What is Socially Responsible Investing?

Social investors recognize that every financial transaction has social implications as well as monetary ones. While traditional investing is aimed exclusively at maximizing financial value, social investing takes account of both financial and social bottom lines. Socially responsible investing can be a catalyst for positive social change or merely a way to help the investor sleep better at night. See our services »


News & Blog

The Beginning of the End for Offshore Tax Havens?

November 23, 2015

Like Law & Order reruns, offshore corporate tax havens have been around so long it’s hard to imagine a world without them. What would become of the national identity of Cayman Islanders? The country’s Wikipedia entry mentions its status as a “major world corporate tax haven” in the first paragraph, well before noting that this is a place where pirates once dwelt and where the endangered blue iguana still roams (at least for now).

Recent high-profile tax haven cases have stoked resentment of the loopholes. In 2013, a U.S. Blue iguana.jpgSenate investigation exposed Apple’s use of two Irish subsidiaries to hold $102 billion in profits offshore; Apple had cleverly structured them so that they owed taxes neither to the U.S. nor Ireland. This fall, Starbucks was ordered by the European Commission (EC) to pay up to $34 million in back taxes to the Dutch government in recompense for a scheme – approved by Dutch tax authorities, no less – that wiped out its tax obligations to that country. (Starbucks is appealing.) The EC has opened an investigation into the tax activities of Apple, Starbucks, and Fiat. Public uproar may have also played a role in Walgreens decision not to move its headquarters to the U.K. upon its merger with Boots Alliance in 2014, a so-called “inversion” that would have allowed it to shift its primary tax obligations to Britain. As these examples illustrate, tax avoidance is a potentially expensive issue for investors in terms of reputation and financial penalties, even for those unconcerned by questions of fairness or the full funding of government programs. Read more »

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Putting Sustainability Oversight Into the CEO’s Job Description

November 23, 2015

The average corporate CEO makes over $16 million per year. Although the image of the CEO goes hand in hand with office treadmills and bottomless cups of coffee, I sometimes wonder if they are, paradoxically, the most unmotivated people in the world. You don’t have to pay the average worker $43,835 per day to show up at the office; in fact, the average worker shows up for about $53,200 in annual salary (303 times less than the average CEO, according to the Economic Policy Institute).

But this is not another article decrying outrageously high executive pay levels, their disconnect to corporate performance, and the failure of all previous attempts to rein in the excess, whether through tax mechanisms penalizing high salaries or good ol’ naming-and-shaming. Let’s put that aside for the moment and instead let our imaginations roam elsewhere to ask: for $40,000 a day (net after meals and subway), isn’t it time that CEOs’ pay was at least partially contingent upon the environmental and social performance of their companies’ operations?

This is not a radical idea; in fact, it’s a practice on the rise. It’s difficult to track precisely how many companies have established this linkage, but Ceres and other monitors of the practice have found an incremental uptick in recent years. According to a 2014 report by Glass Lewis, recent studies put the uptake among large publicly traded companies between 24 and 54%. The authors attribute the wide range to differing survey methodologies and definitions of sustainability. Read more »

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Company Profiles

First Solar (FSLR): A Place in the Sun

November 23, 2015

The past several years have been a roller coaster ride for clean energy investors. As we wrote about back in 2012, the solar industry passed through the valley of death due to a confluence of factors. It has now emerged from those dark days, and a new batch of solar stocks have soared far beyond reasonable value as the market experiences another boom. But there are pockets of value. In the first half of 2015, 40% of all new electrical generating capacity installed in the United States came from solar. Yet solar energy still accounts for just 1.1% of our nation’s total electricity generation. First Solar (FSLR) claims that electricity costs from its modules are on par with coal, nuclear, and natural gas combined-cycle plants in the U.S. This growing affordability of solar represents an attractive value proposition for utilities, FSLR’s primary market in the U.S. Yet installation growth rates in the U.S. will likely decrease after 2016 if Congress fails to renew solar tax credits that expire at the end of next year.

FSLR has a vertically integrated business model, both manufacturing low-cost panels and developing utility-scale solar plants. The company offers its products and services for residential, commercial, and industrial applications throughout the Americas, Asia, Australia, the Middle East, and Africa. FSLR designs and manufactures both photovoltaic (PV) thin-film solar modules, as well as high-power-density monocrystalline silicon solar modules. To date, FLSR has installed more than 10 gigawatts worldwide, making it the first thin-film PV module manufacturer in the world to achieve this milestone. Read more »

Quality Earnings, Quality Food: Whole Foods Market (WFM)

November 23, 2015

Healthier eating habits have been going mainstream in recent years, with natural foods taking increasing market share from conventional grocers. That’s not necessarily been good news for Whole Foods Market (WFM), the company that brought organic and natural foods to scale. Trader Joe’s, Kroger, and Walmart are eating into WFM’s market share and addressing the inflated costs of going natural by lowering prices on organic produce. WFM has had a rough year, and its stock price is currently trading at a four-year low.

The company has been buffeted by bad headlines. In 2015, the company faced allegations of overcharging customers in New York for bulk foods and has dealt with several outbreaks of listeria. After adding 9,000 jobs in 2014, WFM in September announced plans to lay off 1,500 employees and in November adjusted the number upward to 2,000. Last quarter, WFM bowed to pressure from activists and announced it would stop selling products made by inmates (tilapia and goat cheese produced through a Colorado inmate program). And the company is facing a PETA lawsuit alleging that product labels identifying meat as humanely farmed were misleading consumers. In addition, Clean Yield has filed a shareholder proposal calling for stronger palm oil policies.

But one could argue that these factors have had a minor impact on the company’s recent stock performance. The real driver behind WFM’s dramatic downward price adjustment is the combination of a previously overvalued stock and a deceleration in growth due to the stiff competition in the natural foods sector. Entering 2015, WFM was on a tear from a 35-month low of $36 in October 2014, jumping 50% in just four months and peaking just shy of $57 in late February. Read more »

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