47% Say that Responsible Investment Strategies Having a Positive Impact on Returns

"On the key question of investment performance, 47% of investors already committed to responsible investment strategies [e.g., positive screening] said their choice had made a positive impact on returns, while 43% said it was too early to say. Only 6% said they expected returns to suffer."

This statement clearly confirms the importance of providing to investors comprehensive, objective and reliable environmental, social and governance (ESG) data, which of course is the fundamental mission of ASSET4. These results come from the RI Landscape 2008 Asset Owners survey, run jointly by Responsible Investor and IPE magazine, which is one of the widest ever direct global surveys of institutional investors. You can read the full report here.

We cover a broad range of issues in this newsletter including a recent Merrill Lynch study on values based investing and a European pension fund study. I hope you find one or more of the articles of great interest.

Best regards,

Peter Ohnemus ASSET4 President and CEO

And the Leaders in Giving Are . . . Health Care

The Social aspect of the ESG factors can be fundamental to a company’s reputation and brand. One of the Social issues that often gets much attention is the level or amount of charitable giving a company does. Wouldn’t it be interesting to see which sectors were the leaders and laggards in giving? This question is a perfect example of the types of questions that our clients ask our data every day. When we did ask that question, what we found was quite interesting. If one looked at the ten GICS sectors, eight of the sections were all grouped very tightly, while one, Health Care, was the clear leader and another, Industrials, was the clear laggard. To view a short series of charts generated from our data on this issue, please click here.

Merrill Lynch Releases Report on Values Based Investing

As a continuing service to its clients, Merrill Lynch recently produced a report, based primarily on ASSET4 data, covering the issue of Values Based Investing (VBI). The report was written by Jose Rasco and published by the ML Investment Strategy and Quantitative Teams. It describes VBI as a broader definition of traditional SRI. Within VBI the report includes the areas of community development and ideological investing (e.g., Sharia funds), as well as the full range of environmental, social and governance (ESG) issues. One of the many interesting findings from the report is that "Within low beta stocks, higher-ranked VBI companies performed better than lower-ranked VBI companies. This was consistent across geographic region and quantitative method."

New Study Examines How Pension Funds Are Contributing to Sustainability Investing

In conjunction with the German Federal Environment Ministry, ASSET4 has commissioned a study of leading European Pension Funds on the issue of long-term and sustainable investments. The study was conducted by Dr. Axel Hesse, a leading consultant in the area of Sustainable Development Management.

The study found that while leading pension funds are clearly long-term investors, most investors in the financial markets act in a too short-term manner, for example with a maximum horizon of 2 years. Respondents also agreed that pension funds are currently making insufficient use of research with a long-term orientation. They expect that focusing on industry-specific KPIs and sustainability research integration into mainstream research will most likely to lead to long-term, risk-adjusted outperformance, whereas approaches that are too broad are more likely to lead to underperformance.

To read a summary of the highlights, please click here.

BusinessWeek Online: A Leader in European Innovation – ASSET4

In a recent special report on Innovation in Europe, BusinessWeek Online focused on a number of leading companies, such as Nokia, Danone and ASSET4. In an article entitled, "ASSET4 Enriches Risk Assessment," the reporter writes:

"While not easily quantified or strictly predictive, such nonfinancial information is becoming increasingly important to investors trying to pick where to place their bets. Whether it's corporate governance, environmental exposure, labor policies, or community relations, these ‘softer’ factors can play as large a role as return on equity or capitalization ratios in the future performance of a company and its stock."

"Hungry for help sorting out these issues, asset managers, banks, and hedge funds are turning to a European pioneer called ASSET4, based in Zug, Switzerland . . ."

To read the entire article, please click here.

ASSET4 Joins the Ceres Coalition

"Integrating sustainability into capital markets for the health of the planet and its people." This is the mission of Ceres and one that ASSET4 has proudly joined, when it became a member. Ceres (pronounced "series") is a US national network of investors, environmental organizations and other public interest groups working with companies and investors to address sustainability challenges such as global climate change. At its founding in 1989, Ceres introduced a bold new vision to the business community. That vision is of a world in which business and capital markets promote the well being of human society and the protection of the earth’s biological systems and resources. Ceres advances its vision by bringing investors, environmental groups and other stakeholders together to encourage companies and capital markets to incorporate environmental and social challenges into their day-to-day decision-making. To read more about Ceres, click here.