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Unsustainable: Ontario, Canada to end “Basic Income” experiment
Gee, who could have predicted that?
From The Guardian: Ontario’s new Conservative government has said it will scrap the province’s basic income pilot, calling it expensive and unsustainable – and bringing an abrupt end to North America’s first government-backed trial of the idea in decades.
The previous Liberal government launched the pilot program last year, touting it as a unique three-year foray into a policy touted as a panacea to poverty, bloated bureaucracy and the rise of precarious work.
The C$150m pilot recruited 4,000 participants across three regions of the Canadian province, ranging from people working in low-paying or precarious jobs to those on social assistance. Social scientists watched closely as the unconditional payments began to flow last year, tracking whether the funds would improve health, education and housing outcomes.
Even at its launch, uncertainty hung over whether the multi-year project would survive Ontario’s June election. In April, a spokesperson for Ontario’s Progressive Conservatives said that the party would push forward with the trial.
Months later, the party, led by Doug Ford, swept into government, buoyed by promises to lower gas prices, slash government spending and reintroduce “buck-a-beer”.
Soon after, the new government seemingly reversed its position on basic income. On Tuesday, Lisa MacLeod, the Ontario minister responsible for social services, announced the end of the pilot, which she described as “quite expensive”, adding that it was “clearly not the answer for Ontario families”.
She did not back her stance with any data, despite being pressed by reporters. “It was certainly not going to be sustainable,” she said. “Spending more money on a broken program wasn’t going to help anyone.”
Her government’s decision comes months after Finland said it would wind down its own trial of basic income, bringing an end to Europe’s first national, government-backed experiment.
In Canada, where nearly one in five children live in poverty – a rate that is among the highest in the OECD and more than three times that of Nordic countries – leaders from across the political spectrum have championed the idea of basic income.
Those on the left have pushed the idea as a means of fighting poverty and the steady erosion of stable jobs with pensions and benefits, while the right envision it as a way to streamline the bureaucratic welfare systems.
After Ontario launched its pilot, recipients began detailing how their lives had changed; the funds had afforded them healthier food, warm clothes for winter and even a long-postponed visit to the dentist. Others used the funds to go back to school or invest in their own businesses.
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The Hamilton resident Dave Cherkewski, 46, said the monthly payments had eased the stress of daily life, enabling him to better cope with a mental illness that had kept him out of the workforce since 2002.
Now he was gearing up to return to work, hoping to find a role where he could support others with mental health challenges. “With basic income I will be able to clarify my dream and actually make it a reality,” he told the Associated Press.
“Because I can focus all my effort on that and not worry about, ‘Well, I need to pay my $520 rent, I need to pay my $50 cellphone, I need to eat and do other things.’”
On Tuesday, MacLeod declined to elaborate on how and when the basic income program would end, saying only that her government would seek to end the program “ethically”.
Sustainable Investing Basics
What is sustainable, responsible and impact investing?
Sustainable, responsible and impact investing (SRI) is an investment discipline that considers environmental, social and corporate governance (ESG) criteria to generate long-term competitive financial returns and positive societal impact. Examples of ESG criteria can be found here.
Sustainable Investment Assets in the United States: According to the US SIF Foundation’s 2020 Report on US Sustainable, Responsible and Impact Investing Trends, as of year-end 2020, more than one out of every four dollars under professional management in the United States— $12.0 trillion or more —was invested according to sustainable investing strategies.
Motivations: There are several motivations for sustainable investing, including personal values and goals, institutional mission, and the demands of clients, constituents or plan participants. Sustainable investors aim for strong financial performance, but also believe that these investments should be used to contribute to advancements in social, environmental and governance practices. They may actively seek out investments—such as community development loan funds or clean tech portfolios—that are likely to provide important societal or environmental benefits. Some investors embrace sustainable investing strategies to manage risk and fulfill fiduciary duties; they review ESG criteria to assess the quality of management and the likely resilience of their portfolio companies in dealing with future challenges. Some are seeking financial outperformance over the long term; a growing body of academic research shows a strong link between ESG and financial performance.
Terminology: Just as there is no single approach to SRI, there is no single term to describe it. Depending on their emphasis, investors use such labels as: “community investing,” “ethical investing,” “green investing,” “impact investing,” “mission-related investing,” “responsible investing,” “socially responsible investing,” “sustainable investing” and “values-based investing,” among others.
What strategies do sustainable investors use?
From 2020 to 2020, sustainable investing enjoyed a growth rate of more than 38 percent, increasing from $8.7 trillion in 2020. More than one out of every four dollars under professional management in the United States today—26 % of the $46.6 trillion in total assets under management tracked by Cerulli Associates—is involved in sustainable investing.
Sustainable investors comprise individuals, including average retail investors to very high net worth individuals and family offices, as well as institutions, such as universities, foundations, pension funds, nonprofit organizations and religious institutions. There are hundreds of investment management firms that offer SRI investing funds and vehicles for these investors.
Practitioners of sustainable investing can be found throughout the United States. Examples include:
- Individuals who invest—as part of their savings or retirement plans—in mutual funds that specialize in seeking companies with good labor and environmental practices.
- Credit unions and community development banks that have a specific mission of serving low- and middle-income communities.
- Hospitals and medical schools that refuse to invest in tobacco companies.
- Foundations that support community development loan funds and other high social impact investments in line with their missions.
- Religious institutions that file shareholder resolutions to urge companies in their portfolios to meet strong ethical and governance standards.
- Venture capitalists that identify and develop companies that produce environmental services, create jobs in low-income communities or provide other societal benefits.
- Responsible property funds that help develop or retrofit residential and commercial buildings to high energy efficiency standards.
- Public pension plan officials who have encouraged companies in which they invest to reduce their greenhouse gas emissions and to factor climate change into their strategic planning.
Alternative Investment Funds: Alternative ESG assets almost tripled from $206 billion to $588 billion, and the number of funds increased 89% from 413 to 780. These include venture capital and private equity funds, property funds and REITs, and hedge funds.
Registered Investment Companies: ESG-themed ETF fund assets more than doubled from $3.5 billion to $7.4 billion, and the number of funds increased 176 percent from 25 to 69. SRI mutual fund assets have increased 34 percent since 2020 from $1.72 trillion to $2.58 trillion, while the total number of SRI mutual funds has increased 50 percent from 475 to 636.
Community Investments: The community investing sector has experienced rapid growth over the last decade, nearly doubling in assets between 2020 and 2020, and growing just over 50 percent from 2020 to 2020. The largest growth in community investing assets has been among community development credit unions, whose assets have nearly doubled since 2020.
Sustainable investing spans a wide and growing range of products and asset classes, embracing not only public equity investments (stocks), but also cash, fixed income and alternative investments, such as private equity, venture capital and real estate. Sustainable investors, like conventional investors, seek a competitive financial return on their investments.
Several research studies have demonstrated that companies with strong corporate social responsibility policies and practices are sound investments. Studies with such findings have come from Oxford University, Deutsche Asset & Wealth Management, Morgan Stanley Institute for Sustainable Investing, TIAA – CREF Asset Management and the United Nations Environment Programme Finance Initiative, among others. For example, in 2020 Deutsche Asset & Wealth Management and Hamburg University conducted a meta-analysis of over 2,000 empirical studies, making it the most comprehensive review of academic research on this topic. They found that the majority of studies show a positive correlation between ESG standards and corporate financial performance.
Owning shares in a company gives investors a channel through which to raise environmental, social and corporate governance issues of concern. By filing or co-filing advisory shareholder resolutions at US companies, which may proceed to a vote by all shareholders in the company, active shareholders bring important issues to the attention of company management, often winning media attention and educating the public. Moreover, resolutions need not come to a vote to be effective. The process of filing often prompts productive discussion and agreements between the filers and management that enable the filers to withdraw their resolutions.
From 2020 through the first half of 2020, more than 200 institutional investors and money managers collectively controlling a total of at least $1.76 trillion in assets filed or co-filed shareholder resolutions on ESG issues. Investors filed more than 700 resolutions relating to environmental, social and key governance issues for the 2020 proxy season. The leading issue raised in shareholder proposals, based on the number of proposals filed, from 2020 through 2020, was “proxy access.” Investors filed 353 proposals at US companies during this period to facilitate shareholders’ ability to nominate directors to corporate boards. Disclosure and management of corporate political spending and lobbying is also a top concern. Recent social and environmental resolutions have addressed climate change, fair labor and pay standards, human rights and sustainability reporting.
In addition to filing or co-filing shareholder resolutions, investors can also actively vote their proxies, engage in dialogue with corporate management or join shareholder coalitions as a means to encourage companies to improve their environmental, social and corporate governance practices. In addition, investors can participate in public policy initiatives, working with government regulatory agencies, and testify and report on ESG investment issues to Congress.
A few of the many examples of how shareholder resolutions make a difference can be found here. To learn more about the impact that sustainable and responsible investors have had on companies, the investment industry and public policy, see The Impact of Sustainable and Responsible Investment.
BP Statistical Review of World Energy 2020: an unsustainable path
BP today released the 68th annual edition of the BP Statistical Review of World Energy (BP Stats Review), the most comprehensive collection and analysis of global energy data.
This year’s edition highlights the growing divergence between demands for action on climate change and the actual pace of progress on reducing carbon emissions.
“The longer carbon emissions continue to rise, the harder and more costly will be the necessary eventual adjustment to net-zero carbon emissions”
Bob Dudley, group chief executive
Key findings from the BP Stats Review 2020 include:
Global energy demand grew by 2.9% and carbon emissions grew by 2.0% in 2020, faster than at any time since 2020-11.
Natural gas consumption and production was up over 5%, one of the strongest rates of growth for both demand and output for over 30 years.
Renewables grew by 14.5%, nearing their record-breaking increase in 2020, but this still accounted for only around a third of the increase in total power generation.
Coal consumption (+1.4%) and production (+4.3%) increased for the second year in a row in 2020, following three years of decline (2020-16).
The United States recorded the largest-ever annual production increases by any country for both oil and natural gas, the vast majority of increases coming from onshore shale plays.
Introducing the findings for 2020, Spencer Dale, BP chief economist, said: “There is a growing mismatch between societal demands for action on climate change and the actual pace of progress, with energy demand and carbon emissions growing at their fastest rate for years. The world is on an unsustainable path.”
“The longer carbon emissions continue to rise, the harder and more costly will be the necessary eventual adjustment to net-zero carbon emissions,” concluded Bob Dudley, BP group chief executive. “As I have said before, this is not a race to renewables, but a race to reduce carbon emissions across many fronts.”
U.S. banks grapple with system glitches, paperwork snags as small-business program ends fourth day
By Pete Schroeder and Michelle Price
WASHINGTON (Reuters) – The U.S. government’s $350 billion small-business rescue program was plagued by paperwork and technical issues as it lurched to the end of a fourth day on Monday, with some banks experiencing major glitches with the processing system, according to industry groups, bankers and an email seen by Reuters.
The problems with the program, which is jointly administered by the Small Business Administration and the U.S. Treasury Department, threatened to delay putting much-needed funds into the hands of small businesses hurt by the coronavirus crisis.
Three banking officials told Reuters U.S. lenders were unable to process loan applications for hours on Monday after the SBA’s online portal crashed around midday. A senior administration official denied the SBA system had crashed, and said the agency continued to process loans and add lenders.
Since the program opened on Friday, banks have struggled to access the clunky system and the paperwork involved has changed more than once, industry sources said.
“We know that your efforts have been frustrated with system issues, policy questions and slower than usual responses,” the Small Business Administration’s regional offices wrote to bankers on Saturday evening, according to an email seen by Reuters.
Many lenders have had problems signing up for new user accounts with the SBA’s platform, while bankers who already had accounts have had issues unlocking them or resetting passwords, the email said. It said the SBA was working to unlock all of the existing user accounts in one batch.
SBA also alerted lenders in the email that its technology platform’s loan authorization form was “not at all” compliant with the terms of the rescue program.
“Please do not close any loans using the current version of the loan authorization!” it said.
Congress created the unprecedented program as part of a $2.3 trillion stimulus package passed at the end of March to help businesses that have either shut down or have been dramatically curtailed by the coronavirus pandemic. Borrowers can apply for the loans via participating banks until June 30.
Over the weekend, the Independent Community Bankers of America (ICBA), which represents thousands of small banks, complained to the Treasury and SBA about the “failed technology” and “massive delays” its members were experiencing with the SBA platform, which was not designed to process the huge program. [L4N2BT08Y]
Community bankers also took to social media to complain, rebutting claims by President Donald Trump, whose administration had promised the loans would be distributed in just days, that all was going well.
“Going well?! Hell nearly every community bank in the nation is locked out of the . SBA platform!” Noah W. Wilcox, chief executive and chairman of Grand Rapids State Bank, who chairs the ICBA, tweeted on Sunday.
Big banks were having problems as well: one large lender had submitted 10,0000 loan applications to the SBA since Friday, with only five approved so far, according to one of the sources.
A senior Trump administration official on Monday defended the progress made and said launching such a huge program in just one week was unprecedented.
“As of today – Day 4 – we’ve surpassed $35 billion originated; more than 100,000 small businesses have successfully applied and more than 2,000 lending institutions are up and running,” the person said.
“Starting today, the SBA is offering a lender hotline and our 68 district offices across the country will be available to assist lenders,” the official added.
It was unclear how much of that $35 billion had been dished out to businesses as of Monday since the banks are the ones who disburse the funds. According to two industry sources, paperwork problems have prevented all but a fraction of banks from distributing the funds.
“It would have been better to have all these things resolved at the front end,” said Carrie Hunt, general counsel for the National Association of Federally-Insured Credit Unions.
Some small businesses say they have had problems even finding a lender given that many are backed up with thousands of applications and are not processing new clients.
Grant Geiger, CEO of EIR Healthcare, which makes modular healthcare products, said he spent Friday unsuccessfully searching for a bank to take his application after his current lender said it was not yet accepting submissions.
“We were ready last week. Friday morning, we had no place to go,” he told Reuters on Monday.
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