Weekly News Round-Up: February 10th, 2017

New Member

Upcoming Events

 2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ

  • IEN members will be delivering a plenary panel on factoring climate and sustainability considerations into the endowment investment process; and IEN will be hosting a half-day workshop on endowment investing. 

Webinar: Gender Lens Investing l Intentional Endowments Network, February 17, 2017, 12:00 - 1:00 PM ET
  • Research shows that companies where women are better represented in leadership simply perform better. And the financial power of women continues to grow. Yet, staggering gender inequality persists in varying forms across the globe. In this session, Kathleen McQuiggan and Julianne Zimmerman will explore why we should be investing more in women, the economic, social, and financial investment case for investing in companies led by women, how investors can make an impact when it comes to gender diversity, and the role we can play in closing the gender gap.
Webinar: Proxy Voting and Shareholder Engagement for Endowments l Intentional Endowments Network, February 27, 2017, 12:30 - 1:30 PM ET
  • The webinar will provide an overview of the value of proxy voting and additional forms of engagement for endowments that are involved in commingled funds through an outsourced CIO – including the current landscape, trends, specific issues, and why it is important for investors. Guidelines and opportunities of how to take action will also be provided.
Responsible Investment Forum l Private Equity International & UN PRI, March 7-8, 2017, New York, NY
  • Find out why leading global investors are putting increasing pressure on US managers to adopt stricter environmental, social and governance (ESG) principles as they consider investing in private equity and other alternative asset classes. Building on the success of the longest-running ESG event in Europe, the Responsible Investment Forum comes to New York to bring together the most sophisticated LPs, GPs and service providers to discuss why, when, and how your firm should be implementing an effective ESG strategy.
Impact Investing Forum 2017 l Opal Group, April 23, 2017 - April 25, 2017, Boca Raton, FL
  • The Impact Investing Forum will look at many of the asset classes that encompass this space. We invite you to join us and meet top influencers, experienced investors, money managers, and service providers that are leading the charge in this ever growing space. Themes of defining impact investing, portfolio construction, asset class opportunities, and the role of the investor are just a few of the stimulating topics to be covered at this event. This conference will exclusively feature dialogue driven panel discussions led by consultants and family offices.
The Impact Capitalism Summit l Big Path Capital, April 25-26, 2017, Chicago, IL
  • The Impact Capitalism Summit is the Largest Convening of Impact Investors Globally. This year at the Impact Capitalism Summit in Chicago we will explore the progress of leading impact investment portfolios, discover the latest innovations across sectors, themes and asset classes, and identify the steps needed to harness the power of capital markets to build a sustainable, fair and just economy where opportunity and prosperity are shared by all.
New Resources
 
Measuring The Economic Impact of Short-Termism l McKinsey Global Institute
  • Companies identified as “long-term” outperform their shorter-term peers according to new research from professional services firm McKinsey for FCLT Global, the investor/corporate coalition that promotes long-term investment. Read a summary of the results from Responsible Investor (subscription) here.
Sustainable / ESG Investing

Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how some investors in Facebook Inc. and Alphabet Inc. (including IEN Founding Member Arjuna Capital) are growing worried about how the tech giants manage "fake news" on their platforms could drag down profits and leave them vulnerable to regulatory risks. Other highlights include Seattle council unanimously voting to withdraw about $3 billion of the city's funds from Wells Fargo & Co. as it seeks to distance itself from the bank's involvement with Dakota Access Pipeline, a new start-up that thinks newly moneyed millennials will be willing to pay extra for a passive investment that gives them more of a voice, and AOL Inc. Chief Executive Officer Tim Armstrong setting a goal to have women represent 50 percent of the organization’s leadership by 2020.
Details on the U.S.'s First Organic Farm REIT l Crain's Chicago Business
  • Access to capital is notoriously difficult for farmers. To make the process easier, Dr. Stephen Rivard and David Miller created Iroquois Valley Farms (An IEN-Member) to invest in land leased to farmers who convert conventional operations to organic. The Iroquois Valley Farmland REIT public benefit corporation, includes 32 farms across nearly 4,500 acres in Michigan, Maine, New York, Kentucky, Montana, West Virginia, Illinois and Indiana; 73 percent of that acreage has transitioned into certified organic land. It has some $30 million in assets, with 41,500 shares valued at $568 per share.
  • This article discusses Kevin Parker's Sustainable Insight Capital Management and the various dynamics of the ESG market.
London Stock Exchange Responds To 'Investor Demand' Launching ESG Reporting Guidance l Forbes
  • The London Stock Exchange Group (LSEG) has issued guidance, through its Global Sustainable Investment Centre, which sets out recommendations for "good practice" in Environmental, Social and Governance (ESG) reporting. The global guide brought calls today from a member of the World Bank Group for other stock exchanges around the world to follow the bourse’s example and lead. The guide responds to “demand from investors” for a more consistent approach to such reporting that now forms a core part of the investment decision process and to enable investors to make more informed investment decisions.
ESG Investing to Confront Climate Change l Northern Trust
  • Nearly 200 nations agreed in Paris in 2015 to take steps to limit the increase of the global average temperature to no more than 2°C (from pre-industrial times) by the end of the century. The physics of climate change demands an exceptional and immediate response. The world remains on track for 3.6°C of warming, according to the United Nations, and 2016 marked another year of record breaking high temperatures. Further, the U.S. election results created more uncertainty. Amidst these challenges, investment tools and strategies to fight climate change are increasingly important and already available.
Shareholder Engagement & Fiduciary Duty
 
DOL Updates Guidance on Proxy Voting and ESG l Reinhart Boerner Van Deuren s.c.
  • On December 29, 2016, the U.S. Department of Labor (“DOL”) issued new guidance for ERISA plans regarding proxy voting, statements of investment policy (including proxy voting policies) and other shareholder rights. The new guidance, Interpretive Bulletin (“IB”) 2016‑1, withdraws previous guidance which had been interpreted to restrict ERISA plans in voting proxies and exercising shareholder rights unless a cost‑benefit analysis had been conducted. The new guidance also confirms that material environmental, governance and social factors are permissible considerations when developing statements of investment policy. Trustees of ERISA plans may wish to review their proxy voting policies, statements of investment policy and investment manager contracts to ensure they reflect the new guidance.
Legal Guidance and Sustainability: Hiding Places and Conflated Concepts, Four Things We Can Do l LinkedIn
  • People often talk about barriers to ESG integration. Hiding places might be a better metaphor. If you ask an investment fiduciary to do something new, some (though not all) will seek out a number of things to hide behind as to why they can’t. The most popular hiding places have tended to be: fiduciary duties, investment consultants and lawyers. PRI is interested in eliminating hiding places. Through their work on fiduciary duty, building on the work of countless initiatives on that subject, we’ve reduced the size and effectiveness of that hiding place. This article discusses evidence that investment consultants are increasingly advising clients on ESG risks and analysis, though of course, laggard practices remain common.
  • This week Trillium Asset Management and more than 100 sustainable investors and businesses signed a letter urging the Administration and Congress to continue support for the Consumer Financial Protection Bureau (CFPB). Jointly organized by the Interfaith Center on Corporate Responsibility and the American Sustainable Business Council, the letter defends the CFPB, which has provided strong regulatory oversight of the financial sector to protect the interests of consumers, communities, and businesses since 2010. Members of Congress have begun to re-write CFPB regulations, which have the power to limit funding in the future and remove the director.
Climate Risk, Science & Regulation
 
Sweden Pledges to Cut All Greenhouse Gas Emissions by 2045 l The Independent
  • Sweden has committed to completely phase out greenhouse gas emissions by 2045 and called for all countries - including the US - to “step up and fulfill the Paris Agreement." In one of the most ambitious emissions plans published by a developed nation, the Swedish government has reaffirmed the urgency of tackling climate change, ignoring uncertainties about global policies under Donald Trump’s administration.
A Conservative Answer to Climate Change l The Wall Street Journal
  • This proposal, co-authored by conservative thinkers Martin Feldstein, Henry Paulson Jr., Gregory Mankiw, Ted Halstead, Tom Stephenson and Rob Walton, outlines a climate solution based on a sound economic analysis that embodies the conservative principles of free markets and limited government. It consists of four pillars: (1) a carbon tax to reduce emissions, (2) A “carbon dividend” payment, distributed to the American people on a quarterly basis, (3) a border adjustment for carbon content offering rebates for American companies exporting products and fees for carbon content of imported goods from other countries, and (4) the eventual elimination of regulations no longer necessary after the enactment of a carbon tax.
  • From stranded assets to increasing credit risks to missed opportunities in renewables, climate change could have a profound impact on banks. But, according to a recent report by Boston Common Asset Management, many banks are falling behind when it comes to assessing climate risk and only a few banks are performing environmental "stress tests." The report shows, however, that banks have improved in adopting climate strategies, and 23 out of the 28 banks surveyed implemented substantive policy changes related to climate-risk since 2015. In addition, over 80 percent of the banks have adopted more explicit oversight of climate risk at the board level.

Intentionally Designed Endowment Forum at Loyola University Chicago l IEN Blog

  • On November 1-2, 2016, a dynamic group of endowment leaders convened at Loyola University Chicago to connect with their peers and learn from investment experts about the fast-evolving field of sustainable investing -- covering a broad range of concepts and strategies including ESG integration, impact investing, mission-aligned investing, shareholder engagement and more. Participants heard from a variety of high-level speakers, including Former Treasury Secretary Hank Paulson, as well as David Blood of Generation Management, Jeremy Coller of Coller Capital and the Farm Animal Investment Risk & Return (FAIRR) initiative, and more. Visit the Forum page for more details on the event including links to presentations and videos of speaker sessions. 

Clean Energy 

Green Gigawatt Partnership: How to Apply for AASHE's On-Campus Solar Project Support | AASHE

  • AASHE is offering cost-free support for up to five campuses to develop and implement on-campus (or near campus) solar projects. Support will include site screening, stakeholder education, RFP development and support, and contract negotiation support. One page applications are due March 17th. More information is available in the recording of their recent webinar

General Endowment News
 
NEPC Survey: Endowment and Foundation Confidence near All Time Highs l Yahoo Finance
  • NEPC, LLC, one of the industry’s largest independent, full-service investment consulting firms to endowments and foundations, today made public the results of its Q4 2016 NEPC Endowment and Foundation Poll, a measure of endowment and foundation views on the economy, investing, and key market trends. The results show a significant increase in investor confidence, with 64% of respondents saying the US economy is in a better place now than at this time last year. This was a dramatic change from last quarter, when 25% indicated the same sentiment, and it was the second highest confidence reading since NEPC launched this survey in 2013. Only 7% of respondents this quarter feel the US economy is in a worse place now than one year ago.
Endowment Sweepstakes: How Tiny Houghton College Beat Harvard l The New York Times
  • The hotly competitive returns of college endowment performance are out, and the results have again shaken the higher education elite down to their Ivy League roots: The smallest endowments — those with total assets under $25 million — outperformed their billion-dollar-plus rivals for the second year.
Fossil Fuel and Private Prison Divestment
 
Cambridge University Clashes With Own Academics Over Climate Change l Financial Times
  • The University of Cambridge has become embroiled in an internal battle after executives at the UK’s richest educational institution clashed with academics over proposals to divest from fossil fuels.Last month the university’s governing body, which is made up of senior academic and administrative staff from its 31 colleges, passed a motion to divest Cambridge’s £5.8bn endowment from fossil fuels. In an unprecedented break from university tradition, Cambridge’s council, its executive arm that sets policy, has said it will not follow through with the governing body’s calls for divestment within the next 12 months.
Grinnell College Students Hold Sit-in to Demand Divestment in Fossil Fuels l The Des Moines Register
  • Nearly 10 percent of the Grinnell College student body occupied the Nollen House and the office of President Raynard Kington during a sit-in last week, working to convince him to endorse divesting the portion of Grinnell College's endowment in fossil fuels. "Our President has a choice to stand with the Trump administration or he can stand with students and Iowa community members. Climate change is real, and it's a crisis," one student said.
University of California-Wide Protest Urges UC Divestment from Fossil Fuels l The Bottom Line
  • The UC-wide protest, held last week across all nine UC campuses, was sparked by President Donald Trump’s approval of the Dakota Access Pipeline construction, reversing the decision made in the last month of President Obama’s term. Students gathered on to express outrage against the order and urge the UC regents to take a stand by divesting the remaining $1.7 billion invested in fossil fuels by the UC system. The total $1.7 billion supports both the Dakota Access Pipeline and fracking across the state.
  • In this guest column, Matthew Countryman, a Yale alumnus ('86), discusses the movement in the 70s and 80s to divest from South Africa and how that movement and its results compare to the fossil fuel divestment movement and the political climate today.
Potential Referendum Urges University of South Florida Foundation to Divest l The Oracle
  • A controversial petition that urges the USF Foundation to divest from "companies complicit in human rights violations," among other issues, is being pushed for placement as a referendum on the Student Government (SG) election ballot next month. The petition, titled "USF Divest From Fossil Fuels, Private Prison and Companies Complicit in Human Rights Violations," also calls for the Foundation to divest from companies that have a direct connection with contributing to the use of fossil fuels, funding private prisons and investing "in human rights violations in Palestine and Yemen."
Tulane University Student Government Passes Legislation Encouraging Tulane to Divest From Fossil Fuels l Tuland Hullabaloo
  • This week, Tulane's Undergraduate Student Government passed legislation that calls on the University to divest funds from fossil fuel companies. The debate around this resolution lasted around 40 minutes and led to a 27-6-1 vote in favor. A significant part of this resolution was based on a referendum in Spring 2016 of around 2,100 students which led to a 54 percent to 28 percent result in support of divestment. 
Oregon State University Nudges Toward Divestment of Some of its Fossil Fuel Holdings l Portland Tribune
  • Oregon State University affiliates have taken two steps to advance the divestment movement targeting fossil fuel companies. The OSU Board of Trustees voted 11-0 in late January to approve an amendment to the state Public University Fund Investment Policy that calls on the fund to divest its current intermediate and long-term assets in fossil fuel-related stocks, and to restrict future investment in those assets. In a separate action, the OSU Foundation recently agreed to establish a second portfolio for donors that will be free of fossil fuel holdings. The foundation decided it was best to give donors the choice of where their money goes, said OSU President Ed Ray.
Ithaca College Refrains From Fossil Fuel Divestment l The Ithacan
  • Ithaca College  currently has about 2.1 percent of its $270 million endowment invested in fossil fuels, said Janet Williams, interim vice president for administration and finance. Williams said the college does not want to divest from fossil fuels because it would require changing the college’s investment policies and portfolio. She said the current portfolio and policies allow for the college to participate in sustainable practices like the solar array, which went live in November, LEED Certified buildings and environmental research.
The University of Maryland Should Divest From the Prison-Industrial Complex (Opinion) l The Diamond Back
  • This opinion piece outlines The University of Marylands involvement with Maryland Correctional Enterprises, the history behind the issue, and the movement to divest from all involvement.

Investment Manager & Strategies News

Deutsche AM Launches Fixed Income ESG ETF l Investment Week

  • Deutsche Asset Management is launching a fixed income ETF focusing on investing in ESG corporate bonds. To be included, index bonds have to be investment-grade rated and be at least €300m in size as well as meeting the ETF's SRI requirements.

MSCI Launches ESG Universal Equity Indexes for Long-Term Global Investors l Business Wire
  • MSCI Inc., a leading provider of research-based indexes and analytics and the world’s largest provider of environmental, social and governance (ESG) indexes2, announced today the launch of new MSCI ESG Universal Indexes and the renaming of two MSCI ESG Index families. The MSCI ESG Universal Indexes are designed to enable pension funds, endowments and other asset owners to better focus on ESG issues in their investment decision-making processes.

 

 

 

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Weekly News Round-Up: February 3rd, 2017

New Initiatives / Action Opportunities 
 
Framework for U.S. Stewardship and Governance | Investor Stewardship Group (ISG)
  • The corporate governance Framework articulates six principles that the ISG believes are fundamental to good corporate governance at U.S. listed companies. They reflect the common corporate governance beliefs that are embedded in each member’s proxy voting and engagement guidelines, and are designed to establish a foundational set of investor expectations about corporate governance practices in U.S. publicly-listed companies. The Framework goes into effect January 1, 2018 to give U.S. companies time to adjust to these standards in advance of the 2018 proxy season. ISG encourages other investors to sign up and support the framework. 
  • Nearly 20 leading global banks and investors, totaling $6.6 trillion in assets, launched today the Principles for Positive Impact Finance - a first of its kind set of criteria for investments to be considered sustainable.The Principles are part of a broader process under the Positive Impact Manifesto, launched in 2015 to call for a new, impact-based financing paradigm to bridge the gap in financing for sustainable development.
Month of Action #DAPL | First Peoples Worldwide
  • First Peoples Worldwide has issued a call to action for investors to engage in shareholder advocacy with the companies and banks involved with the Dakota Access Pipeline (DAPL). Proxy season is from March to July. If you are an asset owner or asset manager interested in joining the Investors and Indigenous Peoples Working Group contact SHeim@BostonCommonAsset.com 

 

New Reports
 
  • The 2016 NCSE results are based on 805 U.S. college and university endowments and affiliated foundations, representing $515 billion in endowment assets. Of the participants, 17% said they seek to include in their portfolios investments ranking high on ESG criteria, a 2% increase year over year. 27% said they exclude or screen out investments that are inconsistent with the institution’s mission, also up 2% from the previous Study, while 17% said that they allocate a portion of the endowment to investments that further the institution’s mission compared with 16% that did so last year. 8% said they were considering changing their investment policy to include integration of ESG practices in their investment process, up from 7%, while 69% said they were not doing so, compared with last year’s 70%. 
  • This new document from Ceres aims to increase understanding, transparency, and accountability regarding responsible palm oil production by providing a shared set of reporting guidance for companies across the supply chain. Its primary purpose is to inform the content of public corporate communications and transparency on responsible production and sourcing activities including and beyond certification.
The State of Green Business 2017 l Green Biz
  • This report, published by GreenBiz Group in partnership with Trucost, provides a global view on sustainable business, from basic emissions to leadership attributes, such as how many stock exchanges around the world require listed companies to disclose environmental data, or the amount of money being divested from fossil fuel company stocks.
Scaling Up Green Bond Markets for Sustainable Development l Climate Bonds Initiative
  • Scaling up Green Bond Markets for Sustainable Development offers detailed action plans and best-practice examples on how to scale green bond markets. This Public Sector Guide is the result of a partnership between the Climate Bonds Initiative and the UNEP Inquiry into the Design of a Sustainable Financial System. The Guide includes an annex from the World Bank Group as an additional resource for policymakers in emerging economies to assist them in foundational bond market development.
 
Upcoming Events

2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ

  • IEN members will be delivering a plenary panel on factoring climate and sustainability considerations into the endowment investment process; and IEN will be hosting a half-day workshop on endowment investing. 

Webinar: ICCR's 2017 Proxy Season Overview l Interfaith Center on Corporate Responsibility, February 13, 2017 11:30 AM ET

  • Join ICCR as they discuss which issues ICCR members are focused on this proxy season, and to feature new and interesting resolutions/campaigns being launched this year. Featured speakers include Tim Smith, Walden Asset Management; Austin Wilson, As You Sow; Mary Minette, Mercy Investment Services; and Cathy Rowan, Trinity Health.

Trillion Dollar Transformation Outreach Event l Trillion Dollar Transformation, February 23, 2017, New York City, NY
  • During this event Trillion Dollar Transformation will outline the results of their reports and offer useful advice and tips to take back to the boardroom. Trustees of public pension plans though staff and advisors may find the information relevant. The event is free to attend.

Webinar: Proxy Voting and Shareholder Engagement for Endowments l Intentional Endowments Network, February 27, 2017, 12:30 - 1:30 PM ET

  • The webinar will provide an overview of the value of proxy voting and additional forms of engagement for endowments that are involved in commingled funds through an outsourced CIO – including the current landscape, trends, specific issues, and why it is important for investors. Guidelines and opportunities of how to take action will also be provided.

Visit the website for more upcoming events

 

 Socially Responsible / ESG Investing

Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how investors may start asking retailers and restaurants for more transparency on their treatment of cows, pigs and chickens; banks and investors target sustainable development financing; Grantham, Mayo, Van Otterloo & Co. has plans for a new climate change fund; asset managers and owners team up on governance principles; and a Q&A with Green Century Capital Management's Leslie Samuelrich reveals that she prefers divestment to engagement with fossil fuel companies.
$17trn Group of US and Global Institutional Investors Launch US Stewardship Code l Responsible Investor
  • Some of the world’s leading institutional investors have got together to set up a multi-point US stewardship code. Under the banner of the Investor Stewardship Group they have unveiled the ‘Framework for U.S. Stewardship and Governance’ after a two-year effort. The group is calling on “every institutional investor and asset management firm” investing in the the country to sign up to the framework. They are calling it a “historic, sustained initiative” to establish a framework of basic standards of investment stewardship and corporate governance for institutional investor and boardroom conduct. The framework features six fundamental principles for both investors and companies and is the latest ‘stewardship code’ since the first in the UK back in 2010.
  • Investors - from individuals to institutional giants – are seeing the social and financial value of aligning purpose with profit and it’s increasingly important for your brand to define, measure and share your purpose driven-mission for the benefit of humanity and your bottom-line. This article lists five steps you can use to leverage your purpose to make your company more attractive to investors and improve financial performance.
American Investment Titans Push Back Against Trump on Green Issues l NIKKEI Asian Review
  • Institutional investors are voicing concern about the impact of U.S. President Donald Trump's administration on the environment and climate change. Participants at the December conference of the International Corporate Governance Network -- whose members comprise mainly large American and European institutional investors -- expressed interest in corporate ESG efforts and information disclosure. Their discussions generally suggested strong concern about the Trump administration.
ESG: UN Goals Strike a Chord l Investments & Pensions Europe
  • The UN Sustainable Development Goals, agreed by world leaders in September 2015, have captured the imagination of many in the European institutional investment community. In this article, Susanna Rust asks why.
  • ESG issues are no longer just about excluding so-called sin stocks or applying value judgements-- they can be a source of added value, says Minsters and Missionaries Benefit Board's Matthew Sherwood in this Q&A. 

 

Impact Investing
 
More Evidence Of Impact Investing Growth--And What It Means For Social Entrepreneurs l Forbes
  • Sustainable, responsible and impact (SRI) investing is expanding, offering new opportunities for social enterprises, especially those registered as Benefit Corporations. Those are some of the implications of a recent study conducted by the Forum for Sustainable and Responsible Investment (US SIF) Foundation ‘s report, US Sustainable, Responsible and Impact Investing Trends 2016, according to Meg Voorhes, director of research. Specifically, the biennial report found that SRI assets have expanded to $8.72 trillion in the U.S., a 33% increase from 2014. That’s a significant portion of total assets under management.

 

Green Bonds
 
Green Bonds Highlights 2016 l Climate Bonds Initiative 
  • June this year will mark a decade since the very first green bond was issued by the European Investment Bank (EIB). 2016 has shown how far the market has developed, with annual issuance aligned with international definitions reaching a record USD81bn, equivalent to approximately USD9.2m raised every hour!

 

General Endowment News
 
  • College and university endowments’ net returns declined for the second straight year in 2016, dropping into negative territory and posting their worst results since the depths of the financial crisis. Endowments returned an average of -1.9 percent in the 2016 fiscal year that ended in June, net of fees, according to an annual survey released Tuesday by the National Association of College and University Business officers and the nonprofit asset management firm Commonfund. That’s significantly below last year’s return of 2.4 percent and follows a decade of volatile ups and downs.
College Endowment Returns Sink to Their Lowest Level Since The Financial Crisis l The Washington Post
  • University endowments posted the lowest investment returns since the 2008 financial crisis, yet schools upped their spending in fiscal 2016, according to a survey released Tuesday by CommonFund and the National Association of College and University Business Officers. Endowments have been on shaky ground coming out of the recession. Average annual returns have volleyed since plummeting 18.7 percent in 2009. In the 12 months ending June 30, endowments at 805 colleges and universities recorded a negative 1.9 percent return, compared to 2.4 percent growth the prior fiscal year, according to the survey.
Endowment Gains Aren’t Enough for Schools Facing Rising Expenses l Bloomberg
  • School endowments contribute annually to student aid, faculty salaries and other costs in their operating budgets. Spending, which is often determined by three- or five-year averages of investment returns, is coming under increasing pressure as endowments struggle to keep up with historical results. Boards of trustees and investment committees are re-calibrating expectations for performance, said Paul Dimitruk, chairman of Partners Capital, which handles investments for clients including endowments and foundations.

 

Climate Science, Risk & Regulation
 
  • ExxonMobil has appointed a leading atmospheric scientist to its board as it bolsters its response to concerns about climate change. Susan Avery, a former director of the Woods Hole Oceanographic Institution in Massachusetts, was elected a director with effect from February 1. Ms. Avery is a respected scientist who has specialized in atmospheric dynamics and variability, and has worked extensively on climate change. 
Investor Groups React to US Plans to Become ‘World’s Largest Energy Producer’ (Subscription) l Responsible Investor
  • US investor groups have called on President Donald Trump to ensure a swift transition to a low-carbon economy, as Trump advisor Myron Ebell says the US will clearly change its course on climate policy, withdraw from the Paris Agreement and remain a fossil fuel-based economy.
Scientists Grade Climate Risk For Investors l pys.org
  • A new report by CICERO Climate Finance identifies the biggest risks of climate change for investors. The report finds that some impacts are already happening earlier than anticipated and new ones are expected in the time horizon used by investors. The report shades climate risks red, orange or yellow, reflecting whether impacts are observed and likely to increase (red), are expected in the next decade (orange), or by mid-century (yellow).

  • Surrounded by students, Colorado State University President Tony Frank signed a pledge Jan. 25 to commit the university to being powered by 100 percent renewable electricity by 2030. More than 4,300 students, faculty and staff had signed a petition encouraging the university to consider the pledge. Faculty, staff and students from The President’s Sustainability Committee, Live Green Teams, and the Green Guard also endorsed the pledge.
SparkFund Raises $7 Million to Transform Access to Energy Technology l Yahoo Finance
  • SparkFund, a Washington D.C.-based financial technology company, announced today the close of a $7 million Series B investment led by Energy Impact Partners. Round participants include existing investor Vision Ridge Partners and new strategic partners in the energy and utility space, with a total expected raise of $10 million. The new funding will allow SparkFund to rapidly grow partnerships and customer reach, giving organizations across the U.S. a simpler way to access new energy technology. Customers understand that they can save money with energy-efficient equipment upgrades, such as LED lighting or smart HVAC technology, but widespread adoption in the commercial sector has been slow.

 

Fossil Fuel Divestment

Interview with Don Gould, Trustee at Pitzer College, About Their Decision to Divest From Fossil Fuels l Toward Ecological Civilization

  • Don Gould is the president and chief investment officer of Gould Asset Management. He is also a trustee of Pitzer College, one of the five prestigious Claremont Colleges. Working together with other trustees, Mr. Gould played an important role in the recent board decision to divest Pitzer’s portfolio of fossil fuel stocks. In this interview, Mr. Gould describes the board and community process that led to the divestment decision, and the deeper values that motivated him to play a leadership role in this process.
‘Divestment is Our Goal’: Seattle City Council to Vote on Pulling $3 Billion From Wells Fargo over Dakota Access Pipeline l Seattle Times
  • Hundreds of anti-pipeline demonstrators gathered Wednesday morning in downtown Seattle to encourage City Council members to pull $3 billion from Wells Fargo Bank because of its role as a Dakota Access Pipeline lender. The committee voted unanimously to forward the bill to the full City Council on Monday. In addition to terminating the city’s contract with Wells Fargo, the bill would also require that social-justice principles be considered when awarding all city contracts, including construction projects.
As Wells Fargo Divestment Approaches, Where Should Seattle Put Its $3 Billion? l Seattle Weekly
  • “We’re all here today to make sure we divest from Wells Fargo,” said Councilmember Debra Juarez, of the Affordable Housing, Neighborhoods & Finance Committee. The question on councilmembers’ minds wasn’t whether or not to divest from Wells Fargo—which the committee voted unanimously to do. “The challenge,” a councilmember said, “is to find alternatives.” A full Council vote will take place next Monday, but if Wednesday’s committee discussion was any indication, Seattle will likely become the first city in the country to move all of its money from a financial institution in part for its ties with the Dakota Access Pipeline.
  • The Navajo Nation is making moves to join a growing number of tribes that have already respectfully, but conclusively, shown Wells Fargo the door.
Irish Parliament Passes Historic Fossil Fuel Divestment Bill l Good News Network
  • Last week, Irish Parliament passed a historic bill that would lead Ireland to becoming the first country in the world to divest its sovereign wealth from coal, oil, and gas. The Fossil Fuel Divestment Bill will divest over $8.5 billion from the Ireland Strategic Investment Fund. The legislation passed in a 90 to 53 majority vote will be reviewed by the financial committee before becoming law.
  • According to a report assembled by UW System Student Representatives, as of December 2016, 641 institutions across the nation have made a commitment to divest from fossil fuel companies, equaling an approximate value of $3.4 trillion. In the spring of 2016, a motion was introduced to the UW System Student Representatives calling for their support in total financial divestment from fossil fuel companies. The UW System Student Representatives passed the resolution, which was sent to all UW foundations and chancellors, demonstrating student backing in complete divestment from the top 200 fossil fuel companies by all UW System foundations by 2022. Students are currently waiting for a response from the foundations.
Student Petition Calls for Washington University Divestment From Fossil Fuels l studentlife.com
  • Fossil Free WashU (FFWU), the Washington University chapter of a national Fossil Free movement, is calling for the University to divest from fossil fuels through an online petition launched last week that has garnered over 300 signatures. The group demands that Chancellor Mark Wrighton and the Board of Trustees immediately divest the University’s endowment from the 200 “dirtiest” fossil fuel companies headquartered in St. Louis. In addition, FFWU is calling for all endowment investments and proxy voting to be made completely transparent.
Appalachian State University Students Walk Out To Campaign For Fossil Fuel Divestment l The Appalachian
  • Students at ASU gathered last week as part of a national day of action to petition ASU to reinvest its fossil fuel assets into more socially responsible alternatives.
Swarthmore College Students and Professors Walkout, Teach-In for Divestment l The Daily Gazette
  • Last week students At Swarthmore College walked out of classes and gathered to send a message protesting the dangers of climate change denial. Around the nation, similar movements have been occurring in a myriad of academic institutions. This was the Walk out and Teach-in, organized by Mountain Justice, a group advocating divestment from fossil fuel industries to aid in the fight against climate change. Spurred by the recent political situation in our nation’s highest offices, the group endeavored to inform the attendants about the effects of climate change and emphasized the urgency they feel due to the recently appointed administration surrounding the new president, Trump.
University of Montana Students Agitate Against Climate Deniers in Trump Administration, Advocate for Divestment l The Missoulian
  • Last week roughly 100 students and a least a couple faculty members at the University of Montana demonstrated against the climate skepticism in Trump's administration by walking out of class and standing together. Reinvest Montana organized the event, part of a national walkout, as part of its campaign to urge the UM Foundation to divest of fossil fuels.
University of Denver Rejects Divestment as “Unrealistic” l Inside Sources
  • Last Tuesday, the University of Denver’s board of trustees announced its decision not to divest. The board agreed with students’ concerns about climate climate and the need to develop alternative sources of energy. Instead of divestment, though, the university opted to establish a new “green fund” to investigate new sustainability efforts and will offer donors alternative investment options if they are morally opposed to making an endowment donation that might be invested in fossil fuels.

 

Investment Manager and Product News

UBS Launches Sustainable Corporate Bond ETF l FT Adviser

  • UBS Asset Management has launched an exchange-traded fund (ETF) providing access to eurozone corporate bonds that have been screened for sustainability. The UBS ETF Barclays MSCI Euro Area Liquid Corporates Sustainable product seeks issuers with an MSCI ESG rating of BBB or higher from its index. Securities issued by corporations whose business activities are "inconsistent" with socially responsible investing (SRI) criteria are excluded. This includes alcohol, tobacco, gambling, civilian firearms and military weapons.
Northern Trust unveils industry-first sustainable real estate index | ETF Strategy
  • Northern Trust Asset Management has launched the Northern Trust GRESB Developed Real Estate ESG Index, a unique sustainable real estate index tracking the performance of developed market real estate investment trusts (REITs) with strong responsible investment characteristics. It may serve as the basis for future investment products including exchange-traded funds. The index was created in collaboration with GRESB, an investor-driven organization committed to assessing the ESG performance of real assets globally, and representing over $3tn in assets under management.

 

 

 

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Weekly News Round-Up: January 27th, 2017

New IEN Members
 
New Reports
 
  • Just published by the Journal of Sustainable Finance & Investment and available on Granito's website, the study relied on the Dow Jones Sustainability index to identify 157 companies that have good ESG performance. To contrast, and in order to bring statistical significance to the results, it randomly selected a greater number of companies — 809 — that are not listed on the DJSI. As the materiality of the ESG factors is highly related to the industry in which the firm operates, the study grouped equity stocks into 12 industries.  In all 12 industries studied, the group of ESG companies listed in the DJSI, shows lower stock return volatility in comparison to the reference companies — on average by 28.67 percentage points less.
Better Business, Better World l Business and Sustainable Development Coalition
  • Over the past 30 years, the world has seen huge social improvements and technological progress. We have experienced unprecedented economic growth and lifted hundreds of millions of people out of poverty. We’re benefiting from a life-changing digital revolution that could help solve our most pressing social and environmental challenges. Yet despite these successes, our current model of development is deeply flawed. This report offers a positive alternative: setting business strategy and transforming markets in line with the UN Sustainable Development Goals.
Climate Investing in 2017 l Cornerstone Capital Group
  • The imperative for an effective response to climate change only grows following the hottest year on record. This commentary discusses the risks climate investing faces in 2017, particularly from the incoming US administration, and looks to nuanced opportunities that exist for positive environmental and social impact coupled with attractive potential returns. 
 
 
Sustainable / ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how State Street Global Advisors, which oversees $2.47 trillion, is pressing companies to disclose much more about how they are preparing for the impact of climate change on their businesses, as well as Pimco betting it can turn the bond market onto sustainable investing; Sarona Asset Management raising a new fund-of-funds to invest in ESG vehicles; annual isurance of green bonds reaching a record $95.1 billion; and the opportunity that is arising from growing consumer demand for plant-based protein.
  • In this Q&A, Erika Karp discusses what it takes, besides imagination,  to operationalize a regenerative and inclusive form of capitalism.
The DOL Shuffled (Again) But It Was Good For ESG Investors l Seeking Alpha
  • The Department of Labor issued an Interpretive Bulletin that reversed an Interpretive Bulletin from 2008 and it is good for some ESG investors. In 2017, we will see more shareholder activism related to issues such as the appropriateness of executive compensation, corporate governance reforms, and climate change. Fiduciaries may now consider voting on proxies introduced by activist shareholders or initiated by themselves, many of which will connect to environmental, social, and governance issues. Broadly, the Bulletin makes way for shareholder engagement on “non-financial measures of corporate performance.”
PIMCO, Lombard Odier, Northern Trust Unveil ESG, Climate Change Funds l Pensions & Investments Europe
  • A flurry of ESG fund announcements from major asset managers last week underscores the mainstreaming of responsible investment, including through its integration in asset classes beyond equities. US fixed-income investment manager PIMCO announced that it had launched an environmental, social, and governance (ESG) investment platform that aimed to offer “a range of fixed income solutions to investors seeking attractive returns while making a positive social impact”.
  • In this article, an Inside ETFs panel discusses whether ESG is out of step with government. 

Archdiocese of Toronto Among Growing Number Making Move to Ethical Investing l The Catholic Register

  • Beginning in 2015, the Archdiocese of Toronto instructed its investment managers to consider environmental, social and governance factors (ESG) before making investment decisions with its master trust fund worth $528 million. Canada’s largest and richest archdiocese has also joined the Shareholder Association for Research and Education — SHARE. The organization consists of more than 30 institutional investors across Canada with combined assets under management of more than $14 billion, including the United Church of Canada and Canadian Labour Congress.
Seattle City Employees Puts BlackRock on Watch Over ESG Concerns l Pensions & Investments
  • Seattle City Employees' Retirement System placed BlackRock (BLK), which runs a $339 million passive international equity portfolio for the pension fund, on watch, said Jason Malinowski, chief investment officer, in an email. The $2.3 billion pension fund put BlackRock on watch at its Dec. 8 board meeting due to concerns about what they term as BlackRock's “reticence to oppose management, limited focus on environmental and social issues, inconsistency between their proxy voting record with their policies and public pronouncements and limited transparency on investment stewardship activities.”

 

  • In the past two years BlackRock, the world’s biggest asset manager, launched a new division called “Impact”; Goldman Sachs, an investment bank, acquired an impact-investment firm, Imprint Capital; and two American private-equity firms, Bain Capital and TPG, launched impact funds. The main driver of all this activity is investor demand. Deborah Winshel, boss of BlackRock Impact, points to the transfer of wealth to women and the young, whose investment goals, she says, transcend mere financial returns. Among institutions, sources of demand have moved beyond charitable foundations to hard-bitten pension funds and insurers.
Amplifying Impact with Mission Investments l Stanford Social Innovation Review
  • Mission investments are a proven tool that enables us to seize time-sensitive opportunities and grow promising innovations in ways we could not with grants alone. These investments help attract new sources of private capital to the issues we care about and recycle resources to make more dollars available over the long-term.This article focuses on the Packard Foundation and their three new approaches to make an impact on climate change over the next 5-10 years.
 
Green Bonds
 
Global Green Bond Issuance Could Rise to $206 Billion in 2017 After Record in 2016 l Economic Times
  • Moody's Investors Service said that global green bond issuance will reach another record in 2017, and could even rise to $206 billion, following an increase of 120% to $93.4 billion in 2016, reflecting strong China-based issuances and momentum from the Paris Climate agreement.

 

Shareholder Engagement
 
Is Your Mutual Fund Company Taking Climate Change Seriously? l Ceres
  • This article examines how the nation’s largest mutual fund companies voted on climate-related shareholder resolutions in 2015 and 2016. After reviewing results, it goes on to offer possible explanations for the way in which funds voted.

 

Climate Risk, Science & Regulation
Will We Ever Stop Using Fossil Fuels? l MIT News
  • In recent years, proponents of clean energy have taken heart in the falling prices of solar and wind power, hoping they will drive an energy revolution. But a new study co-authored by an MIT professor suggests otherwise: Technology-driven cost reductions in fossil fuels will lead us to continue using all the oil, gas, and coal we can, unless governments pass new taxes on carbon emissions. “If we don’t adopt new policies, we’re not going to be leaving fossil fuels in the ground,” says Christopher Knittel, an energy economist at the MIT Sloan School of Management. “We need both a policy like a carbon tax and to put more R&D money into renewables.”
Business Leadership on Climate Seen as Key l Yale Climate Connections
  • It’s challenging to predict how corporate interests might address climate change under a new Trump administration, and it’s important to acknowledge the broad diversity of those interests. However, there are signs that key segments of the businesses community may continue down the path toward reducing carbon emissions, notwithstanding strong winds in the opposite direction from the Trump administration.

 

Clean Energy
 
Theresa May Seeks Clean Energy to Buoy Vision of Global Britain l Bloomberg New Energy Finance
  • U.K. Prime Minister Theresa May plans to try to turn the nation’s early adoption of clean energy into a global business after Brexit, according to a new industrial-strategy paper. May has said she wants a “global Britain” to bolster the U.K.’s ties to other countries as the nation secedes from the European Union. The U.K. is a world leader in wind energy with more offshore wind power installed than any other country. That industry drew a record $29.9 billion of investment last year, up 40 percent from 2015.

 

General Endowment News
 
Harvard Endowment to Lay Off Half Its Staff l The Wall Street Journal
  • Harvard University’s endowment fund, which is the largest in the world, is planning to lay off half of its staff and ask outside funds to run its investments. This article explores why Harvard and many of its endowment peers are making similar moves.

 

Fossil Fuel Divestment
 
Oregon State University Board Votes to Divest l Corvallis Gazette-Times
  • Responding to calls from students and faculty concerned about global warming, the Oregon State University Board of Trustees voted last week to dump the university’s investments in the fossil fuel industry. Specifically, the board amended the investment policy for the Public University Fund, which manages investment assets for six of Oregon’s seven public universities (the University of Oregon is not a participant). Under an agreement with the other member universities, OSU has authority to set investment policy for the group.
Divest Appalachian Group Requests App State University Divest Fossil Fuels Investments l HCPress.com
  • This week, Divest Appalachian, a student organization, held a march and rally on Appalachian State University to request that the institution divest its fossil fuels investments in its Board of Trustees’ Endowment and Appalachian State University Foundation portfolios. About 50 people, primarily students, gathered on Sanford Mall and marched throughout the campus before ending the peaceful protest by delivering its request in a letter to administrators.
  • As President Trump's Cabinet nominees work their way through the confirmation process, local college students walked out of classes on Monday to protest their positions on key issues including climate change. Students at Boston University, Harvard, Northeastern, took part in walkouts and other actions as part of the nationwide divestment day of action.
Denver University Won’t Divest From Oil and Gas, But Board Approves New Green Initiatives l The Denver Post
  • University of Denver trustees have rejected a student-led request to pull investments from oil, natural gas and coal companies from the private school’s $620 million endowment.Instead, the board and administration approved new initiatives to strengthen sustainability efforts at DU, including the creation of a $5 million “green fund” that will pay for solar panels, composting and other projects. Trustees also will begin requiring frequent reports regarding the university’s efforts to combat global warming, ranging from the food ordered by the dining hall to faculty research on alternatives to fossil fuel.

 

Investment Manager & Strategy News
 
Northern Trust Asset Management Launches Unique Sustainable Real Estate Index and Fund in Conjunction with GRESB l Business Wire
  • Northern Trust Asset Management, collaborating with GRESB, the global sustainability benchmark for real assets, has launched a unique sustainable real estate index. A Dutch-domiciled pooled fund passively managed to this new index has also been launched.The industry-first index is exclusively available to investors using Northern Trust Asset Management vehicles and has been developed in response to demand for a passive approach to real estate investing incorporating environment, social and governance (ESG) factors.

 

 

 

 

 

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Weekly News Round-Up: January 20th, 2017

Upcoming Events
 
Webinar: 2017 ESG Trends To Watch l MSCI, January 24, 2017, 11:00 AM EST
  • This year may usher in a fundamental rethink for investors. Underlying all the major trends we identified for 2017 is a strategic decision point – do we change the way we think about investing, or is this business as usual in a new order? Join the authors of the 2017 ESG Trends to Watch Report, including MSCI’s Global Head of ESG Research Linda-Eling Lee, for an overview of the biggest ESG forces affecting institutional investors over the long haul.
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN members will be delivering a plenary panel on factoring climate and sustainability considerations into the endowment investment process; and IEN will be hosting a half-day workshop on endowment investing. 

 

Sustainable / ESG Investing
 
Bloomberg Brief l Sustainable Investing
  • This week's Bloomberg Brief highlights how impact investors are looking to put capital to work to address global wealth gaps; how low-carbon active managers have been outperforming; a Q&A with DBL Partners founder Nancy Pfund on the business push for low-carbon energy policy; and a look at how Ford Motor Co. is looking to hire more workers with autism as companies seek to broaden their diversity push.
World's Largest Fund Manager Demands Cuts to Executive Pay and Bonuses l The Guardian
  • BlackRock is demanding cuts to director pension entitlements and an end to huge pay rises as UK companies prepare to put their latest pay deals to shareholders. In a letter to the bosses of more than 300 UK companies, the US fund manager said it would only approve salary rises for top executives if firms increase workers’ wages by a similar amount.
On Borrowed Time: New Report Finds Banks Making Slow Progress in Fast Changing Climate l Boston Common Asset Management
  • A new report examining 28 of the world’s largest banks on their management of climate-related risks concludes they are failing to align their business practices with targets to keep global temperature rises below two degrees. The investor assessment comes despite praising banks for introducing measures such as climate stress testing, carbon footprinting and governance for climate risk.
Sustainable Investing: Not Just About Returns l Investor Daily
  • As ESG issues take center stage in 2017, investors should be looking at whether including ESG criteria improves measures other than profitability, writes Investec Asset Management’s Justin Simler. 
Why Smart Investors are Targeting the Companies Solving the World’s Sustainability Problems l Eco-Business
  • Investors today are thinking green and channelling their funds towards sustainable investments. In this article WRI's David Richardson explains why top investors are interested in companies that deal with sustainability.
Color it Greenery: As Government Steps Back, Sustainable Investors Step Up l ImpactAlpha
  • Sustainability and climate change will not be high on the Trump administration’s priority list. For business, investors, tech innovators, and entrepreneurs, this a call to action. If sustainability is to keep moving forward, it’s up to the private sector now. In the pro-business environment ahead, the greatest opportunities await mission-driven, impact-focused companies and investors.

 

Impact Investing
 
  • Swiss banking giant UBS has committed to investing at least $5bn of private client assets to Sustainable Development Goal-related impact investing, in a strategy that includes partnering with the Rise Fund – a new $2bn social impact fund.
  • According to a 2016 survey conducted by the Global Impact Investor Network, more impact investors – a third of all respondents – plan to boost investment in food and agriculture than in any other sector.
Millennials Drive Growth in ‘Impact Investing’ l The Boston Globe
  • Millennials are 15 percent more inclined to stick with an ESG-oriented investment, according to Schroders Investment Management. Millennials will play an increasingly important role in popularizing ESG investing as their earnings rise and they invest some of the $59 trillion they will inherit, according to a report by the Center on Wealth and Philanthropy at Boston College.
Impact Investing - A Sustainable Strategy for Hedge Funds l Deloitte
  • Nearly a decade after its arrival on the social finance scene, impact investing is still growing in popularity. Hedge fund managers have been slow to adopt the strategy, although other types of investment managers are already gathering assets in this space. Yet as the hedge fund industry continues to face performance headwinds, it may be time to take a closer look at how this type of sustainable investing may support alpha generation.

 

Fiduciary Duty
 
Fiduciary Duty Overview For Endowments And Foundations: Integrating Nonprofit Mission Goals Into Investment Practices l Reinhart Boerner Van Deuren S.C.
  • This overview is intended to provide investment fiduciaries with a summary of how fiduciary duties apply to mission-aligned investing, such as strategies that incorporate material ESG factors into investment analysis.  It shows that prudent adoption of mission-aligned investment techniques can be consistent with fiduciary duty.

 

General Higher Education News
 
What a Trump Presidency Might Mean for Higher Education l BU Today
  • What will President Donald Trump do about student college debt? Or visas commonly used by international students and researchers? Or how universities use their endowments? (He has said he plans to pressure colleges and universities with large endowments to spend more on students or, if they don’t, face loss of their tax-exempt status). This article asks BU experts for their take on what a Trump administration and the new Congress might mean on these and other pressing higher education matters.

 

 
Climate Risk, Science & Regulation
 
Massachusetts Attorney General Wins Showdown With Exxon Mobil l The Boston Globe
  • Massachusetts Attorney General Maura Healey won a major legal showdown against Exxon Mobil last week when Suffolk Superior Court Judge Heidi E. Brieger ruled that the company must turn over 40 years of documents on climate change. Brieger denied the company an emergency motion or a protective order that would have blocked Healey’s demand for the company’s internal research on global warming.
Davos Elite Focus on Climate Change, Ignoring Trump’s Skepticism l Bloomberg
  • Donald Trump has often ridiculed global warming and promised to withdraw the U.S. from the accord signed in Paris in 2015. Yet despite the shift in political weather in Washington, the captains of business and finance gathered in Davos this week will spend a lot of time talking about climate change. The World Economic Forum is devoting 15 sessions of its 2017 annual meeting to climate change, and nine more to clean energy -- the most ever on these issues.

Obama Administration Sending $500 Million to Global Climate Change Fund l Wall Street Journal

  • The Obama administration announced this week it is funneling $500 million to a global fund to address climate change, one of the final acts President Barack Obama is taking to preserve his environmental legacy and the U.S.’s role in an international climate agreement.
No Hoax: 2016 Was the Hottest Year on Record l Bloomberg
  • This article outlines 137 years of diligently kept scientific records that show how humans are transforming Earth’s climate. Temperature rise is shown in graphic form, and effects on the climate are explained as well.
You Live in a World Full of Risks: These Are The Biggest l World Economic Forum
  • In this year’s World Economic Forum annual survey, some 750 experts assessed 30 global risks, as well as 13 underlying trends that could amplify them or alter the interconnections between them.

 

Private Prison Divestment
  • Leaders of a campus organization advocating for Yale’s divestment from the private prison industry met with members of the University’s Advisory Committee on Investor Responsibility this week. The meeting marks the latest development in a yearlong campaign led by the Yale Students for Prison Divestment.

 

 

 

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Weekly News Round-Up: January 13th, 2017

New IEN Member 
Upcoming Events
 
Webinar: KnowTheChain Benchmarking Findings l IENJanuary 19, 2017, 2:30-1:30pm ET
  • Benchmarks can play a powerful role in encouraging companies to uphold labor standards and protect workers’ rights. In 2016, KnowTheChain, a resource for businesses and investors to address forced labor abuses and human trafficking within their supply chains, benchmarked 60 large global companies on their efforts to address these risks. In this webinar, we will review the 2016 KnowTheChain benchmark findings and discuss how forced labor and human trafficking risks affect investors and can be addressed in their portfolios.
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN members will be delivering a plenary panel on factoring climate and sustainability considerations into the endowment investment process; and IEN will be hosting a half-day workshop on endowment investing. 
Webinar: 2017 ESG Trends to Watch | MSCI, January 24, 2017, 11:00a.m. ET
  • This year may usher in a fundamental rethink for investors. Underlying all the major trends we identified for 2017 is a strategic decision point – do we change the way we think about investing, or is this business as usual in a new order? Join the authors of the 2017 ESG Trends to Watch Report, including MSCI’s Global Head of ESG Research Linda-Eling Lee, for an overview of the biggest ESG forces affecting institutional investors over the long haul
Webinar: The 100 Most Overpaid CEOs 2017 | As You Sow, February 13, 2017, 2:00 p.m. ET
  • Join As You Sow’s Rosanna Landis Weaver and other leading compensation experts as they examine CEO pay through their upcoming report, The 100 Most Overpaid CEOs: Are Fund Managers Asleep at the Wheel? 
 New Resources
 
  • In Laudato Si, Pope Francis called on the Catholic community to recognize the urgency in addressing the climate change crisis that is looming.This report explores the Catholic community’s response to Laudato Si, specifically how institutions have changed their investing policies.
Sustainable / ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how investors looking to lower their impact on the planet may find that some funds labeled as "fossil fuel free" won't reduce their carbon footprint by as much as they hope, as well as the top environmental and climate policy outlooks around the world; how the Japanese are slowly embracing governance reforms; and how your mutual fund voted on climate change in 2016.

ESG in 2017: A Fundamental Rethink? l MSCI

  • This blog post highlights a new report from MSCI that explores the biggest ESG forces affecting institutional investors in 2017 and how they will affect the capital markets for the next decade.
4 Sustainable Investing Myths, Debunked l GreenBiz
  • In this article Elizabeth Lewis discusses the four most common myths WRI encountered when researching their new paper, "Navigating the Sustainable Investment Landscape." Their research included interviews with 115 investment professionals — including asset owners with $1.26 trillion under management — and they found that the prospects for sustainable investing are strong and overcoming key roadblocks will help the market reach a tipping point.

Graphic: ESG's Path l Pensions & Investments

  • This article highlights graphics that display the growth of ESG assets in the U.S., the dispersement of ESG assets by category focus, the percentage of ESG assets invested by sector, and comparable returns. 
ESG Factors Making Gains in Fixed-Income Portfolios l Pensions & Investments
  • Sources at consultants and money management firms said they are seeing increased interest from institutional investors in integrating ESG factors into fixed-income portfolios — something they are surprised has taken so long. Managers already integrating ESG factors into their fixed-income processes said they are also seeing increased inflows.
Warren Buffett, Bill Gates and Jack Ma are Betting Big on This Sector l CNBC
  • One of every five dollars invested in the U.S. today targets sustainable investments, and , private capital is flowing there too. Bill Gates, Mark Zuckerberg, Jeff Bezos, Jack Ma and other tech titans recently committed $1 billion to launching a new, low carbon energy fund. Warren Buffett's company is busy investing in new solar and wind energy projects, including the world's largest solar plant. And 84 major corporations have pledged to source 100 percent of their energy from renewables going forward.
  • According to a 2016 survey conducted by the GIIN, more impact investors – a third of all respondents – plan to boost investment in food and agriculture than in any other sector.
Shareholder Engagement
 
Is Your Mutual Fund Company Taking Climate Change Seriously? | Ceres
  • Ceres examined how the nation’s largest mutual fund companies voted on climate-related shareholder resolutions in 2015 and 2016. While the majority voted in favor of many climate-related resolutions, a number of the largest firms failed to support any of the resolutions, including big-name players such as American Funds, BlackRock, Dimensional, Fidelity, Pioneer, Putnam, and Vanguard. These firms collectively manage trillions of dollars in assets, and their support of climate resolutions could contribute to majority votes for some resolutions – resulting in enormous pressure on companies to disclose their plans for addressing wide-ranging climate-related risks.
  • Once again this year, dissident ExxonMobil stockholders have filed several resolutions with the company asking it to be more forthright in addressing the climate crisis. Submitted months before Exxon's annual meeting in May, by a twist of fate it has also helped set the stage for the senate confirmation hearing of Rex Tillerson, Exxon's former chief executive and Donald Trump's pick to become secretary of state.
  • More than 530 companies and 100 investors – from iconic Fortune 500 firms to small family-owned businesses – are calling on the Trump administration and the new Congress to support policies to accelerate a low-carbon future that will help curb climate change. The full statement of support, the list of signatories and an interactive map showing how widespread the business support is across the U.S. can be found here.
Church of England to Launch Climate Investment Tracker l Climate Home
  • Next week the Church of England will roll out a data analysis tool to help investors keep track of the climate risks facing businesses. Known as the Transition Pathway Initiative (TPI), it will initially monitor trends in four energy-intensive sectors: oil & gas, mining, utilities and vehicles.
  • This article, written by President Barack Obama, outlines the science behind climate change, private sector leadership in reducing emissions (in turn boosting bottom lines, cutting costs for consumers, and delivering returns for shareholders), and market forces and global momentum that make the advancement of the low carbon economy a bipartisan goal.
Exxon Continued Paying Millions To Climate-Change Deniers Under Rex Tillerson l The Huffington Post
  • Exxon Mobil Corp. promised nine years ago to stop donating to groups that spread misinformation about climate change. Yet between 2008 and 2015, the oil giant’s charitable arm gave over $6.5 million to groups that deny that burning fossil fuels is causing global warming, a new analysis shows.  
An Iceberg the Size of Delaware is About to Break off Antarctica l Mashable
  • Researchers who closely monitor a crack cutting across the Larsen C Antarctic ice shelf reported last week that its progress had suddenly sped up, indicating that a collapse may soon be underway. More worrisome is the possibility that the breaking off of the iceberg from the ice shelf that it's now attached to could speed up the disintegration of the broader ice shelf and land-based ice that lies behind it.

Will Trump’s Climate Team Accept Any ‘Social Cost of Carbon’? l Pro Publica

  • President-elect Donald Trump and members of his proposed cabinet and transition team have taken aim at many of President Obama’s climate and clean-energy policies, programs and legacies including an arcane metric called the “social cost of carbon.”This value is the government’s best estimate of how much society gains over the long haul by cutting each ton of the heat-trapping carbon-dioxide emissions scientists have linked to global warming. The metric is produced using a complex, and contentious, set of models estimating a host of future costs to society, and the Trump administration’s aim of lowering the operative “number,” possibly by a lot, is almost assured.
A Concise Map of Stakeholders in Extreme Events and Climate Risk Management – The Geneva Association l Business Wire
  • This week The Geneva Association published a new tool, The Stakeholder Landscape in Extreme Events and Climate Risk Management. This map graphically illustrates the patterns of stakeholder engagement in the international framework agreements related to disaster risk reduction, climate change and sustainable development over the last five decades. It also displays the complex stakeholder landscape and multi-stakeholder initiatives in extreme events and climate risk management over the last decade and describes the major developments in expanding risk transfer and insurance. The map provides the reader with an overview of the key initiatives underway globally and serves as a valuable and concise primer on the key stakeholders in extreme event and climate risk management worldwide.

Climate Change Is the World’s Biggest Risk, in 3 Charts l Climate Central

  • The World Economic Forum surveyed 750 experts on what the most likely and impactful risks facing humanity are in 2017. In a report released this week, they ranked extreme weather as the most likely risk and the second-most impactful, trailing only the use of weapons of mass destruction. Climate change is responsible for driving an increase in the likelihood and intensity of extreme weather events, notably heat waves.
Fossil Fuel & Private Prison Divestment
 
Denver University: Let’s Drop the False Morality Tale in the Push for Fossil Fuel Divestment (Opinion) l The Denver Post
  • This op-ed outlines the seven meetings a divestment task force at Denver University had with experts and advocates for and against fossil fuel divestment. The leading narrative is a criticism of arguments behind divestment, especially those that are morally based.
Princeton University Group Aims to Divest From Private Prisons l The Daily Pennsylvanian
  • A petition from Princeton Private Prison Divestment (PPPD) is garnering campus support. Composed by a vast array of student social justice groups, PPPD is a coalition that demands Princeton University immediately divest from what they deem are “particularly egregious” private prison corporations. The petition outlines why the coalition believes divestment is so important.

 

 

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Weekly News Round-Up: January 6th, 2017

Upcoming Events

Webinar: KnowTheChain Benchmarking Findings l IEN, January 19, 2017, 2:30-1:30pm EST

  • Benchmarks can play a powerful role in encouraging companies to uphold labor standards and protect workers’ rights. In 2016, KnowTheChain, a resource for businesses and investors to address forced labor abuses and human trafficking within their supply chains, benchmarked 60 large global companies on their efforts to address these risks. In this webinar, we will review the 2016 KnowTheChain benchmark findings and discuss how forced labor and human trafficking risks affect investors and can be addressed in their portfolios.
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN members will be delivering a plenary panel on factoring climate and sustainability considerations into the endowment investment process; and IEN will be hosting a half-day workshop on endowment investing. 
Responsible Business Summit NY 2017 l Ethical Corporation, March 27-28, 2016, New York, NY
  • This conference brings a CEO led speaker line up of innovative and inspiring brands in responsible business to New York, where attendees learn how to deliver purpose for commercial success, the environment and stakeholders. Last day for early bird pricing is today!
New Resource

Climate-Related Investment for Resilient Communities: Divest-Invest Opportunities in Community-Oriented Climate Solutions
 l Croatan Institute
  • This paper seeks to support institutional investors, and in particular philanthropic foundations, with aligning investment portfolios with the transition to a just, low-carbon economy. It presents an extensive overview of investment opportunities in climate change solutions across asset classes, geographies, themes, and risk/return profiles, that pursue positive environmental and social, community-level impacts, as well as a variety of case studies of foundations, funds, and initiatives that proactively and explicitly integrate both climate and community impact considerations into their investment activities.
Sustainable / ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how investors led by Walden Asset Management and Zevin Asset Management (Founding Members of IEN) have filed half a dozen proposals at mutual fund companies this year asking the much bigger asset managers, including BlackRock Inc., Bank of New York Mellon Corp., JPMorgan Chase & Co., T.Rowe Price Group, and Franklin Resources Inc. to review their proxy voting on climate issues. Natixis registering first sustainable target-date funds; France heading out on a green bonds road show; and predictions for the year ahead in sustainable finance are also discussed.
Columbia Alumni Making Sense of Sustainable Investing | GreenBiz
  • Interviews with three sustainable investment professionals — all graduates of Columbia University’s Sustainability Management graduate program — indicate a growing demand for investing that accounts for sustainability performance, but also obstacles to discerning the best investments.
Companies With Higher ESG Scores Are Better Investment Picks l Economic Times
  • According to the Morningstar India Sustainability Index, Indian companies that factor in ESG related risks fare better than those in other emerging markets. The Morningstar India Sustainability Index has returned 14.8% from 2012 to 2016, compared to 13.7% for the Morningstar India Index.
ESG Ratings – Quo Vadis? l Sustainableratings.com
  • The rising demand for ESG information has been adding considerable momentum to the development of the ESG ratings market. After long years of modest growth, it is now said to have a potential value of US$1 billion. The ESG ratings market is likely to grow and consolidate further, leaving ever-greater attention on the part of the financial world in its wake.
Dutch Asset Manager Calls For Regulatory Leeway to Promote Sustainable Investment l Investment & Pensions Europe
  • The €200bn Dutch asset manager PGGM has called for more regulatory leeway for pension funds and other institutional investors when it comes to sustainable investing. A spokesman said pension funds would increase their sustainable allocations if the investments were deemed by the regulator (DNB) to pose less risk. They argued that regulatory changes in support of sustainability stand to increase institutional investment in private equity, infrastructure and real estate.
Why ESG Reporting Still Matters to U.S. Investors l Green Biz
  • Despite the tumultuous geopolitical events of 2016, in the medium-to-long term, four underlying fundamental trends remain unchanged, which means that ESG investing will continue to grow globally. This article outlines those unchanged trends.
How Sustainable Investing Can Help You Meet Portfolio Goals Without Sacrifice l Forbes
  • This article outlines how firms that pursue better ESG practices have higher quality management and better stock performance, citing a 2014 research paper by Oxford University concluded that out of 190 academic studies, 90% of the studies demonstrated that sound sustainability standards lowered companies’ cost of capital, 80% of the studies observed that stock performance and good sustainability practices are positively correlated, and 88% of the studies showed that robust ESG practices improved companies’ operational performance.
Overcoming These 3 Challenges Can Drive Sustainable Investing Into the Mainstream l World Resources Institute
  • While market growth is clear, the SRI field is still young. Market holes prevent investors from fully embedding sustainability factors into practical investment decision-making. This article lays out three critical steps asset managers and other investment professionals can take to overcome these barriers.
Fiduciary Duty & Shareholder Engagement
 
Department of Labor (DOL) Restates Fiduciary Voting, ESG Considerations l ASPPA Net News
  • The DOL has issued new guidance in their "Interpretive Bulletin Relating to the Exercise of Shareholder Rights and Written Statements of Investment Policy, including Proxy Voting Policies or Guidelines" to clarify the agency’s longstanding position that the fiduciary act of managing plan assets which are shares of corporate stock includes decisions on the voting of proxies and other exercises of shareholder rights.”
Trillium’s Statement on Department of Labor Interpretive Bulletin Regarding Shareholder Rights l Trillium Asset Management
  • Last month, the Department of Labor (DOL) issued Interpretive Bulletin 2016-1 on Shareholder Rights, recognizing the importance of proxy voting and fiduciaries engaging portfolio companies on ESG matters. According to Trillium’s Director of Shareholder Advocacy, Jonas Kron, “Yesterday’s action by the Department of Labor gives further support to the validity, significance, and productivity of fiduciaries exercising shareholder rights and engaging portfolio companies on ESG matters."
Understanding UPMIFA: Important Endowment Concepts | JD Supra Business Advisor
  • This is the first in a series of posts on UPMIFA, outlining some of the basic aspects of the Act. Future posts will address the standards for delegation of management and investment of institutional funds to an external agent such as an out-sourced chief investment officer, and the rules for release or modification of restrictions contained in gift agreements.
 

Climate Science, Risk & Regulation
 
Companies Challenged to Adopt Science-Based Climate Goals l Social Funds
  • Over 100 publicly traded companies have reported to CDP that they will adopt science-based emissions reduction plans, and letters from members of the Interfaith Center on Corporate Responsibility intend to hold them to their promises.
  • A record number of oil and gas companies became insolvent last year, according to a new study. The study by accountancy firm Moore Stephens found 16 oil and gas companies went insolvent last year, compared to none at all in 2012. Even if oil demand continues to climb until 2025, its price could drop to $10 a barrel.
US Could See Extreme Rains Increase of 400% By End of Century l The Guardian
  • According to a new study in the journal Nature Climate Change, extreme rain storms that now occur about once a season could happen five times a season by the century’s end, a 400% increase. These storms could produce up to 70% more rain. Such massive amounts of rain occurring more often would put significant strain on infrastructure and agriculture. 
10 Reasons to Be Optimistic for a Low-Carbon Future l Ceres Blog
  • This article presents some much needed optimism for the new year, sharing 10 shining lights for the irresistibility and inevitability of the low-carbon future.

Clean Energy & Technology
 
Solar Could Beat Coal to Become the Cheapest Power on Earth l Bloomberg
  • Solar power is now cheaper than coal in some parts of the world. In less than a decade, it’s likely to be the lowest-cost option almost everywhere. Since 2009, solar prices are down 62 percent, with every part of the supply chain trimming costs. By 2025, solar may be cheaper than using coal on average globally, according to Bloomberg New Energy Finance.
Wind and Solar Costs Are Plummeting: Now What Do We Do? l Triple Pundit
  • Transitioning our electricity sector away from fossil fuels is no longer just an environmental imperative; it’s an economic one. Free markets now favor solar and wind. This article discusses the institutional barriers that need to be overcome before a rapid transition to renewable energy can be realized. 
Ford Says Electric Vehicles will Overtake Gas in 15 years, Announces All-Electric 300-mile SUV, Hybrid F-150, Mustang, and More l Electrek
  • In 2015, Ford announced a $4.5 billion investment in electric vehicles in order to introduce 13 new models. This week Ford CEO Mark Field confirmed several new models will receive electric drivetrain options, including its flagship F-150 pickup truck that will double as an on-site generator. 
General Higher Education & Endowment News
 
New York Governor Revives Free Tuition Idea l Inside Higher Ed
  • New York governor Andrew Cuomo presented a proposal this week for tuition free college for New York State's middle class. Cuomo’s plan, called the Excelsior Scholarship, would ensure free tuition at New York’s public two and four year institutions to students whose families make up to $125,000 per year. The scholarship would be phased in over three years, ending in 2019.
Rich College Donors' Big Tax Break Is Suddenly in Danger | Bloomberg 
  • Congress will soon be considering a plan that would require a quarter of gifts to the wealthiest colleges be used for middle-class financial aid. Otherwise, the donations wouldn’t be fully deductible, and the schools risk their charitable status. Through his tax proposal, Tom Reed, a Western NY Republican and vice chair of President-elect Donald Trump’s transition team, is taking aim at the richest schools. The plan would apply to the roughly 100 colleges with endowments exceeding $1 billion
  • This article discusses how Stanford and other ivy institutions including Harvard are working to reverse negative returns by hiring new analysts and restructuring their portfolios.
Fossil Fuel & Other Divestment Campaigns
 
Fossil-Fuel Divestment Campaigns Hit Boston's College Campuses l WGBH News
  • This article summarizes the divestment movement at different colleges in the Boston area, the context of the fossil fuel divestment movement, and why it is more important now then ever.
  • On January 1st, 2017, during the Vikings/Bears football game at US Bank Stadium, two water protectors rappelled from the rafters to display a large banner urging US Bank to divest from the Dakota Access Pipeline. According to a counter on DefundDAPL.org, individuals have pulled over $40.5 million from the various banks that back the project.
Investor Waves Goodbye to Palm Oil l Climate News Network
  •  A report released last year named companies with heavy investments that make billions of dollars in profits by clear-felling forests for palm oil plantations. Rainforest destruction is the second biggest driver of climate change after burning fossil fuels. This put pressure on fund managers who claimed that their investments were sustainable, and one of them, Dimensional (managing investments of $445bn), has divested two of its portfolios of all palm oil plantation companies.
  • Seattle is moving forward with a proposal which would Wells Fargo for both its fossil fuel investments and unscrupulous business practices. However, it is unclear where the city plans to take its business. A Council Member's statement argued that the new policy was a justified response to both the bank’s investment in the Dakota Access Pipeline and other fossil fuel projects and its unscrupulous corporate policies.
 
Investment Manager & Strategies News
 
  • In order to address the difficulty many investors face trying to find adequate benchmarks and data on how best to screen for sustainability, Grow, a San Francisco-based SRI/ESG investment firm recently released a set of ratings that looks at sustainability in terms of how it impacts the bottom line of a business and not just how green an industry is.The company has also launched a mobile app so that investors can have access to their accounts as well as new ESG data anytime.
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Weekly News Round-Up: December 23rd, 2016

Upcoming Events 

Webinar: KnowTheChain Benchmarking Findings l Intentional Endowments Network, January 19th, 2017, 12:30 - 1:30 pm EST

  • Benchmarks can play a powerful role in encouraging companies to uphold labor standards and protect workers’ rights. In 2016, KnowTheChain, a resource for businesses and investors to address forced labor abuses and human trafficking within their supply chains, has benchmarked 60 large global companies on their efforts to address these risks in sectors that are at high risk of forced labor: the Information & Technology Communication, Food & Beverage, and Apparel & Footwear.  This webinar will explore their findings.  
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN is partnering with Second Nature to design endowment-related sessions.
 
 
New Resources
 
  • To help identify the information needed by investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities, the Financial Stability Board established an industry-led task force: the Task Force on Climate-related Financial Disclosures (Task Force). The Task Force was asked to develop voluntary, consistent climate-related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks. The Task Force developed four widely adoptable recommendations on climate-related financial disclosures that are applicable to organizations across sectors and jurisdictions. 
  • A new paper by World Resources Institute finds strong interest and opportunities for sustainable investing within the US institutional investor marketplace. But key barriers persist. A survey of over 100 investment professionals shows that institutional investors – including pensions, foundations, universities, and NGOs – are increasingly considering the material importance of social, environmental, and governance factors in constructing their portfolios.
  • Hospitals and health systems are recognizing that they have significant, untapped assets at their disposal to help address economic and environmental disparities in local communities: their investment portfolios. Through place-based investing, institutions can leverage these resources to improve their communities’ overall health and well-being. This toolkit will help you get started.
Financing for Better Growth and Development l The New Climate Economy
  • Investing in sustainable infrastructure is key to tackling the three central challenges facing the global community: reigniting growth, delivering on the Sustainable Development Goals, and reducing climate risk in line with the Paris Agreement. Transformative change is needed now in how we build our cities, produce and use energy, transport people and goods, and manage our landscapes. And the challenge is urgent.
Finding the Pipeline: Project Preparation for Sustainable Infrastructure l The New Climate Economy
  • Delivering the Sustainable Development Goals (SDGs) and achieving the Paris Agreement objectives will require increased investment in socially, economically and environmentally sustainable infrastructure. The main barrier to investment of the kind needed is not the lack of available finance, but rather a lack of well-prepared and investment-ready ‘bankable’ projects. Project preparation for sustainable infrastructure needs to be faster, greener and better to ensure sustainable development consistent with internationally agreed goals.

Sustainable / ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights Calpers widening its tobacco investment ban; Dimensional Fund Advisors removing palm oil producers from its sustainability funds; General Motors Co. working with utilities to increase efficiency; and Investors including Trillium Asset Management and Zevin Asset Management calling on U.S. companies to help the fight against income inequality, amid concerns the Trump White House won't support lifting the minimum wage to a "living wage."
  • Jeremy Coller launched the FAIRR (Farm Animal Investment Risk & Return) Initiative with the aim of raising awareness among investors about the material risks of the massive global growth in factory farming. As the initiative celebrates its one-year anniversary, we can reflect on a number of achievements – including a groundbreaking investment risk report, two major collaborative engagements with global food multinationals, the highlighting of investor best practice on this issue and several briefings on protein supply chains and antibiotic use.
Over a Third of Investors Employ ESG Factors l Chief Investment Officer
  • Nearly 40% of institutional investors now incorporate ESG factors into their investment decisions, according to Callan. In a survey of 84 asset owners representing $843 billion, the consultant found a significant increase in ESG investing. This year, 37% of respondents said they considered ESG factors when making investment decisions, up from 29% in 2015 and 22% in 2013.
Will ESG Survive Trump? l Forbes
  • This article about ESG investing under the incoming administration is a Q&A with Jon Lukomnik, one of the pioneers of modern corporate governance. He cofounded the International Corporate Governance Network (ICGN) and GovernanceMetrics International (now part of MSCI), and served as interim chair of the Council of Institutional Investors’ executive committee. He serves as executive director of the IRRC Institute, which funds corporate governance, sustainability and capital market research. 
Robeco Launches Ethical Fund l Financial Times Adviser
  • Dutch asset management firm Robeco has launched a sustainable investment fund, which aims to provide equity-like returns but with lower risk. The Robeco QI Global Sustainable Conservative Equities fund applies strict criteria based on ethical standards, as well as high environmental, social and governance (ESG) scores. 
  • Advisors who ignore the advent of ESG investing could miss out on some serious returns in their client’s portfolios. "Our chief executive, Peter Harrison, has identified this as one of the key strategic areas for Schroders and an area where, if we are doing this analysis, it can help us come to better investment decisions.” said Jessica Ground, global head of stewardship with Schroders. This article details three things advisors need to know about ESG investing.

 

  • Presidents and Chancellors from more than 170 Colleges and Universities, including 35 states in the U.S., have joined together to urge president-elect Trump and the incoming congressional representatives to accelerate progress towards a clean energy future. Through their open letter, organized by a diverse group of higher education institutions and the Boston-based nonprofit Second Nature, they call on elected officials to support participation in the Paris Agreement, climate research, and investment in the low carbon economy.
Scientists Sound the Alarm l Inside Higher Ed
  • A number of academics, physicians and medical students are speaking out against Trump’s pattern of selecting officials who deny climate science, oppose policies backed by many experts and scare scientists in federal agencies who disagree with Trump. In some cases, those voices are dissenting from large professional organizations that have endorsed at least some of his personnel decisions.

Oil Majors’ Survival Questioned by Former Senior Mobil Executive (Subscription) l Responsible Investor

  • The survival of oil majors has been questioned by a former senior executive who helped manage the Exxon-Mobil merger in 1999. Lou Allstadt, former Executive Vice President at Mobil Oil, said: “I don’t think they are going to survive, I personally divested from ExxonMobil three years ago, and reinvested in renewables.” Helena Morrissey, Chair of the Investment Association, said that the interpretation of fiduciary duty associated with climate change has turned on its head. “The investment community has shifted gears [so] that fiduciary duty now should compel or at the very least encourage divestment in fossil fuels. It’s not just the interpretation of our duties, it’s the risks that we have to manage around stranded assets.”

 

Clean Energy
 
Boone, NC Passes Historic Resolution: Ditch Fossil Fuels, Go 100% Clean Energy l EcoWatch
  • The North Carolina municipality of Boone approved a resolution by a 5-0 vote calling on the whole state—and the United States at large—to encourage green jobs and transition to 100 percent clean energy across all energy sectors. This makes Boone the first town in the country to officially demand that the U.S. completely ditch fossil fuels to "avoid climate catastrophe." Boone's resolution was inspired in part by the research of renewable energy expert Dr. Mark Z. Jacobson, a Stanford University professor and cofounder of The Solutions Project, a state-by-state roadmap to convert the country to 100 percent renewable energy by 2050.
Shifting to a Clean Energy Economy Would Bring Billions in Economic Benefits, Shows New Report l WRI
  • The United States and the world as a whole must reduce its greenhouse gas emissions by 80 percent or more by 2050 in order to significantly reduce the risks posed by unabated climate change. A new report from the Risky Business Project, From Risk to Return: Investing in a Clean Energy Economy, finds that achieving that reduction is both technically and economically feasible—and creates a huge business opportunity. The new report presents three pillars for how to transition to a clean energy economy: use electricity instead of fossil fuels, generate electricity from low- and zero-carbon sources, and use all energy more efficiently.

 

General Endowment News
 
  • This article addresses concerns for higher education endowment performance under the incoming administration. The author suggests that all stakeholders should have a voice in their endowment's objective, and decision makers should make bets on active managers and most likely private investments, hire a team of employees to find those investments and monitor them, and accept that those investments will occasionally lose to the market or to peers.

 

 
Fossil Fuel Divestment
  • The scale, reach and pace of the fossil fuel divestment sphere — confirmed at over $5 trillion, a doubling in size in just 15 months — is one of the most important financial stories of the past decade. This is the fastest divestment trend in history, even greater an accomplishment when you consider the rapid growth in divested dollars has been achieved against a backdrop of sluggish economic growth and political instability. In turbulent times, capital seeks safe havens, and for decades, fossil fuels were regarded as the safest of safe ports. For a large and growing chunk of the investment community, this is no longer true. This article outlines how the rapidly expanding divestment phenomenon is only the tip of the smoke stack.
As the Fossil Fuel Divestment Movement Gains Steam, It's Getting Harder for Foundations to Ignore l Inside Philanthropy 
  • When Divest-Invest Philanthropy launched in the beginning of 2014, an effort incubated by the Wallace Global Fund and modeled after the anti-apartheid divestment push, there were just 17 brave foundations on board. Now, almost three years later, that number has grown to 155, and the greater divestment movement, which started on college campuses about five years ago, has become impossible to shrug off. This article explores what's next for foundations.
Snowball Effect: Unity College Fossil Fuel Divestment the First in $5.2 Trillion Effort l Maine Public
  • Four years ago, Unity College became the first U.S. college to eliminate fossil fuels from its international investment portfolio. Now, Unity College President Dr. Melik Peter Khoury says the central Maine school is redoubling its efforts to create a “net-zero” campus and spread its message of energy sustainability to other higher education institutions. 

 

Private Prison Divestment
 
  •  A student-organized group at Georgetown University seeking  transparency in Georgetown’s endowment is demanding the university to divest from private prisons and companies that contribute to the “occupation of Palestine." According to a press release released by the campaign, students submitted a proposal to the Committee on Investment and Social Responsibility Oct. 12 requesting transparency on the university’s investments but have yet to receive a reply. The group, which is endorsed by 17 students groups,  has also sent a letter to University President John J. DeGioia requesting confirmation that the university’s endowment is not invested in any companies that support private prisons or the “occupation of Palestine.” The letter demands a response by Jan. 13.

 

 

 

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Weekly News Round-Up: December 16th, 2016

New IEN Members
New Resources
 
Recommendations for the Task Force on Climate-related Financial Disclosures | FSB Task Force on Climate-related Financial Disclosures
  • To help identify the information needed by investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities, the Financial Stability Board established an industry-led task force: the Task Force on Climate-related Financial Disclosures. The Task Force was asked to develop voluntary, consistent climate-related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks. This report outlines the Task Force's recommendations; a 60-day public consultation period started on Dec. 14, 2016. 
  • This two-page summary report highlights findings for educational institutions from the US SIF US Sustainable, Responsible and Impact Investing Trends Report 2016. Findings include that at the start of 2016, the US SIF Foundation identified $42.7 billion held by educational institutions that consider climate change in investment analysis, a dramatic increase over the comparable $1.3 billion identified in 2014. 
The Global Fossil Fuel Divestment and Clean Energy Investment Movement | Arabella Advisors
  • On the one-year anniversary of the Paris climate agreement, the value of assets represented by institutions and individuals committing to some sort of divestment from fossil fuel companies has reached $5 trillion.1 To date, 688 institutions and 58,399 individuals across 76 countries have committed to divest from fossil fuel companies, doubling the value of assets represented in the last 15 months.2 Pension funds and insurance companies now represent the largest sectors committing to divestment, reflecting increased financial and fiduciary risks of holding fossil fuels in a world committed to stay below 2° Celsius warming. 
  • Through this report, CDP provides a platform for states and regions from across the globe to disclose their environmental impacts and strategies to combat climate change. Over 65 state and regional governments now disclose to CDP, representing 375 million people, US $12.5 trillion and 3 gigatonnes of green house gas emissions (GtCO2e). 
Building Highways to SDG Investing l Dutch Financial Sector 
  • This report invites the Dutch government and DNB to collaborate with Dutch financial institutions to continue to take action in support of the 2030 SDG Agenda in four main areas.
Upcoming Events
Columbia University Energy Symposium: Disruptive Innovation: The New Status Quo? l Columbia University, February 2-3, 2017, New York City
  • The Columbia Energy Symposium brings together more than 300 energy professionals, students, faculty, leaders, and executives representing industry, government, and society, to explore and advance our insights into today’s challenging energy questions. 
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN is partnering with Second Nature to design endowment-related sessions.
 
 
Academic News on Sustainable Investing 

Launching the Investment for Impact Research Prize l University of California Berkeley Haas School of Business

  • The Center for Responsible Business at UC Berkeley Haas School of Business has just launched a $5,000 research prize for work on the role of impact investment aimed at improving society or the environment. The deadline for submitting papers is 11:59 PM Pacific time on April 3, 2017.  A distinguished panel of judges will select the winning paper in late June 2017 and publicly award the prize in September. The competition is open to studies from all disciplines tied to business, economics, law, public policy, or other social sciences. Unpublished working papers suitable for publication in peer-reviewed journals are eligible, as well as papers published in peer-reviewed journals in or after 2016.
Sustainable / ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how Calpers considers end to tobacco investing ban; investors are increasingly wary about their investment exposure to cybersecurity risks; the CEO of Canadian uranium miner NexGen Energy says nuclear energy under Trump could keep the U.S. on track with the Paris Agreemen; and according to a report from the Task Force on Climate-Related Financial Disclosures, energy companies should consider telling investors how executive compensation is linked to climate change risks.
Investors Sharpen Focus on Social and Environmental Risks to Stocks l New York Times
  • Investing based on ESG factors has mushroomed in recent years, driven in part by big pension funds and European money managers that are trying new ways to evaluate potential investments. The idea has changed over the last three decades from managers’ simple exclusion from their portfolios of “sin stocks” such as tobacco, alcohol and firearms makers to incorporation of E.S.G. analysis into their stock and bond picks.
California Public Employees Retirement System (CalPERS) Issues Update on its ESG Expectations Guidance for External Asset Managers (Subscription) l Responsible Investor
  • The $300bn CalPERShas issued an update on its plans to develop ESG expectations for its asset managers, both internal and external. The plan included a review of definitions, data sources and “taking stock of current practices” of its managers. They were benchmarked against external sources such as the PRI, the International Corporate Governance Network (ICGN) guidelines and “global peers”.
UK’s Guardian Newspaper Seeds First Active Emerging Markets Fossil Free Investment Fund (Subscription) l Responsible Investor
  • The Guardian Media Group (GMG), the parent company of The Guardian newspaper in the UK, which has been leading a prominent fossil fuel divestment campaign called ‘Keep it in the ground’ have made an initial seed investment into what is believed to be the first actively managed emerging market fossil fuel free strategy. In 2015, GMG, which controls about £750m in investments, announced that it would sell all its investments in fossil fuels over the medium term due to concerns about climate change. The new investment is part of that strategy, which aims to go fossil free while maintaining investment returns. The value of the investment is not being disclosed, but has been described as “significant”.
Sweden’s Biggest Institutional Investors Commit to UN SDGs in Investment Approach (Subscription) l Responsible Investor
  • Six of Sweden’s biggest institutional investors: Alecta, Folksam, Sjunde AP fond (AP7), Skandia, Swedish pension insurer SPP, and The Church of Sweden have declared that they will integrate the Sustainable Development Goals (SDG) set by the UN’s Agenda 2030 in their business, corporate governance and investment approach, and called on other investors to look at possibilities to cooperate in reaching the SDG objectives.

Church of England’s Transition Pathway Initiative to Launch in January 2017 (Subscription) l Responsible Investor

  • The Transition Pathway Initiative, a data analysis tool project spearheaded by the Church of England (CoE) and the UK Environment Agency Pension Fund, will be launched in January next year, RI understands. The initiative was proposed as part of the CoE’s climate change and investment policy at the July 2015 Synod, where it agreed the development of an “engagement framework” for the following year.
Sustainability Disclosures Fall Short l CFO Magazine
  • The inaugural State of Disclosure report published by the Sustainability Accounting Standards Board finds that sustainability reporting is increasingly becoming a norm in SEC filings, but the environmentally minded investor shouldn’t hold his breath. There’s a long way to go before such reporting becomes as robust as other kinds of disclosures.
New Indicators for Investment Success Identified in CFA Institute Research l Asia Asset Management
  • The purpose, habits and incentives (phi) of investment professionals have a positive correlation with the success of investment outcomes, say the CFA Institute and the Centre for Applied Research at State Street Corporation in a new study. According to the study, a one-point increase in phi – which occurs where the goals and values of an individual or organization intersect – is associated with a 28% increase in odds of achieving greater organizational performance; a 55% increase in the probability of achieving client satisfaction; and a 57% higher chance of excellent employee engagement. Based on the findings, the researchers say that the investment industry and its professionals have to move from a performance-driven culture to a purpose-driven one in order to ensure that the long-term goals of their clients are met.

RI Americas 2016: $25trn Council of Institutional Investors Fears Trump-era Smackdown on Proxy Advisors (Subscription) l Responsible Investor

  • The powerful US investor group, the Council of Institutional Investors (CII), says its expects Congress and the SEC to row back on a number of critical investor protections under new president-elect Donald Trump, notably on shareholder voting advisory services, which it fears could wind up putting all but one of the proxy advisory firms out of business.
ESG ETFs Help Investment Portfolio’s Conform to Investors’ Attitudes l ETF Trends
  • As many seek to diversify their equity portfolios, consider a sustainable investing exchange traded fund strategy that locks on the potential benefits of ESG, principles. On a recent webcast, Sharon French, Head of Beta Solutions at OppenheimerFunds, explained that there is growing demand for ESG investments in response to rising standards for corporate business practices, demographic shifts and investing preferences, regulatory and policy developments, global sustainability challenges, and greater accessibility and proliferation of ESG data.
Financial Performance 
Morningstar Dispels Myth Of SRI Underperformance l Financial Advisor Magazine
  • The idea that sustainable investing is a recipe for underperformance is a myth, said Morningstar in a report issued Monday. In fact, sustainable or responsible funds and indexes perform on a par with similar conventional funds and indexes, despite the belief by many that investors have to be prepared for lower returns if they want to be socially responsible, Morningstar said in the Morningstar Manager Research report, in which it compared dozens of in-depth studies on the issue.
Barclays Researchers on “Green Bonds”: Small-but-Steady Performance Benefits Possible, With Little Evidence of Negative Impact l SAT Press Releases
  • The investment community — especially fiduciaries — continues to have a flow of more “green” products being made available from a growing number of issuers and their intermediaries; these include “green bonds.”  Charting this trend, a team of Barclays managers and researchers issued a report as part of the “Barclays Impact Series.”  Their findings: ESG investing can have a positive effect on portfolios for institutional and individual investors.  There are small-but-steady performance benefits and no evidence of a negative impact for such investing.
 
Climate Risk, Science & Regulation
 
Trump's Transition: Skeptics Guide Every Agency Dealing With Climate Change l The Guardian
  • The heads of Donald Trump’s transition teams for Nasa, the Environmental Protection Agency, the Department of the Interior and the Department of Energy, as well as his nominees to lead the EPA and the Department of the Interior, and for Secretary of State, all question the science of human-caused climate change, in a signal of the president-elect’s determination to embark upon an aggressively pro-fossil fuels agenda.
FSB Climate Disclosures Task Force Ascribes Key Role to Asset Owners l Investment & Pensions Europe
  • The disclosure framework unveiled today by the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD) envisages multiple roles for asset owners, which, in addition to being users of the recommended reporting, are also being asked to apply the recommendations and to help drive their adoption. Overall, the task force believes disclosures by the financial sector could “foster an early assessment of climate-related risks and opportunities, improve pricing of climate-related risks, and lead to more informed capital allocation decisions”.
How to Make a Profit from Defeating Climate Change l The Guardian
  • This article discusses a task force on climate-related financial disclosures that was created by the Financial Stability Board. Its purpose is to develop voluntary, consistent disclosures to help investors, lenders and insurance underwriters manage material climate risks. As befits a solution by the market for the market, the task force is led by members of the private sector, including major companies, large investors, global banks and insurers. The task force's recommendations are now publicly available. They concentrate on the practical, material disclosures most relevant to investors and creditors and which can be compiled by all companies that raise capital as well as financial institutions.
  • The Church of England is to launch a new data analysis tool to help investors monitor companies’ climate-related risks. The move comes as a student-led campaign to persuade institutions to withdraw investments from fossil fuels has reached $5.2 trillion USD. Meanwhile, a group of bishops in the US-based Episcopal Church have questioned President-elect Trump’s decision to appoint climate change sceptic Scott Pruitt as head of the Environmental Protection Agency.
Beijing Mulls Ban on Coal Trucks, Storage in Tianjin in Smog Fight l Reuters
  • Beijing's environmental watchdog is considering a ban on the use of trucks to transport coal and closing coal storage facilities in Tianjin, one of China's busiest ports, a researcher with the agency said, in what would be a drastic move to tackle smog.The city's Environmental Protection Bureau has not made a formal proposal to the municipal government of Tianjin, Zhou Yangsheng, researcher with the agency told a coal industry briefing on late Monday.
Clean Energy
 
Bill Gates, Others Launch Clean Energy Fund l The Wall Street Journal
  • Microsoft Corp. co-founder Bill Gates said Monday that he and other business leaders are launching a $1 billion clean-technology fund that will start investing next year in companies developing low-cost, low-carbon technologies. The fund, Breakthrough Energy Ventures, aims to invest in firms that have promising experimental technologies in power generation and storage, transportation, industrial applications, agriculture and energy system efficiency. Fellow investors include Amazon.com Inc. Chief Executive Jeff Bezos, LinkedIn Corp. Chairman Reid Hoffman, Alibaba Group Holding Ltd. Chairman Jack Ma, and retired hedge fund managerJohn Arnold.
  • The nation's first offshore wind farm has opened off the coast of Rhode Island, ushering in a new era in the U.S. for the industry. Deepwater Wind built five turbines 3 miles off Block Island to power about 17,000 homes, a project costing about $300 million. It announced Monday that the wind farm has begun producing energy for the grid.
The Solar Industry Has Paid Off Its Carbon Debts l The Atlantic
  • The solar industry paid off its long-term energy and climate “debts” in 2011, a study published this week in Nature Communications finds. Since its inception in 1975, the solar-panel industry has almost certainly prevented more greenhouse-gas emissions than it emitted. It has also cumulatively produced more energy than it initially required. In other words, the solar industry is now likely historically carbon-neutral, if not carbon-negative.
  • Upfront capital expenditures in new energy infrastructure will deliver healthy, long-term returns while reducing our annual fuel costs over time. Through 2050, businesses and consumers can expect an average of $366 billion per year in fuel savings. New local jobs will be created in manufacturing, construction and utilities. In construction alone, 800,000 new jobs are expected by 2050. Since 2008, rooftop solar costs have dropped by 54%. Over the past decade, the United States has spent $350 billion on computers and software every year. By comparison, we need investment in the clean energy economy to reach $320 billion annually.  If our next president refuses to take action, American business people must, more than ever, lead this transition for the sake of our climate, our country and our economic security -- and for their bottom lines.
Experts: Under Trump, States and Cities Must Lead on Energy l Midwest Energy News
  • There is growing sentiment that the country’s energy future will be decided largely at the state level and by markets, relatively independent of President-elect Trump’s positions. A study released Dec. 8 by the Brookings Institution furthers that argument by showing that a majority of states have “decoupled” their economies from carbon emissions, meaning their economies have continued to grow even when carbon emissions were reduced.
General Higher Education & Sustainability News
 
Keeping the Torch Lit: Higher Education During The Great Disruption l The Environmental Century
  • This article describes problems in higher education and four innovations that will improve our ability to rebuild a community of interdependent scholars and produce generations of problem solvers.
Make Colleges Diverse l The New York Times
  • This article outlines a new initiative of the Bloomberg Foundation called "American Talent Initiative" that aims to raise the number of Pell Grant recipients (who tend to come from the bottom two-fifths of the income distribution) attending the 270 colleges with the highest graduation rates by 50,000 within 10 years

Fossil Fuel Divestment
 
Investment Funds Worth Trillions Are Dropping Fossil Fuel Stocks l The New York Times
  • Investors controlling more than $5 trillion in assets have committed to dropping some or all fossil fuel stocks from their portfolios, according to a new report tracking the trend. The report, released Monday, said the new total was twice the amount measured 15 months ago — a remarkable rise for a movement that began on American college campuses in 2011. Since then, divestment has expanded to the business world and institutional world, and includes large pension funds, insurers, financial institutions and religious organizations. 
Divest Boston University Hosts Rally, Urges BU to Revisit Fossil Fuel Divestment Decision l The Daily Free Press
  • Nearly 100 BU community members and activists from other university joined Divest BU last week for the organization’s second rally of the semester. Divest BU, the coalition with the main goal of urging the university to divest endowment funds from fossil fuel, organized the rally to inspire other community members to participate in the cause. In a letter sent to the BU community in September, President Brown announced that the university will do its best to avoid investing in coal and tar sands extractors, The Daily Free Press reported on Sept. 20.
  • Last week Barnard College announced that a committee of trustees, professors and students has recommended that the college sell holdings in "all fossil fuel companies that deny climate science or otherwise seek to thwart efforts to mitigate the impact of climate change." The Barnard board's investment committee said that, pending a review, it expected to recommend adoption of the policy by the full board.
American Museum Of Natural History Reports Partial Fossil Fuel Divestment l Clean Technica
  • The American Museum of Natural History, the country’s oldest, largest, and one of the most popular museums in the country, has revealed it has partially divested its $650 million endowment from fossil fuel investments, in response to a letter signed by more than 150 of the world’s top scientists urging museums of science and natural history to divest.
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Weekly News Round-Up: December 9th, 2016

New Resources
 
  • Seriously addressing climate change requires reducing greenhouse gas emissions by at least 80 percent by 2050 in the U.S. and across all major economies. This report concludes that this goal is technically and economically achievable using commercial or near-commercial technology. According to the report, the transition to a cleaner energy economy rests on three pillars: moving from fossil fuels to electricity wherever possible, generating electricity with low or zero carbon emissions, and using energy much more efficiently. 
  • This report looks at almost 300 pieces of regulation covering pension fund rules, stewardship codes and corporate disclosure rules. It also includes interviews with policymakers, investors and stock exchanges in Europe, Asia, Africa and the Americas to find out if these initiatives change the way investors think about ESG, and ultimately the signals they send to their investee companies.

Human Rights Challenges for Business in 2017 l Ethical Corporation

  • This 13-page briefing explores the biggest challenges for businesses in 2017 and outlines how companies need to go beyond compliance and ´ticking the boxes´ to delivering positive societal impacts.

Upcoming Events
 
Webinar: Investing in Clean Energy for Campuses and Endowments l Intentional Endowments Network, December 13, 2016, 1:30 - 2:30 EST
  • This webinar will provide an overview of the Intentional Endowments Network's (IEN) new report titled “Investing in Clean Energy: Campuses and Endowments” which was designed to encourage conversation about the financial and societal benefits of clean energy investments higher education can make – both as a customer and an institutional investor through their endowments.
Columbia University Energy Symposium: Disruptive Innovation: The New Status Quo? l Columbia University, February 2-3, 2017, New York City
  • Columbia University’s SIPA Energy Association (SEA), CBS Energy Club, the Engineering Energy Club, and the Environmental Law Society are pleased to introduce you to the 12th Annual Columbia University Energy Symposium. The Columbia Energy Symposium brings together more than 300 energy professionals, students, faculty, leaders, and executives representing industry, government, and society, to explore and advance our insights into today’s challenging energy questions. 
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN is partnering with Second Nature to design endowment-related sessions.

 

Sustainable / ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights that impact investing has grown by 18 percent a year since 2013; according to a global ranking, Oracle Corp. is the most carbon-efficient company in the world; former U.K. Energy Secretary Chris Huhne says Donald Trump can't put the low-carbon "genie back in the bottle"; and investors who screen out or divest stocks for ethical reasons probably saw just a minuscule negative impact on performance over the past five years, according to new research from Hermes Investment Management Ltd.
JUST Capital and Forbes Release Inaugural “JUST 100 List,” Ranking Companies Performing Best on American Public’s Priorities l Forbes
  • JUST Capital and Forbes recently released the inaugural “JUST 100 List,” which ranks the publicly traded companies in America that perform best on the priorities of the American public. The rankings are based on one of the largest surveys ever conducted on attitudes towards corporate behavior, involving 50,000 Americans over the last 18 months. This year’s list ranks U.S companies against their peers within 32 major industries. In future years, Forbes and JUST Capital will rank companies across industries.
‘Trump Trade’ Threat to US Responsible Investment l Financial Times
  • In what market analysts describe as the “Trump trade”, fund managers have increased their exposure to pharmaceutical companies, banks and coal companies in the US following the election. These sectors are less likely to be selected in ESG portfolios.
A Monopoly Donald Trump Can Pop (Opinion) l The New York Times
  • This Op-Ed explores how institutional investors (including mutual fund companies, insurance companies, pension funds or asset management firms) that buy stock in substantial quantities for the benefit of clients and customers pose a huge challenge to market competition, and what President-elect Trump can do about it.
Shareholder Engagement
 
Goldman, Citigroup Targeted by Diversity Activists in 2017 l Bloomberg
  • Arjuna Capital, Trillium Asset Management and Pax World Management are targeting big U.S. financial institutions including Goldman Sachs Group Inc., Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. in 2017, demanding they disclose compensation data for men and women, and publish statistics about the race and gender of their employees. Though the investors are relatively small, each managing a few billion dollars, they have succeeded in pushing technology goliaths such as Apple Inc. and Intel Corp. to divulge information about pay gaps.
Climate Risk, Science & Regulation
Cashing in on Climate Change (Opinion) l The New York Times
  • This opinion piece outlines different approaches a climate-aware investor can take to protect investments from the effects of climate change.
  • This article explores how global lenders, sometimes flouting their own policies, have financed projects in Indonesia and elsewhere that destroy ecosystems and contribute to climate change.
  • Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly-owned subsidiary of Marsh & McLennan Companies and the Center for International Environmental Law (CIEL) recently announced the launch of their Trillion-Dollar Transformation initiative.  As part of the program, two new research reports outline legal, governance and risk assessment frameworks US pension trustees can use to manage climate change risks.
Protesters Gain Victory in Fight Over Dakota Access Oil Pipeline l The New York Times
  • The Standing Rock Sioux Tribe won a major victory on Sunday in its battle to block an oil pipeline being built near its reservation when the Department of the Army announced that it would not allow the pipeline to be drilled under a dammed section of the Missouri River. The Army said it would look for alternative routes for the $3.7 billion Dakota Access pipeline.
 
 
Green Bonds
Australia's Monash University first in the world to issue a Certified Climate Bond l Investorideas.com
  • Monash University in Australia is the first university in the world to issue a green bond. The A$ 218 million (USD 163m) Climate Bond was certified under the Climate Bonds Standard by the Climate Bonds Standards Advisory Board and will contribute to the University's net zero emissions target. The University structured the bond to provide the market with investment options in USD and Australian dollars over 15 years, 17.5 years and 20 years. Institutional investors in the bond were both Australian and international.
 
 
Clean Energy
 
Google Says It Will Run Entirely on Renewable Energy in 2017 l The New York Times
  • Last year, Google consumed as much energy as the city of San Francisco. Next year, it said, all of that energy will come from wind farms and solar panels. The online giant said this week that all of its data centers around the world will be entirely powered with renewable energy sources sometime next year.
General Higher Education Endowment & Sustainability News
 
Rich Colleges’ Endowments Targeted by Trump Backer in U.S. House l Bloomberg
  • Wealthy U.S. colleges must spend more of their endowment gains on aid for middle-class families or lose their prized tax-exempt status, a Republican U.S. House member and a vice chair of President-elect Donald Trump’s transition team proposed Monday.
  • The University of Chicago is pulling $25 million from its endowment to back business ideas from faculty, students and alumni. The university on Fridayannounced it will tap into its $7.1 billion endowment to provide funding for startup companies founded or that include people from the university or ideas developed on the Hyde Park campus. “By co-investing in new companies that have independent investments by established firms, we will enhance university-wide support for startups while encouraging venture partners to explore investment opportunities coming out of the university.” President Robert  Zimmer said in the announcement. 
An Insider’s Perspective on the Yale Endowment l Chief Investment Officer
  • This article features the thoughts of former Yale investment committee chair Charles Ellis on David Swensen, crowding, and whether or not the Yale Model is broken.
Michigan State University CIO Trades Losing Hedge Funds for Quants l Bloomberg
  • At Michigan State University, it’s out with the old hedge funds and in with the quants. After posting a 4.3 percent loss in its last fiscal year, the university’s endowment is pulling $100 million from four hedge funds and moving the money into computer-driven funds to diversify the portfolio. Michigan State is switching strategies for part of the allocation, including its first deployment in quantitative funds, rather than abandoning hedge funds.
Middlebury College Reaches 2016 Carbon Neutrality Goal l Middlebury Newsroom
  • Middlebury announced today that it has reached carbon neutrality—a major sustainability milestone many years in the making. In doing so, Middlebury attains a net zero carbon footprint, meaning that the institution has balanced the amount of carbon emissions it releases with an equivalent amount sequestered or offset.
Harvard University Hits Emissions Target l Harvard Magazine
  • Harvard reduced its greenhouse gas emissions by 30 percent during the past decade, the Office for Sustainability announced this week. The University’s reduction goal, adopted in 2008 and measured from a 2006 baseline, was met despite 15 percent growth in square footage (the addition of 3 million square feet) and an increase in the energy intensity of existing space. 
  • A month after their last demonstration, more than 20 students involved with Fossil Free Notre Dame presented a petition with 1,183 signatures to University President Fr. John Jenkins’ office last week. 
Once an Oil Executive, Now a Crusader Against Fossil Fuel Stocks l The New York Times
  • The trustees of Cooperstown, N.Y., hardly expected their village (population 1,834) to emerge as a flash point in a national debate over climate change and socially responsible investing. But when they voted in October to divest the pension fund they oversee of all fossil fuel holdings, Cooperstown became the first community in the nation to do so — not just coal (like Stanford University), but also oil and gas.
As Access Pipeline Halts, Yalies Call for Divestment l Yale Daily News
  • Over 100 students and Yale affiliates rallied in support of fossil fuel divestment outside Sterling Memorial Library last week. The action was organized by Fossil Free Yale (FFY) in response to the November election of Donald Trump, which has sparked widespread fears among climate activists about the future of U.S. environmental policy. FFY argued Sunday that the U.S. government can no longer be relied upon to ensure a livable planet and called on Yale to take action to reduce climate change by divesting from fossil fuels.
Simon Fraser University Says: Responsible Investment Pays Dividends for Environment l SFU Office of the President
  • Simon Fraser University (SFU) is taking action to counter climate change through their investment practices as they promote sustainability in their operations. Last month, the SFU Board of Governors committed to decrease the carbon footprint of its investment portfolio by at least 30 per cent by 2030. This target is in line with Canada’s climate commitment, and enables SFU to actively encourage companies to pursue lower carbon solutions, while also reducing our investment risk.
Barnard College Fossil Fuel Divestment Task Force Recommends Divestment From Climate Change Denying Companies, Coal and Tar Sands l The Columbia Spectator
  • Barnard’s Presidential Task Force to Examine Divestment formally recommended this week that the board of trustees fully divest the college’s endowment from coal and tar sand companies. The recommendation also encourages the trustees to divest Barnard’s holdings in companies that actively deny climate change.
Scientists and Laureates Urge Nobel Prize to Divest from Fossil Fuels l Common Dreams
  • Nobel prize winners and scientists urge the Nobel Foundation to divest its $420 million endowment from fossil fuels in a letter released today, ahead of the Nobel Prize 2016 ceremonies this Saturday. They argue that the institution ‘should not profit from the destruction of our planet’s climate’.

 

 

 

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Weekly News Round-Up: December 2nd, 2016

  • This report takes investment decision-makers through key questions to consider on climate-related systemic risk, challenging the common reasons for not acting. The report argues that hedging, risk assessment and divestment aim to “manage the unavoidable” – the first order impacts. However, these strategies fall short of addressing the second and third order impacts in complex, inter-connected systems. The report sets out to stimulate the necessary conversations between investment management organizations, their asset owners, and their consultants on the actions required to “avoid the unmanageable”.

 

Upcoming Events
 
RI Americas 2016: Long Term Value Creation l Responsible Investor and Bloomberg, December 6-7, 2016, New York, NY
  • This event will explore some of today's most critical ESG issues including: How is the US election result going to change responsible investment in America? What are action points from COP21 to COP22? What will next year’s proxy battle headlines be? Is there a conflict between activist investing and declining returns? Who needs to raise their game on ESG, and why? What ideas are there for product development across asset classes?
  • This webinar will help members learn how to pursue on-campus solar energy. Campus solar case studies will be presented from two AASHE members, and two national experts will discuss the larger trends driving solar energy on campuses. AASHE will also announce a contest that will provide detailed technical assistance to five campuses seeking to implement campus solar arrays.
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN is partnering with Second Nature to design endowment-related sessions.
 
Sustainable & ESG Investing
 
The Financial Case for Decarbonizing Investment Portfolios (Subscription) l Responsible Investor
  • The Portfolio Decarbonization Coalition (PDC) recently released its second annual progress report: Investment Portfolios in a Carbon Constrained World. The report describes the actions being taken by PDC’s 27 signatories (representing over US$3,000 billion in assets under management) to decarbonize their investment portfolios. 
Bloomberg Brief l Sustainable Finance (Dec. 1)
  • This week's Bloomberg Brief highlighted how investors concerned about the controversial Dakota Access Pipeline project have started submitting shareholder proposals to the energy companies building the pipeline as well as to the lenders behind it; Van Eck plans the first green bond ETF; SASB finds consumer-facing companies are better ESG reporters; and only one in five funds has a female investment manager.
Bloomberg Brief l Sustainable Finance (Nov. 23)
  • Last week's Bloomberg Brief highlighted how a drop in federal government support for electric vehicles won't stop demand for zero emission cars, PepsiCo.'s latest acquisition; what's ahead for Tesla after the SolarCity deal; a Q&A with John Mandyck, chief sustainability officer for United Technologies Corp; and an identified bisexual wage gap.
What are the Big Sustainable Investment Themes for Next Year and Beyond? l Investment Week
  • As 2017 approaches, sustainable investment is high on the agenda for many fund managers and experts. Here, they reveal which areas will make headlines and how they will gain exposure to them within their portfolios.
A Rundown of November Reports on Business, SDGs and Investing l Devex Impact
  • November was a busy month in the world of business and the sustainable development goals and the financing behind social and environmental challenges — at least if evaluated by the number of reports released. This article taken a look at a host of reports, white papers and research released in November.
 
Impact Investing
 
Place-Based Impact Investing: How to Invest in Your Own Backyard l Cornerstone Capital Journal of Sustainable Finance
  • A model to encourage broad-based place-based impact investing across all asset classes seems to be lacking in the impact investing sphere.  For fiduciaries of place-based organizations’ funds, like those at community foundations, pension plans, endowments and many family wealth pools, the how of regional impact investing is challenging. The due diligence requirements for what would be a small portion of a portfolio are as stringent as in global investing, but resources are often too constrained to allocate the necessary time and effort to seeking these smaller investments and finding enough of them for diversification, as well as measuring the impact and outcomes of these investments.
Impact Investing: A primer for IR Professionals l IR Magazine
  • This article offers a brief introduction to impact investing and how it differs from other sustainable investing strategies.
What is the Link Between SDGs and Impact Investing? l Triodos Investment Management
  • A little over one year ago, The United Nations adopted the Sustainable Development Goals (SDGs). These goals were created as a global call to action for positive change. Near the anniversary of the establishment of the SDGs, this article looks at how impact investing connects to the SDGs and the urgency behind it.

Climate Risk, Science & Regulation
  • This article lays out reasons why the incoming administration should reevaluate its position on the Paris Agreement and choose to stay. As the president-elect and relevant members of his transition team have made statements dismissing the mounting evidence of human-caused climate change, these arguments are needed for advancing U.S. interests that are distinct from the urgent need to slow and ultimately halt human-caused global climate change. 
Tesla Shock Means Global Gasoline Demand Has All But Peaked l Bloomberg
  • The International Energy Agency forecasts that global gasoline consumption has all but peaked as more efficient cars and the advent of electric vehicles from new players such as Tesla Motors Inc. halt demand growth in the next 25 years. That shift will have profound consequences for the oil-refining industry because gasoline accounts for one in four barrels consumed worldwide.
  • The Fletcher School of Law and Diplomacy at Tufts University announced today the launch of its Climate Policy Lab (CPL), a first-of-its-kind research and policy center working to evaluate current climate policies, utilizing empirical, informed research to make concrete recommendations to policymakers around the world. The Lab is a source of independent and objective advice for governments contemplating new policies consistent with the Paris Agreement on Climate Change.
Washington Won't Have Last Word on Climate Change l Bloomberg
  • This article was adapted from remarks delivered by Michael Bloomberg to the China General Chamber of Commerce.
Arctic Ice Melt Could Trigger Uncontrollable Climate Change at Global Level l The Guardian
  • Arctic scientists have warned that the increasingly rapid melting of the ice cap risks triggering 19 “tipping points” in the region that could have catastrophic consequences around the globe. The Arctic Resilience Report found that temperatures in the Arctic are currently about 20C above what would be expected for the time of year, which scientists describe as “off the charts”. Sea ice is at the lowest extent ever recorded for the time of year.
Trump's Big Plan for the Coal Industry Just Got Even Harder l CNBC
  • President-elect Donald Trump faces an uphill battle fulfilling his promises to revive the U.S. coal industry. The battlefield became even more pitched when Canada said it would speed up its effort to reduce its coal consumption. America's neighbor to the north was the fifth-largest market for U.S. coal in 2015. Its pledge on Monday to get off coal sooner than expected will only pile more pressure on a U.S. industry that has seen nearly half of its production fall into bankruptcy due to falling demand, lower prices and a global oversupply of coal.
Trillium Asset Management and 365 Other Companies Reaffirm Support for Paris Climate Agreement l Trillium Asset Management
  • Trillium Asset Management along with approximately 365 businesses and investors have organized a statement urging the incoming Trump administration and global leaders to continue support of the Paris Climate Agreement. The statement was announced at a press conference during the COP22 climate negotiations last week in Marrakech, Morocco.
Perils of Climate Change Could Swamp Coastal Real Estate l The New York Times
  • Though demand remains strong and developers continue to build near the water in many coastal cities, homeowners across the nation are slowly growing wary of buying property in areas most vulnerable to the effects of climate change.
Finland Reveals Plans to Wipe out Coal Use by 2030 (Subscription) l Business Green
  • Within the next fifteen years coal will have no place in the Finnish energy system, according to a new climate plan released by the Finnish government which sets out a roadmap towards the country's new climate strategy.
Marrakech Climate Talks Show There Is No Turning Back On Clean Energy Transition l Forbes
  • The just-concluded Marrakech climate talks reflected a shared understanding of the need to supercharge the already irreversible global clean energy transition. Even as some fretted that political developments in the U.S. might chill early-stage implementation of the Paris Agreement, the opposite occurred. As the tremendous economic and social costs of climate change continue to mount, and as the window of opportunity for stabilizing the climate shrinks fast, talks among country delegations, cities, states, companies, investors, labor leaders and civil society took on a renewed sense of urgency in accelerating forward.
The End of the Load for Coal and Gas l Carbon Tracker Initiative
  • Renewable power generation costs are already lower on average worldwide than those of fossil fuels and clean energy plants will become even more cost-competitive by 2020, a new sensitivity analysis published by the Carbon Tracker Initiative finds.
U.S. Companies to Trump: Don’t Abandon Global Climate Deal l The New York Times
  • Hundreds of American companies, including Mars, Nike, Levi Strauss and Starbucks, have urged President-elect Donald J. Trump not to abandon the Paris climate deal, saying a failure by the United States to build a clean economy endangers American prosperity. In a plea addressed to Mr. Trump — as well as President Obama and members of Congress — 365 companies and major investors emphasized their “deep commitment to addressing climate change,” and demanded that he leave in place low-emissions policies in the United States.

Clean Energy
 
Trump and Clean Energy – Gloom, Probability and Hard Realities l Bloomberg New Energy Finance
  • In this article, Ethan Zindler, Head of Americas for Bloomberg New Energy Finance, explains what he thinks Trump's presidency will mean for clean energy.
Clean Energy Analyst: Renewables Are 'Here To Stay' Under Trump Presidency l NPR
  • NPR's Ari Shapiro talks to Amy Myers Jaffe, executive director of energy and sustainability at the University of California, Davis, about the future of renewable energy under the Trump administration.
General Endowment & Higher Education Sustainability News
 
Yes, Tuition is Rising, But Endowments Probably Aren't the Answer l EAB
  • Lawmakers and advocates are calling on colleges and universities to divert more of their endowment funds toward scholarships to combat rising tuition rates, but institutions argue that view is short-sighted. Representatives of many institutions say supporting low-income students is exactly what they're trying to do, although it has become increasingly difficult to accomplish in a challenging economic climate.
Portland State University Wins National Award for Community Engagement l PSU News
  • The Association of Public and Land-grant Universities (APLU) has named Portland State University the winner of the C. Peter Magrath Community Engagement Scholarship Award in recognition of its 27-year partnership with Portland’s Bureau of Planning and Sustainability. 
Simon Fraser University to Reduce Investment Carbon Footprint by 30% by 2030 l Metro News
  • Simon Fraser University’s Board of Governors announced Thursday it will reduce the carbon footprint of its investments by at least 30 per cent by 2030, making it the second Canadian university to commit to such a reduction.The University of Ottawa made the same commitment in April 2016.
Temple University Endowment Surpasses $500M for First Time l The Province
  • Temple University officials say that the north Philadelphia school's endowment has grown to surpass $500 million for the first time. The Philadelphia Inquirer reports university leaders credit both an increase in donations and better investment strategies as the reason for Temple reaching the milestone.
America's Richest Colleges and Universities Brace for Budget Hits as Endowments Stumble l Washington Business Journal
  • An American City Business Journals analysis of endowment returns at 25 private, nonprofit schools with some of the largest investment portfolios in the country found that all but one — Boston University — saw a year-over-year decline in value. Cumulatively, those 25 endowments shed 4 percent, or $5.3 billion, of their value during the most-recent reporting period. The results for these 25 schools suggest that for private colleges collectively, this could be higher ed's worst year on record since 2009, when the average college endowment reported a 16 percent loss for the year. 

Fossil Fuel Divestment
 
Fossil Fuel Divestment Soars in UK Universities l The Guardian
  • The number of British universities divesting from fossil fuels has leaped to 43, a quarter of the total. The surge means the UK leads the world in campus action to pull university funds from oil, gas and coal. Financial institutions and charities are also divesting and at least $2.6tn (£2.1tn) of assets are covered by such pledges around the world.
Trinity College to Announce its Decision on Divestment, Recognizing Global Movement l University Times
  • Universities across the globe, including Trinity College in Ireland, are paving the way for other institutions to divest from fossil fuels. While the campaign began in the US, it has rapidly gained traction in Europe, with over 160 divestment commitments from various institutions in Europe, including the capital cities of France, Germany, Norway, Sweden and Denmark. In Europe alone, this already totals more than $4 trillion worth of divested fossil fuel stocks.
New York University President Talks Divestment and the Board of Trustees l NYU Local
  • NYU President Andrew Hamilton took strong stances against divesting the university’s holdings in fossil fuel and the boycott, divest, and sanction movement that aims to cut off international support for Israel—two activist causes that have gained relative traction at NYU—during a recent interview with NYU Local.

 

 

 

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