Dear Reader
by Cheryl Smith, Ph.D., CFA, President The first daffodils of spring just opened beside my house. The sight of these spring flowers always engenders a spirit of newness, of freshness, and of hope after the excessively long New England winter. This year more than ever, I need that sign of hope. For at least 50 years, as transaction and trading costs have fallen, world financial markets have become increasingly focused on the short term, and the expectations for acceptable quarterly returns have moved ever higher. Profit’s share of national income has reached new heights. Over the past 15 years, the …
Chevron Liability in Ecuador Pollution Case Approaches $27 Billion
Court Judgment Expected This Year by Shelley Alpern Five years ago, I had the privilege of getting a firsthand look at the evidence in one of the most important lawsuits being heard anywhere in the world. The exhibits are a number of oily pits and ponds scattered throughout the state of Sucumbios, Ecuador, right in the middle of the Amazon rainforest. The contamination is allegedly the work of Texaco, the first petroleum company to break ground in Ecuador in the early 1970s. The court case is being heard in Lago Agrio, a sad-looking town whose many ramshackle buildings look far …
(Very Big) Business As Usual at the Beijing Olympics
The Chinese made a grand entrance on the Olympic world stage – intense, controlled, intimidating (if you find 2,008 men beating drums with seamless precision intimidating). Yet the awe inspiring opening ceremony was perfectly balanced with peaceful displays of song, calligraphy, and dance. As fairies began to fly through the Olympic rings, my biases surrounding the “genocide Olympics” were quickly swept under the 100-yard LCD rug. China has dualism down to an art, and an Olympic sport for that matter. Dualism – the contrast between power and peace, light and dark, yin and yang – has long been recognized in …
Overcoming the Class 5 Rapids
This has been quite a year so far for the global economy. The collapse of the mortgage market and much of the rest of the loan market in the U.S. has spread around the world. Energy prices have soared, reacting not just to global demand and supply fears but to the extremely weak dollar (which came about in part because of the mortgage collapse), as this country slowly awakens to the ramifications of our energy gluttony. Food prices, driven in part by the diversion of farmland toward biofuels, have skyrocketed, literally starving whole communities around the world and throwing local …
Sustainable Returns
How High Are Sustainable Financial Returns? The investment ecosystem has reached a tipping point and the interest in responsible, sustainable investing is surging. Asset owners with over $10 trillion have signed up to the UN Principles for Responsible Investment. The Investor Network on Climate Risk now has over $5 trillion behind it. The leading investment consultant to Foundations will now provide Mission Related Investing services. More corporations are institutionalizing sustainability concepts into their organizations and business education is inching away from the blinkered study of money making toward imagining socially positive enterprises with multiple bottom lines. A recent online survey …
Big Coal Losing Momentum in the U.S.
Poor coal. For so long, it has gotten away with being the largest contributor (41 percent) to global CO2 emissions from energy use, a widespread public health hazard by virtue of lead, mercury and other pollutants, the source of black lung disease, and now we can add deforestation to its achievements. “Coal will be coal,” they said. “Isn’t it great that it’s cheap and abundant?” Coal claims that it’s now clean and has offered to change its ways by burying its carbon instead of spewing it all over the atmosphere, but its persecutors have obtained restraining orders and are bent …
Spotlight on Your Portfolio: Carbon Footprinting Your Investment
You hear a lot of talk from Wall Street these days about how climate change presents “unprecedented business risks and opportunities.” While investment action doesn’t yet fully match this rhetoric, many major firms are establishing research shops focused on the investment implications of climate change. Some of the early (and quite excellent) work has been focused on the likelihood that the U.S. will pass legislation regulating carbon emissions in the next two years. It’s been decades since we’ve seen this kind of sweeping environmental regulation in the U.S. Carbon regulation on its own – as well as other climate change …
Our Investment Reponse to the Recent Credit Market Disruption
One of the themes in sustainable, responsible investing is “patient capital.” Patience and a long-term perspective are especially valuable at times like these. And, while stocks can always fall more, we believe there is a good chance that markets will find a surer footing in the months ahead. A quick summary of what has occurred: after spending two years pushing up interest rates, the Federal Reserve was able to slow the economy, and investors hoped for a soft landing that would avoid an economic recession. However, as is often the case, rising interest rates uncovered weaknesses in the financial system, …
PA Treasurer Invests in Green Century Balanced Fund
Pennsylvania’s Treasury Department selected the Green Century Balanced Fund for a $5 million investment as part of the state’s new environmental investment initiative. Trillium Asset Management Corporation is the sub-advisor for the environmentally focused mutual fund. Adam Seitchik, Ph.D., CFA, the lead portfolio manager for the Fund, states “the Green Century Balanced Fund is focused on investing in companies of all sizes that make strong environmental contributions toward a cleaner and healthier future. We are excited that Pennsylvania is taking the long-term perspective that competitive, risk-adjusted returns are contingent on the vibrancy of our economy and the environment.” Please visit …
Our Current Market Outlook
The stock market is off to a dismal start in 2008. There has been some panic selling that we believe overstates the true underlying risks to the economy and financial markets. As discussed in our Economic and Social Outlook – January 2008 [PDF], we perceive that recession risks have risen to 50%, and are pursuing a more defensive strategy. While the market was perhaps due for a correction after five straight years of gains, we believe that conditions are likely to stabilize later in the year. Aggressive monetary policy (including a dramatic 0.75% cut in interest rates by the Federal …
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