There are many guidelines on attracting investment. There are very few on doing the opposite. But if you are indeed willing to drive away investors from your own market, you can follow these simple steps:
Step 1: Undermine rule of law by selectively nationalizing companies of oligarchs through tax inspections and other financial levers (Yukos). Have your colleagues and trusted friends fill the vacancies in the private and state-owned companies made though these actions.
Step 2: Revoke contracts with major foreign firms over concerns about the environment, and then turn over the same projects to a domestic firm (Shell).
Step 3: Threaten joint ventures between international firms and domestic companies (TNK-BP). Raid the offices of the largest foreign portfolio investor in your country...
What would you do if you were running a country that is having to balance the benefits of high energy prices and the costs of high food prices? Ask Saudi Arabia, which is now gearing up its efforts to buy more and more agricultural land in other countries in order to reduce the pressure on food supplies.
The approach is somewhat interesting, as the investments go into securing productive capacities in other countries, rather than strictly relying on imports or supporting [in many instances] less efficient domestic producers. One of the reasons behind this move is that
Saudi Arabia has reduced its agricultural production with the objective of economizing water and has been seeking land in other countries on which to grow crops.
More from WSJ here. I wonder what will be the response to...
In an increasingly globalized world when two countries pick a fight with one another the rest will suffer in some way. While I am not suggesting that pressures on supply chains and the oil market can ever be equated with the horrors of war, the fact remains that when two modern national economies pick a fight with one another the effects will be felt worldwide.
Georgia seems to be the more economically damaged of the two countries thus far. Its credit rating has recently been reduced from a B+ to a B by the ratings agency Standard and Poor’s (S&P) immediately after the start of the conflict. An economy that has been averaging 10 percent growth for the past few years also faces high inflation and a much smaller growth in GDP this year. Also, oil and gas companies that were...
On May 7th I attended an event sponsored by the U.S. – Ukraine Business Council here in Washington D.C. that featured an impressive gathering of legal professionals discussing the investment climate in Ukraine. Each presenter offered a slightly different take on the current situation in Ukraine, but they all seemed to agree on several key issues:
International investors continue to flood Ukraine with capital despite the risks. The continued high pace of investment is due to extremely high returns on investment.
Substantial reforms need to be implemented to improve the independence of the legal system and to the protect property rights of investors/owners.
Ukraine’s entry into the WTO should pressure the government to revisit some current legislation on investment.
The private...
The prospect of new limits on carbon emissions is driving demand for clean technology in the energy sector. But investors need to take the long viewFor most of its nearly four-decade history, Earth Day has been a call to safeguard such precious resources as clean air and water for future generations, resources put at increasing risk by pollution. Lately, though, the annual April observance has also become a time for investors to take stock of the clean-technology opportunities in energy that have arisen in recent years.One thing to keep in mind is that, despite virtually assured growth of these industries, bets on individual stocks require more patience than investments in sectors where companies are already serving fully developed markets. In some cases, what makes a company a really...
Australian Government investment funds are putting nearly 50 times more money into the fossil fuel and uranium industries than into renewable energy, a new report has found.Large Government-owned investors, including the Federal Government's Future Fund and state bodies such as the Workcover Authority, are investing in direct conflict with their governments' plans to reduce greenhouse emissions, according to the report, to be released today by the Australian Conservation Foundation.The report came as a Newspoll commissioned by Greenpeace found 78 per cent of Australians remain unaware that the fossil fuel industry receives taxpayer subsidies of just over $800 per person each year, about 28 times the amount given in subsidies to the renewable industry.See full...
Every other year, the Social Investment Forum (SIF) takes the pulse of socially responsible investing (SRI) with its trends report. The diagnosis? A healthy heart rate fuels continuing growth. From 2005 (when the report was last published) to 2007, SRI assets rose more than 18 percent--from $2.29 trillion to $2.71 trillion. In comparison, the broader market of all investment assets under management practically stood still, growing less than 3 percent. The report made waves, garnering coverage by the Wall Street Journal, On Wall Street, GreenBiz, Pensions & Investments, and Financial Planning.Doctors usually advise patients to "stay active," and SRI has certainly done so through shareholder activism - with healthy results. Support for shareholder resolutions on social and environmental...
Investors, however, are worried that companies could use the opportunity to blur the big losses suffered during the recent sub-prime turmoil where even safe securities were hurt by mortgage defaultsRegulators are planning to issue guidance next week to address the investor concerns over the values of instruments that companies hold, amid markets that have seized up.The Securities and Exchange Commission is set to tell companies that while they must stick to market prices for instruments, even when these figures paint an unfavourable picture, they will also be permitted to project a wider range of possible values for those securities.Investors, however, are worried that companies could use the opportunity to blur the big losses suffered during the recent sub-prime turmoil where even safe...
Most energy experts agree that global warming is a serious threat, and they also agree that green technology has the power to fundamentally reshape how business gets done. But at this early stage, these experts -- including investors -- are finding it hard to separate truth from exaggeration when it comes to the benefits that green technology can offer. That was the consensus of industry speakers at the recent Wharton Energy Conference who participated in panels on renewable energy, oil and gas, energy finance and power.At the moment, an aura of uncertainty surrounds the electric-power industry, according to several panelists who noted that old-line players, like the investor-owned utilities, are cautiously awaiting signals from politicians, regulators and even the public. Companies want...
Diagnosis: Healthy, GrowingEvery other year, the Social Investment Forum (SIF) takes the pulse of socially responsible investing (SRI) with its trends report. The diagnosis? A healthy heart rate fuels continuing growth. From 2005 (when the report was last published) to 2007, SRI assets rose more than 18 percent--from $2.29 trillion to $2.71 trillion. In comparison, the broader market of all investment assets under management practically stood still, growing less than 3 percent. The report made waves, garnering coverage by the Wall Street Journal, On Wall Street, GreenBiz, Pensions & Investments, and Financial Planning.Doctors usually advise patients to "stay active," and SRI has certainly done so through shareholder activism - with healthy results. Support for shareholder resolutions on...
Companies with best corporate governance practices yield higher returns for shareholders than their poorly governed peers such as troubled British mortgage lender Northern Rock, new research showed on Wednesday.A hundred pounds ($197) invested in a "blue-topped" firm -- which complies with Britain's Combined Code on Corporate Governance and whose procedures, director pay and other features satisfy shareholders -- grows over five years to 120 pounds, and only to 102 pounds if invested in a worst-governed "red-topped" company, said the Association of British Insurers (ABI)."Good governance produces better returns with less volatility -- something long-term savers need," director of investment affairs at the insurance industry trade body, Peter Montagnon, said in a statement.See full...
Most energy experts agree that global warming is a serious threat, and they also agree that green technology has the power to fundamentally reshape how business gets done. But at this early stage, these experts -- including investors -- are finding it hard to separate truth from exaggeration when it comes to the benefits that green technology can offer. That was the consensus of industry speakers at the recent Wharton Energy Conference who participated in panels on renewable energy, oil and gas, energy finance and power.At the moment, an aura of uncertainty surrounds the electric-power industry, according to several panelists who noted that old-line players, like the investor-owned utilities, are cautiously awaiting signals from politicians, regulators and even the public. Companies want...
A flurry of new socially responsible mutual funds and products makes it easier then ever to invest in a double bottom line.Maybe it is Al Gore and the UN's Intergovernmental Panel on Climate Change winning the Nobel Prize. Maybe it is the cost of gas at the pump. Maybe the Enron scandal opened investors' eyes. Perhaps the news from the Sudan has pushed investors.Whatever the reasons, more people are investing with social responsible mutual funds. Over the last year and a half, more SRI mutual funds and products have been launched, meeting consumer demands. No longer can the argument be made that SRI funds offer investors limited choices. See full...
Difficult economic times oblige long-term investors, such as pension funds, to think carefully about whether they make changes to their asset strategies or simply "hold on" through the turbulence. The answer lies in their ability to find a balance between investing with a long-term perspective and making and implementing decisions quickly, and the extent to which they are successful will depend on their governance arrangements.While we see a number of interesting opportunities emerging from the liquidity crisis in recent months, we do not believe that immediate changes to pension funds' investment strategies are required. Rather, now is the time to consider a number of options so they are prepared to take quick and appropriate action in the future. In addition, pension funds should be...
Recently, I made a trip to Russia, where I had a chance to participate in a number of events on corporate governance. In all, it must be noted that Russians academics and practitioners have made a tremendous leap forward - the quality of analysis of corporate governance is quite impressive compared to several years ago. There were, however, a few issues that were quite interesting in terms of a Russian view of things.
One of them is the relationship between CSR and corporate governance. This is a difficult question not just in the Russian context, many countries struggle to realign these two seemingly similar but in reality two different concepts. In Russia it has a special meaning, as during the chaotic 1990s private sector became associated with opaque dealings and insider...
Fearless investing is succeeding where aid often hasn'tIt isn't easy for Masoud Alikhani to check on his investment. The Iranian-born Briton owns a facility in Mozambique that turns jatropha, a hardy, drought-resistant plant, into biodiesel. An October visit starts with an 11-hour flight from London, his home base, to Johannesburg. From there he jumps into a four-seat Piper Seneca II for a wobbly three-hour flight to Maputo, Mozambique's capital, during which one of the passengers, this writer, gets violently ill. On landing at Maputo's airport, where soldiers stand guard on the roof, Alikhani spends an hour wading through the bureaucratic muck of visa clearance and immunization checks. Then it's back on the plane for a 90-minute flight along the Indian Ocean coast to the province of...
The inclusion of environmental, social and corporate governance (ESG) factors within investment thinking is not a new concept - just a contentious one. Pension funds across Europe understand the social good that can be derived from investing in a socially responsible way; it is just the return advantages that confuse them.According to a report issued by the United Nations and Mercer, however, that no longer has to be the case.The report, which analysed 20 pieces of academic work on the relationship between returns and the incorporation of ESG factors, found that integrating ESG does not have to hamper performance.See full...
Socially responsible investing, typically a small corner of the fund world, is starting to attract mainstream attention in the US.As concerns about topics such as climate change and human rights grow, SRI funds are a useful option for investors who do not want their savings invested in companies whose policies they disapprove of.See full Article (paid subscription...
PlaNet Finance & ACI are hosting a microfinance investment conference in New York next May 14-16. More information is available at the Global Microfinance Investment Congress......
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The conclusion is that yes there will be a bubble built up and, at some point, it will burst. However, between now and then, there will be much money to made and so.......let´s make it and just be ready for the downturn when it comes.If you are a long-term investor, much money will be made, with or without a downturn.If you are looking for shorter term profits, much money will be made and be quick when the downturn does arrive, and it will arrive.Onésimo Alvarez-MoroSee article:Darren Kell, chief executive of Tanfield, the UK engineering group, had long seen the potential to make lots of money from climate change.So in 2004, his company made an investment with the sole ambition of doing exactly that.It bought Smith Electric Vehicles with a plan to develop environmentally friendly...
Global sustainable investment specialists EIRIS today published The state of responsible business: Global corporate response to environmental, social and governance (ESG) challenges which provides a snapshot of the state of responsible business around the globe.The report details findings of extensive research into the degree to which companies are addressing key issues including corporate governance, environment, equal opportunities, human rights and supply chain, and finds that responsible practices are increasingly being adopted by companies worldwide, though there are significant differences between regions.See full Press...
Socially responsible investment is often interpreted in a number of ways but what view do investors hold on strategies taking account of environmental, social and governance issues in times of market volatility and credit turmoil?"We haven't seen any significant outflows in our [SRI] funds in the last few months," says George Latham, head of SRI funds at Henderson Global Investors, which manages four retail and two institutional SRI funds. "Just as we see ourselves as long-term investors, so do our investors."See full Article (paid subscription...
IMF thinks things are not so bad in Africa, unlike it is often perceived. Macroeconomic conditions are improving, exports to Asia are on the rise, good policies are more common than in the past, and debt relief is paying off by injecting more stability into the economic climate. Yet, while poverty is on the decline and debt relief/aid are lauded in the article, the mention of micro conditions can’t be ignored:
However, while aid is important, a more dynamic private sector is essential for raising African growth rates and making progress toward the MDGs. Improving the business environment in the region would go a long way toward fostering private sector activity.
And while macro environment is certainly important, things like large informal sectors and poor property rights...
It was a sign on a beach in north-east England advising against eating the shellfish due to pollution that first alerted a teenage Mike Taylor to environmental issues. Now with a large pension fund to run, he is keen to put his principles into practice by investing responsibly, taking account of environmental, social and governance issues.This is not a just a personal crusade, however. As chief executive of the London Pensions Fund Authority, he is answerable to a board appointed by Ken Livingstone, the mayor of London, and in pushing the responsible investment agenda he says he will be trying to “codify the beliefs of the board”.See full Article (paid subscription...
The US debt has given many countries excess liquidity – and the ability to buy companies abroad. Although so far there has been no turmoil as a result of foreign buy-outs, Germany expresses concern about Russia purchasing strategic energy routes in Europe for political gain. Even in the US, there has been public outcry when China and Dubai tried to buy oil and port firms, respectively. To avoid political backlash, sovereign wealth funds need to become transparent in their international operations. – YaleGlobalSee full...
Over the next 15 years, I think we will see a transition from the old world of socially responsible investing (SRI) to the new world of sustainable investing. By sustainable investing, I mean the full integration of environmental, social and governance (ESG) factors into financial analysis and decision-making. This transition is critical if our industry is to broaden its market and maximize its impact on corporate behavior, on financial markets, and on global society itself.Subscribe to Green Money The transition from "socially responsible" to "sustainable" investing isn't just semantics. While it is to some degree a question of framing, framing is more than just words - it's definitional - and I believe such a re-framing is necessary if our industry is to reach its potential. There are...
Socially Responsible Investing (SRI) means many things, look no further than the acronyms it stands for…sustainable and responsible investment, socially responsible investment and the shorthands; sustainable investment, social investment, and responsible investment. Your understanding, if you've heard of SRI, is likely to be influenced by where you live in the world. In the US for example people understand SRI to be mostly about screened funds and shareholder action, while in Europe the understanding of SRI is more dominated by ecological drivers such as resource constraints throwing up opportunities for clean energy, water and eco-efficiency. In Japan SRI is ecological, it is also about CSR nationally with a certain discomfort at looking at the behaviour of Japanese companies globally....
The Ethical Corporation is running a poll on its website, wondering whether companies have a role in helping poor countries address governance failures. Thus far, it seems like 75% think that companies should use their resources to help countries improve governance standards (25% agree that its a job of NGOs and governments to do so, not the private sector’s responsibility).
It seems to me that whether companies should improve governance in poor countries or not is not an appropriate question. A more interesting question we should be asking ourselves is - how can and do companies help improve governance in poor countries?
Investment is one answer. By investing in countries, companies certainly improve governance standards. They do so by creating incentives to improve the...
Foreign direct investment (FDI) into OECD countries in 2006 reached its highest level since 2000 and the near-term outlook for FDI remains strong, buoyed by high corporate profits, low interest rates and robust macroeconomic growth. A new OECD report, Trends and Recent Developments in Foreign Direct Investment, forecasts FDI in its 30 member countries to increase by a further 20% in 2007.Inward FDI rose 22% to USD 910 billion in 2006, up from USD 747 billion in 2005 and USD 491 billion in 2004, according to the latest estimates from the OECD.The United States was by far the world’s largest recipient of FDI in 2006, attracting USD 184 billion from OECD countries. This is the largest amount of direct investment in the US economy since 2001, in part due to a decline in the exchange rate...