Putting Capital In Communities

Screen Shot 2017-02-06 at 11.02.38 AM Non-profit CEO Terri Ludwig unlocks potential in underserved areas through impact investments. by Elliot Clark Prioritizing corporate responsibility can mean creating hiring diversity initiatives or reducing a company's carbon footprint, but for some, it radically reshapes the way they do business. Case in point: Terri Ludwig. This financial aficionado and president and CEO of Enterprise Community Partners decided to use her Wall Street smarts to give back to underprivileged communities through investments in low-income housing. As a result of her efforts, she won the 2015 Responsible CEO of the Year Award at the COMMIT! Forum in October 2015. Here, she discusses the reality of poverty in America, her 15 years in the community investment market, and what she's doing to reach her goal of housing 1 million low-income families by 2020. Elliot Clark: You started life in southern Illinois but now you're in the Big Apple. And you went from investment banking, which is usually perceived as sort of a heartless business in many respects, to low income housing community investment.

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Higher Impact Portfolios Can Outperform

Screen Shot 2017-02-02 at 3.41.19 PM By R. Paul Herman Solving human and environmental problems with investment portfolios builds a better world—and can yield higher income and profits too. Would a responsible executive purposefully invest their retirement money to underpay people, destroy nature, or foster corruption? Today's business world can be quite volatile, and if people choose to operate in this way— intentionally or not—their portfolios might not survive. Alternatively, why not intentionally invest retirement in companies that pay a fair wage, efficiently use natural resources and replenish them, and act transparently in balance with all of society? A retirement fund can help build a better world and—as real-world evidence and academic studies show—bear greater financial rewards. Investing for impact is a compelling theme—one that garners 21 percent market share as of 2016, and represents nearly $9 trillion of invested assets, according to the U.S. Sustainable Investing Foundation.

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Audit Insomnia

Take a deeper look at the risks of auditing, and everyone will sleep better.

By Bill Hatton

What keeps your company’s auditor awake at night? Like most professionals, it’s most likely uncertainty–nagging concern that there isn’t quite enough evidence to support signing off on the audit.

What keeps company executives up? Probably something similar: The auditor might have missed something important, putting your company at risk of embarrassing re-statements—or worse.

Martin Baumann, chief auditor and director of professional standards, Office of the Chief Auditor, Public Company Accounting Oversight Board (PCAOB), says there are good reasons for everyone’s loss of sleep: Auditors may be too credulous.

“Lack of auditor skepticism is common,” Baumann says. “Due professional care requires professional skepticism; auditors need to find evidence that statements are free from material misstatements.

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Financial Reporting: With XBRL, It’s Tag You’re It

In the name of transparency, standardized business reporting to get an interactive signature

By James C. Hyatt

There’s an XBRL in your future. That’s shorthand for “eXtensible Business Reporting Language,” an important financial reporting initiative that many large companies have tested, and which the SEC is strongly pushing.

The XBRL idea is a decade old, but it is clearly picking up speed. Its progress prompted Motley Fool commenter Tim Beyers earlier this year to call XBRL “the most important shareholder initiative in a decade.”

The idea is to standardize business-information reporting and make it interactive so that a wide variety of information users—from accountants, software companies and government agencies to investors and researchers as well as companies themselves—can search corporate filings and compare data in creative ways.

A major hurdle, however, has been the creation of “taxonomies” or agreed-upon definitions that will be used in all XBRL reports.

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FTSE Sizes Up Environmental Technologies Sector

New index tracks alternative energy, water, waste-management businesses

By Dennis Schaal

FTSEInstitutional and retail investors tracking the performance of the global environmental technologies market can access a new tool to benchmark that sector.

FTSE Group introduced its Environmental Opportunities All-Share Index, which includes 450 companies involved in alternative energy, water and waste-management businesses.

To get into the index, the companies must be part of the FTSE Global Equity Index Series and garner at least 20 percent of their revenue from environmental markets or technologies.

The FTSE Environmental Opportunities All-Share Index is available through data distributors including, Bloomberg.

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