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home » what's new archive » december 6, 2004 - january 9, 2005 What's New: December 6, 2004 - January 9, 2005 Canada December, 2004-Ethical Funds 2004 semi-annual report now available Ethical Funds Company just released their semi-annual report, where they introduce a significant change in the way they apply screens and engage in shareholder action. December 6, 2004 – Ethical Canadian Dividend Fund wins Imagine Socially Responsible Investment Award At the Canadian Investment Awards gala held on December 3, 2004 in Toronto, The Ethical Funds Companyreceived the Imagine Socially Responsible Investment Fund Award for the EthicalCanadian Dividend Fund. This award recognizes the best performing socially responsible investment fund in Canada. The Ethical Funds Company won the award on the strength of its screening and research, shareholder advocacy program, and support of community economic development through its association with the Canadian credit union system. The award also recognizes the leadership position the firm has taken with respect to SRI practices, and the commitment they’ve made to the SRI industry as a whole. December 8, 2004 - Actuarial Report on the Canada Pension Plan The 21st Actuarial Report of the Canada Pension Plan was tabled in Parliament on December 8, 2004. In the report, the Chief Actuary of Canada reaffirms the findings of the previous actuarial report and states the CPP is sustainable throughout the 75-year projection period. Under the 9.9% legislated contribution rate, the assets are projected to grow rapidly during the next 17 years as contributions exceed benefits paid. According to the 21st Actuarial Report, the CPP reserve fund, currently $75.2 billion is expected to grow to $147 billion by the end of 2010. December 10, 2004 - Jantzi Social Index Gains 0.45% In November, S&P/TSX 60 Gains 1.13%, S&P/TSX Gains 1.94% Over Same Period Jantzi Research reported that the Jantzi Social Index increased in value by 0.45% during the month of November 2004. For the same period, the S&P/TSX 60 Index and the S&P/TSX Composite Index increased by 1.13% and 1.94%, respectively. From its inception on January 1, 2000 through November 30, 2004, the JSI achieved an annualized return of 3.57%, while the S&P/TSX 60 and the S&P/TSX Composite had annualized returns of 1.81% and 2.99%, respectively, over the same period December 30, 2004 - OMERS gets government approval for 2005 plan changes The OMERS Board recently received approval from the Ontario government for a number of plan changes, effective January 1, 2005. The plan changes include improvements to survivor benefits and will have little or no cost to the plan. Among the changes are the following:
Conference Announcement - Building Sustainable Relationships: Aboriginal Engagement & Sustainability Conference - Feb 8-9, 2005 The organization anticipated that 350 leaders from industry, aboriginal communities, government and NGOs would participate in order to engage on the integral role of Aboriginal communities in sustainabilityand corporate social responsibility (CSR). An emphasis will be place on sharing the lessons learned, innovation, and success stories of developing and sustaining relationships in the mining, oil and gas, energy and forestrysectors. For more information about registration and agenda January, 2005- SHARE’s Pension Trustee Education Program In 2005, SHARE will be offering education courses at the beginner and intermediate level for pension representatives on pension investment and plan governance taught from a labour perspective by SHARE staff and union pension experts. Courses will be offered in Harrison Hot Springs, B.C. at the end of January; Morrisburg, Ontario, in February; and Winnipeg, Manitoba in February and April, 2005. For more information on times and registration January 8, 2005 - RRSP investors to focus on income The mutual fund industry enjoyed a green Christmas thanks to a year-end sales boost by investors. The unexpected push (net sales for December are estimated at just over $1 billion) is expected to put annual net sales for 2004 at $14.7 billion — the best tally in three years. But more importantly, it could make for a strong start to registered retirement savings plan contribution season, which can account for as much as half of annual fund sales. Mutual fund industry watchers have been cautiously predicting healthy RRSP sales this year. The Toronto Star highlights that among the most popular funds are: bond, income and dividend. These funds have been strong sellers throughout the year and that's unlikely to change now, with many investors still reluctant to get back into equities and the strong Canadian dollar discouraging them from foreign funds. However, one downside for the industry is that bond, income and dividend funds tend to have lower management expense ratios than equity funds. Funds will continue to face competition this season from income trusts as investors try to find security with a regular income stream. December 2004- The Sarbanes-Oxley Challenge December 7, 2004 - Ford Motor Company Becomes First Automaker to Report on Effects of HIV/AIDS Ford Motor Company released its first detailed report on the effects of HIV/AIDS under terms of the Global Reporting Initiative. Ford is engaged with the Interfaith Centre on Corporate Responsibility (ICCR) to raise corporate awareness of the HIV/AIDS issue and monitor and further develop its own response to all environmental, social and humanitarian issues. December 15, 2004 – State Street Corporation Enhances Portfolio Analysis Capabilities For Customers State Street Corporation, the world’s leading provider of services to institutional investors, announced that it has added to its portfolio performance and analytics capabilities with technology and data enhancements that enable customers to evaluate the governance attributes of their investment portfolios. GovernanceMetrics International, a leader in the field of corporate governance research and reporting, will provide State Street with its governance ratings for thousands of investment securities. December 22, 2004 - Dell and Starbucks First Companies to Endorse Calvert Women's Principles Dell and Starbucks became the first corporations to endorse the Calvert Women's Principles, a code that encompasses seven broad goals for promoting gender equity and women's empowerment. The Calvert Group, the largest socially responsible investment mutual fund firm in the US, launched the principles earlier in 2004 to address the under- acknowledged issue of systemic gender bias in the corporate community. By endorsing the principles, Starbucks and Dell not only publicly support the principles' goals, but also commit to taking concrete steps to implement the principles in their business practices over time, The principles address employment and income; health, safety, and violence; civic and community engagement; management and governance; education, training, and professional development; and business, supply chain, and marketing practices. December 24, 2004- Reports examine role of business in meeting Millennium Development Goals A set of four new sector reports from AccountAbility and Business for Social Responsibility (BSR) examine how companies can improve their contribution to economic development and help to fulfil the Millennium Development Goals, an agenda for reducing poverty and improving lives agreed upon at the Millennium Summit in September 2000, most with specific targets to be reached by 2015. December 30, 2004 Calvert First SRI Firm to Issue Global Reporting Initiative-Based Sustainability Report The Calvert Group became the first US-based socially responsible investment mutual fund firm to issue a report on its social and environmental performance based on Global Reporting Initiative (GRI) Sustainability Reporting Guidelines. While Calvert Group operations may not have major environmental and social impacts relative to large publicly traded companies, the report is noteworthy because of its symbolism. January 8, 2005 - Judge Rejects United's Contract With Pilots A federal bankruptcy judge rejected a contract between United Airlines and its pilots' union on Friday, saying the agreement unfairly forced other unions to join the pilots in letting United terminate their pension plans. The airline said Friday afternoon that it had reached a tentative agreement on wage and benefit cuts with its mechanics union, and that it was close to a deal with its flight attendants. United said it hoped to reach agreement with the flight attendants by Monday, when another hearing was scheduled. The developments came as United was prepared to press its bid in bankruptcy court to set aside the contracts of the mechanics and flight attendants and replace them with frugal terms. The uncommon action by Judge Eugene R. Wedoff was the latest setback for United, which filed for bankruptcy protection in December 2002 and has yet to present a reorganization plan. It was particularly bad news for United's pilots, who had won compensation and several protections in the contract, in exchange for a 14 percent pay cut and other concessions worth $180 million a year. United and the pilots association said they were "disappointed" by the ruling. United said it considered the contract "fair and equitable." January 8, 2005 - 10 Enron Ex-Directors to Pay $13 Million to Settle Suit by UC and Other Investors Ten former EnronCorp. directors will pay $13 million out of their own pockets to help settle a shareholder lawsuit by the University of California and other investor groups. Enron's insurance company will pay $155 million to the groups, including the Washington State Investor Board, the San Francisco City and County Employees' Retirement System and the Archdiocese of Milwaukee. THE WORLD January 4, 2005 - Latin American Forest Products Company Illustrates Best Practice Sustainability Reporting Late December, forest products company Terranova issued its second sustainability report based on Global Reporting Initiative guidelines. What makes this development particularly significant is that the company is based in Chile, a country not often associated with cutting-edge corporate sustainability performance. Only four US-based forest and paper products companies have issued GRI-based sustainability reports. The report also distinguishes itself on several other counts, including its straightforward presentation of information and easy readability, its depth of engagement with stakeholders, and external verification. December 17, 2004 - UNEP Report Takes First Steps Toward Understanding Slow Consumer Uptake of Sustainability What motivates the uptake of sustainability, and what sustains this motivation? These are the questions posed in a recent report by London-based MPG International as part of a United Nations Environment Programme (UNEP) program sponsored by the World Association of Opinion and Marketing Research Professionals (ESOMAR). While the motivations for corporate adoption of sustainability are relatively well developed and understood, it is consumers who drive business, and consumer motivation to embrace sustainability is much less well developed and understood. December, 2004 - Eurosif Pension Programme SRI Toolkit 2004 – 2005 Eurosif presented the first European toolkit designed to help interested pension fund trustees and other readers understand how to make Socially Responsible Investment an integrated part of institutional fund portfolios. The Toolkit is based on research conducted in ten European countries during 2004, examining current best practice, field leadership and ongoing trends. This user-friendly toolkit has been designed to allow readers to focus on the content areas most relevant to them. January4, 2005 -Corporate donations spotlighted in tsunami aid funding Australian Prime Minister John Howard has urged big business to find the money to donate more to the relief operation for the Asian tsunami crisis, as corporations around the region decide what to give. The Prime Minister's comments tap into growing community anger in Australia over the insignificant levels of corporate donations in the last week. As of the end of last week, Australians had pledged $39 million, of which only around $6.2 million was from big business. READING NEWS December 29, 2004 - Report Finds Bank Sector Assessment of Impact on Disadvantaged Communities Lacking According to One-Report, Business & Economic Development: Financial Sector Report, a recent report from AccountAbility and Business for Social Responsibility (BSR) shows how banks strategize, assess, and disclose their economic impact on disadvantaged communities. The report's findings are significant and advocate for extending assessment beyond project financing, which typically involves substantial funding to companies, to cover bank activities more broadly, including direct interactions with individuals and indirect impacts on communities. The report also promotes transparent reporting. December 14, 2004- New Business Book Rejects Myth that Higher Purpose Equals Lower Profits Cause for Success: 10 Companies That Put Profits Second and Came in First , a study of business ethics and success, by author and business consultant Christine Arena is the first publication to present detailed case studies told from the inside perspective of CEO’s that clearly demonstrate how social responsibility can drastically improve corporate health, growth and competitive edge. Each “high purpose” company featured in the book approached a serious world problem, such as poverty, inequity or environmental degradation, as a business opportunity, and made more money as a result. January 2005- Journal of Applied Corporate Finance (Fall 2004) Nell Minow from The Corporate Library describes a special issue of the Journal of Applied Corporate Finance (now owned by Morgan Stanley) which focuses on disclosure. Beyond Financial Reporting – An Integrated Approach to Corporate Disclosure, by Amy Hutton explains how “standard disclosure practice has left many companies releasing a great deal of data while conveying only limited understanding to outsiders.” Hutton advocates a strategic approach. “Through its choice of supplemental disclosures, management can empower analysts to be effective outside monitors or even missionaries for emerging businesses. However, the power of supplemental disclosures is realized only if they are logically and consistently linked to the underlying drivers of the firm’s business model.” In addition, Brian Bushee, of Wharton, writes in Identifying and Attracting the ‘Right’ Investors: Evidence on the Behavior of Institutional Investors the results of seven years of research where the author separates the institutions into three categories: “transient” (high turnover), “dedicated” (stable owners with large positions) and (3) quasi-indexers (trading infrequently with small stakes). He prefers this classification to the traditional approach based on legal type (pension fund, bank trust, etc.). Bushee found that “managers with higher total institutional ownership were less likely to cut R&D to meet their earnings targets,” concluding that this is due to the additional sophistication and patience of institutional investors. He found that “transient institutions invest more heavily in companies with larger proportions of their value in near-term earnings and a lower proportion in long-run value” as well as greater liquidity. THIS WEEK’S WEBSITE Canadian Business for Social Responsibility (CBSR): http://www.cbsr.bc.ca/about/default.htm Vancouver office 1111 West Georgia St. Toronto office The Canadian Business for Social Responsibility (CBSR) is a non-profit, business-led, national membership organization of Canadian companies that have made a commitment to operate in a socially, environmentally and financially responsible manner, recognizing the interests of their stakeholders, including investors, customers, employees, business partners, local communities, the environment and society at large. Among the main services provided by CBSR are:
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