014

Last week Olivia Mitchell a professor at the Wharton School at the University of Pennsylvania (my alma mater), wrote an article in the WSJ entitled “The Financial Sacrifice of Socially Responsible Investing”.   She discussed the potential sacrifice of limiting your investment choices.  Today Blue & Green Tomorrow, with the help of US SIF posted their response and how while there are downsides of SRI investing there are potentially more upsides.

June 4, 2014

There was an announcement today of “the first and only mutual fund in the U.S. that focuses on investing in companies that are global leaders in advancing women.”  I haven’t been able to do any due diligence on the fund and haven’t gotten the details yet, but I find this an interesting move.  There have been studies that show that companies whose boards of director have women outperform those that are all male.  Let me know if you’re interested and as I find out more information I’ll let you know when I find out more.

June 2, 2014

Want to know what companies are doing as far as sustainability?  It’s getting easier.  The Governance and Accounting Institute just released the results of their current study: In year 2013, our analysis shows 72% of the S&P 500 published in some form a sustainability or responsibility (or “citizenship”) report. In 2012, their analysts reported that just over half (53%) were reporting. In 2011, the first year of their analysis, they found just under 20% of S&P 500 companies were publishing reports.

June 2, 2014

I assume anyone reading this blog has already read about the EPA’s new carbon pollution standards.  But some might wonder how this effects their investments.  I thought it was summed up nicely by CERES in a quote from New York State Controller Thomas P. DiNapoli:  "As the trustee of the New York State Retirement Fund, it is my duty to maximize returns on investment and to manage avoidable risks.  Quite simply, climate change poses a significant risk to the global finances, and our fiscal and ecological health depends on building a low carbon, energy efficient economy. The Carbon Pollution Standards released today will greatly serve that goal by providing a catalyst for clean energy solutions already at work in the United States." The New York State Retirement Fund manages $176.2 billion in assets.

May 31, 2014

Article in today’s New York Times entitled “The Surge in Investing by Conscience.”  Nothing new in the article and I think everything that was written is mentioned below, but always good to get the word out.

May 23, 2014

From Income Investing: Barclays this week downgrades the entire electric sector of the U.S. high-grade corporate bond market to underweight, saying it sees long-term challenges to electric utilities from solar energy, and that the electric sector of the bond market isn’t pricing in these challenges right now. It’s a noteworthy downgrade since electric utilities which make up nearly 7.5% of Barclays’ U.S. Corporate Index by market value.  Makes you wonder about what other traditional industries could get hurt by mispricing the cost of their unsustainable ways. 

May 20, 2014

Article today in the Financial Times written by Michael Bloomberg (billionaire, former NYC Mayor) and Mary Schapiro (former SEC Chair) about non-financial disclosures.  Public companies must disclose all their relevant financial information.  They need to tell investors about profits, losses, assets, etc.  But, most don't disclose much else.  But in an ever changing world, there is some important information that is not disclosed.  One example from the article: "Take climate risk for example, and consider two property development companies, both valued at $1bn. If one owns buildings that are in a coastal flood plain and the other does not, do you – as an investor – want to know?"  When looking at SRI for clients, I try to find managers that are aware of not only the financials but are always looking at non-financials for insight.

May 8, 2014

Just read an article in USA Today about McDonald's.  They announced new goals for sustainability and social responsibility by 2020.  Some include:

  • Increasing in-restaurant recycling by 50%
  • Purchasing 100% of fiber-based packaging from certified or recycled sources.
  • Serving 100% more fruit, vegetable, low-fat diary or whole grains in nine of its top markets.

Or course, there are many environmentalists who are saying based on their size, it's not enough and they need to go further to make a real dent in their footprint.

May 7, 2014

More news out of Stanford today.  Nice article in the Stanford Social Innovation Review magazine that is published at the Stanford Center on Philanthropy and Civil Society at Stanford University.  The article entitled "Investing Evolves: A brief history of investing that advances environmental and social concerns, and why impact investors and sustainable investors should look to what they have in common, not how they differ." It's a good summary for those of you who are new to SRI and want to learn about it's history and some good questions to ask yourself.

May 7, 2014

The big news in the SRI world today is that Stanford University has decided to divest from coal companies.  I find it interesting that I talk to some clients that surround themselves with people who think like them and have integrated SRI into their portfolios.  But most clients feel they are in a bubble, and are always questioning their decision until they see moves like this from major players.

May 7, 2014

CERES annual report entitled "The Future Is Now" was just released.  This is their 25th anniversary and I think they gave a little extra knowing this.  The report goes over their history of activism and really shows where the SRI movement has gone over the last 25 years.    For those of you who aren't familiar with CERES:

"Ceres is an advocate for sustainability leadership. Ceres mobilizes a powerful network of investors, companies and public interest groups to accelerate and expand the adoption of sustainable business practices and solutions to build a healthy global economy.

Our mission is to mobilize investor and business leadership to build a thriving, sustainable global economy.

Founded by a small group of investors in 1989 in response to the Exxon Valdez oil spill, Ceres has been working for more than 20 years to weave sustainable strategies and practices into the fabric and decision-making of companies, investors and other key economic players."

April 30, 2014

CERES just released their report entitled "Gaining Ground: Corporate Progress on the Ceres Roadmap for Sustainability".  It's available online if you want to see how well 613 of the largest, publicly traded U.S. companies are integrating sustainability into their business systems and decision-making.  Key findings according to CERES:

  • While many companies are taking action to reduce GHG emissions, few have set time-bound targets.
  • A growing number of companies are incorporating sustainability performance into executive compensation packages
  • More companies are setting clear sustainability standards for suppliers

April 21, 2014

Article today written by the CEO of Philips for the Middle East in Gulf Business.  (That's the one in the Middle East, not the one in the South).  Title is:  "Good Business: Why Placing Ethics Before Profits Pays Off."  I think that says enough when a corporate leader in that part of the world understands the need for doing the right thing.

April 14, 2014

Just read that the first Green Bond from the auto industry is being launched for about $3.5 mil.  Toyota Financial Services is using the bond to finance loans for hybrid and alternative fuel vehicles.  These bonds were all snatched up and were not available for the public to buy, but the concept is interesting as more and more companies are allocating some of their debt towards specific green parts of their business allowing investors to follow their passions more and more in the bond market.

April 11, 2014

The Clean Energy Victory Bonds Act of 2014 was introduced on April 8th.  This bond is a proposed US Treasury bond in support of renewable energy and energy efficiency technologies.  Green America is having a webinar on the topic on 4/17/14 if anyone is interested.  More info on their website.

Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. 

April 8, 2014

Harvard University just announced the launch of it's $20mil climate fund.  It's always interesting when the largest university endowment in the country acts on something like this.  Of course, based on the size of their endowment, this is just a token gesture.  University president Drew Faust said "We can and must galvanise the deep commitment of students, faculty, staff and alumni to work together to move us closer to a world founded on renewable energy.”  Harvard has also become a signatory to the United Nations-backed Principles for Responsible Investment (PRI) and the CDP, formerly known as the Carbon Disclosure Project.  They however have not stopped investing in fossil fuels.

April 4, 2014

While this blog is on SRI, our firm's base is in Financial Planning.  Beyond the typical financial planning advice we feel we have expertise in three areas, SRI, multi-generational wealth management and philanthropic planning.  We consider it all Legacy Planning.  It is always nice when the outside world combines some of these emphasis areas.  The Boston Foundation, one of the oldest and largest community foundations in the United States, has just announced that they are going to offer SRI choices as investment options for its donors in response to donor demand, especially from younger people. We've been working with clients to help there goals for a better world come together.  This is an example of how one can help philanthropic causes while making your investments are matching your morality.

April 1, 2014

Article in the Wall Street Journal today entitled "More Companies Bow to Investors With a Social Cause."  Great read reviewing on the basics of how shareholder activism is getting companies to relook at their environmental policies and how proxy proposals work in getting companies to act.

March 24, 2014

Just read a recap of some of the recently passed farm bill. While a very small portion of the bill, funding for fruits, vegetables and organic programs increased by more than 50% since 2008.

March 20, 2014

Just heard we didn't win a Sustainable Quality Award this year.  We scored above average in all three judging categories, but not high enough to win.  We'll still be attending and hope to see you on 4/30/14.  It's a great event right here in Santa Monica.

March 17, 2014

Interesting article in the New York Times entitled A Harvest of Company Details, All in One Basket.  It discusses a couple of different sites/apps that are taking available government data and aggregating it so it could be found in one place.  Traditionally if you wanted research about a company and it's public records you had to go to various sites, such as the SEC, congressional records, etc.  These sites allow you to get information all at one place such as how much a company executives might have donated to various presidential candidates, how many of their executives visited met with POTUS, their lobbying expenses and their SEC filings all in one place so you can get a complete picture without going to a dozen places.

March 11, 2014

Finally finished reading the 2014 Proxy Preview (See March 5, 2014 entry for more details).  Fascinating discovery of the trends that are going on and how shareholder activists are using proxies to change companies from the inside out.  I highly recommend scanning it if you are thinking about how to vote your proxies on certain ESG issues.

March 5, 2014

Just listened to the annual 10th annual Proxy Preview webinar.  Produced by As You Sow, every year this report looks at the shareholder resolutions that are proposed and categorizes them to show the hot issues.  As we've discussed below, SRI (Socially Responsible Investing) is related to and sometimes used interchangeably with ESG (Environment, Social, Governance).  Much of modern ESG investing is done by having shareholders file resolutions with the companies they own to promote change from within.  This year there was a record number of 417 shareholder environmental and social resolutions in the US.  The webinar talked about current trends and where they think proxy voting is going.

March 4, 2014

This is not as much about SRI, than about personal social responsibility.  The LA Times has had a few articles in the last week based on Shahzeen Z. Attari's paper in the "Proceedings of the National Academy of Sciences of the United States" entitled Perceptions of Water Use.  Both the articles and the paper talk about how households use water and easy ways to save water.  A good read if you want to learn a few easy tricks to save water and a great read if you're about to do some remodeling.  As with most things in life the intuitive guess isn't always the right method.

February 27, 2014

Interesting article in Forbes today on "The Key Ingredients of CSR".  For those not in the know, it's Corporate Social Responsibility and deals with the need (or lack thereof) of corporations to give back to the community.  Boston College's Center for Corporate Citizenship reported that 97% of surveyed companies had a discreet operating budget for Corporate Citizenship in 2013, up from 81% in 2010.  The article talks about different views of CSR and how it might effect the valuation of a company.

February 17, 2014

Britain charged three ex-Barclays employees for fraud for allegedly rigging a key interest rate in the run-up to the financial crisis.  For many SRI is about environmental causes, but this is a good reminder that SRI can be about more.  Corporate governance is a key component of many investment manager's SRI check list.  While it's not without its own risk, looking for companies that have a management team that tries to make ethical decisions can avoid this sort of embarrassment in one's portfolio. 

February 14, 2014

Turned in our application today for the Santa Monica Sustainable Quality Awards.  Wish for the best for Capital Intelligence Associates.  We'll hear how we did in the next several weeks. 

February 13, 2014

Speaking of speeches (see Feb. 11), a reader just pointed out that another great speech to watch is Chris McKnett's Ted talk entitled "The investment logic for sustainability."

February 11, 2014

If you have a chance, look up the speech given by Nancy Pfund to the National Association of College and University Business Officers Endowment.  Titled "Beyond Campus Conflict: How Impact Venture Capital Can Address Student Concerns While Furthering Endowment Investment Goals," it goes over some of the history of the SRI movement and gave practical ways to move forward for colleges and endowments.  I believe that these methods can also be used in an individual portfolio easily.

February 5, 2014

Nice article on The Motley Fool entitled "More Corporations See Sustainability as a Boon, Not a Burden."  Gives some great real life corporate examples of companies doing things to improve the environment and by doing so also saved money.

February 3, 2014

A quick update from December.  Environmental Leader magazine is on their third article on "Sustainable Mythbusters".  This one is on the myth that "Sustainability is Too Expensive".

January 31, 2014

For those who really like to see both sides of every arguement, there were two interesting articles in The Guardian over the last week.  The first by Charles Eisenstein was titled ""Let's be honest: real sustainability may not make business sense."  That was followed up by Hunter Lovins' "Sustainability is better business – and we can prove it".  While both give food for thought, Lovins' piece cites over 50 studies showing that sustainability is good for business and for the world, including such "from the likes of those wild-eyed environmentalists at Goldman Sachs show that the companies that are the leaders in environment, social and good governance policies are financially outperforming their less sustainable peers."

January 30, 2014

Great article on the Dealbook section of the New York times about foundations gathering together in order to get rid of fossil fuel investments.  The article talks about some foundations that are and why.  This goes hand in hand with the US-SIF piece mentioned below.

January 27, 2014

Spent the weekend reading US-SIF's "Unleashing the Potential of US Foundation Endowments:  Using Responsible Investment to Strengthen Endowment Oversight and Enhance Impact." Great read if you are on the staff or board of a non-profit with endowment funds.  Too often we see the non-profit world investing money in companies that are fighting against their charitable purpose.  The paper is great on showing how an SRI portfolio may help you meet your fiduciary duties and helping organizations think about the issues and take the steps that are appropriate for their goals.

January 24, 2014

Great article in today's NY Times entitled "Industry Awakens to Threat of Climate Change".  It talks about how corporate profits are being hurt based on climate change and how many companies that traditionally have fought against climate change regulation are now fighting for it.  Some interesting points are made regarding the cost of the regulation vs. the cost of not regulating carbon and making global policy changes.

January 23, 2014 released their 108 page State Of Green Business report "State of Green Business 2014" online.  The report stays away from investment advice, but I find it useful for two reasons.  First it talks about the problems and solutions that are facing the environment and business.  It allows me to look at companies that are addressing these concerns and those that are ignoring them.  Second they have created a Natural Capital Leaders Index that shows who they think are the top companies around the world in each industry.  While the data is imperfect I find it a great overlay when doing research along with other analysis.

January 20, 2014

On Martin Luther King Day, I like to think about the power each of us have to make a difference.  By doing the right things each of us can help change the world.  It was the divestment movement that helped finalize the downfall of Apartheid South Africa.  The movement goes farther back to religious organizations who refused to invest in companies that were involved in the slave trade in our country's early days.

January 13, 2014

Per the request of some green builders I know I put in a proposal to speak on SRI at the 2014 GreenBuild in New Orleans.  With over 30,000 attendees this is the largest conference in the world for those in the green building industry.  The presentation is a bit outside the box for what they normally focus on at the conference, but based on my experience, most people in this industry have a green professional portfolio, but are lacking when it comes to a green investment portfolio.

December 23, 2013

Growing up I always thought a reusable tree was better for the environment since it could be used over and over again.  But, looking at most research nowadays, it appears that most are better of buying a real tree.  (Of course if you live in an environment where you can buy a live tree and plant it even better).  Most real trees are grown on tree farms and can be mulched after the holidays.  Artificial trees are mostly made in china with chemicals that are not good for the environment and created using energy from coal burning plants.  Lots of good articles online if you want to do some research. 

December 19, 2013

Always interesting when the big players get concerned about SRI.  Bloomberg just came out with their new Carbon Risk Valuation Tool.  The tool lets you look at individual companies or a total portfolio and determine how much a change in oil prices could effect their stock price.  It can differentiate between changes in oil price due to carbon taxes or by other methods of creating energy becoming more efficient.  I think that if the big players are concerned the rest of us should be too.

December 11, 2013

KPMG just issued their 2013 report on corporate responsibility.  A few interesting findings:

  • Of the 250 largest companies in the world, 93% now create corporate sustainability reports.  So, if you're looking to invest, the information about sustainability is getting easier to find.
  • In the US, 86% of the largest companies created these reports - up from 74% just 5 years ago.
  • My favorite quote was: "Companies should no longer ask whether or not they should publish a CR report, even in the absence of regulatory requirements to do so. That debate is over," according to John Hickox, who heads Climate Change & Sustainability for KPMG Americas. "Companies that do not publish these reports need to ask themselves whether it benefits them to keep swimming against the tide." 

December 9, 2013

Environmental Leader magazine has started a series of articles entitled "Sustainability Mythbusters: Debunking the Sustainability Myths".  The fisrt topic is that "Sustainability does not make business sense."  The article gives some great examples of public companies that are saving money by being sustainable.

December 3, 2013

For those of you who say I only talk about the positives of SRI, you should read the article in today's LA Times entitled "Power Struggle: Green Energy Versus a Grid that's not ready".  The concern is that the US has a very old power grid that was built to rely on constant energy sources from mostly fossil fuels.  Alternatives tend to not be as constant as wind power has gusts and lulls, solar power's output changes with each passing cloud, etc.  The more we add alternatives to the system, the harder it will be on the grid and require more infrastructure improvements.

November 26, 2013

Article today on Morningstar about SRI.  Not much information there, but I think it can be summarized in one line when asked about how SRI funds perform: "SRI funds appear to hold their own in the market." 

November 22, 2013

Great LA Times article today on climate change.  The research states that just 90 companies worldwide produced fuels that generated two-thirds of industrial greenhouse gas emissions from 1854 to 2010.  For those of you looking to change your portfolio to reduce its carbon footprint, that's a great place to start.

November 20, 2013

Just read the recently released Callan survey results that assessed the status of responsible and sustainable investment strategies in the U.S. institutional market. The questions concerned ESG (Environment, Social and Governance issues).  Some of them most interesting findings to me:

  • Around one-fifth of respondents have incorporated ESG factors into decision making.
  • Funds with $2 billion or more tend to embrace ESG more than their smaller counterparts. The larger the fund, the more likely ESG adoption is present: funds with greater than $10 billion in assets were more than twice as likely to have incorporated ESG factors into investment decision making (46%) as the total respondent group.
  • By fund type, foundations had the highest rate of ESG adoption, followed by endowments. Public and corporate funds had similar adoption rates.

November 18, 2013

Pardon the interruption.  We had been busy redoing our website and I've been unable to post over the last month.

October 21, 2013

Trilliums CEO, Matt Patsky was featured in the Wall Street Journals Voices column which is designed to allow wealth managers to address issues of interest to the advisory community. Trillium is one of the oldest SRI companies around and when they speak, its almost nice to listen. This article focused on shareholder advocacy.  

October 5, 2013

Today was the 70th birthday party for one of my favorite former coworkers and she invited some other former friends from our AFP Group days. One of them is now working for a local firm that specializes in Impact Investing. While there product is still being rolled out, I look forward to the opportunity to be able share this investment space with clients sometime soon. 

September 26, 2013

Attended a Santa Monica Green Business mixer tonight hosted by the SM Chamber and Sustainable Works. It was nice mingling with other like-minded businesses and looking at ways to help each other get better and greener results. I was asked to speak for a few minutes and as the featured Certified Green Business and talk about how the process has helped our business (and the planet). 

September 20, 2013

CalPERS just released their set of 10 Investment Beliefs that will provide a basis for strategic management of the investment portfolio, inform organizational priorities and ensure alignment between the Investment Office and CalPERS staff. Its an interesting read. They really are looking at sustainability and trying to match assets and liabilities. As the largest pension fund in the US, not everything they do applies to the average investor. But by looking at their 10 Investment Beliefs, one can start asking tough questions about his or her portfolio and consider whether it makes sense to make changes that reflect what the large players are doing. 

September 17, 2013

CNBC just ran an article How to extract fossil fuels from your investment portfolio. While this approach isnt right for everyone, it can be done. My favorite line is And you dont have to sacrifice performance. 2 years ago, the discussion of fossil-free portfolios almost never came up. Now its a regular occurance. It isnt easy, but I can show you how. 

September 6, 2013

Third NY Times article in the last week about SRI. This one talks about more mainstream investors going using ESG factors and how some traditionally focused SRI investors are looking to broaden their holdings. My favorite line First, lets talk returns. Are they as good as a portfolio without an E.S.G. screen? The short answer is yes. 

September 6, 2013

Read article today published on 9/2 about the crowd funding site Mosaic that specializes in renewable energy projects. While I think there isnt enough data to recommend to clients, I think that foundations and non-profits will be using more and more investments like this to make sure their portfolio matches their mission. 

September 5, 2013 

Nice article in todays NY Times regarding the divestment programs at many top universities, featuring Harvard. It compares the fossil fuel compaigns today to the South Africa campaigns of the 80s. 

September 3, 2013

Just passed my last test for my CAP(R) designation. While there is paperwork to complete, its not official, but the last test is done. Its been a great joy studying for these exams as its really about helping clients reach their goals for a better world. The last class did a great job of integrating ESG and SRI factors into philanthropy and looking for the best models to serve clients and make the world a better place. 

August 22, 2013

Studying for my last exam in the CAP (R) (Chartered Advisor in Philanthropy) program. Great couple of assignments looking at non-profits trying to match their mission with their investments and of the rise of for-profit business models that are trying to also do good. 

August 14, 2013

For those of you who have businesses in the City of Los Angeles, they have just announced their Green Business Certification Program. There is no cost for the first 300 businesses that qualify. Going through the process with the city of Santa Monica earlier this year was a great experience for our firm and we were able to make some changes that helped our firm and the environment.

August, 13, 2013

The US SIF just released a report on investment vehicles that target community development. There have been many such funds that have developed across the globe in recent years, but they haven't gotten as much attention in the US. The report though states that interest for these funds is increasing, "especially from high net worth individuals, family offices, donor-advised funds, community foundations and pension funds." The report mentions that some structural changes are still needed on how these funds are offered, but the trends are moving in the right direction.

July 24, 2013

News is just coming in that a US Court upholds in full US SEC Rule 1502 requiring companies to disclose use of conflict minerals. This was an important part of Dodd-Frank and a great step of requiring companies to better disclose their sustainability.

July 23, 2013

The Triple Pundit website posted tody a great summary of Catalyst Research study of women in the board room. Looking at Fortune 500 companies that had women board members. Those with women members showed Higher Return on Equity, Superior Sales and Higher ROI. The study goes on to show that having women board members also helps enable sustainable business results.

July 18, 2013

The USSIF (United States Social Investment Forum) has just announced that they are launching a new education brochure on their website entitled "Investing to Curb Climate Change: A Guide for the Retail Investor." While I haven't read it yet, based on the quality of their other investor oriented pieces about SRI, I'm sure it will be quality work. For those of you who have questions about SRI, their website is a great resource of knowledge.

July 11, 2013

Just finished reading the ICCR's Insights for Investors Working for Bolder Intervention on Climate Change. Very interesting piece discussing what can be done about climate change. It emphasizes that the majority of the work needs to be done by global policymakers, but discusses the importance of investors doing their roll. It talks about the benefits and drawbacks of both divestment, such as's campaign, and of sharehold engagement.

July 10, 2013

Interesting article on It starts by comparing America's want of gun control legislation and congress' failure to act to similar polls showing most Americans want climate change regulation but the lack of any bills to make it out of congress. The article talks about some of the reasons that they believe no action has been taken.

June 26, 2013

Spent some time reviewing President Obama's Climate Action Plan that was announced yesterday at Georgetown University. Most of the feedback I've read shows that the measures that will help to drive innovation, create U.S. jobs and benefit consumers, and bolster international efforts to curb climate change. Many in the SRI community believe he hasn't gone far enough but almost all agree that it's a move in the right direction. As it gets implemented there will be many companies that are affected adding another another dimension to company analysis.

June 17, 2013

CERES just released their Roadmap for Sustainability on their website. The Ceres Roadmap provides a practical framework for companies that are integrating sustainability into their business models. The website explores 20 expectations for a sustainable corporation, gives examples with new case studies and resources, and shows data on the performance of 600 of the largest U.S. companies. It's a great way to look at the companies you might be investing in or give thoughts on how to improve your small business.

June 10, 2013

Just watched a video on Vimeo done by Jon Scott on how to vote your Proxy. I am often asked by clients how to vote their proxies and have a hard time answering without spending hours doing research. This 20 minute video goes through an actual proxy ballot vote by vote discussing what it means to vote and the potential impacts of your vote. I admit to not even looking at most of my proxies in the past, but a few minutes of time can make a huge impact on causes I care about. Over the last few years I look at every Proxy and try to do what I think is best for my profits and the world. It gives good references to sites such as Proxy Democracy and Proxy Preview where you can look up specific ballots and get ideas of what other thought leaders are voting.

June 7, 2013

Interesting survey results just released from Green America (GA), EcoVentures International (EVI), and the Association for Enterprise Opportunity (AEO). They interviewed a 1305 small business owners and the results showed it paid to be green. Some of the results included that "Nearly six out of 10 (58 percent) small businesses said that they had been able to expand their products and services with green offerings during the recent economic downturn" and "Nearly four out of five (79 percent) of small business survey respondents strongly agreed that offering green products and services gave their businesses a competitive advantage." More results can be found at the Big Green Opportunity website.

May 21, 2013

CERES just released their report "Power Factor: Institutional Investors' Policy Priorities Can Bring Energy Efficiency to Scale. "Many interesting points on how little changes in laws can help investors really fuel a change in power efficiency in the US and around the world. Small changes can make a big difference. In addition the report pointed out that Investment analysts estimate that climate change could contribute ten percent of overall risk within institutional investment portfolios.

May 16, 2013

Just completed the course "Fundamentals of Sustainable and Responsible Investment" that is offered by the US SIF. While many of these were basic ideas that were review, it is always helpful to review the basics. I only missed one question on the exam for a score of 97%. If anyone knows investors or professionals who are looking to really understand ESG and SRI better, I highly recommend the course.

May 8, 2013

The CFA Institute (Chartered Financial Analyst) is having their 66th annual conference in 10 days in Singapore. They have a lot of articles leading up to the conference about investing in Asia. Usman Hayat posted a great article about SRI in Asia. He mentions that financial companies usually get bad press but some of the SRI issues could help them in a more positive light. The article went over the conflicting moralities of industrial projects there. One example was banks looking at funding a dam that would provide power to some of the poorest people in the world but on the other hand would cause environmental problems. He then lists other reasons that SRI can add value to a portfolio.

April 29, 2013

Just read an article published last week in Forbes about Socially Responsible Investing. It gives the real basics on waht SRI is and questions you should ask.

April 25, 2013

Several great articles today, including the New York Times regarding the petition to the SEC requiring companies to disclose their political donations. Over 500,000 people signed or commented making it by far the biggest petition ever to the SEC. ESG (and other) investors want full transparancy to keep corporations accountable in a post Citizen's United era. But there is resistance of course from the big corporations who do not want their donations disclosed.

April 23, 2013

We're in the middle of proxy season. For years I didn't vote for my personal holdings as I thought it didn't make a difference. But so many of the votes today are put on the ballot by socially responsible investors that it's worth a few minutes of time to research your vote and see if it a topic of interest to you.

April 17, 2013

Capital Intelligence Associates just went through the Santa Monica Green Business Certification Program and are now a Santa Monica Certified Green Business. While there wasn't much we had to do, the letters we wrote to our landlords helped make changes much bigger than our firm.

April 8, 2013

Many investors I know avoid SRI because they feel it won't make a difference. I just got a release from one SRI firm that they were able to get four companies to agree to making Board Inclusiveness one of the criteria they look for in searching for new board members and to review the skills of the board on an annual basis to look for openings for new board members. All four companies currently had zero or one woman on the board.

April 3, 2013

Investment News, one of the many trade publications I read regularly, printed this week an article entitled "More Investors Follow Their Heart." It is a good piece discussing why many clients prefer SRI, how many advisors think incorrectly that SRI investing will hurt their clients returns, and how an advisor can't advise well in this area unless they devote significant resources to it.

March 15, 2013

The US-SIF released their statement on fossil fuel investments today. It doesn't call for an all-out ban aknowledging that can't be done for every portfolio or every client. But it outlines the issues very well and gives some best practices. I believe the analysis can work equally well among most SRI issues.

March 14, 2013

Went to the 18th annual Santa Monica Sustainable Quality Awards today. They've given out over 100 awards over the years. It's amazing how you don't have to look hard to so many people doing so many good things for the environment.

March 5, 2013

Just finished our initial review and adjustments as we work with Sustainable Works towards becoming a Santa Monica Certified Green Business. We have accomplished most of the items on the checklist before meeting with them. We are currently working with our landlords to help make our office environment more sustainable. Also we have finished our purchasing and staff environmental policies. Hopefully they'll be up on the web when our rebranding is completed (but that's a whole different matter).

February 26, 2013

RepRisk just released a report on what they deemed to be the "Most Controversial Companies of 2012". Very interesting to see who made the list and why. Most were big news items, but a few have slipped through the cracks in most of the U.S. media. Its amazing how so many companies can do so many bad things in so little time.

February 14, 2013

Being Valentines Day, I've seen a lot of advertisements for various "perfect gifts." It's hard to look at most of these companies and not see the issues they have with the sourcing of their stones, or providing living wages to their employees or the pesticide use or... But some do stand out. Always good to know who you're doing business with.

January 31, 2013

For those of you who are concerned about climate change, a client just pointed me to this WEBSITE where you can ask your college or university to divest their holdings of fossil fuels. A lot of my clients ask me how they can act. This little bit of work might lead to a huge change.

January 28, 2013

The NEW YORK TIMES OPINION PAGES ran an interesting debate last week. It featured articles from 6 different stakeholders on divestment. It looked at the pros and cons of divesting mostly in petroleum but also mentioned firearms. The pages look at why one would want to divest and the possible outcomes caused by mass divestment.

January 8, 2013

For those of you who are worried about corporate involvement in politics (according to a recent Demos poll about 80% of all Americans), the SEC is looking into what it can do. The agency announced that they will consider a proposed rule to require that public companies provide disclosure to shareholders regarding the use of corporate resources for political activities. A petition requesting this rule-making was filed in 2011 by a bipartisan committee of leading law professors.

December 18, 2012

Just finished reading the Governance & Accounting Institute's report "2012 CORPORATE ESG / SUSTAINABILITY / RESPONSIBILITY REPORTING DOES IT MATTER?"

My highlights: Over 1/2 of all fortune 500 companies are now disclosing ESG informations, compared to about 20% two years ago. The findings "show that companies who measure, manage, and ultimately disclose more and engage in structuring reporting on their Sustainability or ESG issues enjoy considerable advantage when compared to their non-reporting peers."

December 13, 2012

If you think it's only a few fringe players worried about the enviroment and clean energy, think again. A new report by Calvert, Ceres and the WWF shows nearly 60 percent of world's largest companies have renewable energy or greenhouse gas reduction commitments, citing the strong business case to make such a move.

December 3, 2012

US SIF CEO Lisa Woll has a new article on the Triple Pundit website talking about mandatory ESG disclosures and the SEC. It mentions some of the progress that has been made in the last 5 years and some of the immediate goals moving forward with new leadership at the SEC.

December 2, 2012

Interesting blog article today from Marc Gunther. It discusses how many of the top SRI managers have relatively large plays in oil companies. It goes over some of the rationals for these holdings for some and why others won't touch them at all. The blog has many follow ups in some of the SRI online forums with some very heated discussions.

November 30, 2012

In time for Thanksgiving there was a very good article in the Chicago Tribune's Your Money column on SRI. It goes over some of the very basics of how it works and what clients should expect. Some of the industry leaders are quoted.

November 19, 2012

The US SIF Foundation (United States Social Responsible Forum) just released their "2012 Report on Sustainable and Responsible Investing Trends in the United States". Among many highlights were that SRI assets were up over 22% in the last two years and accounts for 11.23 percent of all assets under professional management in the United States at year end 2011.

November 12, 2012

For those of you who follow Socially Responsible Investing, you might see a new standard in responsible investment research called ARISTA. But don't worry. It's not one more layer trying to add confusion. It's the relaunching of one of the first standards called CSRR-QS. The standard is the same, only the name is different. They are hoping the new name will bring new awareness.

October 22, 2012

Newsweek just released their GREEN RANKINGS of the US and world's greenest companies. What is more important than the results is the fact that 20% more companies gave information for the study. As time passes more companies are not only reporting their earnings, but also their impact on the world allowing us to better pick those companies to invest in.

October 9, 2012

Just saw a great TED VIDEO ON YOUTUBE. In 20 minutes you can really see why it makes sense for companies to look not only at it's bottom line, but the world's bottom line.

August 30, 2012

The WOMEN IN GREEN FORUM was held the last two days in Santa Monica. I attended part of each day. Some great ideas about on ways to look at Green businesses and some good insight on some of the different needs of women investors.

August 22, 2012

Just got back from the LPL National Conference in San Diego. Lot's of good general and break out sessions on all sorts of planning and investment techniques. But related to this blog, there was a great breakout on Double Bottom Line investing. It went over trying to find companies that are not only doing well financially, but doing well in the community.

August 10, 2012

If you want to get to the basics of Socially Responsible Investing, a good read is the PRINCIPLES FOR RESPONSIBLE INVESTING that was backed by the United Nations. It really talks about the big picture issues that are important to SRI and the basics one should look for in a responsible company.

August 6, 2012

Just read an interest REPORT on college endowments and Enviromental, Social and Governance (ESG) issues. While universities were some of the leaders in SRI investing in the 70's and 80's, they are no longer on the front line. Many endowments are looking into it, but haven't started to act yet.

July 31, 2012

Just read a report from the GAO regarding Socially Responsible Investing in their Thrift Savings Plan. Yes, that's the United State Government Accountability Office Even the Fed is realizing that this a trend that is here to stay.

July 26, 2012

Presented a seminar on Socially Responsible Investing as a volunteer for the Financial Planning Association last night. It went well with a lot of participants who were very passionate about the subject. Several came up afterwards and told me how much they learned and how it helped them think about their portfolio better.

July 25, 2012

Think you're alone in wanting your investments to be socially responsible? A new STUDY shows that total assets managed by U.S. private equity managers with the goal of achieving both financial returns and intentional social benefits at approximately $4 billion.

July 18, 2012

Just read an interesting ARTICLE on Extended Producer Responsibility. The idea is that makers of products should be partially responsible for the waste of the packaging. The study shows it would increase green jobs and decrease the amount of waste in our landfills. The concept has worked in some other countries.

June 23, 2012

The Rio+20 conference was held on Sustainable Development was sponsored by the UN last week. While discussing a lot of issues, found the article from CORPORATE SECRETARY very interested as it related the conference from a pure business point of view. In the UK, all public corporations need to report on their social and environment performance, or explain why they aren't doing it. Other countries are now looking to follow suit. We'll see if it gets to the US.

June 7, 2012

Signed up our home for a Drip Irrigation System. With incentives it will cost us about $800 out of pocket and probably save $30/month in our water bill. When investing in socially responsible companies, the trick is finding ones that can use this leverage at a large scale to create long-term profits.

May 21, 2012

I just was scheduled at WISE AND HEALTHY AGING next month to talk about Green Investing. It is part of my pro-bono activities there through the Los Angeles Chapter of The Financial Planning Association. Let me know if you want more information. It should be appearing on their website soon.

May 11, 2012

Went to the ALTBUILD EXPO at the Santa Monica Civic Auditorium this morning for a Local Business Mixer. We got a private tour through the exhibits. It's amazing how many products are available that could lead to energy and/or water savings AND pay for themselves in less than a year.

April 2, 2012

We have worked with many non-profits in trying to match their investments to their mission. Often a member of the board is worried that these changes will hurt the organization because it could reduce it's long-term capital. NONPROFIT QUARTERLY just published an article considering SRI a "Free Good" and shouldn't hurt long-term performance.

March 22, 2012

The US SIF (Formally the Social Investment Forum) just published their SRI impact paper. This 39 page report, for members only, highlighted some of the advances in SRI from helping promote democracy in South Africa 20 years ago to changing governance today.

March 12, 2012

MORNINGSTAR.COM today had an article on Socially Responsible Investing. My take aways was the following sentences: "Modern portfolio theory says that they should hurt, because anything that makes an investment universe less diversified results in a lower expected return for a given level of risk. In practice, though, it has been surprisingly difficult to prove that social screens make any significant long-term difference to investment returns."

March 8, 2012 just published a great ARTICLE on SRI investing. Look it up to see some of the basics and some of the questions to ask.

December 21, 2011

I was just talking to a client regarding our dependence on oil. He mentioned a FORBES ARTICLEregarding fuel convoys. "Fuel convoys are easy targets for roadside bombs, which have accounted for nearly half of American deaths in Iraq and almost 40% of deaths in Afghanistan." No matter what your view on drilling is, the government is going to look for ways to use alternative fuels to keep our soldiers safe.

October 19, 2011

NEWSWEEK just released their list of the greenest companies in the world.

September 29, 2011

Recently read a FORBES ARTICLE talking about CalPERS, the largest pension plan in the country. They are integrating Environmental, Social and Governance issues into their investment decisions. While always an innovator in investment policies, they looked at 36 studies regarding ESG issues and found that investing this way was either neutral or positive 86% of the time.

September 15, 2011

Just got to an LA TIMES ARTICLE from a couple of weeks ago that clearly talks about some of the pros and cons of investing in specifically green technology. As in any emerging technology there are risks, but potential for some rewards for taking those risks.

August 21, 2011

A Harvard Business School professor recently published an article in the HARVARD BUSINESS JOURNALabout shared value. He argues that companies can profit more by doing good and helping form positive social change.

July 14, 2011

Look no farther than your own front yard to look at the leaders in the green movement. THE LOS ANGELES TIMES just reported that nearly 320,000 people in the state work in green jobs with a little less tahn one-third in the Los Angeles Metropolitan Area.

June 15, 2011

Read an interesting PIECE about the general national security interest of the US in the second half of the 20th Century was containment (mostly of communism). In order for us to succeed in the 21st Century, we need to move to a mission of sustainability. This view is shared from researchers to 
Chairman of the Joint Chiefs Admiral Mike Mullen.

June 10, 2011

The New York Times had and ARTICLE yesterday about most developed countries getting on the substainable bandwagon, but the U.S. is behind since many in congress are not ready to act on climate change. Investing in green could mean more international exposure in a portfolio.

June 6, 2011

On the opposite side of the scale, the Los Angeles Times this weekend had an ARTICLE about Wal-Mart going green at one of its stores. Not only were some of the green changes good for the environment, they were good for the store's bottom line. Sometimes putting a little capital up front can greatly increase the long-term bottom line.

June 2, 2011

Marketplace on NPR had an interesting story on ENVIRONMENTALISTS FIGHTING ENVIRONMENTALISTS. Much of Lanai is uninhabitted by humans and could easily support a wind farm to supply local and renewable energy to Hawaii. But those who want green energy are fighting against other environmentalists who do not want the local environment disturbed. Like going green, picking the right investments is a careful study of the plusses and minuses of the various alternatives to find the right personal balance of the risks and rewards.

May 20, 2011

Investing by definition is for the long-term. Based on some RECENT STUDIES more and more companies are more and more concerned about quarterly earnings to boost short-term stock prices. Companies that invest in long-term substainability might not always hit these benchmarks and might look poor in the short-term. But, the investment now can create long-term profit (and therefore long-term better potential valuations).

May 17, 2011

Clients often ask if socially responsible or green investing hurt their overall return. Based on analysis of dozens of studies, "The general consensus is that on average, responsible investment methods perform on par with conventional techniques, neither outperforming nor underperforming them on a regular and reliable basis." 1

May 6, 2011

Clean-tech venture capital jumps 54% in first quarter 2011 according to the LA TIMES. More big money is going this way.

May 4, 2011

Think your money is green? Well, the printed version isn't. Visited the Los Angeles office of the Fed today, the second largest in the nation. They shred paper money after it has been overused. But the shredded money all ends up in a land fill. Because of all the safety strips and other pieces to make sure it isn't counterfitted paper money can't be recycled.

May 1, 2011

President Clinton has shared his TOP 10 GREEN IDEAS. To take it to an investment level, think about which companies make the products that help you go green.

April 27, 2011

Went to the SANTA MONICA SUBSTAINABLE QUALITY AWARDS today. The award winners were everything from an alternative medicine center to a school to a car dealership. While the car dealership obviously has a bigger carbon footprint than the other winners, they have the potential to create the biggest change.

April 25, 2011

I have been thinking about a discussion I had with a client last week about green investing and the two main reasons to do it. The first is you believe that this is where the growth in the economy will be in the years to come and it is a place to make some money. Or some invest to feel good that their money is invested in companies that have the same ethos that they do.

Neither is right or wrong, but there are risks in both. Investing for growth can be profitable, but as technology and times change green investing can change too. One needs to look at the valuations to see if there is room for long term growth and see if donating a small amount to a passionate cause might have more of an effect than investing a large amount as a relatively small shareholder.

  1. 2011 GovernanceMetrics International, Inc. report entitled Ten Things to Know about Responsible Investment & Performance