June 21, 2018


Sustainable Mutual Funds Investing Ratings
– Morningstar Has Added This To Its Widely-Used Information & Advice Platform – Some Practical Advice Offered to Investors…

Mutual Funds:  They are there in your individual or institutional portfolio, right? This should be of interest to most:

The 20th Century concept of “mutual funds” investment debuted before the stock market crash of October 1929; in 1924 the Massachusetts Investors’ Trust in Boston was created with State Street Investors’ Trust as the custodian.  That fund opened to public investment in 1928.  That same year the Wellington Fund (offering both bonds and equity) opened for business.

When the dramatic market crash occurred there were 19 open-ended funds for investors. The 1929 crash diminished individual investors’ appetite for equities for most of the following decade.  And, most Americans had little money to invest during the Great Depression (one of four households were unemployed).

But by 1940, as investors “recovered” and gained some confidence in the market, and the national economy improved with preparation for WW II, there were enough mutual funds for the Congress to pass the Investment Company Act of 1940 to regulate mutual funds and protect investors.

The first index funds came along in 1971 (a Wells Fargo offering); The Vanguard Group’s legendary investor John Bogle would use the concept (he embraced while a college student) to build the giant mutual fund enterprise.

By the end of 2016, Statista was charting 9,500-plus funds with US$16 trillion in AUM in operation.  There are also Exchange Traded Funds (ETFs) now with at least $3 trillion in AUM as of October 2017 according to Global X.

Of course, as investors embrace the concept of sustainable or ESG investing, both mutual fund and ETFs offerings have been coming to market to add to the long-available funds offered by Domini, Trillium, MSCI, Pax, Calvert, Zevin, and other SRI advisory firms (the newer funds du jour have such titles as Fossil Free, Green Future, Sustainable Investing, Green Bonds, Low Carbon, Socially Responsible, etc.).

And, of course, sustainability-focused ratings/scores/rankings/best for mutual funds and ETFs quickly followed here in the 21st Century as “sustainable” funds expanded. The popular Morningstar platform offers information on “Socially Responsible Funds” – any fund investing according to non-economic guidelines (issues include environmental responsibility, human rights, religious views, etc.)  Morningstar also offers Sustainability Ratings for “Sustainable Investing” funds and tools such as the Portfolio Carbon Risk Score™.

Janet Brown, a contributor to Forbes’ “Intelligent Investing,” offers her perspectives on ratings and rankings in this issue’s Top Story.  She begins with: between two funds with the same returns, many people invest in the one with companies with good ESG practices or commitment to data security and privacy.  Do sustainable ratings of the funds make a difference?

There are four factors she and the team at her company (Fund X Investment Group) and Morningstar recommend considering: (1) Cost of Ratings (free or not); (2) What do sustainability ratings measure?; (3) How to use these ratings to find suitable funds; (4) How do the ratings fit into your investing strategy?

The narrative captures highlights of a recent webinar by Fund X and Morningstar and explains some of the latter’s approach to the new Sustainable Funds ratings for you.

Top Stories

What You Need To Know About Fund Sustainability Ratings
(Friday - June 15, 2018) Source: Forbes - Given the choice between two funds that have similar returns, many people prefer to invest in the one that prioritizes investing in companies that focus on clean energy, good governance or are committed to data security or...

Sustainability: Forward Momentum! For Your Attention: The Editors' Scans

Editorial: UNL displays impressive success with sustainability
(Monday - June 11, 2018) Source: Journal Star - the UNL administration deserves significant praise for its forward-looking policies to save energy and save money, which have been steadily paying increasing dividends for years.

Sustainability governance is integrated governance
(Tuesday - June 12, 2018) Source: GreenBiz - Academic research, Wall Street reports, even company financial performance all show that sustainability is good for business. Investors and other stakeholders are looking for evidence that companies are combining their... 

Sustainability pays
(Thursday - June 14, 2018) Source: D&C - Normally, it takes laws and regulations to make private-sector companies act in a socially and environmentally responsible way. In many developing countries and emerging markets, governments are not in the position to pass...

Viewpoint: Sustainability required in actions, not just words
(Friday - June 15, 2018) Source: Boston Business Journal - How can a national business university and its industry partner demonstrate and teach environmental sustainability? As leaders, we have an obligation not only to teach students about the challenge of climate change...

Why My OBE Shows That the Greatest Sustainability Challenges Lie Ahead, Not Behind Us
(Friday - June 15, 2018) Source: Sustainable Brands - Having worked for over 25 years to drive sustainable development with businesses, NGOs and governments, I’ve seen us accomplish a lot over the last two decades.

And about the Apparel and Fashion Industry:

20 Fashion Revolutionaries Making Sustainability A Fashion Must-Have Luxury
(Monday - June 11, 2018) Source: Forbes - We are Fashion Revolution. We are designers, producers, makers, workers and consumers. We are academics, writers, business leaders, brands, retailers, trade unions and policymakers. We are the industry and the public...

How Sustainable Is Your Wardrobe?
(Monday - June 11, 2018) Source: British Vogue - It's been a big week for environmental awareness with the news that Gucci has pledged to put sustainability at the heart of its business. But is this, and the environmental efforts of other brands, enough to reduce the fashion... 

And Food & Agriculture in Focus:
Coffee giant changing the sustainability game, report shows  
(Thursday - June 14, 2018) Source: Human Nature - A Starbucks ethical sourcing program is brewing larger-than-expected changes across the coffee sector, according to a recent report from Conservation International. 

Studies assess the sustainability of different food production methods
(Wednesday - June 13, 2018) Source: FoodDive - Environmental sustainability has become a mainstream concern for shoppers who increasingly seek out mission-based brands that invest in practices such as organic and regenerative farming... 

About Sustainability and Cities:

If you want sustainable cities, you need to first consider resilience
(Wednesday - June 13, 2018) Source: Create Digital - The term ‘sustainability’ is often used interchangeably with ‘environmentally friendly’. However, for cities, sustainability doesn’t just mean going green – it means staying agile, preparing for turbulence and adapting to... 

Our Focus This Week on A Range of ESG Topics & Issues – More Things For You to Think About 

8 Ways Your Business Can Help Save the Environment
(Tuesday - June 12, 2018) Source: Earth 911 - The workforce is getting younger as Millennials take over jobs once held by retiring baby boomers. Companies hoping to hire 20- and 30-somethings face increasing challenges in attracting and retaining 20- and 30-year-old workers... 

New study examines impacts of fracking on water supplies worldwide
(Wednesday - June 13, 2018) Source: Phys.org - Using hydraulic fracturing to extract oil and natural gas from shale is a common technique used worldwide. Because the technique requires large amounts of water, however, it raises the question of whether it could lead to water... 

10 Incredible Renewable Energy Stats From Around the Globe
(Thursday - June 14, 2018) Source: The Motley Fool - If humanity wants to limit the rate of climate change and reduce its impact on the natural environment, then it needs to transition to clean and renewable sources of electricity within the next several decades...


Headlines for You From the Corporate Sector - Both Positive & Negative 

"There is no innovation without sustainability" says Nike's chief operating officer
(Tuesday - June 12, 2018) Source: de zeen - Nike is putting new focus into sustainability, says chief operating officer Eric Sprunk, and has just created a new super material from recyclable natural leather fibre...

Six Senses Releases Impressive Sustainability Results
(Wednesday - June 13, 2018) Source: Travel Pulse - Six Senses Hotels Resorts Spas, long a leader in the sustainability movement, has just released documentation outlining the progress it is making minimizing the environmental impact of its properties around the world...

Tyson Recalls Over 3,000 Lbs. of Frozen Chicken Products
(Monday - June 11, 2018) Source: Snopes 

Kia recalls 500,000 vehicles in the US due to airbag glitch
(Monday - June 11, 2018) Source: Engadet

Activist investor Paul Singer just chose Sempra Energy as his next turnaround project
(Tuesday - June 12, 2018) Source: CNBC

China to Investigate Deplorable Conditions at Amazon Echo Factory
(Tuesday - June 12, 2018) Source: The Daily Beast

Daimler to Recall 774,000 Vehicles Over Alleged Emissions Cheating
(Thursday - June 14, 2018) Source: The Drive

Volkswagen fined $1.18B for diesel emissions cheating
(Thursday - June 14, 2018) Source: Fox Business 

General Motors Just Named Its First Woman CFO
 (Thursday - June 14, 2018) Source: Jalopnik

Google releases first diversity report since the infamous anti-diversity memo
(Friday - June 15, 2018) Source: Tech Crunch 

McDonald's to scrap plastic straws in UK and Ireland
(Friday - June 15, 2018) Source: CNN 

Kentucky sues Walgreens, cites 'alarming' rate of dispensing opioids
(Friday - June 15, 2018) Source: Reuters

News & Opinion: Asset Managers, Sovereign Wealth Funds, Pension Funds

The World’s Biggest Pension Fund Struggles With Sustainability
(Tuesday - June 12, 2018) Source: Bloomberg - Japan’s Government Pension Investment Fund has nearly $1.5 trillion in assets and a legion of external asset managers running its portfolio. The GPIF sees itself as a “super-long-term investor” with the goal of a century or more... 

Nigeria sovereign fund to boost domestic focus after profit drop
(Monday - June 11, 2018) Associated Profiles : Excess Crude Account (Nigeria) Source: CPI Financial - The Nigeria Sovereign Investment Authority is restructuring ... similar amount to fund the completion of a state-controlled steel plant. The so-called excess crude account stood at about $2.32 billion at the end of last year...

Calpers Weighs Following Warren Buffett’s Path
(Monday - June 11, 2018) Associated Profiles : California Public Employees’ Retirement System (CalPERS) Source: The Wall Street Journal - The nation’s largest pension is considering a new strategy: setting up multibillion-dollar funds to buy and hold private companies for the long haul, replicating the approach of Warren Buffett’s Berkshire Hathaway...

The next generation of Silicon Valley’s sustainability investing needs strategic corporates
(Wednesday - June 13, 2018) Source: GreenBiz - Silicon Valley’s cleantech boom and bust cycle has been well chronicled, but some venture capitalists are working on new methods for funding the next generation of sustainability startups. And it turns out the formula requires... 

Trending: Goldman Sachs, CMS Energy, Danish Pension Funds Take on Sustainability-Linked Investments
(Thursday - June 14, 2018) Source: Sustainable Brands - Among the latest wins for ‘good finance,’ Goldman Sachs Asset Management (GSAM) launched an exchange-traded fund (ETF) tied to measurements of “just” business behavior; utility company CMS Energy has become the first U.S. company...

SEC announces cryptocurrency ether is not a security
(Friday - June 15, 2018) Source: Yahoo Finance - n an announcement at Yahoo Finance’s All Market Summit: Crypto in San Francisco on Thursday, the U.S. Securities and Exchange Commission Director of Corporate Finance William Hinman said that the commission would not be... 

Louis Coppola from G&A Institute Goes In Depth on How to Improve ESG Performance


G&A Institute Sustainability Update
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Governance & Accountability Institute's blog focusing on the sustainable world evolving daily before our eyes. Read it, absorb it, question it and challenge.

7 Reasons Why America is Rethinking Capitalism Now

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G&A's To The Point! is a businesss intelligence web-platform resource. This management briefing service offers timely insights and perspectives on Corporate Sustainability, Responsibility & Citizenship.Click here to request a trial subscription. Below are links to a sampling of three recent briefs:

Second in the Series: A BIG YEAR SHAPING UP, 2018 – Developments in Corporate Sustainability / Responsibility & in Sustainable Investing in 1Q

ABOUT THOSE CORPORATE EMPLOYEE PENSION PLANS –The Focus is Increasing on the Shortfalls…and Remedies

Governance & Accountability Institute Research

Using The GRI Sustainability Reporting Framework Improves The Quality of ESG Disclosures - Joint Research From G&A Institute and Baruch College Shows

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