SRI News
March / April 2008
OnValues report on Swiss market: sustainable investment grows 67% in 2007
In spite of financial market turbulence, the total market volume in Switzerland increased by 67% in the period between end of 2006 and end of 2007. Assets managed by means of sustainable funds and other collective vehicles grew 92% in the same period, while the total Swiss fund market saw its volume decrease by 1%. In a special focus survey, investments in sustainable themes (climate change, renewable energy/energy efficiency, sustainable water) were assessed in detail for the first time. The market share of private investors (53%) has for the first time surpassed the share of institutional investors.
Major international funds reconsider cluster bomb investments
The New Zealand Superannuation fund, the Irish National Pension Reserve Fund and the Danish Pension Fund Industriens Pension are a few of the recent institutional investors who have either banned, or are reconsidering, their investments in firms that manufacture cluster bombs. These bans would be similar to the one that exists regarding mines under the Ottawa Convention. Drafts of agreements will be negotiated at the upcoming international diplomatic conference on cluster munitions scheduled for May 19th-30th in Dublin, Ireland.
http://www.commondreams.org/archive/2008/04/04/8094/ & http://www.belfasttelegraph.co.uk/breaking-news/ireland/article3487964.ece
94% of Schemes believe they could do more to become environmentally friendly
Results from eShare pensions’ “The Big Green Survey” revealed that there is room for improvement regarding eco-friendliness in the Pensions industry. From the 192 schemes which participated in the survey, 71% said they do not actively pursue environmental issues, with a further 7% stating they weren’t interested in any green issues.
Microfinance: an emerging investment opportunity
Deutsch Bank Research recently published a paper which examined the attractiveness of microfinance for private sector investors. The study showed that microfinance sector currently has an estimated total loan volume of $25 bn. Yet, it is unable to serve more than a fraction (about 100m) of today’s total sector demand of roughly 1 bn micro-borrowers. This situation translates into an immense funding gap estimated at around $250 bn.
How Investing in Intangibles Translates into Financial Returns
Wharton finance professor Alex Edmans analyses the relationship between employee satisfaction and long-run stock performance. An annually rebalanced portfolio of Fortune magazine’s “Best Companies to Work For in America” earned 14% per year from 1998-2005, over double the market return, and a four-factor alpha of 0.64%. The portfolio also outperformed industry- and characteristics-matched benchmarks. Returns continue to be significant when extending the sample back to 1984, before the list was published in Fortune. One conclusion from the study is that employee satisfaction is positively correlated with shareholder returns and need not represent excessive non-pecuniary compensation.
Alex Edmans won the 2007 Moskowitz prize for this research.
