Is Big Business Sustainable?

As the following NY Times article suggests, businesses with market power ( the ability to set wages for the sector, the ability to set prices, the ability to crowd out start-ups) may be undermining their long-term success.

Many businesses operate with the belief that if they can dominate, they can grow and profit unimpeded.  Indeed, for a while, sometimes even a decade or more, this may even be true, returning shareowners a hefty return.  But after a while, the lack of new business start-ups becomes a drag on the economy.  New businesses are the engines of growth.  They provide the most new jobs, an outsized portion of innovation and new avenues for exploration, and have been a key path for immigrants and the lower classes to rise to the middle class.

Without this growing crop of new businesses, there becomes no growth in customers for the large dominant companies.  As Walmart famously learned, if you force all other businesses to fold, and prevent new ones from rising, there are fewer employed people to shop at your mega-stores.  If you set the wage standard to below subsistence, no one can afford to shop at your mega-store – not even your own employees!

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Yes, it is getting hotter.

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10 studies that show how and why ESG investing works

Earlier this year, TruValue Labs (creators of Insight360 SASB ) laid out the top 10 reasons Wealth Advisers and Managers are following investor demand to ESG.

The next question: how do ESG, or environment, social, and governance investments, perform? When do these strategies work, and why?

Here’s a look at the circumstances under which ESG-related investing works the best, across different asset classes such as stocks and bonds.

http://lipperalpha.financial.thomsonreuters.com/2017/07/10-studies-that-show-how-and-why-esg-investing-works/

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Ten Funds With a Conscience Win Big

By MaryAnn Busso

July 10, 2017

Investing for good can also be a good investment. A number of the mutual funds that take environmental, social and corporate governance (ESG) into account when making investing decisions have proven to be stellar performers. Two of our top 10 ESG funds—selected using a formula that takes 1, 3 and 5-year total returns into account—beat the S&P 500 over all three periods. Investors are taking notice: Investments in these funds are up 33 percent in the U.S. since 2014, to $8.7 trillion. That’s 22 percent of all professionally managed U.S. assets. Harvard Management Co., which oversees Harvard University’s $36 billion endowment fund, recently announced plans to make sustainability the driving factor in selecting new investments for its natural resource portfolio.

https://www.bloomberg.com/graphics/2017-ten-funds-with-a-conscience/

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Sustainable Finance: Bain Capital Gets $390M for Impact Bet

Alternative investment firm Bain Capital is betting that mission-led investing can deliver returns on par with its standard private equity pools.

Also inside: Vanguard’s votes on climate change are up for their own vote; Big oil is waking up to EVs; Deloitte is beginning to shift away from traditional approaches built around gender, race, or sexual orientation.

Bloomberg Brief

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A Bigger Economic Pie, but a Smaller Slice for Half of the U.S.

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Nine New Findings About Inequality in the United States

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Making a difference, while making a profit.

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Investors Sharpen Focus on Social and Environmental Risks to Stocks

 

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Cashing in on Climate Change

These changes are happening – denying them just puts a company further behind in adapting, and that means a drag on productivity and returns.  Selecting your investments to include (or only contain!) companies that are addressing these changes and adapting TODAY not only contributes to a better future, but better returns.

 

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