Christine Bader TED Talk: The Evolution of a Corporate Idealist

Christine Bader, Amazon's Director of Social Responsibility, discusses how we need to re-frame the conversation surrounding the alignment of business interests and social good. By focusing on where some have failed, she offers advice on how others can succeed. 




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Chris McKnett TED Talk: The Investment Logic for Sustainability

Sustainability is the defining challenge of our time; but what groups can really drive the kind of progress needed? Chris McKnett makes the case that it's large institutional investors. He shows how strong financial data isn't enough, and reveals why investors need to look at a company's environmental, social and governance structures, too.






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Audrey Choi TED Talk: Prioritizing Investing for Social Change

Can global capital markets become catalysts for social change? According to Audrey Choi, CEO of Morgan Stanley’s Institute for Sustainable Investing, almost half of global capital is owned by individuals and that gives them the power to make a difference by investing in companies that champion social values.




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2016 Proxy Season Brings Opportunity to Accelerate Corporate Sustainability Progress

Concerned About Climate and other Environmental Risks?

2016 Proxy Season Brings Opportunity to Accelerate Corporate Sustainability Progress

By Stuart Dalheim

As we turn the corner into 2016, our attention turns to the upcoming elections.  No, I am not referring to the elections for public office that already dominate the airwaves (though they are important too), but the opportunity investors have to participate in shareholder democracy by voting proxies during corporate annual general meetings. Springtime marks the height of the proxy season, which means investors can use their position as owners to vote on slates of corporate directors, make their voices heard about executive compensation packages, and cast ballots on a wide range of social and environmental shareholder proposals.

Investors are becoming more and more aware of the connections between financial, ecological and social risks in their investment portfolios and many are incorporating ESG factors into their analysis and buy and hold decisions. As this awareness grows and the public understands the significant impacts that companies have on the environment and society, and asks for change, investors increasingly engage via dialogue and shareholder proposals to ask how companies manage these risks to their business and reduce their impacts on the environment and society.

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Recent News for the Intentional Endowments Network

Below you will find news from the week of January 11th. You can always find more on the IEN newsfeed

Sustainable Investing 

BlackRock expands ESG product range with fixed income ETF l Wealth Manager 

By Joshua Thurston, January 11, 2016 

  • BlackRock has launched a sustainable bond exchange traded fund (ETF), in response to increased demand for socially responsible investing.

Bloomberg Brief l Sustainable Finance

January 14, 2015

  • This weeks Bloomberg Brief discusses green bonds, BlackRock's new strides towards sustainability, and corporate responsibility.

ESG & Fiduciary Duty  

Socially-conscious investing gets a boost from the DOL fiduciary rule l Investment News

By Blaine F. Aikin, January 13, 2016

  • This article reviews the DOL's ruling in 2015 on fiduciary duty, and the result it will likely have on environmental, societal, and governance factors when investing. 

By Sarah Berman, January 12, 2016

  • America's thundering gun debate sparks a new financial frontier.

Colombia University Holds Panel on Israel Divestment l Frontpage

By Mara Schiffren, January 13, 2015 

  • The nexus between boycott, divestment and sanctions (BDS) and Black Lives Matter activists that began with the 2014 protests following the police shooting of Michael Brown in Ferguson, Missouri culminated in a recent panel discussion at Columbia University.

Penn State forms Ad Hoc Committee to consider fossil fuel divestment l The Daily Pennsylvanian 

By Cherry Zhi, January 14, 2015 

  • Almost a year after the Nominations & Elections Committee held an undergraduate referendum on fossil fuel divestment, Penn is forming an ad hoc committee to further consider the issue.
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Recent News for the Intentional Endowments Network

Each week, the IEN posts relevant news and reports. Below you will find some news articles related to endowments and/or sustainable investing that we wish to highlight. For more, please visit the IEN news feed!

Fiduciary Duty 

DOL Issues New Guidance on Economically Targeted Investments l The National Law Review

November 6, 2015

  • The guidance clarifies that environmental, social, and governance factors may be relevant to a plan fiduciary’s evaluation of an investment’s economic merits.

Divestment & Climate Risk 

By Marc Gunther, November 11, 2015 

  • The Rockefeller Brothers Fund, the University of California and the World Council of Churches are among about 460 faith-based groups, pension funds, colleges and nonprofits that have pledged to divest some or all of their fossil fuel holdings. They can do so with the help of consultants who will advise them on how to minimize their financial risk.

MIT Research VP: No Divestiture; MIT Initiates 5-year Climate Change Plan l WGBH

By Marilyn Schairer, November 11, 2015

  • MIT Professor Maria Zuber discusses with WGBH Morning Edition host Bob Seay the Institutes plan to confront climate change, and student/faculty demands to divest from fossil fuel companies.

Dayton divestment conference delves into ways to leave fossil fuels behind l National Catholic Reporter

By Leo J. Schenk, November 12, 2015

  • A contingent of business leaders, health care professionals, academics and environmental activists from around the country gathered here at the University of Dayton in early November to delve into the concept of divestment from fossil fuels.

Wall Street Meets Climate Change With Fossil-Free Exchange-Traded Fund l IBT

By Maria Gallucci, November 12, 2015

  • Etho Capital is preparing to launch a diversified exchange-traded fund that excludes fossil fuel producers and favors "carbon efficient" companies. 
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Anthony Cortese's Peer Discussion after AASHE 2015

After the 2015 AASHE conference, First American Education Finance hosted a peer discussion, led by IEN's Principal Anthony Cortese. There were 40 attendees from higher education. The full video of this discussion can be found below. 

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Application of Fiduciary Duty to Sustainable Investment Practices

Susan N. Gary, University of Oregon School of Law, Keith L. Johnson, Reinhart Boerner Van Deuren s.c., Megan K. Jackson, Reinhart Boerner Van Deuren s.c. (November, 2015)


Trustees and directors who manage funds as fiduciaries have to consider their duties of loyalty and care when they create investment policies or make investment decisions. Two recent statements, one from the Internal Revenue Service (the “IRS”) and one from the Federal Department of Labor (the “DOL”), provide guidance on the fiduciary rules, and confirm that fiduciaries can consider material environmental, social and governance (“ESG”) factors as part of an investment strategy that combines ESG factors with traditional financial tools.

Trustees and directors who oversee investment of university endowments, pensions, charities and private trusts are all fiduciaries. They have a duty of loyalty to act in the best interests of their fund members, beneficiaries or charitable mission, and they have a duty of care to take care of the assets of the organization and manage the funds as a prudent investor would. These recent regulatory rulings provide important guidance on how to apply the duty of loyalty in today’s investment market environment.

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Recent News for the Intentional Endowments Network

Each week, the IEN posts relevant news and reports. Below you will find some news articles related to endowments and/or sustainable investing that we wish to highlight. For more, please visit the IEN news feed!

FACT SHEET: White House Announces Commitments to the American Business Act on Climate Pledge l the White House

October 19, 2015

  • On the 19th, the White House announced new commitments from companies from across the American economy who are joining the American Business Act on Climate Pledge. 

Empowering Women Drives Impact Investing l Financial Advisor 

By Jerilyn Klein Bier, October 23, 2015 

  • The key takeaways: empowering women is a key driver of impact, impact investing is moving into the mainstream, and interest will continue to expand as impact becomes more measurable and as millennials get further entrenched in the investing world.

UCOP announces pension plan with Japanese government l The Daily Californian

By Harini Shyamsundar, October 25, 2015 

  • On Oct. 21, the UC Office of the President announced it was the first U.S. pension plan and endowment fund to sign the Japan Stewardship Code to foster economic growth through greater involvement on the part of investors.

Divesting to Invest in Cleaner Energy l The Link

By Jonathan Caragay Cook, October 26, 2015

  • Almost a year since the Concordia University Foundation board announced they would divest $5 million from fossil fuels, they have chosen to reinvest the money into American fund Nelson Capital Management.
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Fiduciary Duty is Not an Obstacle to Addressing ESG


By Sonal Mahida, Senior Consultant, U.S. Strategic Projects, PRI  


Outdated interpretations and limited understandings of materiality have led to the misconception that addressing environmental, social and governance (ESG) factors falls outside the scope of fiduciary duty.  As a result, incompatibility with fiduciary duty has often been given as a reason by asset managers and advisers for not incorporating ESG factors into the investment decision-making process.  A recent Principles for Responsible Investment (PRI) report “Fiduciary Duty in the 21st Century,” published along with UNEPFI, UNEP Inquiry and the UN Global Compact, looked  at fiduciary duty across eight markets--US, Canada, UK, Germany, Brazil, Australia, Japan and South Africa--and found that for asset owners, fiduciary duty is not an obstacle to action.

Fiduciary duties exist to ensure that those who manage money on behalf of others act in the interests of beneficiaries, rather than serving their own interests. Under the duty of loyalty, fiduciaries should act in good faith, should impartially balance the conflicting interests of different beneficiaries, should avoid conflicts of interest and should not act for the benefit of themselves or a third party.  The duty of prudence calls on fiduciaries to act with due care, skill and diligence, investing as an ‘ordinary prudent person’ would do.

There are extensive in-depth legal, academic, and investor arguments for, rather than against, accounting for ESG factors in investment decisions.  Key to these arguments, from an asset steward perspective, is the recognition of aligning liabilities with frameworks that prioritize long-term value creation and the likelihood of increasing materiality across a long-term horizon.  Case law as well as fiduciary frameworks recognize the need to preserve assets to satisfy future, as well as present, claims and requires that trustees take impartial account of the interests of all beneficiaries. 

A long-term investment horizon requires the consideration of factors that might influence investment performance and strategies over time.  The lead-up to the 2008 financial crisis, for instance, demonstrated how a focus on quarterly gains, or “quarterly capitalism,” can drive behaviors that may have immediate benefits but endanger performance over a long-term investment horizon.

Fiduciary practices that fail to address key material factors over a relevant time horizon can fall short of maximizing a portfolio’s risk and return profile.  As recommended by the CFA Institute, trustees should “consider all relevant risk and value factors deemed appropriate when designing the scheme’s investment strategy. In addition to typical financial measures, these factors may include environmental, social, and corporate governance issues.”[1]   

Past changes in interpretation reflect the dynamic nature of fiduciary duty in the US.  As the landscape for investment changes, so too does the notion of fiduciary duty. The processes and approaches used to guide investment decisions have evolved over time in response to changes in the generally accepted understanding of market behavior.[2]  We are again at an inflection point.  As the evidence and rationale behind addressing material and business related impacts of ESG factors in the investment process further develops and is increasingly accepted, so does our understanding of these factors through a fiduciary lens.

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