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Articles: Socially Responsible Investing

Climate Change Shifts Economic Landscape

             The risks posed by climate change and the opportunities of mitigating the dangers are changing the investment landscape as seen by governments and mainstream economists.

            “Our current fossil fuel economy has reached its limit,” the president of the European Commission, Ursula von der Leyen, said at a news conference in Brussels. [i]

            She was presenting a plan by the 27-nation European Union to reach a carbon-neutral economy by 2050, including big changes in this decade. The bloc has committed to cut greenhouse gases emissions by 55 percent by 2030 from 1990 levels.

            Economic forecasters view the transition as one of the main drivers of economic change in the foreseeable future.

            “We do not believe tackling climate change comes at a net loss to global economic activity,” the financial company BlackRock said in a new report. [ii] “In fact, we see the physical damages that may result if nothing is done to combat climate change as detrimental to global growth. We see a green transition to a low-carbon economy improving the outlook for growth and risk assets relative to a no-action scenario.”

            Investors should heed the risks and opportunities of climate change, the forecasting firm Sustainalytics said in a report issued through its parent company, the independent analytical service Morningstar.

            “Climate change represents not only an existential threat to humanity but also material financial risk to investors,” the Sustainalytics report said. “First, there are physical risks resulting from the increased severity and incidence of extreme weather and from longer-term changes in precipitation and weather patterns caused by rising temperatures and sea levels. [iii] The report details the risks and opportunities faced by different economic industries and sectors.





Seeking Greater Openness from Pharmaceutical Companies

            Advocates of sustainable investing want drug makers that received public funds to develop Covid-19 vaccines to make the medicines more available to poorer nations and thus boost global economic recovery.

            “Pharma companies already carry huge reputational risks as a result of exorbitant drug pricing. Sharing information about how these companies are prioritizing equitable access during the pandemic could go a long way to restoring their credibility,” said Chris Cox of Seventh Generation Interfaith Coalition for Responsible Investment which filed a shareholder resolution with Merck. [i]

            The World Bank is predicting that limited access to Covid vaccines will stymie economic recovery in the developing world. [ii]

                        Resolutions urging drug companies to be more transparent on how public funds have been used to develop the vaccines garnered 32 percent support among Johnson and Johnson shareholders, 33 percent at Merck and 28 percent at Pfizer, reported the non-profit Interfaith Center on Corporate Responsibility.[iii]

            Delivery of vaccines to non-wealthy nations has lagged the developed world. [iv]

            “More than a billion doses of vaccine have been administered globally - but just 0.3% have been administered to people living in low-income countries,” said Cathy Rowan of Trinity Health, which filed the resolution at Pfizer. We are gratified that the administration took note of these inequities in access and is taking the necessary steps to redress it.”  [v]

            In May, President Biden backed a temporary waiver of intellectual property (IP) protections for Covid-19 vaccines to ease their manufacture by generics companies to help lower income countries. [vi]

            Progress on sharing the intellectual property and sharing the vaccines has been slow.  

            Pfizer, which developed a widely used vaccine, is stalled in talks with India over supplying 50 million doses. India has balked at Pfizer’s demand for indemnity from costs related to severe side effects. [vii]

            The trade industry group the International Federation of Pharmaceutical Manufacturers and Associations acknowledged “Covid vaccines are not equally reaching all priority populations worldwide.” [viii]

            Critics say a proposal from the trade group “fails to address non-profit pricing and price transparency and says nothing about working with smaller manufacturers in low- and middle-income countries or collaborating with more open licensing, technology transfer, and IP pooling.” [ix]

            “Failure to ensure global access to vaccines now and into the future is widely expected by economists to hinder the global economy’s ability to revive itself, ultimately harming not only people but also the overall portfolios of shareholders,” said Nicholas Lusiani of Oxfam America, who filed the resolution at Johnson & Johnson. [x]


            The World Bank forecast that the economic recovery of emerging countries would lag behind that of the developed world in part due to “highly unequal vaccine access”

            “In low-income countries, the effects of the pandemic are reversing earlier gains in poverty reduction and compounding food insecurity and other long-standing challenges,” the World Bank said in a report issued this month. [xi]

[i] ;












State Treasurers Warn of Financial Risk of Climate Change

             The elected Treasurers of 16 states – including Oregon, California and Washington, warn that climate change poses financial risks for investors, including public pension funds. They urge private and governmental players in the financial sector to hold corporations accountable for their role in the threat. [i]

            “The economic impacts of climate change are enormous,” said the letter, released by For the Long Term, a non-profit group that lobbies public treasurers “to deliver sustainable long-term growth.” [ii]

            “The effects of rising temperatures on factors such as crop yields, labor productivity, and floodwater impacts can become nonlinear above certain thresholds, causing food systems, physical assets, and infrastructure services to deteriorate or break down and stop working altogether. [iii]

            Advocates of sustainable investing and climate justice groups have been urging similar steps. [iv]

            “Climate change will impose systemic, undiversifiable, portfolio-wide risks to long-term and institutional investors with broad market exposure including the financial assets of our states. Climate change will impact all sectors and all asset classes, including equities, fixed income, real estate, private equity, and commodities,” said the letter.

            Among the steps the treasurers urged were:

  • Holding corporate directors accountable at companies in climate-critical sectors that are not setting and aligning to targets consistent with a goal of limiting warming to 1.5º C, consistent with the Paris Accord; [v]
  • Calling for systemically important institutions to commit to comprehensively address climate risks by measuring, disclosing, and eliminating emissions generated by their business models;
  • Calling for such federal regulators as the Financial Stability Oversight Council, the Federal Reserve Bank, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency to identify climate change as a systemic risk and incorporate climate risk into stress test modeling for financial institutions;[vi]  
  • Urging  the U.S. Securities and Exchange Commission to mandate corporate disclosure of climate and environmental, social and governance (ESG) risks; and
  • Calling for reversal of U.S. Department of Labor rules governing proxy voting by certain federally monitored pension plans undermine the principles of sustainable investing.

            The other state treasurers signing the letter were from Massachusetts, Vermont, Connecticut, Colorado, Maine, Wisconsin, Maryland, Nevada, Rhode Island, Iowa, Illinois, New Mexico, and Delaware. [vii]



[iii] McKinsey Global Institute, “Climate risk and response: Physical hazards and socioeconomic impacts,” January 16, 2020, See

[iv] See for example:;;;


[vi] Americans for Financial Reform, Potential Day 1 Actions by the Administration and Regulators, See


Shareholders and Court Hit Oil Companies on Climate 

Environmentalists scored victories against three major oil companies in another sign that shareholders and the courts are increasingly alarmed by climate change. [i]


A court in the Netherlands ordered Royal Dutch Shell to dramatically cut its emissions over the next decade, which it can likely only meet by dramatically changing its business model.[ii]


On the same day, shareholders of at Chevron voted over management objections to demand that the company cut emissions caused its customers burning its products.[iii]


And shareholders dealt ExxonMobil management what the New York Times called “a stunning blow” by overcoming company objections and voting in at least two directors who pledged the steer the world’s largest petroleum company away from oil and gas. [iv]


“This is a landmark moment for Exxon and for the industry,” said Andrew Logan, a senior director at Ceres, a nonprofit environmentalist investor network, the Times reported.  “How the industry chooses to respond to this clear signal will determine which companies thrive through the coming transition and which wither.”


The Exxon action was spearheaded by Engine No. 1. The tiny activist fund based in San Francisco owns just 0.02 per cent of the company’s stock, but has insisted that Exxon needs a better answer to the question of how to meet the climate challenge. [v]

A spokeswoman for the Dutch court said the body “understands that the consequences could be big for Shell. “But the court believes that the consequences of severe climate change are more important than Shell’s interests. Severe climate change has consequences for human rights, including the right to life. And the court thinks that companies, among them Shell, have to respect those human rights,” said the spokeswoman, Jeannette Honée. [vi]

The decisions show society is “at a tipping point,” said Aeisha Mastagni, portfolio manager at the California State Teachers’ Retirement System, one of the nation’s largest pension funds.

“You’re seeing investors from around the world that are wanting to see better disclosure around climate change, you’re seeing shareholder proposals that are passing with increased shareholder support, and now we have this monumental vote at ExxonMobil.” [vii]








Curbing the Plastic Wave

Curbing the Plastic Wave

Advocates of Sustainable Investing are pushing DuPont and other corporations to curb their use of plastics and to report plastics spilled into the environment.

A record-setting 81 percent of DuPont shareholders this month asked the company to report on spills of plastic pellets released into the environment. [i]

 “This vote confirms a tidal wave of support by investors to confront a deadly contributor to the global plastic pollution crisis, as well as a historically high-vote result for a common sense request that the company provide public reporting on spills of pre-production plastic pellets,” said Conrad MacKerron, senior vice president of the non-profit As You Sow.

Other major corporations that have agreed to report data on spilled plastic pellets Chevron Phillips Chemical, Exxon Mobil Chemical, Eastman Chemical, Westlake Chemical, Occidental Petroleum, and Dow Chemical. [ii]

Sustainable investors are pressuring Amazon, Target and other companies to reduce their use of non-recyclable plastic packaging. As You Sow and the sustainable mutual fund company Green Century have discussed curbing the use of plastics with Coca-Cola, Keurig, Dr. Pepper, Mondelez International and PepsiCo. [iii]

Amazon does not disclose how much plastic packaging it uses but is believed to be one of the largest corporate users of flexible plastic packaging, which cannot be recycled. The Interfaith Center for Corporate Responsibility estimated that Amazon generated 465 million pounds of plastic packaging waste last year and that up to 22 million pounds of its plastic packaging waste entered the world’s marine ecosystems. [iv]

Plastic pellets, sometimes called nurdles, are the building blocks for nearly all plastic products and estimated to be the second largest direct source of microplastic pollution to the ocean by weight. [v]

Plastics are damaging the marine environment, from coral reefs to deep sea trenches, affecting up to 800 species of birds, turtles, whales, dolphins and other creatures, according to a comprehensive report issued in 2020 by the Pew Charitable Trusts. If current trends continue, the annual flow of plastic into the ocean will nearly triple by 2040, to 29 million metric tons per year, it said.






  U.S. Finance Companies Commit to Fight Climate Change

Facing pressure from social justice activists, JP Morgan Chase joined a growing list of major financial companies committing to slow global warming, pledging $2.5 trillion over the next decade to “address climate change and contribute to sustainable development.” [i]

“Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase. “Business, government and policy leaders must work together to support long-term solutions that advance economic inclusion, bolster sustainable development and further the transition to a low-carbon economy."

The commitment follows announcements from Wells Fargo and Goldman Sachs that they are joining other banks to help meet the goals set by the Paris Agreement to try to limit global warming to 1.5 degrees Fahrenheit. [ii]

The pledges come as the Biden Administration is encouraging other nations to step up their commitments to fight climate change. [iii] The Trump administration sought to pull the United States out of the Paris Accord.

Climate justice groups including and As You Sow have been urging advocates of sustainable, responsible and impact investing to pressure financial service companies to commit to a post-carbon economy and divest from the fossil fuel industry.

“These announcements are a clear signal to companies in every sector, including oil & gas, that they must set and meet credible net-zero transition targets or find access to capital increasingly expensive and restricted. No longer is business as usual an acceptable standard,” As You Sow said in news release.

“Just a year ago these commitments seemed a long way off, even laughable, given the banks’ initial responses to our engagements. Tenacity and perseverance are paying dividends,” As You Sow said.

The global climate justice organization has been pressing JP Morgan Chase to divest from stocks and bonds in the oil, gas and goal industries, and to stop lending them money. In a recent report issued with other environmental groups, found that JPMorgan’s financing of fossil fuel companies totaled $317 billion, more than other major banks.

“Let’s be clear, JPMorgan Chase is the biggest banker of fossil fuels by far. As such, Chase has the unique responsibility among private-sector banks to sharply reduce its fossil finance,” Brett Fleishman of said in a recent statement on the company. [iv]






Green Investors Push Curbs on Non-Recyclable Plastics

             Advocates of sustainable investing are persuading toy makers to reduce their use of plastic in their products and packaging.[i]

            Sustainable investors want to reduce the use of non-recyclable plastics for several reasons. Plastic waste has been showing up in growing quantities in the world’s oceans, in visible pieces and micro-particles. Non-recyclable plastics are produced from fossil fuels, which contribute to man-made climate change.

            Mattel, Inc, has joined other major companies in agreeing to set goals for reducing plastics in its toys, which include Barbie Dolls, Hot Wheels and Fisher-Price goods. [ii]

            Mattel will set metrics on the use of plastics under an agreement with Green Century Capital Management.[iii]

            Environmentalists are pushing for sharp reductions in plastics, which are fossil fuel by-products that clog landfills and contribute to climate change.

            Mattel’s goals include using 100 percent recycled, recyclable or bio-based plastic materials in packaging by 2020. [iv]

            Other toy companies that have agreed to reduce the use of plastics include Hasbro and Spin Master. [v]

            “Mattel’s extensive plastic use poses material risks to the company and its investors, and this commitment will help address those risks.” said Leslie Samuelrich, president of Green Century Capital Management. [vi] Green Century runs Sustainable, Responsible and Impact funds, and is owned by Public Interest Research Groups.

            About 79 percent of plastics produced around the world “actually ended up in landfills or scattered around the world or burned, but not refashioned into new products,” according to Sharon Lerner of The Intercept. [vii]

            “The effects of plastic pollution are more far-reaching than most people realize,” said Judith Enck, of the non-profit “Beyond Plastics. “In addition to the fifteen million metric tons of plastic entering our oceans each year, scientists have found plastic particles in the most remote places on earth, from the peak of Mt. Everest to thirty-six thousand feet underwater, in the Mariana Trench.”[viii]

            Historically, plastics were made from oil and toxic chemicals. Now they are being created from ethane, a greenhouse gas that is a byproduct of fracking, said Enck.  

            “Plastic production is the fossil-fuel industry’s Plan B,” Enck said in an interview published in The New Yorker. “With the demand for fossil fuels falling—due to the increased use of renewable energy, electric cars, and the like—the industry is banking on plastics to boost its profits and provide a market for all the ethane created as a byproduct of hydrofracking. And it’s important to note that the fossil-fuel industry, the chemical industry, and the plastics industry are one and the same: a three-headed monster.” [ix]

[i]; and;



[iv] The wood products will be certified through the Forest Stewardship Council ( ); and; and



[vii]; and;




Administration Reverses Trump’s Restrictions on Green Investing

The Biden Administration is rolling back restrictions placed on Sustainable Investing by Trump appointees to the Labor Department, drawing praise from shareholder activists. [i]

The Institutional Shareholder Services group said it “applauds today’s decision by the Department of Labor not to enforce the burdensome, unnecessary, and illogical rules that were hastily adopted late last year and which served to diminish the rights of institutional investors.”  [ii]

 “We are particularly gratified by the Department’s recognition of the important role that environmental, social and governance (ESG) integration can play in prudent investment management,” said ISS President Gary Retelny.”We hope today’s decision is a harbinger of future efforts by the Biden administration to support institutional investors in their critical role as good stewards of capital on behalf of millions of American savers.” [iii]

The Trump Administration had issued rules barring retirement plan administrators from using ESG mutual and exchange traded funds, arguing that they were not in the best interests of investors.

Newly appointed Labor Department officials refuted assertions that sustainable and responsible investments were too risky.

“These rules have created a perception that fiduciaries are at risk if they include any environmental, social and governance factors in the financial evaluation of plan investments, and that they may need to have special justifications for even ordinary exercises of shareholder rights,” said Principal Deputy Assistant Secretary for the Employee Benefits Security Administration Ali Khawar. [iv]

“We intend to conduct significantly more stakeholder outreach to determine how to craft rules that better recognize the important role that environmental, social and governance integration can play in the evaluation and management of plan investments, while continuing to uphold fundamental fiduciary obligations,” Khawar said. [v]

The amount of money flowing into ESG investing increased to $17.1 trillion at the start of 2020 from $12.0 trillium at the start of 2018, reflecting the continued strong performance and attraction of the sector, according to the U.S. Sustainable Investment Forum and the independent analytical agency Morningstar. [vi]

The Trump Administration rules, Morningstar said in a report, “ignored substantial evidence that the use of ESG considerations can improve long-term investment returns for retirement plans and were already having the effect of shutting off growing demand for ESG options in defined-contribution plans.”[vii]

“ESG investing is increasingly mainstream as it should be. ESG risks are financially material risks. Trying to define particular types of ESG strategies as unfit for 401(k) plans is not helpful and not necessary,” wrote Morningstar analyst Jon Hale. [viii]











Racial Justice Tops List of Shareholder Resolutions

A coalition of responsible investing advocates reported more shareholder resolutions on racial justice in 2020 than any other issue – followed by climate change and the pandemic.

            “We stand at a pivotal moment in time, faced as we are with an overwhelming series of challenges — a global pandemic, centuries of racial injustice, and a worsening climate crisis, among them — that no one organization can hope to solve on its own. But together we can harness our power, increasing both the breadth and depth of our work,” the Interfaith Center on Corporate Responsibility said in an annual report. [i]

            The group is a coalition of faith-based, non-profit and other advocates of Sustainable, Responsible and Impact investing, also known as ESG for Environmental, Governance and Societal screens.

            Among the 244 shareholder proposals filed by ICCR members, 64 addressed Diversity and Racial Justice – an increase of 50 percent over 2020. Sixty-four proposals urged companies to help curb man-made climate change, and 37 were on other Human Rights issues. Forty-four addressed the Covid-19 pandemic, including calls to ban price gouging for vaccines and the implementation of paid sick leave as a standard benefit. [ii]

            The ICCR and other activists want the Securities and Exchange Commission to ease curbs on shareholder advocacy introduced by Trump Administration appointees under pressure from fossil fuel companies. Under the Trump rules, corporations challenged 62 of the proposals, including those filed for Chevron, Exxon-Mobil, Valero Energy, Sempra Energy, Duke Energy, Union Pacific, and Wells Fargo. [iii]

            Biden Administration appointees to the SEC have moved quickly to require corporations to disclose climate risks. Acting Chair Allison Herren Lee, an advocate of sustainability,[iv] has created a Climate and ESG Task Force, led by Kelly L. Gibson, Acting Deputy Director of Enforcement. She will oversee 22 members drawn from the SEC’s headquarters, regional offices, and specialized units. [v]

            In the past, climate change, environmental damage, workplace diversity, gender equity, executive pay and political contributions have topped the list of shareholder resolutions. In a sign of increased emphasis on civil rights, another advocacy group has issued score cards rating U.S. corporations on racial justice and workplace diversity. As You Sow, an Oakland-based non-profit, gave high marks for racial justice to Intel, HP, and Coca-Cola. For workplace equity, it gave top grades to Intel, Goldman Sachs, and Apple. [vi]

            “The only way to end corporate complicity in systemic racism is to confront it head-on,” said Olivia Knight, As You Sow’s racial justice initiative coordinator. “Our goal in releasing the racial justice scorecard is to provide a helping hand to get companies on the path to end systemic racism, starting with the corporate sector.”[vii]


[i], pg. 3;

[ii]; pg. 4;

[iii] Pg. 7;





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New York State Comptroller Announces Plans to Divest from Fossil Fuel Stocks

New York State Comptroller Announces Plans to Divest from Fossil Fuel Stocks

            The New York State Pension Fund, one of the world’s largest institutional investors, will divest from most fossil fuel stocks over the next five years, a decision hailed by advocates of Sustainable, Responsible and Impact (SRI) investing. [i]

            “New York State’s pension fund is at the leading edge of investors addressing climate risk, because investing for the low-carbon future is essential to protect the fund’s long-term value,” Comptroller Thomas DiNapoli said in announcing the decision.[ii]

            The Climate Justice organization hailed the move as the “biggest leap forward worldwide on climate finance action in 2020, an otherwise bleak year for the planet “ [iii]

            “It creates the most comprehensive program of any large public fund worldwide to divest from fossil fuels, decarbonize across a massive portfolio, and put major financial pressure on public companies — from auto companies to utilities — to align their operations with the scale of climate action needed to stave off worldwide catastrophe, ” said in a statement on its website. [iv]

            Climate change and other environmental factors are the leading factors that managers of sustainable funds use to select the stocks and bonds in which they invest, according to the U.S. Forum on Sustainable Investing, an industry interest group based in Washington, D.C. Increasingly, those managers are choosing to divest their portfolios of coal, oil and natural gas companies.[v]

            Bill McKibben, a founder of, wrote in the New York Times that the announcement by DiNapoli suggested that “the once-dominant fossil fuel industry has reached a low in financial and political power.” [vi]

            McKibben noted that DiNapoli had tried to engage major American oil companies in a dialogue on steps to slow climate change, but had failed to persuade them to change their business models. [vii]

            The fossil fuel industry, McKibben wrote, has a two-fold problem: “It faces a sprawling resistance movement, rooted in the undeniable fact that its products are wrecking the planet’s climate system. And in wind and sun, it faces formidable technological competitors who can provide the same service, just cleaner and cheaper.” [viii]









Money Flowing into Sustainable Investing Accelerates

            Sustainable investments continued to increase sharply, rising by 42 percent increase since 2018, despite impediments raised by appointees of the outgoing Trump Administration, the US Sustainable Investment Forum said in a recent report. [i] Sustainable investments also were outperforming the broader markets.

            “In 2020, while sustainable and impact investing continued on a growth trajectory, and sustainable equity funds and sustainable taxable bond funds outperformed their counterparts during the first two quarters, the Department of Labor and the Securities and Exchange Commission took on an anti-ESG agenda,” the US SIF report said, using an acronym for Environmental, Social and Governance Screening. ESG is as synonym for Sustainable, Responsible and Impact (SRI) Investing.[ii]

            The Labor Department and SEC, dominated by Trump appointees, “issued rulemakings that would limit the rights of shareholders and create confusion about whether fiduciaries for ERISA-governed pension plans may utilize ESG criteria or vote proxies.[iii]

            Since US SIF began measuring SRI investments in 1995, they have grown 25-fold, at an annual rate of 14 percent, to $16.6 trillion domiciled in the United States. The most rapid growth has occurred since 2012.

            Most of those assets, $12 trillion, are managed on behalf of institutions, such as insurance companies, pension funds, foundations, universities and faith organizations. The next largest category was individual investors, $4.55 trillion.[iv] Of the total, 69 percent “remains largely opaque as they were managed through undisclosed investment vehicles” whose managers “did not disclose the specific ESG factors that they consider, reporting that they consider ESG in general.”  

            For those money managers who disclose their criteria, $4.1 trillion were focused on climate change, $2.44 on anti-corruption, $2.29 on board issues, $2.38 trillion on sustainable natural resources or agriculture, and $2.22 trillion on executive pay. [v]

            Shareholder resolutions continued to play a key role in sustainable investing, with growing emphasis on pressuring corporations to slow man-made contributions to climate change. [vi]

            The number of successful shareholder resolutions that were opposed by management rose from two 2012-2014 to 26 2018-2020. [vii]

[i] US SIF Trends Report., US SIF is based in Washington, D.C., and represents the SRI industry.







Sustainable Funds on Track to Double New Investments

Sustainable investment funds are on track to double their inflows over 2019, attracting a record $30.7 billion through July, the independent Morningstar analytical firm reported. [i]


“The urgency of the pandemic, climate change, and the movement for racial justice, even the election, have likely spurred more interest among investors to align their investments with their broader concerns,” Morningstar Analyst Jon Hale reported.

Mutual and Exchange Traded Funds (ETFs) specializing in Sustainable, Responsible and Impact (SRI) investing accounted about 10% of all new money invested into U.S. stock and bond funds in the third quarter.


“It wasn’t so long ago when that percentage was routinely below 1%,” Hale wrote. This follows a record year in 2019, when the flow of new money into “green” funds was four times higher than in any previous year.[ii]


“Sustainable funds continue to perform well relative to the broader universe of funds under uncertain market and economic conditions, which have underscored the value of considering ESG-related risks in portfolios,” Hale wrote, using another term for SRI, standing for Environmental, Societal and Government metrics.

Assets in the 344 “green” funds tracked in the Morningstar report climbed to $179 billion in the third quarter, up about 13% from $159 billion at the end of June, the report said.


The biggest boost came from a new series of ETFs issued by BlackRock which follow stricter screening guidelines than an earlier package of funds from the same company. The flow of money into ETFs has been nearly twice that into actively managed funds. [iii]


Despite its strides in SRI, BlackRock has come under pressure from environmental activists to divest from the large fossil fuel investments the company holds in its non-SRI funds. [iv] The firm, the world’s largest money manager, also has been criticized for investing in companies that use raw materials from deforested areas, for example, rain forests in Southeast Asia that are being cut down for palm oil plantations. [v]


ETFs differ from mutual funds in that the latter are more actively managed and almost always carry higher fees.


Calvert Investments, whose managed mutual funds were among the first in SRI, had nearly $1 billion in new capital inflows. Calvert was acquired several years ago by Eaton Vance, which turn was purchased in September by Morgan Stanley. The changes reflect the transformation of the sustainable investing world by such large conventional investment houses as Morgan Stanley, BlackRock, Vanguard and Fidelity.  




[iv]; The climate justice organization is among those who remain critical of BlackRock despite the company’s steps toward more sustainable practices. “Goldman (Sachs) and Blackrock land on top of an incrementally expanding community of institutions committing to some level of fossil fuel divestment. As of this writing (not including Blackrock) there are 1,158 investors who have set some sort of fossil fuel divestment policy. Many of these entities were pushed by their constituents, their members, or their student-base organized as volunteer campaigns. And, many campaigns are still pushing to get their targets on this list.”

[v] The following is from a September 2020 report from Friends of the Earth: Financial institutions can address deforestation in companies they own or finance in many ways: through direct engagement with companies, proxy voting, introducing criteria for loans and underwriting of debt and equity securities, or by excluding companies entirely from their lending and investment portfolios. Deforestation, and climate risk more broadly, are increasingly recognized by financial institutions as having direct materiality. Yet, the “Big Three” asset managers – BlackRock, Vanguard, and State Street – have no risk frameworks or explicit policies to measure, manage, and mitigate deforestation, native ecosystem conversion, and peatland destruction – or the associated risks of land grabbing and human rights violations.” Friends of the Earth balanced that criticism with this caveat: “A qualified exception is BlackRock which, after continued pressure from legislators, shareholders, activists, and the public has said it will vote against company directors where it doesn’t see enough progress on supply chains and deforestation – though this remains to be seen.”

Shareholder Vote on Deforestation

Two thirds of Proctor & Gamble’s shareholders have asked the consumer goods giant to eliminate deforestation in the supply chain for such products as Bounty paper towels and Charmin toilet tissue. Scientists say that deforestation is a major contributor to climate change, which increasingly is the subject of shareholder resolutions filed by advocates of Sustainable, Responsible and Impact (SRI) investing. [i]

            P&G management had urged shareholders to vote against the non-binding resolution, which was filed by Green Century Capital Management, an SRI investment firm with $825m of assets under management. Green Century noted in a statement that the vote margin was more than twice that received by any previous resolution on deforestation. [ii]

            Key to the wide margin was the support of BlackRock, the world’s largest asset manager, which at the beginning of 2020 issued a set of guidelines calling for greater emphasis on sustainability in the financial world. [iii] BlackRock holds more than 6 percent of P&G’s publicly traded shares. BlackRock itself is under pressure from climate justice activists to divest from fossil fuel companies. [iv]

            Green Century also said that some of P&G’s rivals had implemented stronger deforestation policies. Kimberly-Clark, it said, has committed to halve its sourcing from natural forests, and Unilever has “zero-net deforestation” in its supply chains. [v]

            The U.N. Convention on Bio-Diversity in a recent report stressed the need to curb deforestation to slow climate change and prevent the loss of plant and animal species. Although the rate of deforestation slowed 2010-2020 compared to the previous decade, it said. further steps were needed. [vi]

            Global deforestation is a major driver of climate change and “has significant financial implications for investors,” the non-profit sustainability organization Ceres said in a recent report. [vii]

            “Even as the COVID-19 pandemic throttled the global economy, deforestation continued largely unchecked in many parts of the world,” the Ceres report said.

            “Every day, vast swaths of tropical forests are razed for production of agricultural commodities such as soybeans, palm oil and beef that eventually make their way to grocery shelves worldwide. Clearing and burning forests emits staggering amounts of greenhouse gases (GHGs) and reduces the land’s ability to store carbon. Protecting and restoring forests and other natural ecosystems are second only to eliminating fossil fuel use as a solution to climate change,” Ceres said.

[i] Financial Times:; Market Watch:; For trends in shareholder activism, see the USSIF Trends report:









Business Leaders Say Action Needed on Climate Change

With wildfires in the American West, Australia, Brazil, Indonesia and even arctic Siberia, [i] as well as well as powerful storms hitting U.S. southern shores, business leaders are intensifying call to slow man-made climate change.

            “Climate change is real and we must act,” said Mary Barra, chairman and CEO of General Motors Co. [ii]

            “Meeting the scope of this challenge will require collective global action. We encourage business leaders across industries to do their part,” she said in a report by the Business Roundtable.

            Doug McMillon, chairman of the Roundtable and President and CEO of Walmart, said in the same report: “Climate change is one of the greatest challenges facing the planet today, and we believe businesses are an essential part of the solution.”

            “Representing more than 200 CEOs from America’s leading companies, the new Business-Roundtable position on climate change reflects our belief that a national market-based emissions reduction policy is critical to reducing greenhouse gas emission to levels designed to avoid the worst effect of mitigate the impacts of climate change,” McMillon said.

            The corporate leaders said the main push should come from private companies and be market driven.

            By contrast, the respected global consulting firm McKinsey & Co., emphasized government spending to stimulate low-carbon solutions to the economic downturn caused by the pandemic. [iii]

            “The tragedy of the COVID-19 crisis has taken much attention away from the threat of climate change, as institutions devoted themselves to protecting lives and livelihoods,” said the report McKinsey on Climate Change, issued this month.

            “Important as it is to repair the economic damage, a swift return to business as usual could be environmentally harmful, as the world saw after the 2007–08 financial crisis,” it said.

            The report said the global economy needs to shift from fossil fuel to renewable energy, and that governments could create more economic benefit.



            McKinsey research “suggests that many such programs stimulate growth and create jobs as effectively as—or better than—environmentally neutral or harmful programs.”

            “An econometric study of government spending on energy technologies showed that spending on renewables creates five more jobs per million dollars invested than spending on fossil fuels,” the report said.

            Individuals seeking to slow climate change have a number of options, Jon Hale wrote for the independent analytical company Morningstar. [iv]

            Voting is one. Reducing your carbon footprint is another. [v]

            Those fortunate enough to have investments can also vote with their dollars, Hale wrote.

            “About 350 sustainable funds are now available to U.S. investors, and they are more popular than ever, attracting record amounts of new money from investors last year and during the first half of this year,” he said. [vi]






[v] For steps to reduce your carbon footprint, see the guide from the National Resources Defense Council:


[vi] For more on the growth of Sustainable, Responsible and Impact investing, see:


Socially Responsible Investors Review Policies to Fight Racism

Advocates of socially responsible investing are re-committing to fight racism, in part by pressuring the companies they invest in.

“Systemic racism, including racial inequities throughout the criminal justice system, has deep roots in our society and perpetuates economic inequalities, hampering the development and prosperity of black communities,” said John Streur, president of Calvert Investments, one of the largest mutual fund companies practicing Sustainable, Responsible and Impact (SRI) investing.

“We believe that existing efforts to promote diversity, while welcome and helpful, have been insufficient and more will be demanded of society's institutions, including governments, companies and investors. Because of the growing visibility of ongoing injustices suffered by the black community, we do not believe that a return to the status quo is possible or desirable,” Streur said. [i]

 The pandemic has exacerbated environmental and racial injustice in the United States, said a statement issued by Ceres, a non-profit coalition representing the investment, business and government sectors.

“We have long seen that the impacts of the climate crisis, water pollution and scarcity, and other environmental harms fall disproportionately on the poor, marginalized, and communities of color,” Ceres said.[ii]

“The compounding Covid-19 pandemic has shined a similar light on the deep and long standing fissures of racial inequality that are so searingly evident today and must be urgently addressed,” it said.

Mutual fund companies that engage in SRI or “green” investing said they were reviewing their own practices to help eliminate racism.

“We must stand with our black brothers and sisters and say loudly and clearly that we are one people, one nation, and we will work together to eradicate discrimination, violence and oppression,” said a statement from Pax, another SRI firm. [iii]

Pax will address racism in the construction of its portfolios, examining how companies address diversity, inclusion and equality. And it committed to engage with companies to address inequality, through pay equity, environmental justice and by eliminating enablers of unconscious bias.





Sustainable Investors Pressing Corporations for Justice during Pandemic

Advocates of sustainable investing are pushing companies to protect the health and safety of both their employees and customers, specifically to address short-term demands on the food supply chain by:

  • Strengthening the accessibility and affordability of food products;
  • Ensuring worker, customer, visitor and vendor safety during the crisis;
  • Ensuring the quality of food donations and incorporating healthy guidelines into the company’s donation policies.[i]


Financial services companies focused on Sustainable, Responsible and Impact (SRI) investing are screening their funds for companies that protect employees and the general public in the pandemic.


“If you want your asset managers to be engaging with companies about their response to the pandemic and about how they are addressing racial injustice, invest in a sustainable equity fund,” said Jon Hale of Morningstar, an analytical service.[ii]


The pandemic and racial justice issues are testing the resiliency of the American experiment, SRI investors said.


“The conjunction of COVID-19, with its disproportionate impact on communities of color, and the infliction of racist violence against those same communities, has brought us to a moment where we need to return to our founding principles: liberty and justice for all,” said Joe Keefe, president of Pax investments, an SRI company. “This includes protesting injustice and repairing our torn social fabric and body politic.” [iii]


“In the private sector, we need a revolution that brings more minorities and women into decision-making positions, and we need companies that put the common good and the long term above short-term gain,” Keefe said.


The Interfaith Center for Corporate Responsibility (ICCR), a coalition of investment professionals, government officials and faith communities, is pressing for changes in the food processing industry, especially meat packers.


“We are concerned for the welfare of all essential workers on the frontline of the COVID-19 crisis in Colorado. In particular, given historic health and safety lapses, we are closely monitoring the meat processing facilities statewide,” said Colorado State Treasurer Dave Young in a statement released by the ICCR. “It would be a grave error to not use this moment to push for systemic reform.” [iv]


"Workers in meat processing facilities often represent already at-risk communities so the Coronavirus only serves to heighten their vulnerability,” said Magaly Licolli of Venceremos (We Will Win), an organization in Arkansas focused on protecting human rights for poultry workers. 


"Immigrants, women and people of color are assuming great risks to their safety and the safety of their families at home because they don’t have paid sick leave and are afraid of wage loss, or because they fear reprisals from managers should they speak out about workplace health and safety lapses,” Licolli said in the ICCR release. [v]


[i] [i]







Companies with sustainable practices are faring better than average during the pandemic, which analysts say is part of a longer range trend that is attracting more investors to Sustainable, Responsible and Impact (SRI) investing.

Since the beginning of the year, 94 percent of SRI funds have performed better than the market indices to which they are compared, according to Blackrock, the world’s largest asset manager. [i]

Blackrock and other financial companies, including Morningstar, MSCI, Calvert and Parnassus, said the economic downturn since February was a major test of their belief that companies that follow sustainable principles are more resilient than their peers.

In a white paper, BlackRock said that companies “with strong profiles on material sustainability issues have potential to outperform those with poor profiles. In particular, we believe companies managed with a focus on sustainability should be better positioned versus their less sustainable peers to weather adverse conditions while still benefiting from positive market environments.” [ii]

Research by BlackRock has established a correlation between sustainability and traditional factors such as quality and low volatility, which themselves indicate resilience, the company said. Many SRI mutual funds were performing better than their peers before the pandemic, which many observers attributed to a poor showing by fossil fuel companies.

The lagging oil, natural gas and coal companies are not the only cause, said Blackrock.

“We believe that the outperformance has instead been driven by a range of material sustainability characteristics, including job satisfaction of employees, the strength of customer relations, or the effectiveness of the company’s board. Overall, this period of market turbulence and economic uncertainty has further reinforced our conviction that ESG characteristics indicate resilience during market downturns,” BlackRock said, using the abbreviation for Environmental Societal and Governance as a synonym for SRI. [iii]

The same conclusion was reached in a detailed quantitative analysis by MSCI, which maintains ESG indices for markets around the globe. MSCI found that the outperformance by ESG stocks during the pandemic was consistent with “what we observed over the past five years.” [iv]

The resilience of sustainable companies stems from the systems approach they take toward their environment, not only the natural world, but also their employees, the communities they serve and their other stakeholders, said Todd Ahlsten, chief investment officer of Parnassus, one of the largest SRI mutual fund companies. [v]

"In times of crisis, companies and governments have an opportunity to take major steps forward in the eyes of their key stakeholders and establish or deepen a relationship built on trust," wrote John Streuer, head of Calvert Investments, the most diversified of the SRI mutual fund companies.

“Those that perform well right now, serving their customers, employees and communities, will benefit in the long term, winning customer support and loyalty. Those that perform poorly, on the other hand, are likely to find that customers have long memories of crisis-era actions," Streuer wrote. [vi]

The head of sustainable analysis at Morningstar, Jon Hale, said that “sustainable funds are proving themselves to be resilient in a down market, something many of them hadn’t had the opportunity to demonstrate prior to the pandemic.”

The “pandemic is generating wider appreciation for the importance of the ‘social’ dimension of ESG analysis,” Hale wrote.

In the bigger picture, he said, “the pandemic seems likely to hasten the movement toward stakeholder capitalism… a shift away from a narrow focus on short-term profit maximization, toward long-term value creation that benefits all stakeholders. [vii]

Blackrock also sees the most recent trend as part of a larger pattern. “We believe that we are still in the early stages of a persistent and long-lasting shift toward sustainability – the full effects of which are not yet included in market prices, given the long transition. This is a transformation that we expect to see through the current pandemic, recovery, and long after.”









Market storms are a good time to re-evaluate financial strategies

The uncertainty surrounding the Corona virus pandemic and resulting upheaval in the financial markets signal a good time for investors to reevaluate their long-term goals and strategies, behavioral scientists say.

Our usual patterns of thinking can become disrupted under great stress, according to the behavioral finance team at Morningstar, an investment research firm based in Chicago.

“Our minds take shortcuts when we make decisions (When we aren’t sure where to order takeout from, for example, we look to online ratings to help us decide),” said members of the Morningstar behavioral sciences team, including Sarah Newcomb, Ryan Murphy, Steven Wendel and Samantha Lamas. [i]

 “Usually, these shortcuts are for the better. They help us react quickly, and they help us manage the thousands of decisions we make every day. There are times, however, that mental shortcuts lead us astray—that’s when they become biases,” they said. .

 "The complexity of our finances means that many of the shortcuts we use in everyday life can take us down the wrong path when we think about money—even more so when we’re stressed, distracted, unsure, and anxious, as many of us are today,” they said in a report. [ii]

 Many investors have learned not to panic when the market drops, to stick with their investments. At the same time, the behavioral investing tea, at Morningstar team said, such crises are a good opportunity to reevaluate long-term financial goals and strategies. They suggest consulting with a financial adviser, and also running through a behavioral checklist:

 Get to know your biases: We all make poor decisions sometimes and it’s useful to understand the large role our biases have in everyday decisions about our lives and finances;

  • Turn down the noise: Reading or hearing about frequent price changes can put any investor on edge. To turn the volume down on that noise, set a schedule for how often you check your portfolio;
  • Create speed bumps for decisions: To help avoid a hasty decision, try setting up decision-making speed bumps, such as creating a three-day wait rule;
  • Reconnect with your goals: Reacquaint yourself with what your goals are, why you set them in the first place, and how your current financial strategy can help you reach them;
  • Be your own devil’s advocate: challenge the decisions that you are contemplating;
  • Thoughtfulness matters: it’s extremely hard to stay calm and wait out the storm when your portfolio’s losing value. Don’t suppress this urge. Redirect your efforts. Take time to rebalance your portfolio, take advantage of buying opportunities, capitalize on lower interest rates.




Businesses Honoring Workers and Communities Faring Better in COVID Crisis

Businesses that are accommodating their employees, customers and communities during the COVID-19 pandemic are experiencing better performance in the stock market than their peers, says a non-profit group that tracks corporate responsibility.

“Looking at the market performance of these outstanding companies, we find that they outperformed the market in the first quarter of 2020, while the companies that put less emphasis on their workers and customers respectively underperformed,” according to a report issued by Just Capital. [i]

The report cited retailers that gave employees extra paid sick leave, personal protective equipment and financial support. The same companies provided special opening hours for vulnerable populations, deferred payment for goods and services and gave discounts to needy customers. It also examined the performance of utilities that waived billing charges and did not terminate service for customers experiencing economic hardship.

Those corporate actions were among those called for by a coalition of 309 religious, labor, financial and government leaders responsible for managing investments worth $8.4 trillion in a Sustainable, Responsible and Impactful (SRI) way.[ii]

“We recognize the long-term viability of the companies in which we invest is inextricably tied to the welfare of their stakeholders, including their employees, suppliers, customers and the communities in which they operate,” said the signatories in a letter released by the Interfaith Center on Corporate Responsibility (ICCR), based in New York.

“It is particularly critical that workers, already suffering hardship as a result of the pandemic, are not abandoned by corporations during this time of extreme need,” said Josh Zinner, CEO of the ICCR, which spearheaded the letter along with Domini Impact Investments and New York City Comptroller Scott Stringer.

"As shareholders, we expect companies to protect the health, safety, and economic stability of their workers. The long-term success of companies depends on the long-term success of employees, and this call to action is not just the right thing to do, but the smart thing to do,” said Stringer.

Other signatories included the treasurers or comptrollers of Oregon, Delaware, Illinois, Maryland, Connecticut, Vermont, Rhode Island and the Oneida Nation, as well as the AFL-CIO, the American Federation of Teachers, SEIU, the International Brotherhood of Teamsters, and Communication Workers of America. From the faith community, the backers included the Unitarian Universalist Association, the American Friends Service Committee, the Episcopal Church, the Evangelical Lutheran Church, Methodist Women, and many Roman Catholic orders. It also included many SRI financial service companies, and representatives from Canada, the United Kingdom, Italy and Spain.


“Millions of working people will face impossible hardships as COVID-19 shuts down schools, workplaces, hourly employment, transportation and more. We also know that vulnerable communities are the most at risk as they have limited access to social safety nets and financial resources to weather this uncertain period,” their letter said.

COVID victims fall disproportionately among communities of color and other disadvantaged groups, the national Center for Disease Control has reported. [iii]

“Furthermore, the prospect of widespread unemployment will exacerbate the crisis and pose grave risks to basic social stability and the financial markets. Finally, in the face of this global humanitarian crisis we all benefit by coming together,” the letter said.

The steps the coalition urged aligned with those monitored by Just Capital: 1) paid leave; 2) priority to the health and safety of employees and customers; 3) maintaining employment for workers; 4) maintaining customer and client relationships; and, 5) financial prudence.




Sweeping changes forecast from pandemic

The Coronavirus Pandemic is changing the way we look at the world and is likely to have long-term effects on the global economy.

The world will look different when we get to and through the great recovery, and I really believe it will be a better place than we are in now,” said Rob Lovelace, vice chairman of the Capital Group Companies.[i]

“We will have a recession. The only question now is how deep and for how long?,” said Lovelace, whose firm manages the American Funds, the second largest U.S. mutual fund company. “I think volatility in the markets will be elevated for a while, and that could impact markets through 2020 and into 2021. The pace of the recovery will be different depending on the local response to the crisis.”

Groups supporting Sustainable, Responsible and Impact (SRI) investing were monitoring how U.S. corporations were treating their workers communities and approaching the social justice impacts of the pandemic.

Analysts outside the SRI community also were drilling into changes already underway, gauging which might enhance and which might damage society.

“The coronavirus is not only a health crisis of immense proportion—it’s also an imminent restructuring of the global economic order,” the consulting group McKinsey said in a report based on information from corporate executives around the globe. [ii]

“It is increasingly clear our era will be defined by a fundamental schism: the period before COVID-19 and the new normal that will emerge in the post-viral era: the ‘next normal.’ In this unprecedented new reality, we will witness a dramatic restructuring of the economic and social order in which business and society have traditionally operated. And in the near future, we will see the beginning of discussion and debate about what the next normal could entail and how sharply its contours will diverge from those that previously shaped our lives,” the McKinsey report said.

The McKinsey analysis identified five stages of recovery: Resolve, Resilience, Return, Reimagination, and Reform. And it said that the “duration of each stage will vary based on geographic and industry context, and institutions may find themselves operating in more than one stage simultaneously.”

Martin Whittaker, the founding CEO of the advocacy group Just Capital, said that the coronavirus had “reset the economy. It has accelerated the need for a new, better operating system that gives more Americans the incentives and, in many cases, the opportunities they need to create broad-based prosperity.” [iii]

Just Capital, which advocates what it calls “stakeholder capitalism,” has been collecting information on how the largest American corporations have responded to the crisis. The categories include: Adjusted Hours of Operation; Back-Up Dependent Care; Corporate Leadership, including board and executive pay cuts; Community Relief; Customer Accommodations; Financial Assistance to employees; Furloughs or Unpaid Leave; and health and safety, among others.

Analyzing many of the same factors, McKinsey forecast that: “(t)he aftermath of the pandemic will also provide an opportunity to learn from a plethora of social innovations and experiments, ranging from working from home to large-scale surveillance.”

“With this will come an understanding of which innovations, if adopted permanently, might provide substantial uplift to economic and social welfare—and which would ultimately inhibit the broader betterment of society, even if helpful in halting or limiting the spread of the virus,” it said.

[i] A video and text of Lovelace’s remarks can be found at:

[ii] McKinsey: Beyond coronavirus: The path to the next normal;

[iii] See the Just Capital website:


Good Companies Increasingly Adhere to Sustainable Principles  

Successful companies are better able to manage Environmental, Societal and Governance (ESG) risks, an indicator of their sustainability, a new report says.

“Companies today face unprecedented risks as stakeholders demand accountability and transparency in how corporations approach the environment; attend to the well-being of their workers, customers and neighbors; and govern themselves in an ethical way,” said the report from the analytical agency Morningstar. [i]

The paper provides case studies of companies that either benefitted from their adherence to ESG principles, or suffered when they ignored them. Sustainable, Responsible and Impact (SRI) investing also is known as ESG.

“A company that ignores these risks or commits a misstep could incur significant economic costs that jeopardize its ability to earn long-term, sustainable profits,” the report said.

ESG risk can foretell changes in a company’s competitive advantage.That advantage is described by investor Warren Buffett as an economic moat.

“Economic moats and ESG risk tend to work together,” the Morningstar report said. Those companies with wide economic moats tend to be better at managing ESG risks, because they have greater human, political or financial capital than their competitors.”

The report noted the increasing focus of investors on environmental risks, especially those associated with climate change.

The paper examines in detail how two energy companies approached two related environmental issues, reduction of carbon emissions and production of renewable energy.

It also examines the approach of a pharmaceutical company to producing affordable drugs for an aging population. And it looks at a security breach at a company that collects, analyzes and markets the financial data of clients.

The paper also reviews governance issues that led a major U.S. conglomerate to consistently make decisions based on short-term profits rather than long-term results that would have benefitted shareholders and broader society. The company eventually lost value, and many of its components were sold off.



Green Funds More Than Holding Their Own in Downturn

Sustainable mutual funds weathered the initial phase of the current market downturn better on average than other categories, according to the independent rating service Morningstar. [i] Like the rest of the market, of course, they have recorded losses.


The number of funds specializing in Sustainable, Responsible and Impact investments has greatly expanded over the past few years, “with many prominent asset managers and public companies beginning the year by making significant commitments to sustainability,” Morningstar analyst Jon Hale said in a report. [ii]


One reason that investors are moving into sustainable funds is that many of them perform as well or better than the broader market. The green funds select their investments according to Environmental, Societal and Governance (ESG) criteria.

“While ESG equity funds have taken big hits this month, their losses have been less severe than those of conventional peers,” wrote Morningstar analyst Jon Hale.

“With global markets now in bear-market territory for the first time in more than a decade, here is an update through March 12, 2020. The takeaway: Sustainable equity funds continue to outperform on a relative basis,” Hale wrote.

Morningstar compared the trailing one-month and year-to-date returns of all 203 sustainable equity open-end and exchange-traded funds available in the United States with those of their respective peer groups, the report said.

The data covered began a week before the downturn started on Feb. 20.

Morningstar reported that for the period Feb. 13 to March 12, 66 percent of Sustainable, Responsible and Impact (SRI) Funds placed in the top half of their categories. And 39 percent landing in the top quartile, meaning they performed better than 61 percent of their competitors.

Many SRI funds exclude fossil fuel stocks, which have been hard hit since the beginning of the year.




Sustainable Investing Continues to Deliver Good Returns

Sustainable and fossil-fuel free investing can give investors consistently higher rates of returns than the broad market, according to two studies released this year.


“America’s corporations are getting more sustainable, and investors are benefiting, along with the planet and the rest of its inhabitants,” Barron’s reported on Feb. 7 in its third annual Green Growth Report. The analysis was done in conjunction with Calvert Research & Management, which is affiliated with one of the largest mutual fund companies specializing in Sustainable, Responsible and Impact (SRI) investing. [i]


“Shares of the 100 companies on our list returned 34.3 percent on average, in 2019, beating the S&P 500 Index’s 31.5 percent,” Barron’s reported. “More than half the honorees, 55, outperformed the mighty index, which has been nearly unbeatable for a decades.”


Two non-profit advocacy groups cited a similar trend in a separate report called the “Carbon Clean 200: Investing in a Clean Energy Future,” focusing on “publicly traded companies that are leading the way with solutions for the transition to a clean energy future” around the globe.


“Since its inception in July 2016, the Clean200™ has outperformed the S&P Global 1200 Energy Index with a return of 1.29 percent compared to -2.49 percent,” said the report, issued by the California-based As Your Sow advocacy group and a Canadian counterpart, Corporate Knights.


Neither the list cited by Barron’s nor the Clean200 ™ are available as specific mutual or exchange traded funds. However, many “green” financial services firms use similar screening methods in building investments based on SRI principles, also known as Environmental Governmental and Societal (ESG) criteria. [ii]


The authors of the Clean 200 ™ report said the performance of those companies “is lagging behind the broad-market benchmark for the S&P 1200 which had a return of 19.67 percent, mostly due to the impact of the simmering trade war between China and the U.S. If Chinese stocks are excluded from the Clean200, its return since implementation jumps to 20.4 percent, moving it ahead of the broad-market benchmark. The Clean200 therefore continues to provide evidence that market forces are driving growth for low-carbon companies across all sectors of the economy.” [iii]


The 100 companies cited in the Barron’s report were analyzed not only for their low carbon footprint, but also for general environmental impact, hiring and labor practices.


“With companies in general adopting more ambitious goals for the environmental and workplace practices, returns will keep outperforming,” Barron’s predicted. “If sustainability once seemed like a hobby for a group of eccentric business, it’s now viewed by many corporations as mission critical.”


One factor boosting the performance of the 100 companies on its list, Barron’s said, is that “they are better at personnel retention. Employee turnover is 25 percent to 50 percent lower at these operations, studies show …. In addition, good environmental policies, whether on water, facilities, fuel or waste – can lower costs.”


“Good sustainability practices are also a magnet for customers, who increasingly want to show that their partners treat the environment, workers and other stakeholders well.”

Barron’s predicted that “at this rate of adoption, it won’t be long – years not decades – before virtually every company in America will seek sustainable advantages.” [iv]


[ii] Representatives of As You Sow and Corporate Knights spoke in a Webinar, featuring a PowerPoint presentation available on the As You Sow Website:

[iii] The full report is available at




Rethinking Charitable Gifting – an update with information for clients who must take Required Minimum Distributions from their IRAs.

Use these when discussing your 2020 strategy with your tax advisor

Standard Deductions Rise: The standard deduction for tax year 2020 is $12,400 for individuals and $24,800 for married couples filing jointly, according to the IRS annual inflation adjustments. For those over age 65, the standard deduction is now $13,700 for individuals. If both spouses are over 65 and filing jointly, the deduction is $27,400.

What this means to taxpayers: The standard deduction may be easier, but itemizing may lower taxes for many. It could pay to make both calculations!

What this means for charitable gifting and other itemized expenses: Many taxpayers who choose to make charitable contributions may not get the additional itemized deductions that they would have in the past. However, with planning, some taxpayers can take steps to reduce taxes other ways.

If you take RMDs, consider Qualified Charitable Distributions: If you are an IRA owner over 70 ½, a qualified charitable distribution (QCD) up to $100,000 could help. To qualify as a QCD, the funds must go from your IRA directly to the charity.

Note that the Setting Up Every Community for Retirement Act (SECURE, which became law on Dec. 19, 2019), raised from 70 ½ to 72 the age at which you must take Required Minimum Distributions (RMDs).

When you make a qualified charitable distribution at 72 or older, it satisfies the RMD, but the deduction is not included in taxable income on your tax return.


Thus you get the benefit of making a charitable contribution regardless of whether you choose to itemize your deductions. Using a QCD can benefit those who give more and are in a higher tax bracket. If your spouse is also eligible, the benefits increase. Each spouse can make up to $100,000 of QCDs, for a combined total of $200,000.

Here’s where people get confused – there is NOT a tax deduction for the contribution. Instead the amount transferred from the IRA to the charity is excluded from taxable income. While you can give more than your RMD, the gift counts toward your RMD. By excluding the QCD amount from your income, you receive a better tax benefit than if you had just gotten a deduction. That’s because it decreases your Adjusted Gross Income (AGI), allowing for more AGI-based tax benefits, which results in a lower tax. A lower AGI may mean a lower tax bracket, lower tax rates on Social Security benefits, no Medicare surcharge, and 0% capital gain tax.

Whether or not you are 72, Consider Bunching:

Bunching means combining charitable gifting and other itemized deductions every other year so that you move between the standard deduction one year and itemized deductions another. The idea is to see whether bunching makes itemizing work for you every other year. For example, if you give $10,000 to charities, you would skip one year and then give twice that amount the next year, if that, along with other deductions, enables you to itemize and get a greater deduction.

Whether or not you are 72 Consider a Donor Advised Fund:

While you cannot make a QCD from your IRA into to a Donor Advised Fund, you can set up a Donor Advised Fund and gift appreciated shares of stock or other assets and get a tax deduction if you exceed the standard tax deduction.

The tax benefit of a Donor Advised Fund (DAF) is that you are able to donate assets and receive an immediate tax deduction, even though the actual funds may not be given to charities during that tax year. A DAF effectively separates the timing of when the deduction occurs from when the charity receives the money. This means you can fulfill your charitable goals while maximizing your deductions and saving money overall.

Make sure you discuss these ideas with your tax preparer in advance so that you can create a plan that works best for you each year.

Securities America and its representatives do not provide tax advice; therefore it is important to coordinate with your tax advisor regarding your specific situation.

communication have been the cornerstone of my foundation of success.

Electric Vehicles Attracting Attention

Super Bowl LIV watchers may have noticed an upsurge commercials for electric vehicles (EVs) – four compared to five for conventional cars. In 2019, the Super Bowl included only one EV ad, with none in the previous three years. [i]

The shareholder advocacy group Ceres is citing those ads to boost its own alliance with major companies to increase the percentage of electric vehicles in corporate fleets. [ii]

“So, why electric vehicles?” Ceres said in an announcement. “Transportation is the highest greenhouse gas-emitting sector in the U.S. And corporations own or operate a large portion of the vehicles on the road. So, if we’re going to tackle climate change and reduce transportation-related emissions at the pace and scale necessary to tackle the climate crisis, electric vehicles—including corporate fleets—must be part of our strategy.”

The Boston-based non-profit has a history of working with major corporations on environmental issues, which form the heart of contemporary Sustainable, Responsible and Impact (SRI) investing. Ceres was founded in 1989 in response to the Exxon Valdez oil spill by investors seeking a new way to evaluate the role and responsibility of companies as stewards of the environment and social justice. [iii]

Major carmakers are spending billions to develop electric cars, spurred in part by strict emission standards in such states as California, but sales have lagged. In 2019, automakers sold only 300,000 EVs in the United States, a decline from the year before, and less than 2 percent of the 17 million vehicles sold nationwide. [iv]

While the Ceres campaign does not include major automobile manufacturers among its “flagship members,” the list does include several major U.S. and foreign corporations.

[i] The EV ads were from Audi, Porsche and GM, with a Ford ad in some regional markets.




Kellogg’s to remove chemical linked to cancer from its cereals

Shareholder advocates have persuaded Kellogg’s to phase out by 2025 wheat and oats on which farmers have used glyphosate as a drying agent. The chemical has been linked to cancer deaths. [i]

Glyphosate is the active ingredient in Roundup, the Bayer-Monsanto weed killer that is the most heavily used herbicide in the United States.

“We are working with our suppliers to phase out using glyphosate as pre-harvest drying agent in our wheat and oat supply chain in our major markets,” the company said in an announcement posted on its Website. [ii] The major markets include the United States, Britain, France, Canada, Mexico and Australia.


“We are working with our suppliers and other stakeholders to create an action plan for 2025,” Kellogg’s chief sustainability officer Amy Senter said in the posting.

The shareholder advocacy group As You Sow, which has been pushing companies to keep glyphosate out of food products, said it would continue its campaign

“Kellogg’s commitment sets the stage for industry-wide action,” As You Sow said in an announcement. “We’ll monitor Kellogg on its progress, and at the same time ratchet up the pressure on peer companies like Quaker Oats’ parent company Pepsi.”[iii]

The independent watch-dog organization, Environmental Working Group, has cited numerous studies and court decisions in Europe and the United States linking glyphosate to cancer in in humans. [iv]

Shareholder advocacy and engagement with publically held corporations are key parts of Sustainable, Responsible and Impact investing.





Debate over Proposed Curbs on Shareholder Advocacy


Controversy continues over a proposal by the Securities and Exchange Commission (SEC) that would curtail the ability of shareholders to influence corporate policy. Such advocacy is central to Sustainable, Responsible and Impact (SRI) investing, especially on environmental, diversity and corporate governance issues.

A network of corporate oil and gas interests appears to be promoting the new proposals, partly by manipulative means, according to an extensive investigation by the Bloomberg News Agency.

Currently, shareholders need to own $2,000 of a company’s stock for a year to petition for all company holders to vote on an issue. The proposed SEC changes would require shareholders to own larger chunks of corporate stock and for a longer period of time. [i]

In promoting the changes, SEC chairman Jay Clayton highlighted letters from supposedly ordinary people who backed the restrictions.

“But a close look at the seven letters Clayton highlighted, and about two dozen others submitted to the SEC by supposedly regular people, shows they are the product of a misleading – and laughably clumsy -- public relations campaign by corporate interests,” Bloomberg reported. [ii]

Bloomberg reporters contacted the purported authors of the letters and discovered they either had never heard of the issue and had not sent them, or in the case of one woman had been approached by a public relations firm which asked and received permission to use her name on the letter.

The campaign, Bloomberg reported, originated with Main Street Investors Coalition, which was formed in 2018 by the National Association of Manufacturers. That association provided initial funding for the campaign to restrict shareholder rights, and represents such corporate giants as Exxon Mobil Corp. and Chevron Corp., companies that have publicly called for new limits on shareholder proposals, the newsletter GreenBiz reported. Shareholder advocates have been petitioning fossil fuel industries in regard to climate change.

The changes, GreenBiz reported, “could undermine investors’ ability to push for better environmental performance at publicly traded companies by creating new restrictions on who is eligible to file shareholder proposals and how much support they need to make it onto the proxy statement.” [iii]

According to the SEC website, by late November the commission had received more than 18,000 comments opposing the changes, many of them apparently form letters from such SRI groups as the US Social Investment Forum, the Interfaith Center on Corporate Responsibility and Ceres, a Boston-based advocacy group. [iv]

Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility, echoed the position of many investors who oppose the revisions: “We see this unjustified action by the SEC as part of a broader move across this Administration to realign the regulatory landscape in favor of corporate interests at the expense of the public interest."[v]

[i] See SEC Website:




[iv] See related articles on the website of the U.S. Social Investment Forum (, the Interfaith Center on Social Responsibility ( and Ceres (




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Funds Flowing into Sustainable Investing at a Record Pace

Sustainable funds in the United States attracted new assets at a record pace in 2019, according to a new report from Morningstar, a global financial research firm based in Chicago.

Estimated net flows into open-end and exchange-traded sustainable funds that are available to U.S. investors totaled $20.6 billion for the year, according to the study by Jon Hale, director of Sustainability Research for Morningstar. That's almost four times the previous annual record for net flows set in 2018.

The study analyzed cash flows into “300 mutual funds that thoroughly integrate environmental, social, and governance factors into their investment processes, and/or pursue sustainability-related investment themes, and/or seek measurable sustainable impact alongside financial returns.”

The sustainable funds group does not contain funds that employ only limited exclusionary screens without a broader emphasis on environmental, social and governmental (ESG) criteria, “nor does it contain the growing number of funds that now acknowledge that they consider ESG factors in a limited way in their security selection,” Hale wrote.

For more information, read the full article[i] or contact my office.




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