This Week in ESG and Impact Investing

Pursuing some accountability, a Black economist  has  filed a petition with the Securities and Exchange Commission (SEC) to require companies to report on Black Lives Matter (BLM) pledges. The request by William Michael Cunningham, who runs Washington, D.C.-based Creative Investment Research, says data from his firm shows 251 U.S. companies promised to battle systemic racism within their own organizations. All told, Cunningham claims those companies pledged $65 billion to boost their diversity and equity initiatives from May 2020 to May 2021. Yet, to date, Cunningham maintains that $500 million has been allocated toward such efforts. Compared to $500 million, Cunningham  estimates  the commitments by now should be $15 billion to $20 billion based largely on damages Black companies have suffered from the COVID-19 pandemic. He says his projections are tied to the companies having combined profits of $750 billion as of 2019. https://www.blackenterprise.com/black-economist-seeking-accounta

Given changes in the social and economic environment, it is clear to us that the proposed merger between US. Bancorp and Union Bank is in serious trouble and should not, for reasons described below, be approved.  As with majority of large bank merger proposals over the past thirty years, the lead entity, in this case, US Bank, has claimed the transaction will provide significant social benefits. The bank stated the merger would “provide benefits for both customers and the communities served by the combined organization through improved technology, products and customer choice.” A review of bank mergers over the past forty years shows that this is untrue. There is no objective, fully independent data to support this contention. In fact, inequality has risen over the intervening years. Many merger opponents cite Covid-19 and the significant racial and economic divisions the virus revealed as reason to delay or oppose the merger. Other opponents have requested a public hearing on the prop

Just 13 inches of damage in a pipeline near California severely harmed the local wildlife and ecosystem, in addition to costing millions of dollars to cleanup. Oil spills are some of the most visible and consequently environmental issues. The Deepwater Horizon oil spill is still imprinted in the collective American consciousness, and it also carried with it some of the most severe fines in American history, with BP paying more than $60 billion in fines. Yet, with World leaders meeting to discuss environmental issues at COP26, how much has truly changed? The recent oil spill in California, while significantly less impactful than the Deepwater Oil Spill, offers a look changes over the last decade has brought.  Southern California’s troubles first started with an October 1 report of sheen on the water. Due to difficulties in recognizing this sheen at night, it was not until the morning of October 2nd that the Coast Guard, an Orange County Sheriff, and a Coast Guard supporting aircraft inv

On October 7th, during Tesla's annual shareholder meeting, company founder Elon Musk announced that he would be moving Tesla's headquarters from Palo Alto, California, to Austin, Texas. Reasons included a lack of space needed for the expansion of Tesla's Fremont factory and the high cost of living in the Bay area. Musk's decision makes his the latest in a line of companies leaving California for Texas, a list that includes Oracle Corp., Hewlett Packard Enterprise Co., and Charles Schwab. The Texas Economic Development and Tourism Office stated there has been a "tremendous increase" in interest. Since the pandemic began, the Office claims there are 37 relocation and expansion projects currently underway. Texas has made a significant effort to attract businesses from other states, using low taxes and minimal regulations as bait. Texas officials have promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and

  The Eight Commitments of Ethical Culture From the Philadelphia Ethical Society 1. Ethics Is Central - The most central human issue in our lives is creating a more humane environment. 2. Ethics Begins With Choice - Creating a more humane environment begins by affirming the need to make significant choices in our lives. 3. We Choose To Treat Each Other As Ends, Not Means - To enable us to be whole in a fragmented world, we choose to treat each other as unique individuals having intrinsic worth. 4. We Seek To Act With Integrity - Treating one another as ends requires that we learn to act with integrity. This includes keeping commitments, and being honest, open, caring and responsive. 5. We Are Committed To Educate Ourselves - Personal progress is possible, both in wisdom and social life. Learning how to build ethical relationships and cultivate a humane community is a life-long endeavor. 6. Self Reflection And Our Social Nature Require Us To Shape A More Humane World - Growth of the hum

In a June, 2021 internal report by Creative Investment Research on the Child Tax Credit (CTC) and simple non-filer tools, we noted that the Biden Administration forecast the CTC would cut child poverty by half. For the first time since July’s CTC’s implementation, we have data that helps determine the impact of the initiative on both consumer spending and household stability. New research confirms CTC’s positive impact on U.S. social and economic activity. In an August 2021 report, the Niskanen Center forecast a $27 billion dollar increase, over the next 12 months, in consumer spending. They envisage this jump in spending will generate another $1.9 billion in revenue from state and local sales taxes.[1] Their forecast predicts an increase of 500,000 median wage level jobs. These are significant and positive impacts. In addition to elevated consumer spending, CTC will have significant positive impacts on low-to-middle income families. Developed under the American Rescue Plan to reduce c

According to an article in Black Enterprise Magazine, "William Michael Cunningham,  an economist who runs Washington, D.C.-based Creative Investment Research, says MEOA’s offering could prompt other investors to create new SPACs and venture capital funds to invest in Black companies. 'This is relevant because it may represent a new and significant source of capital that has not previously been available to Black and minority firms. If it works as intended, you could see billions in new startup and operational capital going to Black firms,' he says. He says the offering’s timing was perfect because of the increased attention on Back economic empowerment. That is fueled, he says, by the increased requirement corporations and investors are showing toward their commitment to doing business with Black firms." See: Black Enterprise Magazine. Exclusive: Black-Led SPAC Raises Colossal $126.5 Million, Set To Acquire Black, Minority-Owned Firms.  https://lnkd.in/dyWy6D35 Also s

 August 26, 1996 (Revised & Resubmitted by Facsimile on August 28, 1996) Mr. William Wiles Secretary Federal Reserve Board 20th & Constitution Ave., N.W. Washington, D.C. 20551 Dear Mr. Wiles: I am writing with respect to three proposals (Docket Numbers R-0841, R-0701, and R-0932) recently announced by the Federal Reserve Board. The Board, in a July 31, 1996 press release stated: "The Federal Reserve Board today requested comment on three proposals to modify the conditions under which section 20 subsidiaries of bank holding companies may underwrite and deal in securities. The first proposal would increase the amount of revenue that a section 20 subsidiary may derive from underwriting and dealing in securities from 10 percent to 25 percent of its total revenue. Comment on this proposal is requested by September 30, 1996. The second proposal would amend or eliminate three of the prudential limitations, or fire walls, imposed on the operations of the section 20 subsidiaries:

by  Jeffrey McKinney December 23, 2008. Black Enterprise Magazine. Three African American executives are trying to raise $50 million to create a black-owned bank holding company with some help from the federal government. The entity, MBF LP, would be designed to make capital investments in and own parts of new and existing black-owned U.S. banks, said William Michael Cunningham, senior investment adviser at Creative Investment Research Inc., a Washington D.C. firm specializing in minority banking. Cunningham, MBF general partner, said the company would be an equity fund based in Washington. The company has applied for bank holding company status and is seeking capital from the U.S. Department of the Treasury’s Troubled Asset Relief Program (TARP).   Cunningham said MBF partners and management team members would include Elrick Williams, chairman and CEO of Allston Trading L.L.C., a Chicago-based firm that specializes in electronic trading of stocks, Treasury bonds and other securitie

We note ongoing discussions concerning the replacement of the current Chair of the Federal Reserve, Jerome Powell. While Mr. Powell was perhaps the most competent policymaker chosen by an Administration noted for it's lack of competence,  there are reasons to consider replacing him. In the face of novel crises like COVID, Global Warming and the George Floyd protests, we believe a new perspective is required.  We encourage Mr. Biden to consider replacing Mr. Powell with Roger Ferguson, retiring CEO of TIAA-CREF. As we noted, in 2006, Mr. Ferguson was directly responsible for saving the US economy in the days following 9/11. See:  https://drive.google.com/file/d/1Dwun8vPy1-9_U0Bfh7ELkeWkRZSFTZ43/view?usp=sharing Mr. Ferguson will be better able to deal with the growing economic and social costs of racism. The Fed has consistently been wrong about, well, Black people. In response to a question from Congresswoman Joyce Beatty (OH) about Black unemployment, former Fed Chair Janet Yellen

UPDATED #INFLATION ANALYSIS - We note the Biden Administration now expects consumer prices to rise 4.8% in the fourth quarter of 2021. This follows July's 5.4% increase in consumer prices in advance of the Fed’s Jackson Hole conference. Our analysis suggests that the inflation spike is due to fear and greed-based labor and supply chain disruptions resulting from the unprecedented and ongoing COVID crisis. Thus, price increases are to be expected. The current pandemic is not fully comparable to earlier ones, given technology's role in facilitating the highly integrated nature of the global economy and the decline in ethical standards of business behavior, as evidenced by the prior occupant of the White House. The Fed is right to focus on inequality, now the greater risk, than it is on protecting the financial standing of a small group of mainly non-minority individuals and institutions. Given the above, we suggest the central bank modify monetary policy to resist price increase

According to the Intergovernmental Panel on Climate Change (IPCC), a group of United Nations (UN) scientists, "human activity is changing the climate in unprecedented and sometimes irreversible ways." The report "warns of increasingly extreme heatwaves, droughts and flooding, and a key temperature limit being broken in just over a decade."  The report's authors claim, that "it is unequivocal and indisputable that humans are warming the planet."  This is incorrect and reflects the lack of honesty in the discussion.  We stated, on February 5, 2015, in testimony to the Norwegian Ministry of Finance ( http://www.creativeinvest.com/NorwayTestimonyFeb52015.pdf ) and on April 22, 2015 in testimony to the Government of the United Kingdom ( https://www.creativeinvest.com/UKConsultationonChangestoInvestmentRegulationsApril222015.pdf ): "As the market value of environmental, social and governance factors continues to grow, companies and investment managers

On July 28, 2021, the U.S. Chamber of Commerce held  a webinar titled “Equality of Opportunity in Action: Addressing Maternal Healthcare Disparities”, discussing racial gaps in maternal health outcomes and the proposed Black Maternal Health Momnibus Act.  Maternal mortality rates are critically high in the United States, and problematically, higher for minority groups due to various social and structural inequities. Research from the Centers for Disease Control and Prevention (CDC) shows that Black women are much more likely to die from a pregnancy-related cause than white women. In fact, if childbirth as a Black woman were an occupation, it would be the 5th deadliest job in America.  The first part of the webinar featured Congresswoman Lauren Underwood, a nurse instructor and Representative with a background in healthcare policy. She emphasized that the majority of maternal deaths are preventable, but that this persistent and withstanding crisis has been problematically ignored. Direc

On Friday, July 9, 2021, "President Biden signed a sweeping executive order..intended to increase competition within the nation’s economy and to limit corporate dominance, factors the White House says have led to higher prices and fewer choices for consumers while dampening pay and restricting the freedom to change jobs." Mr. Biden noted that “What we’ve seen over the past few decades is less competition and more concentration that holds our economy back..rather than competing for consumers, they are consuming their competitors. Rather than competing for workers, they’re finding ways to gain the upper hand on labor.” This order synchs to several issues we identified in Amicus Briefs filed in Federal appeals and lower courts: September, 2018 - Amicus Brief in Net Neutrality Case (18-cv-1051) https://www.prlog.org/12729944-william-michael-cunningham-files-amicus-brief-in-net-neutrality-case-18-cv-1051.html As we noted in that brief, eliminating net neutrality lowers income for

At the beginning of 2020, $16.6 trillion in US-domiciled ESG assets were held by 530 institutional investors, 384 money managers and 1,204 community investment institutions. Since 1995, the US SIF Foundation finds that sustainable investments have increased at a compound annual growth rate of 14 percent. This data proves that the financial landscape is rapidly moving toward impact investing. As a student of finance curious about the markets and how I can make a difference, I turned to the US SIF FORUM 2021 to learn more.  Over the week of June 14th - 18th, 2021, I attended the US SIF FORUM 2021 as a Peter DeSimone Scholar. The Forum for Sustainable and Responsible Investment conference brings together leaders of the sustainable and impact investing community to learn about approaches, trends and policy developments in the field.  This year’s conference featured 60+ speakers in 25+ sessions with topics ranging from racial justice to ESG disclosure. Additionally, the event included many

On June 23rd, the NSU Broward Center for Innovation held a webinar titled “Blue Economy: Trends, Challenges, Opportunities, Strategies” to discuss the advancement of sustainability and innovation in developing the human economy around ocean resources.  Moderated by John Wensveen, the Executive Director of the NSU Broward Center for Innovation, the panel included Shelby Thomas, CEO of Ocean Rescue Alliance, Daniel Kleinman, CEO of Seaworthy Collective, Sean O’Hanlon, Principal at Tierra Verde, and Alec Bogdanoff, Principal at Brizaga.  The Blue Economy , according to the World Bank is defined as as “the sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health.” Through the webinar, the panelists discussed the current state of the Blue Economy, its various sectors and applications, and what to expect moving forward. The panelists could not overstate the economic magnanimity of this growing industry, citing an overall market cap es

On June 17th, 2021, the Biden Administration announced the Child Tax Credit (part of the American Rescue Plan) in order to combat child poverty. To be eligible for this program, individuals must file taxes and have income no greater than $50,000. This program gives $3,000 to parents with children between the ages 6-17 and $3,600 to those who have children under the age of 6. The Biden Administration believes that it is a moral imperative to make sure this tax credit reaches parents struggling to take care of their children. In a critical modification not seen before, this programs gives parents who have not filed taxes the ability to receive tax credit through a simple non-tax-filer tool specifically for this child tax credit.  This program has several distinctive features:  First-time payments will be distributed in monthly $500 increments.  Furthermore, parents who have not filed taxes are encouraged to file immediately, since this tax credit program allows them to receive stimulus p

A recent webinar titled  ESG Integration Across Asset Classes displayed Bloomberg’s focus on recognizing the need for data centered, environmental, social and governance (ESG) metrics within every investor’s portfolio. Bloomberg is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City. As a part of Bloomberg’s Portfolio & Index Research Conference, the webinar provided technical details on the firm's efforts to measure ESG. ( Creative Investment Research has been measuring ESG impacts since 1989 .) A three-pronged approach—analyzing the carbon transition, power sector transition, and climate policies—underlies Bloomberg’s climate scores.  With a focus on climate impact and commodities, Bloomberg presented two approaches to measuring carbon emissions—the number one priority of the Paris Climate Agreement benchmarks.  First, Bloomberg experts used company level data and Bloomberg Industry Classification Standard (BICS).

  On June 15th, several American financial and political leaders convened in distinct discussions concerning the future of Minority Deposit Institutions (MDIs) and Community Development Financial Institutions (CDFIs). At a White House press conference, a Federal Deposit Insurance Corporation (FDIC) Board meeting and MDI policy statement release, in a House Financial Services Committee statement, and a Georgetown University forum with an all-star cast, minority lending was the conversation of the day. Utilizing the Mosaic Theory, Creative Investment Research contends that the convergence of these events may not be a coincidence, and may signal a significant policy change. We note that the MDI events of June 15th were preceded by a June 14th meeting of the California Public Employees’ Retirement System (CalPERS) Investment Committee. Of particular relevance was a progress report on the Fund’s Sustainable Investment 5 Year Strategy Plan. Fund management discussed diversity and inclusion t