Onerous legal rules for Impact Investing?

You can trust that lawyers will not miss a chance to make things complicated - and then charge ever-rising fees to disentangle the rules and regulations that they helped to create. Case in point this report by Freshfields about the obligations of fund managers to take impact (socially/environmentally) of the decisions into account. The problem with imposing these obligations is that any lobby group - however small - can start legal proceedings and impose substantial costs on the funds (while often supported by taxpayer money, directly or indirectly or by donations from charities, ngo's or think tanks that in their turn are only representing the view of a small but often vociferous minority). Taken to the extreme there could be a challenge to the investment in a milk delivery company because (take any of the options) it uses petrol or diesel for its vans, uses metals sourced from 'bad' countries, does not have a workforce split evenly between male/female, old/young, white/non-white etc. The possibilities are endless. As are the costs and burdens on business and ultimately the end consumer/investor, Joe Sixpack, you and me.
Freshfield Report

(15-Dec-2021)

How to influence Companies' Human Rights behavior

How should, how can, shareholders influence Companies? The only solution I can see is a new platform to give them a say in the proxy process. As matters stand the existing (and pretty much unaccountable) oligolopy of profit-seeking proxy 'advisers' cannot be relied on to represent the views of the ultimate owners of Companies.

LinkedIn is facing pressure from senior MPs and academics to stop “bowing to Beijing” by censoring users who are critical of China.

The Times has identified scholars, businessmen, journalists, whistleblowers and a former diplomat whose accounts were blocked in China after the professional networking site found “prohibited content” on their profiles.

 Stop bowing to Beijing, MPs tell LinkedIn (The Times, PayWall)

ESG: How will 'Racial Justice' be measured?

This initiative has the potential to become a never-ending saga. How many angels can dance on the tip of a needle? Will rating agencies become the arbiters? (and charge you a hefty fee for this?)
(7-Aug-2020)

Racial Injustice Will Have Greater Weight in ESG Scores, S&P Global Says

China: all the ESG Talk is just that, Talk!

When the Corporate Governance - in particular the ESG fanatics - are called to perform there is just silence, golden silence!
(27-July-2020)
Wall Street turns a blind eye to atrocities committed in China

ESG creates quagmire for Fund Managers

And business in general. The demands from lobbies and interest groups will expand and no action by managers and businesses will be enough to satisfy them. Once pandora's box is opened issues that really should be settled in the realm of politics will lead to never-ending complications for what should really be the priority for business and investment - obtaining profits or a satisfactory performance for savers.
(27-July-2020)
Boohoo supply chain allegations reveal challenges facing ESG investors

Blackrock's commitment to sustainability - on whose orders?

Pious intentions may be to investor's tastes but has Blackrock - or its self-mportant group of Sustainability experts - received any specific mandate from the investors whose money is at risk?
(24-July-2020)
Blackrock: our commitment to sustainability

Climate Change, Diversity, Human Rights, Income Equality

Climate Change, Diversity, Human Rights, Income Equality - all very worthy causes but the solution is not to push business to provide all the answers. That just means that politicians are left off the hook as they should be providing a framework that can take care of these issues.

• Use too much coal, oil? - There is a simple solution and it is not so prone to be aubused fraudulently than the carbon tax: higher taxes on production/sale.
• Diversity - simple legislation can mandate ratios for different ages, sexes, even 'races', but get a democratic majority for any law (and please, not just 50.1%)
• Human Rights - Don't ask managements to judge in which countries a business should operate, again, politics needs to make a (democratic) decision.
• Income Inequality - no point moaning, too many pieces of legislation further growing inequality and achieve the opposite of what politicians claim they try to.
  (19-August-2019)
  

AntiTrust massively eroded - Should Fiduciaries care?

Should Investors - and their hired hands in the Fund Management/Private Banking Industry - really care if Oligopolies and Monopolies are not held in check? Higher profits at the cost of higher inequality may be attractive in a Darwinian world but how does this fit in with the current focus on ESG, SRI and Impact Investing?
(9-Jan-2019)
Why the Regulators went soft on Monopolies

Seed Oligopoly - next battleground for ESG/SRI Investment?

Just a question of time before the investors in the Seed providers will come under heavy fire from those concerned about good ESG/SRI practices. How much does it cost to invent? discover? a new seed variety? Have those breeding new varieties of flowers, pigs etc left tons of money on the table? Given that the seed companies are so keen on protecting their 'intellectual' property one can only be suspicious of their motives. How much does it cost to develop a new seed variety, and how much in annual rent are they exacting?
(8-Jan-2019)
India's Top Court backs Genertically modified Seed Oligopoly

China closes Christian Church - where does SRI/ESG Community stand?

A very topical issue!
And Merry Christmas to all Readers!
Be more pro-active in the New Year and let us know your views!
(19-Dec-2018)
https://lnkd.in/gfFkzvq

ESG Investing - more than just a fashion?

The targets of ESG investors are all worthwhile but do not take much courage. Why not also go after excessive executive compensation or nasty political regimes?
(17-Dec-2018)
ESG groupthink has captured the fund industry

Should Chinese Companies be given access to 'West'?

Maybe it is too late, but given this kind of news, should Chinese Companies be given access to 'Western' Capital Markets and be allowed to acquire companies (and indirectly extend their sway over huge numbers of employees?). So far the SRI and ESG - let alone the Corporate Governance Crowd - has abstained from expressing strong and clear views on this issue - but given the determination with which Xi and his minions proceed this debate cannot be swept under the carpet forever. Similar concerns can be raised with all other non-democratic states - and please no hair-splitting, we all know an authoritarian society when we see one.
(30-Nov-2017)
China's Tech Giants help Government surveillance effort (Wall St Journal, Paywall)

Corporate Bullies - what has ESG/SRI crowd to say about it?

With growing concern about ESG and SRI issues in the top echelons of the Investment Industry it would be nice to see some action and not just pious public relation statements and advertising. One may not agree on issues such as the one described in the article, but at least investment fiduciaries should make their position clear.
Stop subsidizing the Big Wind bullies | New York Post

Socially Responsible Investing - Just a Fig Leaf?

While it may hurt investors in the pocket, are they not the ultimate responsible party on the way to socially responsible business practises? If yes, can they stay aside when a company tries to squeeze the last dollar out of its product, however reasonable the may be following simplistic principles of capitalism? Or should there be some restraint based on ethical consideration even if it if against full-out profit maximization? What would one say if doctors create a monopoly in heart operations and use every possible legalistic trick to prevent competition thus being able to increase their fees to some astronomical level?
(18-Oct-2017)
Bloomberg

Indexes should not be blind

The importance of Indexes (and their well-paid providers) has expanded dramatically during the past few decades. First it was the institutions which benchmarked more and more products, now it is the avalanche of passive money, not only through ETF's, that hugs indexes slavishly.
But given the fact that the world has become more complicated it can no longer be right to leave value judgements out of index construction. There simply WAS no investment in Venzuela, China etc and not too many people cared about the environment, social issues or human rights a few decades ago.
Investors Have Lost Sight of the Purpose of Indexes - Bloomberg

Disclosing climate-related risk - Metorite impact risk next?

The list of 'risk disclosures' gets longer and longer, will companies be forced to disclose the risk from meteorite impacts next? This will speed up the death of the public company
(27-June-2017)
Dan Yergin on disclosing climate-related risk: Let’s get it right the first time

Just Capital: Do Corporations do the "right thing"?

Interesting effort, but would it not be much easier to enshrine high standards in legislation?
nonprofit starts data revolution so corporations do the right thing - Business Insider

Santander employs staff on contracts that guarantee just 12 hrs work a year

Deplorable? certainly, but that would include regulators, government 'experts' (SRI/ESG) in the 'Ficuciaries' that invest on our behalf. Hear no evil, see no evil? And the CEO sitting there by the grace of Nepotism is fawned on by the gullible Media.
(27-Mar-2017)
Santander employs staff on contracts that guarantee just 12 hours work a year

Jeremy Grantham gets it right - up to a point

He agrees that Executive Compensation, especially for CEO's and other top officials, has gone way beyond what can be called reasonable. But the remedies he suggests do not go far enough. These new rules will be gamed as well and I fear the only real solution is a radical end to selective compensation schemes that are based on the wrong management theory that says that already well-paid executives need to be showered with incentives in order to do the best possible job.
In addition, as is the case with most lamentos about Executive Pay, there is no proposal about how change to the excesses we experience can be brought about.
It is my opinion that the main culprits are the top 30-50 investment institutions that do not take their fiduciary responsibilities seriously enough. They are basically living in a bubble and are completely cut off from the wishes of their end-investors (and I am not talking about allocators in Private Banks or Pension Fund Trustees but the main in the  street who is the ultimate paymaster of the Fund Managers and Corporate Executives.
 (29 July 2015)

The 10 Topics that really matter

Jeremy Grantham at the Conference on Inclusive Capitalism