A chronicle of sustainable investment

Here is a personal, annotated chronicle of sustainable investment that I collected while working my way into the field through the browsing of websites, reports and articles. I collected the data in 2018. Since most of the sources are websites, this means that much of the lingo is from 2018 and likely to be anachronistic.

1981 Social Investment Forum launched in US

The source claims it is the first of such forums. http://uksif.org/our-strategy/history/

https://www.ussif.org/

1984 Start of UK’s first ‘retail ethical fund’

http://uksif.org/our-strategy/history/

1991 UK Social Investment Forum (UKSIF) started

http://uksif.org/our-strategy/history/

1992. Start of Jantzi Research

The company, investigated company’s sustainability performance.

It had collaborations with the Duch Triodos Bank, and later merged step-wise with a number of companies (DSR, Scoris) into Sustainalytics.

https://www.sustainalytics.com/about-us/#History

The source is a typical big-step chronology with some vague phrasing of what happened exactly.

1992 (or a bit later) United Nations Environment Program – Finance Initiative (UNEP FI)

UNEP FI was created after the 1992 Earth Summit (the Rio Summit) to promote sustainable finance. Among other things, it organizes a bi-annual global roundtable event to identify the most urgent issues. (http://www.unepfi.org/about/, Oct. 2018)

±1993 Start of Dutch Association of Investors for Sustainable Development (VBDO)

In 2018, the VBDO writes ‘for almost twnety-five years’

2002 Launch of Corporate Knights

A company that publishes a quarterly magazine which is inserted in the Globe and Mail and Washington Post. The company also has a research division that produces rankings and ratings of companies and financial product based on sustainability performance.

Corporate Knights is the most prominent brand in the clean capitalism media space. We define “clean capitalism” as an economic system in which prices incorporate social, economic and ecological benefits and costs, and actors know the full impacts of their actions.”

Issues can be bought for $0,99 per pdf, but individual articles can be read on-line – at least the ones I tried. It has very interesting issues and articles, but focuses mostly on Canada. However they have a few issues called ‘The global 100’ , about the 100 most sustainable companies worldwide. The 2018 list can be browsed here. They even report their method, their variables (Key Performance Indicators, KPIs) and how they weigh their variables. The individual company-level data is not available but all data comes from public sources.

2002 Launch of Dutch Sustainability Research (DSR)

DSR was created by Triodos Bank, FortisMeesPierson and PGGM (a Dutch pension fund for health care workers)

https://www.sustainalytics.com/about-us/#History

April 2006. The Principles of Responsible Investment launched at the New York Stock Exchange

Since its start the number of signatories has increased steadily to 2250 in 2018. (https://www.unpri.org/pri/about-the-pri, Oct. 2018). The principles are backed by the UN. They were an initiative of Kofi Annan.

These are the six principles.

  • “Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
  • Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
  • Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  • Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
  • Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
  • Principle 6: We will each report on our activities and progress towards implementing the Principles.”
    ( https://www.unpri.org/pri/about-the-pri, October 2018)

In my opinion, they sound nice and good-willing, but they are easily adhered to without doing anything substantial. It basically says, we will think about it, but promise nothing.

The PRI website is elaborate, but typically, clicking on the link for the list of signatories ends up in a broken-link message. ( https://www.unpri.org/signatories/who-has-signed-the-principles , 3 October 2018 )

2009 Start of Sustainalytics

Sustainalytics was a merger of DSR, Scoris and AIS

https://www.sustainalytics.com/about-us/#History

2009 First Sustainable Stock Exchanges Initiative (SSE) Global Dialogue

“The Sustainable Stock Exchanges (SSE) initiative is a peer-to-peer learning platform for exploring how exchanges, in collaboration with investors, regulators, and companies, can enhance corporate transparency – and ultimately performance – on ESG (environmental, social and corporate governance) issues and encourage sustainable investment. The SSE is organized by the UN Conference on Trade and Development (UNCTAD), the UN Global Compact, the UN Environment Program Finance Initiative (UNEP FI), and the Principles for Responsible Investment (PRI).”
(http://www.sseinitiative.org/about/, October 2018)

There is a list of fact sheets about participating stock exchanges at http://www.sseinitiative.org/data_/factsheets/

The sheets provide a standard list of facts, among others ‘Requires ESG reporting as a listing rule?’. The ones that I browsed answered ‘no’. Would there be any that answers ‘yes’?

April 2012. PRI launches a data portal

“The Data Portal:

  • supports asset owner engagement with their managers by enabling easier access and comparison of the reported data;
  • promotes the sharing of best practice/ knowledge by giving signatories easy access to each other’s reports;
  • helps the PRI identify areas of further work based on most popular searches;
  • facilitates the informed decision-making between signatories working together;
  • increases the use of PRI data for identifying responsible investment trends.

In the long-term, the Data Portal will link the PRI’s guidance on investment practices to indicators of the reporting framework, thus helping –  for example – asset owners with the selection process of managers.”
(https://www.unpri.org/signatories/pri-data-portal-explore-signatories-reporting-data/391.article, October 2018)

Hmm, I wonder what the reported data are?

November 2013 or before. Bloomberg and Thomson Reuters have launched their respective ESG databases

See https://www.theguardian.com/sustainable-business/bloomberg-thomson-reuters-esg-tools-materiality

The Guardian has a discussion on ‘materiality’ “The definition of materiality, when it comes to sustainability reporting, remains unclear”

2014 MSCI acquires Governance Holdings Co.

MSCI was launched in 1969. The company collects and sells data about companies. The on-line company history (https://www.msci.com/our-story, Oct. 2018) shows frequent acquisition of other such companies.

I’ve come across MSCI in multiple sources, so it is a big player in the market of company data. MSCI offers, among other things, data for ESG investing. This is probably mostly coming from their 2014 acquisition of  Governance Holdings Co. which produced something called ‘GMI Ratings’

June 2016 Start of European Responsible Investment Network (ERIN)

“A new Civil Society Organisation (CSO), the European Responsible Investment Network (ERIN), was launched last week at a conference in Berlin. The network is made up of 25 organisations from Belgium, Denmark, France, Germany, Italy, the Netherlands, Norway, Switzerland and the UK. Members range from Dutch sustainable investment associations and Italian ethical banking groups to NGOs that address Norway’s sovereign wealth fund’s investment practices.”
https://www.manifest.co.uk/european-responsible-investment-network-is-formed/

July 2017. Morningstar acquires 40% stake in Sustainalytics

https://www.sustainalytics.com/press-release/morningstar-acquire-stake-sustainalytics/

 

2018? Global Sustainable Investment Alliance ( GSIA) launched

This is a collaboration (association?) of national and regional sustainable investment associations. I.e. GSIA is a next level of organization of companies interested in sustainable investment. I have been unable to find the exact starting year/month of the GSIA

In 2018, members of the alliance were Eurosif, RIA Canada, UKSIF, US SIF, and VBDO (The Netherlands),

 

https://www.fsb-tcfd.org/about/#