Tuesday, November 30, 2010

A Path Forward for Social Finance

Today the Canadian Task Force on Social Finance issued a call to action outlining a path forward in mobilizing $30 billion in Canadian financial support for social enterprises and social-purpose businesses.  The field of social finance aims to mobilize private financial capital to fund companies whose core purpose is to address environmental and social issues.  Social finance is different from traditional finance because it emphasizes 'blended value' - the concept that investing in social purpose businesses can provide a social and/or environmental benefit, as well as a financial benefit.

The Task Force (made up of ten of Canada's social finance leaders) is grappling with 1) how to unlock new sources of capital for social enterprises, 2) how to make it easier for charities and non-profits to generate much needed operating revenue from for-profit enterprises, and 3) how to create a universe of high quality, investment-ready social enterprises for the institutional investor market.

Wednesday, November 17, 2010

The Sustainability Index - Friend or Foe?

Goldcorp Inc. has been added to the Dow Jones Sustainability Index (DJSI).  It's a company with a checkered past.  And while Goldcorp has taken steps to improve its human rights practices as of late, its listing on the DJSI led me to wonder, are sustainability indexes good or bad when choosing to invest in sustainable and socially responsible companies?

When companies like Goldcorp or BP Plc. are added to the DJSI, or any other sustainability or corporate social responsibility (CSR) index for that matter, it always seems to raise the ire of critics.  Does listing on the DJSI simply give companies an unwarranted stamp of approval?

In my opinion, yes and no.

Tuesday, November 2, 2010

Goldcorp Takes Step Forward with Human Rights Policy

One of Canada's highly scrutinized gold miners, Goldcorp Inc., has released its long awaited Human Rights Policy, as well as a more general Corporate Social Responsibility (CSR) Policy this week.  The documents were developed following a long process undertaken by Goldcorp to conduct a Human Rights Assessment of its Marlin mine in Guatemala.

The company, local community members and international activists have been at odds for years over issues like water, land rights and royalty payments at the Marlin mine.  The polarized positioning of both sides created a challenging problem for responsible investors:  Do you 'cut and run' by selling your shares in Goldcorp, essentially washing your hands of the situation, or do you use your influence to initiate change?

Tuesday, August 24, 2010

CSR is Not Dead

The Wall Street Journal has reignited a debate about the value of corporate social responsibility (CSR). Does it add value to a business, or is it an unnecessary drain of resources away from shareholders?

The WSJ article, posted by Professor Aneel Karnani, rehashed the old Milton Friedman argument of 'the social responsibility of business is to maximize profits.' The argument goes that by generating profits, the benefits of business innovation will trickle down and society will be better off in the long run. Sure, in a simple world this would be the case. But as many practitioners in the CSR field have pointed out, there are a few holes in this theory.  As Nathan Schedroff succinctly points out, "how good was Enron, Worldcom or Blackwater for society?" Not to mention the financial crisis precipitated by excessive short-termism.

Tuesday, August 17, 2010

Has BPA Contaminated Your Portfolio?

That pesky chemical Bisphenol A, or BPA, is in the news again, raising questions about how the companies in our portfolios are managing the prolific risks associated with man-made chemicals.

Yesterday, Statistics Canada released a report stating that 91% of Canadians surveyed had detectable levels of BPA in their blood stream. Even more concerning is that they detected notably higher levels of the chemical in children and teens.

Some studies have linked BPA to concerning health effects including behaviour issues, brain development and even cancer. It is an extremely common chemical, used in everything from plastic containers, tin cans, bottles, DVDs, receipts, dental resins and even recycled toilet paper! (Check out this great interview with Adria Vasil, Author of Ecoholic Home). Canada banned BPA from baby bottles in 2008 because it was concerned about the effects of the chemical on children. But BPA remains in millions of products consumed by Canadian children and adults every day.

Consider this, if BPA is so prevalent in our food and consumer products, it's also rampant in our investment portfolios.

Thursday, August 5, 2010

RIM's Privacy Challenge, Should Investors Weigh In?

Is Canada's darling, Research in Motion (RIM) about to face the same fate as internet giants Google and Yahoo regarding the right to privacy? The maker of Blackberry is facing mounting criticism from authoritarian governments about limitations on government access to private information on Blackberry servers.

The information is used by some governments to monitor the movement of human rights defenders and political opponents. Some say government access to this information is an infringement on human rights and the right to privacy.

Google and Yahoo have faced significant pressure from shareholders over the past few years regarding the right to privacy.
The issue came to a head after human rights defenders were jailed in China after technology companies provided the government with internet tools to track and sensor the activists.

Is it RIM's turn for the spotlight?

Monday, August 2, 2010

The ABC's of ESG

Just as in any industry, the responsible investment (RI) industry is full of jargon, abbreviations and acronyms. This post will familiarize you with common terms we use.
  • Responsible Investing (RI) or Socially Responsible Investing (SRI) - An investment philosophy and practice that considers social, environmental, and ethical criteria in addition to financial criteria when making investment decisions. Many investors believe that these factors can be determinants of business value. The term often encompasses many different RI techniques (some are defined below) including positive and negative screening, ESG integration, proxy voting and shareholder engagement. It is also closely related to other finance and investment practices such as social finance, community investing, mission-based investing, and microfinance, which directly seek out both financial returns and social benefits when making each investment.