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Gore Offers Sustainable Capitalism as Night-Vision Goggles for InvestorsBy Eric Roston May 20, 2013 7:42 AM EDT 1 Comments "
Bear with me,” Al Gore said to a rapt crowd of about 200 last Monday night at the fourth annual U.S.-India Energy Partnership Summit in Washington. He was asking the audience’s indulgence as he offered a scientific analogy to describe his investment philosophy.
Traditional investors focus on a narrow part of the spectrum of value that any company, or economy, produces, he said. Mainstream accounting in that way is like visible light. It’s all that eyes can see but makes up just 2 percent of the complete electromagnetic spectrum, the band of radiation that extends from high-powered gamma and x-rays to microwave and radio frequencies.Generation Investment Management, the firm Gore founded 10 years ago with former Goldman Sachs Asset Management Chief Executive Officer David Blood, tries to widen the bands of light that it sees by incorporating sustainability analysis. It’s an approach that values environmental, social and governance criteria “ESG” and long-term time horizons.
There’s a lot of information that’s material today — water, carbon, working conditions in far-flung suppliers — that hasn’t always been important to investors before.“If you take the rest of the sustainability factors into account, you can get a fuller and more realistic image, and that’s what we try to do,” he said.Generation Investment Management beta-tested its approach to what Gore and Blood call sustainable capitalism before the firm started investing client money.
It’s worked so far. “Knock on wood, we have done extremely well,” Gore said.Bloomberg News estimated Gore’s wealth last week at $200 million, in a 3,700-word investigation by Ken Wells and Ari Levy. Public filings show that in 2008 through 2011 London-based Generation racked up almost 140 million pounds $218 million in profits to be split among its 26 partners, Wells and Levy wrote. As founders, Gore and Blood are thought to have the largest equity stakes; the firm doesn’t disclose partnership equity or how the partners split profits, a spokesman told Bloomberg News.
Related: Call It What You Like — New Investing Approach Gains Followers: The GridGore Is Romney-Rich With $200 Million After Bush DefeatMajor U.S. Cities at Risk for Climate-Related Water ShortageResource Strain Pushes Coca-Cola, Dow to Put Price Tag on NatureGore cited Generation’s analysis of BP Plc as an example of their approach. “We were invested in British Petroleum, BP, when we started,” he said. The company’s CEO from 1995 to 2007, Lord John Browne, was an early climate hawk and made sustainability a rhetorical and marketing focus. After BP’s 2005 Texas refinery fire and its 2006 pipeline spill in Alaska’s Prudhoe Bay, Generation “looked at the safety culture and found that it had not been pushed into the American acquisitions. So we got out of BP — before the Deepwater Horizon,” he said.To refine Gores metaphor, sustainable investing is more akin to donning night-vision goggles, which extend human vision into the infrared band. That’s the part of the electromagnetic dial at which bodies radiate heat. It’s the same emission band as that other invisible thing Gore is known for trying to get people to see: atmospheric carbon dioxide.Analysis and commentary on The Grid are the views of the author and dont necessarily reflect the views of Bloomberg News.Visit www.bloomberg.com/sustainability for the latest from Bloomberg News about energy, natural resources and global business.
via Gore Offers Sustainable Capitalism as Night-Vision Goggles for Investors – Bloomberg.
In our continued efforts to help support our valued partners, Social(k) is pleased to announce the addition of Exchange Traded Funds (ETFs) as the latest investment offering on our pure open architecture platform. Choose mutual funds or Exchange Traded Funds as investment options. Over 200 Environmental, Social and Governance, ESG, screened mutual funds and now over 200 screened ETF options as well.
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Video: Social(k) Smarts: Keeping Score 
Some people watch baseball and do line scoring. Others keep score with box scores. Line score is similar to single bottom line accounting. Box score is like triple bottom line accounting. How do you keep score of your financial returns? How do you keep score of the way the game was played?
Keeping score using line score, or single line accounting, measures returns only. $100 goes in and $125 comes out. Financial wizards can measure financial returns with great precision. They can even measure the amount of risk taken for the return. But at the end of the game it is a line score. What is harder to measure is how the game was played, how the returns were made. If you want to really understand the dynamics of a specific game you use box scores. This brings much more depth to the story of the game, or the investment.
We know Portfolio 21, a mutual fund, returned 2.99% annually, over the last five years as of Dec 31, 2010. We know The Vice Fund, also a mutual fund, returned 2.43% annually, for the same time frame. Very similar returns as seen from the line scores.
Let’s look at the box scores. What companies do they look at to invest in?
“The Vice Fund invests in companies, both domestic and foreign, engaged in the aerospace and defense industries, owners and operators, gaming facilities as well as manufacturers of gaming equipment, manufactures of tobacco products and producers of alcoholic beverages.” www.usamutuals.com/vicefund
“Portfolio 21 invests in companies designing ecologically superior products, using renewable energy, and developing efficient production methods. Portfolio 21 companies seek to prosper in the 21st Century by recognizing environmental sustainability as a fundamental human challenge and a tremendous business opportunity.” www.portfolio21.com/
The box scores add a deeper understanding of the game. Triple bottom line accounting adds a deeper understanding of the investment.
How are you keeping score of your investments? Are you measuring success by dollars only? Isn’t wealth more than cash in the bank? Returns at any cost, certainly not. We can each use our own values and beliefs to decide what is important to measure, but we should be measuring more than the simple return.
 401(k)s : 401(k)s
& how they compare to IRAs)
A simple straight forward explanation of what a 401(k) is all about from Khan Academy. Good place to start if you are a new HR manager and need to brush up.
via 401(k)s | Khan Academy.
BOSTON, MA–Marketwire – 10/07/09 – The Eventide Gilead Fund NASDAQ:ETGLX – News, a mutual fund practicing values-based and socially responsible investing, was named as a Category King by the Wall Street Journal for the one-year period ending September 30, 2009 for its no-load retail class shares. This is the fifth time in 2009 the Fund has been named Category King by the Wall Street Journal, in recognition of ranking within the top ten funds in its category for fund performance. The Eventide Gilead fund was ranked #2 out of 380 midcap-core funds for the period based upon its investment return. During this period, the Fund generated a return of 15.67% compared with the S&P 500 Index return of 6.91%, an out-performance of 22.58%.
via Eventide Funds | A Values-Based Approach to Investing.
Dutch pension funds are increasingly looking to integrate environmental, social and governance (ESG) factors beyond the developed market equity asset class, according to a new study from the VBDO, the Dutch Association of Investors for Sustainable Development.
The study Benchmark Responsible Investment by Pension Funds in the Netherlands 2010 found that the investors are looking at ESG factors in the corporate and government bond class, real estate and alternatives.
While 39 of the funds reviewed – 65% of the sample – have an exclusion policy for public equity, the VBDO found that 32 have a similar stance for corporate bonds, and six have exclusion criteria for government debt.
As for ESG integration, the VBDO found that 20 funds “demonstrably” integrate ESG into their public equity investment selections. This compares to 11 who integrate, five systematically, in corporate bonds. Two funds, Pensioenfonds SNS REALL, and Rabobank Pensioenfonds, integrate ESG into their government bond portfolios.
via Responsible Investor.
WASHINGTON, D.C.
November 9, 2010
SRI Assets Up 13 Percent in Current Economic Downturn, While Overall Assets Increased Less Than 1 Percent; Several Factors Driving Current and Expected Future SRI Growth.
Despite the recent economic downturn, sustainable and socially responsible investing (SRI) in the United States is continuing to grow at a faster pace than the total universe of investment assets under professional management, according to the new 2010 edition of the Social Investment Forum Foundation’s Report on Socially Responsible Investing Trends in the United States.
Key report findings include the following:
• The pool of assets engaged in SRI strategies – the use of environmental, social and governance (ESG) criteria, shareholder advocacy and community investing — has grown more rapidly than the overall investment universe due to such factors as net inflows into existing SRI products, the development of new SRI products, and the adoption of SRI strategies by managers and institutions not previously involved in the field.
• Since 2005, SRI assets have increased more than 34 percent while the broader universe of professionally managed assets has increased only 3 percent. From the start of 2007 to the end of 2009, a three-year period when broad market indices such as the S&P 500 declined and the broader universe of professionally managed assets increased less than 1 percent, assets involved in sustainable and socially responsible investing increased more than 13 percent (from $2.71 trillion to $3.07 trillion).
• Nearly one out of every eight dollars under professional management in the United States today — 12.2 percent of the $25.2 trillion in total assets under management tracked by Thomson Reuters Nelson — is involved in some strategy of socially responsible and sustainable investing.
via Social Investment Forum: Press Release: Report: Socially Responsible Investing Assets in US Top $3 Trillion; Nearly 1 Out of Every 8 Dollars Under Professional Management (11/9/2010).
SocialFunds.com — Founded in 2007 in response to genocide in the Darfur region of Sudan, where hundreds of thousands of people have been killed and another three million displaced, Investors Against Genocide (IAG) seeks to bring pressure on investment firms to end their investment in companies that contribute to genocide or crimes against humanity.
According to IAG, five Asian oil companies—PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation, Sinopec, and PETRONAS—have provided revenue to the government of Sudan for arms and funding of genocide, rather than economic development for the poor people of Sudan. Large mutual funds that have not yet made a commitment to genocide-free investing include Fidelity, Franklin Templeton, and Vanguard.
In a white paper entitled Genocide-free Investing: New Opportunities for Investors, IAG documents some of the successes it has had in its engagement with financial institutions on the issue. Unlike the three above-named companies, which continue to hold large investments in companies linked to genocide, American Funds and Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF) have sold their holdings in companies with ties to the government of Sudan.
via Investors Against Genocide Expands Focus Beyond Shareowner Engagement to Include Recommendations for Financial Advisors.
As investors, we have an opportunity to engage with companies and the public in addressing environmental and other corporate responsibility concerns that inform our investment process.
We employ several different engagement strategies, all of which are integrated into our research and investment process, thereby linking our investment decisions with the success or failure of our company engagements. We also support and collaborate with As You Sow, a non-profit organization using shareholder activism to ensure that corporations act responsibly. Our primary concerns are corporate actions taken at the expense of employees, environment, and community. Communications and Proxy Voting are the primary engagement strategies.
via In Depth – Activism – Portfolio 21.
Portfolio 21 developed and employs the following proprietary framework to evaluate which companies understand their ecological risks and opportunities, and are taking positive action to integrate sustainability strategies in their business models.
In our view, there are no truly sustainable companies in Portfolio 21, therefore no companies excel in all of the areas listed below. However, we select companies with strengths in multiple areas that are well positioned to make further advancements in addressing sustainability challenges.
via In Depth – Investment Philosophy – Company Evaluation Criteria – Portfolio 21.
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