Weekly News Round-Up: August 11th, 2017

Upcoming Events
Intentionally Designed Endowment Roundtable | Sept. 8th, 2017, Berkeley, CA 
  • Building on the success of previous events, the Intentional Endowments Network, in partnership with the Center for Responsible Business at Berkeley-Haas and BlackRock, is pleased to host an Intentionally Designed Endowment Roundtable for endowment decision-makers and stakeholders from institutions interested in enhancing their leadership on sustainable investing. The event will focus on low-carbon strategies and climate solutions.
The SRI Conference l November 1-3, 2017, San Diego, CA
  • The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
Higher Education Sustainable Investing News

Our Commitment to a Sustainable Future l Australian Catholic University
  • Australian Catholic University (ACU) demonstrated its commitment to a sustainable future on Tuesday 25 July by securing $200 million in investor funds earmarked for projects that deliver positive social and environmental outcomes. ACU raised the funds through the sale of Sustainability Bonds to some of Australasia’s biggest institutional investors. The ACU Sustainability Bonds are the first Sustainability Bonds issued in Australia. These Sustainability Bonds benefit from a second party opinion from Sustainalytics and financial assurance provided by KPMG.
  • UniSuper, the $60 billion fund for Australia's higher education and research sector, is appointing an active strategy for its once passively managed sustainable investment option. Under this important shift management of the Global Environmental Opportunities (GEO) investment option will be internalised and the MSCI ESG Research Sustainable Impact Metrics database adopted for portfolio construction.
Sustainable, Responsible, Impact & ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how development banks are bucking a general downward trend in clean energy investment, pumping billions into renewables and energy efficiency; Fannie Mae sells the first U.S. commercial mortgage-backed security wholly backed by green loans; Green bond assurance rises but at the expense of disclosure; BlackRock cuts fees on ESG ETFs; and JetBlue's Head of Sustainability Sophia Mendelsohn refocuses sustainability reporting for its investors.

Sustainability as a Source of Growth l Investor Daily

  • Long-term social, demographic, environmental and resource challenges are creating plenty of opportunities, writes Pengana Capital’s Adam Myers in this article – as well as growing risks for sectors that deplete human and natural capital.
ROI of Sustainability is More Complex Than You Think l National Real Estate Investor
  • Benchmarking a building’s energy outputs and developing a strategy to implement more sustainable practices will result in a more efficiently operated asset, which in turn yields improved ROI through higher rents, quicker absorption and lower vacancies, and lower overall operating costs. In addition, the incremental cost of implementing more energy-efficient building systems is often negligible when you consider the many available utility rebates and government incentives. But there’s more to it: the reality is that the value of energy efficiency and sustainability can prove to be greater, more lucrative or more complex than it appears on the surface. This article explores some of the “hidden” reasons why it pays to invest in energy optimization.
In ESG We Trust -- The Risk And Rewards Of ESG Investing l Forbes
  • Sustainability is basically about identifying well-managed companies that have a long term view,” continues Thorendal, “and where sustainability aspects are part of their business model even though it is not necessarily expressed as sustainability.” For an investor, the first step of identifying these well-managed companies is integrating ESG-factors in a financial analysis. An investor should also understand how the asset managers apply ESG factors in their own analysis. This article describes what investors should look for in an investment manager. 
Resolving ESG Conflicts: Important, But Not Material? l CFA Institute
  • Institutional investors take note: “Doing Well by Doing Good” is not just a sales pitch private wealth advisers use to court millennial clients. The global economy’s interconnected nature has turned every business decision, even the nonfinancial ones, into forces that can have far-reaching and unexpected effects on investment returns. Pension plans and other large, long-term investors are acting accordingly. One such institution is CalSTRS, which oversees a portfolio of about $208 billion. At the 62nd Annual Financial Analysts Seminar, CalSTRS CIO Christopher J. Ailman discussed the importance of integrating ESG considerations into the investment decision-making process. This article discusses his talk.

MSCI Reports Strong Growth in ESG Investing l Just Means

  • ESG investing is fast becoming a mainstream area within the investment industry. An increasing number of investors are now adopting the Principles for Responsible Investment (PRI), and choosing companies that score high on ESG performance. Investors inclined towards responsible investments operate on the belief that in the long run addressing ESG issues will preserve and boost their portfolio returns. In sync with this trend, MSCI says it is experiencing increasingly strong demand for a combination of ESG and factor indices. The company has reported a $2.7 million or 24.7 percent increase in second-quarter ESG revenues to $13.7 million in its Q2 earnings presentation.
Gender And ESG -- 'More Women' Means 'More Money' l Forbes
  • In this Q&A, Richard Gröttheim, Chief Executive Officer at AP Fonden 7, and Niklas Ekvall, CEO of AP4, discuss gender diversity, good governance and how institutional investor inquires in gender diversity positively affect ESG integration.
The $500 Million Blue Haven Initiative, Unplugged (Podcast) l Impact Aplpha
  • The Blue Haven Initiative was one of the earliest family offices to commit itself to 100% mission-aligned investing. At more than $500 million, it’s one of the biggest to make that commitment. And it’s one of the first to share its challenges publicly. In this edition of the Returns on Investment podcast, the principals, Liesel Pritzker Simmons and Ian Simmons, share their investment philosophies, their favorite investments, and the myths about impact investing that they’d list to bust.
Millennials are Driving a $9 Trillion Change in Investing l Business Insider
  • Millennials are driving the nearly $9 trillion sustainable investing market, according to a survey of 1,000 investors by Morgan Stanley's Institute for Sustainable Investing.  Despite recent strides in the space, the belief that sustainable investing solutions deliver weaker returns remains prevalent.
How Impact Investors Help Small Fishermen Stay Afloat l EcoSystem Marketplace
  • Impact investors have poured more than $8 billion into projects that support sustainable land management, and now more money is also finding its way into sustainable fishing. This month, a new partnership providing equity to sustainable small-scale fishing-related enterprises in Philippines and Indonesia, has made its first investment in a Filipino fishing processing and exporting group.
Green Bonds
 
Green Bonds Gain Momentum l benzinga
  • With so many investors applying ESG principles to equity investments, it was only a matter of time before the bond universe got in on the act. A new fixed income exchange-traded fund, the VanEck Vectors Green Bond ETF allows bond investors to emphasize ESG virtues in the bond market. The VanEck Vectors Green Bond ETF debuted in March and could serve to illuminate investors to the potential of green bonds, a still small but rapidly growing part of the bond market. GRNB, the first ETF in the U.S. dedicated to green bonds, follows the S&P Green Bond Select Index.

Investment Manager News
 
Brown Advisory Launches Sustainable Bond Fund l CISION
  • Brown Advisory, an independent investment management and strategic advisory firm, announced this week the launch of the Brown Advisory Sustainable Bond Fund, which seeks to deliver attractive risk-adjusted returns over time by incorporating rigorous environmental, social and governance (ESG) research. 
Fee Cuts Make Their Way to ESG ETFs l Investopedia
  • Issuers of ETFs are not shy about cutting fees on their products in an effort to attract more assets from investors. No corner of the ETF universe is off limits when it comes to sponsors trimming fees, and that sentiment is being confirmed once again as BlackRock, Inc.'s iShares unit announced expense ratio reductions on several of its ETFs aimed at ESG investing principles. BlackRock's iShares unit, the world's largest ETF sponsor, has eight ETFs aimed at sustainable investing themes, several of which are dedicated ESG funds.
The Rohatyn Group to Acquire Grantham, Mayo, Van Otterloo & Co. Renewable Resources l Business Wire
  • The Rohatyn Group (“TRG”), a specialized asset management firm focused on emerging markets, global investment management firm Grantham, Mayo, Van Otterloo & Co. LLC (“GMO”), and GMO Renewable Resources, LLC (“GMORR”), a joint venture between GMO and the GMORR principals that invests in forestry and agriculture opportunities, today announced that they have entered into a definitive agreement whereby TRG will acquire the GMORR business from GMO and the GMORR principals. Under the agreement, the team from GMORR is expected to move, intact, to TRG. GMO, which currently owns 51% of the GMORR joint venture, with the GMORR principals owning 49%, will retain its investments in funds managed by GMORR.
TruValue Labs™ Launches ESG Momentum™ Score in Suite of New ESG Metrics l CISION
  • TruValue Labs today announced the ESG Momentum score, the first ESG indicator that leverages artificial intelligence, big data and the SASB materiality framework. The score reveals the direction, or trend, of ESG performance based on daily data. ESG Momentum was built to serve investment professionals who know that today's company valuations depend on performance in the areas of ESG.
General Higher Education Endowment & Sustainability News
 
University of California Endowment Revamps Asset Allocation in Turn to More Private Assets l Pensions & Investments
  • The $10.6 billion University of California endowment is embarking on a major asset allocation restructure that will cut the amount invested in equities by a third and put a new emphasis on private market investments, adding more dollars into private equity, absolute-return strategies, and real assets. The new asset allocation for the Oakland-based endowment cuts equities to 30% from 45% of the endowment, shows a webcast of the UC Regents investment subcommittee on July 11. Private equity increases to 22.5% from 11.2% and absolute-return strategies increase to 25% from 18%.
Oxford University Endowment Returns 16.4% in 2016 l Pensions & Investments
  • Oxford Endowment Fund, Oxford, England, returned 16.4% over the year ended Dec. 31, bolstering assets by 23.3% to £2.34 billion ($2.9 billion). The latest annual report, published by Oxford University Endowment Management, an Oxford University subsidiary and manager of the assets, said the fund had returned an annualized 11% over the three years ended Dec. 31 and an annualized 11.8% return over the five-year period. It returned 7.6% in 2015.
  • Sustainability professionals from around the world will gather at Yale University this September 12-15 for four days of thought-provoking lectures and interactive discussions at the Yale Sustainability Leadership Forum. The Forum’s small class size fosters an environment of idea sharing and gives participants and speakers an opportunity to interact one-on-one. Speakers are distinguished thought leaders and innovators drawn from Yale's renowned Law School, School of Management, and School of Forestry & Environmental Studies, as well as leading practitioners in government and industry.
First Colombian Institution and Two Additional Canadian Institutions Designated as Changemaker Campuses l AshokaU
  • Ashoka U announced this week that three additional institutions of higher education have joined its network of Changemaker Campuses, expanding the network’s global presence to over 40 institutions across eight countries. The new Changemaker Campuses are Colegio de Estudios Superiores de Administración (CESA), a private business school in Bogotá, Colombia; Mount Royal University, a public institution in Calgary, Canada; and Simon Fraser University, a public research institution in Vancouver, Canada.
Photons for the Future: Solar Panels Providing a Bright Future for Eastern Kentucky University Students l The Richmond Register
  • The Photons for the Future scholarship program for students pursuing a degrees in scientific fields has one of the college's (and galaxy's) biggest donors — the sun. In order to fund the $1,000 scholarships, the university will be using the monetary savings generated by the recent installation of 25 solar panels on campus. According to Patrick McKee, EKU's sustainability manager, the system which was installed last week near the newly completed second phase of the university's science building is predicted to generate approximately 10,300 kWh of energy per year.
College Presidents Endorse Carbon Pricing to Fight Climate Change l philly.com
  • Leaders of 125 cities, nine states, 902 businesses and investors, and 183 colleges and universities recently signed an open letter committing to concrete emissions reductions that align with the Paris agreement goals. These institutional commitments to reducing emissions are crucial, but to be effective, they must be part of a more comprehensive strategy that works toward systemic change. Putting a price on carbon has the potential to create meaningful policy and behavioral changes nationwide. More than 30 college and university presidents — the Leadership Circle — have announced public support for the “Put a Price on It” campaign, an initiative that advocates for carbon pricing as a fair, achievable, and powerful policy response to climate change.
Climate Risk, Science & Regulation
 
Scientists Fear Trump Will Dismiss Blunt Climate Report l The New York Times
  • The average temperature in the United States has risen rapidly and drastically since 1980, and recent decades have been the warmest of the past 1,500 years, according to a sweeping federal climate change report awaiting approval by the Trump administration. The draft report by scientists from 13 federal agencies concludes that Americans are feeling the effects of climate change right now. It directly contradicts claims by President Trump and members of his cabinet who say that the human contribution to climate change is uncertain, and that the ability to predict the effects is limited. “Evidence for a changing climate abounds, from the top of the atmosphere to the depths of the oceans,” a draft of the report states. 
  • Fossil fuels have two major problems that paint a dim picture for their future energy dominance. These problems are inter-related but still should be discussed separately. First, they cause climate change. We know that, we’ve known it for decades, and we know that continued use of fossil fuels will cause enormous worldwide economic and social consequences. Second, fossil fuels are expensive. Much of their costs are hidden, however, as subsidies. If people knew how large their subsidies were, there would be a backlash against them from so-called financial conservatives. A new study finds 6.5% of global GDP goes to subsidizing fossil fuels.
Climate Report Could Force Trump to Choose Between Science and His Base l The New York Times
  • The impending release of a key government report on climate change will force President Trump to choose between accepting the conclusions of his administration’s scientists and the demands of his conservative supporters, who remain deeply unconvinced that humans are the cause of the planet’s warming. A White House official said on Tuesday that it was still reviewing the draft document that was written by scientists, some of whom have said they fear Mr. Trump will seek to bury it or alter its contents before it is formally released. Sarah Huckabee Sanders, the White House press secretary, said the administration would not comment on the report before its scheduled release this fall.
Clean Energy
 
  • This year is proving to be the year of investing in innovative energy technology.  Mercom Capital Group reports that in the first half of 2017,  over $1 billion in venture capital and private equity funding has been invested in battery storage, smart grid and energy efficiency companies worldwide, exceeding the first-half funding benchmarks in 2014, 2015, and 2016.
Fossil Fuel Divestment
 
  • How are we to deal with fossil fuel companies that fight the world’s shift to renewables, fund bogus research attacking climate change and generally strip-mine local communities’ tomorrows for short-term profits today? This article discusses how Jesuit Colleges and Universities can use their faith as a lens to approach divestment and shareholder engagement conversations.
  • The investment staff of the San Francisco City & County Employees' Retirement System and its general investment consultant, NEPC, have come out in opposition to a plan to divest fossil-fuel company holdings, including industry giants like Exxon Mobil, Royal Dutch Shell and Chevron Corp. Meanwhile, the retirement board is split on how they will vote, four years after the San Francisco Board of Supervisors passed a resolution calling on the $23 billion pension fund to divest of fossil-fuel company securities.
Engagement by Three Coal Companies Staves Off Calpers Divestment
 l IR Magazine
  • Three coal companies have avoided divestment from Calpers by convincing the US pension fund they planned to make significant changes to their business models. This week Calpers announced it had divested from 14 thermal coal companies, which mine coal for electricity generation, to meet the requirements of a law passed in 2015 aimed at reducing California’s reliance on carbon. The law, which applies to both Calpers and CalSTRS, required the pension funds to divest from coal holdings by July 1, 2017 unless the companies in question had plans to increase their focus on clean energy sources. In a report describing its adherence with the law, Calpers reveals that three companies – Banpu of Thailand, Exxaro Resources of South Africa and PT Adaro Energy of Indonesia – side-stepped divestment following engagement with the fund.

 

 

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Weekly News Round-Up: August 4th, 2017

New IEN Member
  • Eastern Washington University 
 
Upcoming Events
Intentionally Designed Endowment Roundtable | IEN, Center for Responsible Business at Berkeley-Haas, and BlackRock, Friday, Sept. 8th, 2017, Berkeley, CA 
  • Building on the success of previous events, the Intentional Endowments Network, in partnership with the Center for Responsible Business at Berkeley-Haas and BlackRock, is pleased to host an Intentionally Designed Endowment Roundtable for endowment decision-makers and stakeholders from institutions interested in enhancing their leadership on sustainable investing.
The SRI Conference l November 1-3, 2017, San Diego, CA
  • The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
New Reports & Resources
Podcast: "Unlocking Endowments for Impact" | Coalesce, Campus Sustainability Accelerator  
  • What are the facts, case studies, myths, and barriers to shifting how endowments are invested? Explore the evolving field of impact investing with Georges Dyer, Principal from the Intentional Endowments Network. (Scroll down on page to access the podcast) 

Book: EarthEd: Rethinking Education on a Changing Planet | Island Press

  • Earth education is traditionally confined to specific topics: ecoliteracy, outdoor education, environmental science. But in the coming century, on track to be the warmest in human history, every aspect of human life will be affected by our changing planet. Emerging diseases, food shortages, drought, and waterlogged cities are just some of the unprecedented challenges that today’s students will face. How do we prepare 9.5 billion people for life in the Anthropocene, to thrive in this uncharted and more chaotic future? Answers are being developed in universities, preschools, professional schools, and even prisons around the world.
Endowment Sustainable Investing News
Divested from Fossil Fuels Since 2011, Hampshire College Reports Endowment Investment Returns | Huffington Post
  • President, Johnathan Lash and Investment Committee Chair, Dick Hurd report on how and why Hampshire has aligned endowment investments with mission and sustainability outcomes -- and how investment returns have performed as a result: "Organizations can align their investment strategy with their educational and social mission, without forfeiting financial returns. The Daoist philosopher Lao Tzu observed that “the best way to teach is to be.” Students learn not just from professors but from the entire culture of their school. Every decision by faculty and administrators, whether on standards for free speech, curriculum, design of buildings, or how to invest endowment funds, has an impact." 
Sustainable, Responsible, Impact & ESG Investing
Sustainable Finance | Bloomberg Briefs
  • A record volume of green bonds were issued in the first half of 2017, Bloomberg New Energy Finance’s monthly report shows. Corporate bonds with a clean energy focus are on the rise; Tesla burned through a record amount of cash before bringing out its most affordable model yet; Procter & Gamble says Nelson Peltz is confused about its business as a fight escalates.
  • Swiss Re, the world’s second-largest reinsurer, is 90 percent of the way through the process of shifting its entire $130 billion liquid asset portfolio towards ESG indices. It expects to complete the transition by the end of the third quarter of 2017. Risk-averse reinsurers's finances are being hit more often by the impact of climate-linked catastrophes, such as floods and hurricanes. That is prompting more frequent conversations in the corporate world around this challenge: How to help mitigate the risks that climate change poses in certain sectors and regions. Swiss Re's decision to tie its portfolio to ESG principles is, at least in part, motivated by a need to stay on top of what companies and sectors are actually doing.
Good returns don't require 'bad' investments | Houston Chronicle 
  • Good guys don't necessarily have to finish last when it comes to investing. For years, conventional wisdom said that do-gooders who only wanted to invest in responsible corporations would have to sacrifice rates of returns. Brokers claimed that if you cut out all the big companies that polluted waterways, produced harmful products or engaged in questionable management practices, you were going to leave money on the table. Two independent financial data analysis firms, though, found that focusing on environmental, social and governance factors - what the industry calls ESG - can actually outperform portfolios loaded with bad boy corporations.
  • On May 18, 2017, CAIA’s Boston Chapter held a panel discussion at the InterContinental Boston on “An Alternative Approach to Responsible Investing.” Moderated by Bill Kelly, CEO, CAIA Association, panelists included leading ESG investing experts Tim Brennan, Treasurer & CFO, Unitarian Universalist Association; Jeff Finkelman, CFA, Research Associate, Impact Investments, Athena Capital; and Lee Gardella, Managing Director, Head of Risk Management, Adveq Management.
Pension funds turn up ESG dial | Euromoney
  • Blue states lead lagging US on environmental, social and governance (ESG) investing; pension funds hold investment managers accountable.
More Evidence of Solid Performance From Sustainable Funds | Morningstar
  • Investors in funds that incorporate environmental, social, and governance factors into their process appear not to suffer a performance penalty.
Sustainability Gets A Trump Bump | Barron's
  • The Trump administration may want to gut the Environmental Protection Agency and roll back transgender rights, but increasing numbers of investors are pushing back by searching out companies with the best environmental, social and governance records, says Morningstar.

Governance
Investors want more women, minorities on corporate boards | Boston Globe
  • Big investors including the Massachuetts pension fund and State Street Global Advisors are pushing companies they invest in to diversify their boards. What do Amazon, Facebook, and Netflix have in common? Not a single person of color sits on their corporate boards. For that reason alone, the Massachusetts pension fund refused this year to support the slate of board nominees recommended by each company.
  • A new, first-of-its-kind investment mechanism could bridge the gap by unlocking private financing to stimulate investor demand for reducing deforestation. The Forests Bond will provide investors the opportunity to invest in a traditional financial product that offers the unique option of receiving interest payments in the form of environmental impact — in this case, verified carbon credits generated through REDD, an initiative that rewards landholders for protecting forests, thereby reducing carbon emissions that worsen climate change.

Investment Manager News
Rockefeller Foundation Backs Nonprofit ETF Startup | US News
  • The Rockefeller Foundation is helping to finance a startup hoping to build exchange-traded funds for nonprofit organizations and direct the profits back to their causes, officials from the group said with a plan to announce the initiative later on Tuesday.The foundation awarded a $300,000 grant to Impact Shares Corp, a Dallas-area organization that aims to offer charities the ability to create ETFs that will be sold to the public.
  • The Money Management Institute (MMI) has partnered with Morningstar in a joint initiative, the MMI/Morningstar Sustainable Investing Initiative, to help educate advisors about the sustainable investment opportunity, notably the incorporation of environmental, social and governance or ESG factors, and how to better implement these strategies in their practices.
General Endowment News
Higher ed institutions among nonprofits with largest endowment expansions | EducationDive
  • The Chronicle of Philanthropy reports that nonprofits are increasingly growing their substantial endowments, with a significant portion of that growth occurring at colleges and universities: Harvard University added $11.1 billion from 2010 to 2015, a 44% increase, while Princeton University saw its endowment grow 90% in the same period with the addition of $10.5 billion.
Colonial Williamsburg's CEO blamed past decisions for its dire state | The Virginian Pilot
  • It was an announcement by Reiss in late June – laying out just how far Colonial Williamsburg had fallen, losing $277 million in five years and draining its endowment of more than $600 million in a decade – that surprised even longtime observers, donors and locals.

Sustainability & Climate Risk, Science and Regulation
 
By Tomorrow, We Will Have Consumed More Resources So Far This Year Than the Planet Is Capable of Regenerating | EcoWatch
  • We humans use a lot of stuff — so much stuff, in fact, that we consume more in a year than the planet is capable of regenerating. That wasn't a problem until a few decades ago. Back in 1987 the "overshoot" date for Earth's resources was December 19, less than two weeks before the end of the year. Thirty years later, however, that date has moved up—and up—and up. Last year what has now been dubbed "Earth Overshoot Day" had moved all the way up to August 8.
The Uninhabitable Earth | New York Magazine
  • A comprehensive look at the severity of the threats posed by climate change: "It is, I promise, worse than you think. If your anxiety about global warming is dominated by fears of sea-level rise, you are barely scratching the surface of what terrors are possible, even within the lifetime of a teenager today. And yet the swelling seas — and the cities they will drown — have so dominated the picture of global warming, and so overwhelmed our capacity for climate panic, that they have occluded our perception of other threats, many much closer at hand. Rising oceans are bad, in fact very bad; but fleeing the coastline will not be enough..."
  • Even if humans could instantly turn off all our emissions of greenhouse gases, the Earth would continue to heat upabout two more degrees Fahrenheit by the turn of the century, according to a sophisticated new analysis.
In Sweltering South, Climate Change Is Now a Workplace Hazard | New York Times
  • Adolfo Guerra, a landscaper in this port city on the Gulf of Mexico, remembers panicking as his co-worker vomited and convulsed after hours of mowing lawns in stifling heat. Other workers rushed to cover him with ice, and the man recovered. But for Mr. Guerra, 24, who spends nine hours a day six days a week doing yard work, the episode was a reminder of the dangers that exist for outdoor workers as the planet warms.
 
Clean Energy
The Booming Wind Energy Industry Might Finally Break Its Massachusetts Hex | Huffington Post
  • The company behind North America’s first offshore wind farm unveiled plans this week to bring seaward turbines to Massachusetts. If the Bay State regulators give Deepwater Wind their blessing to build a massive wind farm in the waters between Massachusetts and Rhode Island, the burgeoning wind industry could finally break the curse of Cape Wind, the failed 24-square-mile project first proposed off Cape Cod 16 years ago. Renewable energy skeptics have long used Cape Wind’s failure as proof that turbines were too costly, dangerous and unpopular to serve as a top power source for the country.  
Fossil Fuel Divestment
  • It’s been a rough stretch for Wells Fargo. The bank has been in the news quite a bit lately over a series of fraud scandals and revelations about their questionable business practices, leading major cities like New York, Philadelphia, and Chicago to pull funds from the bank. At the same time, a grassroots movement is growing to use divestment to hold Wells Fargo and other big banks accountable for their investments that prop up the dirty fossil fuel projects that threaten our communities and our climate.

 

 

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Weekly News Round-Up: July 28th, 2017

IEN in the News

U.S. Impact Investing Alliance Launches to Scale the Practice of Impact Investing l U.S. Impact Investing Alliance

  • The U.S. Impact Investing Alliance (“Alliance”) this week announced the launch of its expanded network of impact investing leaders dedicated to advancing this growing market. The Alliance was founded last year by representatives from philanthropy, business and finance to champion the potential of impact investing by increasing awareness of impact investing in the U.S., fostering deployment of and demand for impact capital across asset classes globally, and by partnering with policymakers and other stakeholders to build the impact investing ecosystem. The Alliance is also launching an Industry Advisory Council of leading impact investing network organizations. The Intentional Endowments Network is one of the organizations leading this Council.

New Reports
 
The ESG Integration Paradox l Harvard Law School Forum on Corporate Governance and Financial Regulation
  • Michael T. Cappucci is Senior Vice President at Harvard Management Company. This post is based on a recent paper by Mr. Cappucci. If investment managers followed the old saying “whatever is worth doing is worth doing well,” then more would have best‐in‐class ESG programs. It used to be that asset owners could identify which investment managers “got” ESG investing principles simply by asking whether they had a written ESG policy. Today, most investment managers have something to say about ESG issues, and written ESG policies are becoming ubiquitous. Yet, as anyone who has ever looked at investment managers’ ESG policies can attest, the existence of a written document is not a reliable indicator of a firm’s commitment to or performance on sustainable long‐term goals.
  • On July 13, 2017, PRI launched guidance on incorporating ESG provisions in private equity fund terms. The publication, Incorporating Responsible Investment Requirements into Private Equity Fund Terms (the Guidance), followed a year-long consultation period with PRI signatories, expert counsel, and industry associations. The Guidance aims to demystify the concept of ESG provisions, outline the terms of these provisions and work towards a consistent industry approach on this aspect of responsible investment. The Guidance identifies current and emerging best practices, as well as possible limitations. In particular, the Guidance offers practical solutions to LPs and GPs that are considering how they may integrate responsible investment into fund terms.
 
Employment Opportunities

FAIRR Investor Engagement Officer

  • We are looking for an enthusiastic candidate with 3-5 years work experience to join our small team to support FAIRR’s collaborative investor engagement work with global food companies. The role will provide support and coordination for FAIRR’s existing engagements and assist in the development of new work-streams. This is an exciting opportunity to join an innovative and growing organization with huge ambition. 

FAIRR Senior Communications Officer

  • This role is an exciting opportunity for an enthusiastic senior communications professional to lead the global expansion of a fast-growing initiative that is reshaping the views of the investment risks and opportunities within both the global food system and the intensive livestock production sector.  Experience of business/ financial communications and issues management will be essential as will previous experience international media activity. An interest in sustainable food or animal welfare issues is an advantage.  
Endowment Sustainable Investing News
 
  • Reaffirming its commitment to social justice and environmental sustainability, Loyola Marymount University announced it has signed onto the United Nations-supported Principles for Responsible Investment. The action places LMU among just a handful of university signatories across the country, and more than 1,700 investors, financial firms, and other institutions, who have agreed to the global network’s guidelines for incorporating environmental, social, and governance factors into investment decisions.
  • The Northland College Board of Trustees voted Friday to fully divest Northland College’s endowment funds from fossil fuels in the next five years. Approximately 2.9 percent of the College’s $28 million endowment—about $823,000—is currently invested in fossil fuels, according to the Carbon Underground 200, an annually updated global listing of the top 100 public coal, and the top 100 natural gas and oil companies. These investments will be replaced with more socially responsible investments with no new endowment funds invested in fossil fuel companies.
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how State Street Corp. followed through on its Fearless Girl pledge to vote against directors at companies that don’t have women on their boards; Snap and Blue Apron excluded from indexes for no-vote shares; Morningstar acquires 40 percent ownership stake in Sustainalytics; International Brotherhood of Teamsters gets a say-on-pay win at McKesson Corp.; and Darrin Williams, CEO of Southern Bancorp, sees growing Wall Street interest in community development financial institutions. 
10 Studies That Show How and Why ESG Investing Works l Reuters
  • Earlier this year, Reuters laid out the top 10 reasons Wealth Advisers and Managers are following investor demand to ESG. The next question: how do ESG, or environment, social, and governance investments, perform? When do these strategies work, and why? Here’s a look at the circumstances under which ESG-related investing works the best, across different asset classes such as stocks and bonds.
Ethical Funds Show That Doing Good Can Be Profitable as They Beat Rivals by Backing Firms Loved by Millennials l This is Money
  • Fund managers trying to woo younger investors are backing firms that do good in the world. Ethical funds are undergoing a major overhaul as asset managers try to work out what is important to the next generation of investors. Catherine Howarth, chief executive at Share Action, a charity which promotes responsible investment, says: ‘There is a generational shift taking place in investing. Ethical funds in the 1980s were focused on avoiding arms, pornography and tobacco, but millennials are more interested in labour rights and the environment. ‘Funds need to reflect the priorities of a new generation.’
Is the “Trump Bump” in SRI Sustainable? l WealthManagement.com
  • Donald Trump's election gave a sharp boost to demand for socially responsible investment funds, just as several large asset managers moved into the field. “The political climate has buttressed interest in sustainable investing in a way we would not have imagined prior to the election,” says Joe Keefe, president and CEO of Pax World Management, which launched the first socially responsible mutual fund in the U.S. in 1971, a year after the first Earth Day. It remains to be seen if the new money flowing into these funds can continue at the same pace.
Short Sellers Less Active in ESG Stocks l Fund Strategy
  • Short sellers are less active in companies that perform strongly on ESG factors as ESG ETFs attract record inflows. North American companies that rank in the top 10 per cent based on ESG ratings have 1.8 per cent shares on loan, less than half of that seen worldwide, IHS Markit analysis shows. Research analyst Simon Colvin says there are still plenty of short targets among firms ranked highly for ESG, but that this is likely company specific.
Trump Will Not Derail the March of Sustainable Investing l Economic Voice
  • The US withdrawal from the Paris Climate Agreement has initiated a debate about whether the reversal in US policy will halt momentum within the sustainable economy. Although undoubtedly a disappointing development and one that will impact a number of industries, we argue that it will not derail the structural shift to a low carbon world. In our view, there are four powerful factors that will continue to drive innovation and development: policy and regulatory pressure; investment flows; technology; and demographic trends.
Passive Managers are Increasingly Interested in ESG l FT Adviser
  • Passive managers are no longer treating stewardship responsibilities as a ‘box-ticking’ exercise, but are actively looking to influence investee companies and help improve environmental, social and governance (ESG) standards across the board. They vote and engage directly with firms on prominent issues such as executive pay, board diversity and climate change. As a result there has been a clear shift in recent years, primarily driven by large asset owners. Institutional investors are increasingly aware of the positive impact that ESG integration and active ownership practices can have on investment performance. Regulators have contributed further with the adoption of stewardship codes in several countries, including the UK, Switzerland and most recently Japan.
ESG in Emerging Markets Depends on Better Data and Disclosure l Financial Times
  • During the past few years, data collection and monitoring of developed market companies have become significantly more prudent and accurate, while emerging market corporates have been left behind. In terms of ESG, emerging markets are suffering from a perception deficit compared with their developed market peers. The most obvious reasons they score poorly are limited data availability and lack of disclosure, resulting in artificially low ESG rankings.
Why Impact Investing Needs to Go Mainstream l Knowledge at Wharton
  • In this interview, Durreen Shahnaz, who set up Impact Investment Exchange (IIX), discusses impact investing and the recent $8 million Women’s Livelihood Bond.
  • A recent survey of 320-plus institutional investors found broad support for ESG-related themes, with 80% of respondents stating that companies have not considered environmental and social issues as core to their business and that generating sustainable returns over time requires a sharper focus on ESG issues. Expect hedge funds and other activist investors to get in the ESG game as well as they look for new measures to improve corporate performance and rally support for campaigns. The bottom line is that the market is demanding more attention to these issues, primarily because shareholders believe they play an integral part in a company’s overall performance.
Why the World’s Largest Asset Managers are Pushing Long-Term Thinking l Green Biz
  • Recently, the CEOs of the largest global asset management firms put portfolio company executives on notice that their current short-term focus can be a barrier to long-term growth. This isn’t just a philosophical discourse, the “Big 3” asset managers — Vanguard, BlackRock, and State Street — with combined assets under management of more than $11 trillion, mean business. They are encouraging publicly traded companies to adopt and regularly disclose long-term strategic plans and governance practices. This alignment and congruence among leading investment managers, and their leaders’ public communications in support of long-termism, is thought by many to be unprecedented. How should forward-looking CEOs and boards respond?
 
 
Investment Manager News
 
Morningstar Underlines its Commitment to Responsible Investment with Sustainalytics Stake (Subscription) l Responsible Investor
  • If Morningstar wasn’t quite a member of the sustainable investment fraternity before, it definitely is now with its acquisition of a 40% stake in Sustainalytics. In fact, at a stroke the NASDAQ-listed household name positions itself at the heart of the sector and the deal consolidates the partnership between the two firms on ESG fund ratings. As RI has reported, the methodology for these ratings has caused alarm in the sustainable investment sector – but the inconvenient truth (for some) is that Morningstar has now demonstrated beyond any doubt that it is here for the long haul.
  • The Inspire Corporate Bond Impact Equal Weight Index – consists of about “250 investment grade, intermediate term corporate bonds issued by some of the most inspiring large cap “blue chip” companies in the U.S., as determined by Inspire’s revolutionary Inspire Impact Score methodology.” The constituents of the fund are expected to leave a positive impact on the investment world, giving the portfolio a socially responsible angle. The index is equally weighted, rebalanced quarterly and calculated on a total return basis in U.S. dollars.
Thomson Reuters And S-Network Introduce ESG Best Practices Ratings & Indices-Rebranding And Methodology Changes To Existing Indices Reflect Market Evolution And Growth Of ESG Investing Strategies l Mondovisione
  • Responding to changes in the way Thomson Reuters collects ESG data and the growth of socially responsible investing (SRI), Thomson Reuters in partnership with global indices provider S-Network has announced changes to the methodology for the Thomson Reuters Corporate Responsibility Ratings and Indexes, which effective immediately have been rebranded Thomson Reuters/S-Network ESG Best Practices Ratings & Indices.
PKA Will Lead the Search for Sustainable Returns l Finans Watch
  • The Danish pension fund PKA has acquired a taste for socially minded investments, and is now pushing for more investments to be made more available for investors. Among the investments is DKK 400 million focused on bank loans to women in third-world countries which Maj Invest is behind.
Independent Broker-Dealer Vanderbilt Revamps to Focus on Impact Investing l Investment News
  • An independent broker-dealer with roots dating back 52 years, Vanderbilt Financial Group is growing a new reputation for itself by committing to the socially responsible investing space. Its dedication to the investing strategy and a focus on prioritizing impact within the firm culture has helped it expand its adviser headcount at a time when many independent broker-dealers are exiting the business. Of the $3 billion in client assets, about $1.5 billion is in sustainable investing.
General Higher Education Sustainability & Endowment News
 
  • The MIT Office of Sustainability (MITOS) has announced the recipients of the first-ever Campus Sustainability Incubator Fund, with $200,000 awarded between four multi-departmental projects, all of which use the MIT campus as a test bed for research in sustainable operations, management, and design. The four project teams are lead by Kripa Varanasi of the Department of Mechanical Engineering, Randy Kirchain and Jeremy Gregory of the Concrete Sustainability Hub, Lisa Anderson of the Department of Chemical Engineering, and Danielle Dahan of the Center for Energy and Environmental Policy Research.
Lessons From University Endowments l All About Alpha
  • In a recent article for The Journal of Investment Consulting, John Mulvey and Margaret Holen look at the practice of asset allocation among large U.S. university endowments. They focus on asset category definitions in the hope of throwing some light on “the movement to define asset categories with reference to their target performance or underlying return drivers rather than traditional investment vehicle-types.” In the introduction to their paper, Mulvey and Holen observe that college and university endowments have led the way ahead of other institutions in the move into hedge funds and private equity funds. In 2000, the average endowment portfolio was 23% in alternative assets; in 2014, the corresponding number was 51%. Among endowments with more than $1 billion in assets under management, that number was 57%.
The High Price of Cutting State Funding to Colleges l Market Watch
  • Policy makers and experts often hotly debate the reasons behind rising college costs. New research indicates that state disinvestment in higher education may be at least partly to blame. For every $1,000 in funding per student that states cut from public universities, students paid about $257 more a year on average between 1987 and the present, according to a forthcoming study in the journal, Economics of Education Review. But students attending college more recently are even more likely to shoulder a larger burden of cuts to state funding. Before 2000, students paid about $103 more a year on average for every $1,000 per student cut by states. After 2000 that number increased to about $318 more a year, the study found.
Climate Risk, Science and Regulation
 
The Market Will Kill Oil Before the Government Does l Bloomberg
  • European governments are making a big splash, pledging an assault on traditional cars to help clean up polluted air in cities. The latest strike came Wednesday in the U.K., which says it will ban the sale of diesel- and gasoline-powered cars by 2040. Those plans might not be quite as ambitious as they first seem. Consumers, automakers, and even some oil companies are already preparing for a battery-powered future.The U.K. government’s plan to tackle record levels of air pollution was announced two weeks after French President Emmanuel Macron announced a similar plan to cut smog and become a carbon neutral nation. 

Just How Far Can California Possibly Go on Climate? l New York Times

  • Over the past decade, California has passed a sweeping set of climate laws to test a contentious theory: that it’s possible to cut greenhouse gas emissions far beyond what any other state has done and still enjoy robust economic growth. Now that theory faces its biggest test yet. Last August, the State Legislature set a goal of slashing emissions more than 40 percent below today’s levels by 2030, a far deeper cut than President Barack Obama proposed for the entire United States and deeper than most other countries have contemplated.
Corn Could Be Major Victim of Climate Change l Bloomberg
  • The weather has always been an unpredictable element of agriculture, but climate change is expected to make matters significantly worse. Determining how much worse has historically been a challenge. A new study, however, says climate-induced drought could hit several of the world's major corn producing regions all at once. The Met Office, the U.K.'s national weather service, used a novel approach to determine the probability of severe water stress in three major corn-producing regions that are responsible for 40 percent of global production . Instead of relying on observed historical data—which the researchers found to seriously underestimate the impact of climate change—the new study used a model focusing on water stress. The authors noted the limitations of the study, including its reliance on a single climate model, and they advise researchers to utilize multiple models in the future.
 
 
Clean Energy
 
Toyota Eyes Mass EV Output in China as Early as 2019: Report l Reuters
  • Toyota Motor Corp is likely to begin mass production of electric vehicles (EVs) in China as early as 2019, the Asahi daily reported on Saturday. The model will be based on the C-HR sport utility vehicle and manufactured for Chinese market only, the report said without citing sources. The pace of production is to be decided after taking into account the regulations and the subsidies, the report said, adding that annual output could start with more than several thousand units.
U.K. Joins France, Says Goodbye to Fossil-Fuel Cars by 2040 l Bloomberg
  • The U.K. became the latest European country to mark the end of the line for diesel and gasoline fueled cars as automakers such as Volvo race to build electric vehicles or face the consequences of getting left behind. In London, the government said it will ban sales of the vehicles by 2040, two weeks after France announced a similar plan to reduce air pollution and become a carbon-neutral nation. For some in the auto industry, the plans are too much too soon while environmental campaigners say exactly the opposite.
  • The University of Virginia continues to expand its portfolio of carbon-free power-generation sources and achieve key sustainability targets with another partnership announced today with Dominion Energy. Under a 25-year agreement, the University will purchase the entire output of a proposed 120-acre solar facility in Middlesex County. The solar facility, developed by Coronal Energy, will be constructed and owned by Dominion Energy. It will produce an estimated 15 megawatts of alternating current, or about 9 percent of the University’s electric demand.

Fossil Fuel Divestment
 
  • According to this article, divestment is the right thing to do and, given the accelerating renewable energy revolution and regulation of greenhouse gases, the smart thing to do.The author argues it’s time to tell your financial services provider and company pension fund trustees you no longer want to be invested in destroying your future.

 

 

 

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Weekly News Round-Up: July 21st, 2017

New Resources & Opportunities
 
  • After years of talking about it, investors are finally starting to put their money behind this approach. According to US SIF, U.S. investments incorporating ESG principles, in whole or in part, increased from $1 trillion to approximately $9 trillion between 2012 and the beginning of 2016. This report explores the multiple factors driving this growth.

Job: Senior Associate, Sustainable Investing l World Resource Institute

  • WRI’s Sustainable Finance Center focuses on shifting public and private capital toward low carbon and climate-resilient development and away from activities that harm people and the environment. As Senior Associate, you will help lead and manage the Sustainable Finance Center’s research agenda, with a special focus on our work greening private finance.
Upcoming Events
  • The Principles for Responsible Investment (PRI) invite investors for several launch events for a new research entitled: "2 degrees of separation: Transition risk for oil & gas in a low carbon world". The report is produced by the Carbon Tracker Initiative in partnership with Legal & General Investment Management, AP7, FRR, PGGM, PKA, and the Principles for Responsible Investment.
The SRI Conference l November 1-3, 2017, San Diego, CA
  • The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
 
 
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how Bain Capital is betting that mission-led investing can deliver returns on par with its standard private equity pools; Vanguard's votes on climate change are up for their own vote; Big oil is waking up to EVs; and Deloitte is beginning to shift away from traditional approaches built around gender, race, or sexual orientation.
Aiming to Do Good, Not Just Well l The New York Times
  • If you want to invest in companies that are not just making a profit but are also doing good in the world (or, at least, doing no harm), you may find yourself overwhelmed by confusing choices. This kind of investing is known as ESG investing, or sometimes simply as “socially responsible investing.” These labels encompass a wide array of options and criteria, which have been used for years among mutual funds and exchange-traded funds, or ETFs, focused on companies in the United States. This article explores the recent uptick in the space as well as fund offerings.
  • Beginning in 2013, the ESG research team at MSCI, a provider of market indexes, repeatedly flagged Volkswagen for its risk exposures and management practices. In September 2015, the U.S. EPA accused Volkswagen of installing computer software in 482,000 American vehicles to conceal nitrogen oxide emissions up to 40 times above the legal limit. The company subsequently acknowledged that up to 11 million cars worldwide had been fitted with a similar “defeat device.” From April to October 2015, VW stock sank by 64%, wiping out $40 billion in market value. That episode, combined with other corporate calamities, has driven investors toward U.S. companies that meet positive standards for sustainability, social impact and sound governance.
Ford Foundation, ACA Convene Push for Impact Investing in Nigeria l Business Day
  • Ford Foundation and the African Capital Alliance (ACA) have held an advocacy convening to sensitise corporates and high net worth individuals in Nigeria about the need for impact investing in sustainable development and capacity building in Africa’s biggest economy. Impact investing connotes investments in firms, funds, and organisations, with the dual purposes of generating social and environmental impact and earning financial return; it entails leveraging private capital for social good.
  • Human trafficking, essentially modern slavery, is a large and growing practice, although most people are unaware of its existence and extent. Pope Francis has called it a plague on humanity. The NGO Human Rights First notes that Human trafficking is the world's fastest growing criminal enterprise, earning exploiters an estimated $150 billion annually. Elaborating on this, Amy Sobel, Vice President, Anti-Human Trafficking Campaign, says that modern slavery is occurring in the vast supply chains that fuel our global economy, causing human tragedy and damaging some of the world's most trusted brands. An article, Inside the Scarily Lucrative Business Model of Human Trafficking, in Time shows that it is a very profitable business. This article explores how companies can lead the fight against this industry.
  • In recent years, investors have shown a greater interest in ESG disclosures. This heightened interest is likely due to an increased awareness of how disclosing this information can impact the financial sustainability of companies. ESG issues, ranging from climate change to diversity to board effectiveness, can show investors how forces outside of normal market variables can affect a company’s operations and revenues. This blog examines issues related to climate risk disclosures.
Does the HLEG Need to Define Sustainability? l Investment & Pensions Europe
  • The European Commission-appointed High Level Expert Group (HLEG) on sustainable finance should come upwith a definition of sustainability in time for its final report, it has been suggested. Commenting on the group’s interim report – published last Thursday – Filip Gregor, head of responsible companies at law firm Frank Bold, said defining sustainability was “indispensable for developing effective policies”. Such a definition was missing from the HLEG interim report, and the group should be encouraged to address it in its final report, he said.
  • Investing for good can also be a good investment. A number of the mutual funds that take environmental, social and corporate governance (ESG) into account when making investing decisions have proven to be stellar performers. Two of our top 10 ESG funds—selected using a formula that takes 1, 3 and 5-year total returns into account—beat the S&P 500 over all three periods. Investors are taking notice: Investments in these funds are up33 percent in the U.S. since 2014, to $8.7 trillion. That’s 22 percent of all professionally managed U.S. assets. Harvard Management Co., which oversees Harvard University’s $36 billion endowment fund, recently announced plans to make sustainability the driving factor in selecting new investments for its natural resource portfolio.

Best ESG Communications: Why PKN Orlen Won l IR Magazine

  • With investors upping their focus on ESG issues, companies are rethinking their communications approach to better explain the links between financial and non-financial performance. For those looking for inspiration, a good place to start is the integrated annual report from Polish oil major PKN Orlen: the company won best ESG communications at the IR Magazine Awards – Europe 2017. ‘The main strategy was to create a single, transparent document with all necessary information, so that [readers] would find all the data they require from one source,’ explained the company in its awards submission. ‘It contains a number of interactive tools facilitating access to contents, an interactive GRI Indicators Table, a glossary of economic and industry-specific terms, and an online survey.
Morningstar, MMI Launch Sustainable Investing Initiative l Wealth Management
  • The Money Management Institute (MMI) announced today a joint initiative with Morningstar called The MMI/Morningstar Sustainable Investing Initiative, aimed at educating advisors about sustainable investing and how to better incorporate it into their practices.  “Clients are clearly interested in discussing ESG with their financial advisors," said Jon Hale, Morningstar’s Head of Sustainability Research. "But the majority of advisors need more professional education and practical insights on incorporating sustainable investing into their practices to feel comfortable having those conversations."
Sustainable Development Goals (SDGs) News
 
The Impact of the SDGs on Sustainability Reporting l Ethical Corporation
  • This 9 page briefing outlines the role the SDGs have to play in sustainability reporting and how leading brands are incorporating them into their reporting and communications strategy. 
  • Businesses and companies are continuing to make contributions to the SDGs.The UN Global Compact has established a Corporate Action Group for ‘Reporting on the SDGs,’ which is part of a comprehensive Tool Box to help companies achieve sustainability and contribute to the SDGs. In addition, the UN Industrial Development Organization (UNIDO) is partnering to make cities more sustainable, the insurance industry is helping to advance the SDGs, the Partnership for Action on Green Economy (PAGE) is encouraging investments in the green economy, and Dutch fund managers are developing a standard for SDG investments.
  • A report published by the UN Development Programme (UNDP) Innovation Facility finds that innovation and emerging technologies are increasingly changing how international organizations are investing to realize the Sustainable Development Goals (SDGs). The report showcases how UNDP’s innovation investments have led to more effective development solutions and to new service lines to government partners.
General Higher Education Endowment News
 
Endowment Managers Still Upbeat on Economy, Survey Says l The Chronicle of Philanthropy
  • Managers of nonprofit endowments were upbeat about the state of the U.S. economy in 2017’s first quarter but slightly less so than in the final quarter of last year. This article explores the results of NEPC's Endowment & Foundation Q1 2017 Survey.
  • According to David Swensen, the head of Yale's endowment, exchanges such as Nasdaq and New York Stock Exchange pay brokers billions of dollars to send trades to their venues. Wall Streeters and government officials are calling on the SEC to ban so-called rebates because they view them as inefficient for markets.
Historically Black Colleges Try to Catch Up as Rich Schools Get Richer l Bloomberg
  • The wealthier a school’s endowment, the more money it has both to attract students and to provide them with the funding and academic services to get them to graduation. Howard’s endowment means it has just under $58,000 for each of its 10,000 students. By comparison, Nashville’s Vanderbilt University has about $300,000 per student. Of the 90 schools with billion-dollar endowments, not one is an historically black colleges and universities, also known as HBCUs.
Climate Risk, Science & Regulation
 
With Thursday’s Vote, Climate Finds ‘Bipartisan Majority’ Support in Congress l Citizens' Climate Lobby
  • Last week, dozens of House Republicans joined Democrats to vote down an anti-climate amendment and sent a strong message that the military should prepare for and fight climate change. This article explores the details of the vote.
California Legislature Extends State's Cap-and-Trade Program in Rare Bipartisan Effort to Address Climate Change l LA Times
  • California lawmakers voted Monday evening to extend the state’s premiere program on climate change, a victory for Gov. Jerry Brown that included unprecedented Republican support for fighting global warming. In a break with party leaders and activists in California and Washington, eight Republicans joined with Democrats to continue the cap-and-trade program, which requires companies to buy permits to release greenhouse gases into the atmosphere. The legislation would keep the 5-year-old program operating until 2030, providing a key tool for meeting the state’s ambitious goal for slashing emissions. Cap and trade also generates important revenue for building the bullet train from Los Angeles to San Francisco, another priority for the governor.
Clean Energy
 
  • This article explores NRG's attempt to transform itself from brown to green — how it started, where it went off the rails and, now, how it is ending.
Fossil Fuel Divestment
 

Cape Town Commits to Divestment l 350 Africa

  • The town of Cape Town has committed to divest from fossil fuel assets and companies in favour of greener and cleaner investments. In a press release, the mayor stated: "We are going to instruct investors looking after our money not to put our money into fossil fuel-related companies or for it to be used to fund the development of dirty and unsustainable projects. We want our investments to be aligned with our principles of resilience and sustainability."
CU Divestment: Growing Momentum l Boulder Weekly
  • In 2015 the University of Colorado’s Board of Regents voted against divesting its endowment, citing their preference for “institutional neutrality” in social and political matters. The vote came as a response to student activism, which has continued since. This year brought another wave of protests — in April the student group Fossil Free CU held a week-long sit in at the Chancellor’s office. Regent Linda Shoemaker, the board’s vice chair, says that a fall 2017 vote is possible. But she is doubtful about it passing, pointing to the fact that no fundamental changes have occurred in the Republican-controlled board since 2015’s 7-2 decision upholding the existing investment plan. Lior Gross, one of Fossil Free CU Boulder’s leaders, is more hopeful. “We are in the best position we’ve ever been to get a win from the regents and to get a vote for divestment,” Gross says, pointing to recent community support. “It’s not that I’m optimistic, it’s that I know that we can’t have a livable future if we continue to operate this way.”

 

 

 

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Weekly News Round-Up: July 14th, 2017

Upcoming Events 

Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.

PRI and Carbon Tracker Launch Events: 2 Degrees of Separation: Transition Risks for Oil & Gas in a Low-Carbon World  

  • The Principles for Responsible Investment (PRI) invite investors for several launch events for a new research entitled: "2 degrees of separation: Transition risk for oil & gas in a low carbon world". The report is produced by the Carbon Tracker Initiative in partnership with Legal & General Investment Management, AP7, FRR, PGGM, PKA, and the Principles for Responsible Investment.
The SRI Conference l November 1-3, 2017, San Diego, CA
  • The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
Sustainable, Responsible, Impact & ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how the European Commission backed recommendations to curb climate risk, which may include a label for green bonds; Ten top-performing ESG funds; Proxy access topped proposals received by companies in 2017 for the third year in a row; Natixis SA issued the first green commercial mortgage-backed security; NRG mulls renewables sale.
ESG, OECD, and the Tragedy of the Commons l Aperio
  • In its paper "Investment governance and the integration of environmental, social and governance factors,"1 the Organisation for Economic Co-operation and Development (OECD) weighs in on the issue of environmental, social, and governance (ESG) factors as they relate to investment choices. The report makes some excellent recommendations on improving disclosure by companies regarding ESG issues, while also providing a useful framework for different types of investors, as measured by their commitments to broader stakeholders than just shareholders. This paper could be described as an extension of the economic concept of "the tragedy of the commons," or in more technical jargon, the problem of externalities around major environmental issues. 

10 Studies That Show How and Why ESG Investing Works l Reuters

  • This article offers a look at the circumstances under which ESG-related investing works the best, across different asset classes such as stocks and bonds.

Investing in Food and the Climate: A New Playing Field with New Tools l Non-Profit Quarterly 

  • Whether by conscience or market pressure, corporations are paying more attention to issues that matter to their markets and the in many cases pressure is coming from investors. This article explores those pressures.

When Silicon Valley and Social Responsibility Collide l Bloomberg 

  • Silicon Valley venture capital is no place for socially responsible investors. Or at least, it increasingly looks that way as accusations of sexual harassment against the industry continue to pile up. The New York Times reported last week that more than two dozen women in technology startups contend that they’ve been sexually harassed, in some cases by prominent venture capitalists who have acknowledged the harassment. If accusations of sexual harassment continue to pervade Silicon Valley, then socially responsible investors will have to decide whether to sidestep a large -- and perhaps the most promising -- portion of an already limited number of venture funds. 

The “Data Science Arms Race” Has Begun l Barron's

  • Three major trends sweeping the asset management industry -- robo advisors, sustainable investing, and smart-beta or factor investing -- have been driven by investors' penchant for Big Data. But that's just the tip of the iceberg. "Data science and the profound impact it will have on the asset management industry is a complicated topic," wrote Dan Fannon, a Jefferies equity analyst. "Its impact will be felt not only at the highest levels (corporate) but also at the most basic level with each individual active manager having to retool their investment processes and skill sets."
  • With consumer activism becoming such a powerful change agent, investors and particularly millennials who have over $3 trillion in spending power, are getting in on the act. A new investment app by Goodments has been developed that makes it easier for people to invest in "good" businesses and build a portfolio that better suits their individual values. "It does feel like it's the right time," said Emily Taylor, co-founder of sustainable investment platform Goodments. "I would never say we like Trump. But I think him being in power and a lot of the regressive policies that are coming from our own government, and also the US, is actually making people realize that they need to take matters into their own hands," Ms. Taylor said.
Q3 2017 Sustainability Newsletter l Breckinridge Capital Advisors
  • This newsletter contains articles on Breckinridge's new community outreach program, how millennials are poised to redefine investing for the better, and why climate change has enduring relevance in intelligent long-term investing.
  • To meet needs of professionals seeking knowledge about the expanding fields of Corporate Social Responsibility, Sustainability, Citizenship, Sustainable Investing and related subject matters, Governance & Accountability Institute has partnered with the Swain Center for Executive Education at University of North Carolina Wilmington to offer an online, self-paced learning course.
ESG Investors Like Gains as Much as Anyone Else l Investment News
  • The average socially conscious fund has edged out the S&P 500 the past 12 months, gaining 18.6%, according to Morningstar. Part of the reason could be the collapse in oil prices. ESG funds tend to be light on oil because of environmental concerns. The Parnassus Fund (PARNX), for example, has no energy stocks in its portfolio. And that has worked out just fine. Energy stocks have tumbled 35% since oil's peak of $105 a barrel in June 2014.

 

Investment Manager News
 
  • SwissRe is implementing environmental, social, and governance (ESG) benchmarks across its entire $130bn investment portfolio, with the switching process due to be completed in the third quarter of this year. Last year SwissRe moved to adopt ESG-based benchmarks for its actively managed credit and equity portfolios. A spokeswoman for the company said it was around 90% through the shift for the whole portfolio. Guido Fürer, group chief investment officer at Swiss Re, said adopting broad-based ESG benchmarks “has been the most meaningful and strategic step in our journey to integrate ESG considerations into the investment process”.
BlackRock Expands iShares Fixed Income ETF Offering l Business Wire
  • BlackRock is infusing the mortgage-backed bond market with a competitively priced choice to traditional mortgage bonds: a lower cost exchange-traded fund, iShares MBS ETF (MBB). The firm is transforming MBB to be a financial instrument and risk management tool of choice for investors seeking exposure to the mortgage market. BlackRock is also launching four new fixed income smart beta and environmental, social and corporate governance (ESG) ETFs to meet increasing client demand.

UBS is Backing an Investment Fund Co-founded by Bono l Business Insider

  • UBS has made sustainability one of the cornerstones of its wealth-management business. On Monday, it announced that UBS Wealth Management and UBS Wealth Management Americas have raised $325 million for The Rise Fund, an impact investment fund led by private equity firm TPG Capital. The Rise Fund was founded by Bill McGlashan, the cofounder of STX Entertainment, singer-songwriter Bono, and Jeff Skoll, a billionaire Canadian engineer. The fund has an investment cap of $2 billion.
  • Bentall Kennedy released its 2017 Sustainability Report Summary today, entitled Invest Soundly + Sustainably, showcasing industry-leading practices for sustainable investment, management and development, in real estate. The report examines many of Bentall Kennedy's properties across North America and their role in shaping communities as part of a living, breathing ecosystem challenged with combatting climate change in our increasingly fragile environment.
Christian Super Charts a Course for Institutional Impact Investing l Impact Alpha
  • Christian Super is not stopping with its 10% allocation to impact investments, which is already impressive for an institutional investor. To the more than AU$100 million out of its $1.3 billion portfolio, the Australian pension fund has committed another $50 million. The kicker: the impact portfolio has exceeded performance benchmarks at a lower risk than other asset classes (except cash).

Axa IM Signals ESG Commitment With McDonald Hire l Portfolio Adviser 

  • The Rosenberg Equities branch of the asset manager has been taking into account environmental, social and governance factors in its portfolio management process since the mid-1990’s, but said the hire comes as part of a push to achieve “full ESG integration” across the platform by the end of the year. The move toward full ESG integration “is fully in line with Axa IM’s overarching convictions and commitment to investing responsibly,” said Rosenberg Equities chief executive Heidi Ridley.

Biggest Pension Fund Craves More After Foray Into ESG Assets l Bloomberg

  • The world’s largest pension fund aims to boost and broaden its socially responsible assets after buying them for the first time this year. Hiromichi Mizuno, who helps manage $1.3 trillion in assets for Japan’s Government Pension Investment Fund as chief investment officer, said the fund wants to increase allocation to the point where it impacts results. For that to happen, GPIF President Norihiro Takahashi has said ESG assets should reach around 10 percent of its Japanese equity holdings, Mizuno said.

Green Alpha Advisors Goes Long on the 'Next Economy' l Opalesque

  • "The problem with a lot of ESG funds you see out there today," Garvin Jabusch, co-founder and CIO of Denver-based Green Alpha Advisors, says, "is that they just screen out industries like tobacco or oil and call it sustainable without thinking through what the future is." For Jabusch, many ESG strategies are too heavily correlated to the S&P 500 benchmark, which is essentially an index of the legacy economy. Big chunks of the benchmark include companies that only fit an ESG strategy if the definitions of ESG and sustainability specifically, are generous enough to support natural gas producers or heavy manufacturing companies. Jabusch contends that a true ESG strategy should be focused on the economy of the future, which means looking at companies that are positioned to deal with climate change, resource scarcity and widening inequality.
Shareholder Engagement

The Value of the Shareholder Proposal Process l Harvard Law School Forum on 
Corporate Governance and Financial Regulation

  • Early in June, the House of Representatives passed a piece of legislation, dubbed the Financial CHOICE Act, which would gut much of Dodd-Frank. One of its provisions would make it impossible for all but the largest investors to file shareholder proposals by requiring that investors must hold at least one percent of the outstanding shares for three years in order to file a proposal. This would remove a key tool that investors use to communicate with corporate boards. This article highlights some of the reasons why shareholder proposals should be limited by this Act.

Investors Beware: Your Shareholder Rights Are At Risk l Forbes

  • This article outlines how the U.S. House of Representatives recently passed the Financial CHOICE Act of 2017. Section 844 of the Act would make it nearly impossible to file shareholder resolutions by raising the ownership requirement from $2,000 worth of shares for one year to 1% of the company’s outstanding stock for three years. If you are concerned about losing your rights, contact your Congressional representatives and voice your opposition to the Financial CHOICE Act.
Green Bonds

Natixis Facilitates First “Green Bond” CMBS Deal l Commercial Property Executive

  • Noting it received “very strong interest” from major green investors across the globe, French corporate and investment bank Natixis collaborated with Ivanhoé Cambridge and Callahan Capital Properties to issue the first green tranche in a CMBS to refinance part of the acquisition loan for 85 Broad St. in Downtown Manhattan. The $72 million green-specific tranche was issued as part of the CSAIL 2017-C8 CMBS Securitization to refinance part of the $358.6 million fixed-rate, first mortgage loan provided by Natixis in the spring to purchase the 1.1 million square-foot office tower in the Financial District.

  

General Endowment News 

Regents Vote to Increase University of Texas Austin’s Share of Endowment Payout l Statesman

  • The governing board of the University of Texas System voted unanimously Thursday to boost UT-Austin’s share of the system’s annual endowment payout by 4 percentage points, or $24 million, to $338 million. The flagship campus had been scheduled to receive 49 percent, or $314 million, of the payout. Instead, it will get 53 percent, effective for the budget year that begins in September.

  

Climate Risk, Science & Regulation
 
Businesses and Investors Need to Act on Climate Now l Stanford Social Innovation Review
  • The business case for acting on climate change has never been stronger, and the need to act has never been more urgent. This article explores trends related to the economy and climate change, and three steps businesses and investors can take to move forward.
Climate Ratings for Investment Funds: Do They Show the Full Picture? l Money Observer
  • A new climate change metric, Climetrics, which aims to rate investment funds on a scale of one to five ‘leaves’, has been launched today. The ratings consist of an analysis of the underlying fund holdings (this part makes up 85 per cent), the investment policy of the fund and mandate (which makes up 5 per cent), as well as the public statements companies make and the agreements they sign up to (the remaining 10 per cent). This article explores the strengths and weaknesses of this type of rating system.

U.S. Withdrawal from Paris Climate Change Accord Seen as ’a Gift,’ Experts Say l Pensions & Investments

  • ESG investing should be part of opportunity management, panelists said during the Global Future of Retirement conference in New York late last month. The U.S. decision to exit the Paris climate change accord could turn out to be "a gift," some experts contend. President Donald Trump's decision to withdraw from the pact made at the 2015 U.N. Climate Change Conference resulted in an immediate uptick in terms of inflows into low-carbon funds, said Cindy Rose, head of responsible investing-stewardship at Aberdeen Investment Management.
Massive Iceberg Breaks Off from Antarctica l NASA
  • An iceberg about the size of the state of Delaware split off from Antarctica’s Larsen C ice shelf sometime between July 10 and July 12. “The interesting thing is what happens next, how the remaining ice shelf responds,” said Kelly Brunt, a glaciologist with NASA’s Goddard Space Flight Center in Greenbelt, Maryland, and the University of Maryland in College Park. “Will the ice shelf weaken? Or possibly collapse, like its neighbors Larsen A and B? Will the glaciers behind the ice shelf accelerate and have a direct contribution to sea level rise? Or is this just a normal calving event?”

  

Fossil Fuel Divestment 

Banks Have Cut Funding for Fossil Fuels Projects 22 Percent l Yes Magazine

  • A new report from a consortium of environmental groups shows that big banks are reducing their investment in fossil fuel projects. While this is welcome news to the movement led by tribes to get banks to divest from fossil fuels—most notably in response to the Dakota Access Pipeline—the truth behind the numbers isn’t so rosy: it isn’t enough to stop global climate change, and banks still invest in or lend money to fossil fuel companies. “The financial industry needs to be held accountable for its fossil fuel financing and that takes a lot of forms,” says Jason Disterhoft, a senior campaigner for Rainforest Action Network. “We need everybody to continue to work and make that happen.”

Unversity of Toronto President Gertler’s Retreat From Responsibility (Opinion) l The Varsity

  • The University of Toronto Asset Management Corporation’s (UTAM)recent report on responsible investment describes steps to include environmental, social, and governance (ESG) considerations in U of T’s investment decision making. This article argues that President Gertler should revisit his decision not to divest, implement the spirit and letter of the divestment policy, and stop funding an industry that is burning up the future of U of T’s students.

 

 

 

 

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Weekly News Round-Up: July 7th, 2017

New IEN Member
Upcoming Events
 
Webinar: First-time Fund Managers in Emerging Markets Bring a New Model to PE in Africa l Intentional Endowments Network, July 11th, 2017, 1:00 PM EDT
  • Speak to any capital provider and they will tell you the standard private equity model is not structurally sound for the African ecosystem – as evident by the too few deals, limited human capital to run portfolio companies, and constrained levers for liquidity events. So, can the Find-Fund-Support value chain be deconstructed to build a new model for investing in Africa? In this webinar, four first-time fund managers will discuss how they tweaked different elements across the Find, Fund and Support value chain to create a new model for investment in Africa.
  • On July 12, 2017, The Investment Integration Project (TIIP) and the Center for Applied Research (CAR) at State Street, in conjunction with Ceres, will co-host an event that explores the intersection between efficiency and intentionality, and how the alignment of the two leads to effective investing.
Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.
The SRI ConferenceThe SRI Conference l November 1-3, 2017, San Diego, CA
  • The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how electric cars will outsell fossil-fuel powered vehicles within two decades, according to a new Bloomberg New Energy Finance forecast; Solar company shares have taken a curious turn upward since President Donald Trump announced plans to withdraw from the Paris Agreement; Big investors lose patience with unresponsive corporate directors; and Chicago has the greenest office buildings.
PRI Finds Disconnect Between Investors, Ratings Agencies on ESG Factors l Pensions & Investments
  • A number of disconnects exist between investors and credit-rating agencies when it comes to environmental, social and governance factors, said a new report by the Principles for Responsible Investment. The report outlines how investors and credit-rating agencies are taking ESG factors into account in credit risk analysis. The report said a particular disconnect exists when it comes to views on the time horizons over which ESG factors should be considered. "Investors and (rating agencies) struggle to agree on what is a reasonable time horizon to consider," said the report. "Investors tend to align their time horizons with their investment objectives: some buy and hold long-term bonds until maturity (while) others trade more frequently."
  • Although socially responsible investing is getting popular, in the future investors will no longer need a separate investment bucket for companies with socially responsible practices in place, says Columbia Threadneedle’s Ed Kerschner. Instead, companies that have good returns and dividends will have good environmental, social and governance practices in place, says Kerschner, chief portfolio strategist for Columbia Threadneedle, a global asset manager with $467 billion in client assets.   “There are still people who believe you have to sacrifice returns to invest in socially responsible companies, but that has been proved false,” Kerschner says. Columbia Threadneedle’s investments that take ESG issues into consideration outperform the S&P average.

The Value of SDG-Focused Business Models l Eco Business

  • What does the chief executive of the world’s largest consumer goods company have to say about the business case of the Sustainable Development Goals? Listen to Unilever’s CEO Paul Polman in this exclusive interview.
Is Sustainability Reporting Working? l Eco Business
  • More companies are now reporting the impact they have on the environment and society. But where is the value in doing this, and what effect does it have in the real world? Eco-Business asked the new chief executive of Global Reporting Initiative (GRI), Tim Mohin.
  • Leading institutional investors have backed the first close of a new “blended finance” climate investment facility called Climate Investor One (CIO) with $412m (€365.6m). CIO is the inaugural initiative of Climate Fund Managers (CFM), which was set up in October last year as a joint venture between Dutch development bank FMO and Phoenix InfraWorks, the Cape Town-based infrastructure specialist headed by former Macquarie Africa Chairman Andrew Johnstone. It the first of an intended series of initiatives designed to combat the effects of climate change. Targeting Africa, Asia and Latin America, CIO will focus on solar, wind and ‘run-of-river’ hydro renewable energy projects.
Interview: RobecoSAM CEO on ESG’s ‘Unprecedented Transformation’ l Investments and Pensions Europe
  • Investors are catching up with corporates in appreciating sustainability as a concept that can help unlock opportunities rather than just mitigate risk, according to the chief executive of RobecoSAM. Speaking at a Responsible Investor conference in London earlier this month, Aris Prepoudis – who took over as CEO in January – said investors’ approach to sustainability was unfolding in a similar way to how the corporate sector embraced the concept. Speaking to IPE after the conference, Prepoudis said that although the focus among asset owners was still on risk management he was confident more would appreciate the opportunities that came from sustainability investing.
What Exactly Is Sustainable Investing? l Morningstar
  • In this article, John Hale, Head of Sustainability Research at Morningstar, answers two questions One has to do with the definition: What exactly is meant by sustainable investing? The second has to do with the availability of appropriate funds: Are there enough viable choices to build a diversified sustainable portfolio?
  • BlackRock, the world’s largest asset manager, recently conducted a survey that was discussed by Anne Ackerley in The BlackRock Blog. They that found that “67% of millennials say they want investments to reflect their social and environments values.”  By the way, the article went on to say that, “… for women, it’s 76%.”  We refer to this type of investing as “Impact Investing” and it is becoming a way of life for the next generation of investors.  The question is; if you don’t have tons of money to invest, how can you get started?
Investment Manager News
 
  • SRI-focused asset manager Mirova, part of Natixis Global Asset Management, has entered into exclusive negotiations to purchase a majority stake in London-based impact investment boutique Althelia Ecosphere. Mirova stated that the projected acquisition of Althelia aims to create a European platform operating from London and Paris and dedicated to natural capital investing. The platform would provide investors with access to investment solutions addressing global environmental challenges such as climate change, protection of landscapes, biodiversity, soil and marine resources.
Reynders, McVeigh Capital Management Announces ESG Data Partnership with OWLshares l Business Wire
  • Reynders, McVeigh Capital Management, an investment management firm with a focus on socially responsible investing (SRI), announced today its partnership with environmental, social, and governance (ESG) optimization technology provider, OWLshares. The partnership gives Reynders, McVeigh access to a wide set of proprietary ESG data and underscores the firm’s commitment to defining more precise performance metrics for its investment research. By adding the ability to optimize the value of ESG data in its own research process, Reynders, McVeigh has evolved its capabilities for analyzing the underlying factors that contribute to operating performance in different companies across sectors.
  • Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, announced Monday that it will shift 3% of its passive domestic equity investments (roughly $8.8 billion) into environmental, social, and governance (ESG) indices. The first of the $1.2 trillion fund’s picks include MSCI’s “Empowering Women” WIN index, in favor of its gender equality agenda. The index focuses on companies that “encourage more women to enter or return to the workforce,” ranking companies according to the gender balance of staff from their new hires to their executive board.
Sustainalytics on a Strong Growth Path l The Fifth State
  • ESG research and ratings organisation Sustainalytics is expanding its Sydney office and building a team to better serve Australia and New Zealand, which is the second-fastest growing region for responsible investment, after Japan. Sustainalytics is a multinational firm with 13 offices worldwide, employing 300 team members and more than 170 in-house research analysts with multidisciplinary expertise across 42 sectors.
Green Bonds
 
Should You Invest In 'Green Bonds?' l Forbes
  • Traditionally, socially-responsible investing meant buying stocks of companies that weren’t in the alcohol, gambling, gun or tobacco business or that helped the environment, as well as mutual funds or exchange-traded funds (ETFs) that owned them. But lately, the idea has spread to bonds — specifically “green” bonds used by companies and municipalities for projects with eco-friendly or climate benefits such as initiatives for clean water, renewable energy, energy efficiency or habitat restoration.
Climate Risk, Science & Regulation
 
Institutional Investors Welcome TCFD Climate Task Force Recommendations  (Subscription) l Responsible Investor
  • European institutional investors have welcomed the final recommendations of the high-level climate disclosure task force set in train by Bank of England Governor Mark Carney. The panel – the Task Force on Climate-related Financial Disclosure (TCFD) under the auspices of the Financial Stability Board – released the report today and it was hailed by the Institutional Investors Group on Climate Change (IIGCC). The TCFD aimed to devise a principles-based framework for voluntary disclosure, balancing the needs of the users of disclosures (investors) with the challenges faced by the preparers (companies). It has developed a voluntary framework for companies to disclose climate-related information in their financial filings.
Investors Slowly Start to Push Climate Change up Their Agenda l Reuters
  • Investors are slowly starting to push companies to reduce their carbon footprint and help the world meet targets on limiting global warming that were agreed in the 2015 Paris climate talks. Energy firms have faced shareholder demands to do more to curb carbon emissions, while some pension funds are demanding more commitment to climate goals from firms they invest in. Yet progress has still been modest since the Paris deal agreed by almost 200 nations came into force in November last year, aiming to limit global warming to 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times. "Lots of investors are looking to align their investments with a 2 degrees world. It's just at what pace they all get there," said Fiona Reynolds, managing director at the United Nations-backed Principles for Responsible Investment.
  • Africa was for the first time high on the Agenda of the 2017 G20 Summit, which was held in Germany recently. The Summit brought together nine heads of government, including Ghana’s President, Nana Addo Dankwa Akufo-Addo, heads of the World Bank, the International Monetary Fund (IMF) and the African Development Bank (ADB), as well as the Federal Chancellor of Germany, Dr Angela Merkel, German Minister of Finance, Dr Wolfgang Schäuble, and the German Development Minister, Dr Gerd Müller. The various state officials discussed issues of central importance to the continent’s future, as well as forging a new partnership between the 20 most important industrialised and emerging countries and Africa.
Are Canadian Investors Ready to Give up Oil? l Wealth Investor
  • For many Canadian investors it’s hard to imagine owning a strong portfolio that doesn’t contain any oil stocks, which is understandable. Oil is so tightly linked to Canadian markets and the economy that it’s now ingrained into the psyche of investors who rely on their portfolios to deliver returns. However, a new study has made discoveries that could debunk that myth. The research shows that portfolios holding a significant concentration of heavy carbon-emitting companies can actually put an investor’s funds at risk.
  • This platform includes a new database with the world’s biggest coal plant developer companies disclosed.
Clean Energy
 
APG Finances Largest Onshore Wind Power Project in Sweden, Will Take Leading Role in New Projects (Subscription) l Responsible Investor
  • Dutch pension investor APG has teamed up with HgCapital’s Vasa Vind to build Sweden’s largest onshore wind power project – and says it will take a “leading role” in initiating new projects. APG and Vasa, a portfolio company of HgCapital’s Renewable Power Partners 2 fund, said they have started construction of the 288MW Åskalen project in Jämtland, central Sweden. The project will comprise 80 Vestas V136 3.6MW turbines and total construction investment will amount to approximately €300m, and commissioning will be completed in 2020 delivering a total power production close to 1TWh/year, equivalent to 50,000 Swedish households.
Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019 l The Wall Street Journal
  • For Volvo the internal combustion engine has run its course. In the face of competition from upstarts like Tesla Inc., which begins production this week of its new mass-market Model 3 electric battery-powered family car, the Chinese-owned automotive group on Wednesday said all new Volvo models from 2019 would be either fully electric or a hybrid. Volvo is the first major auto maker to abandon the technology that has powered the industry for more than a century.
  • Sustainable energy finance may maintain momentum even as President Trump moves to protect fossil fuel interests. On June 1, the same day the president announced the U.S. would withdraw from the Paris Agreement, an international accord aimed at reducing carbon emissions, Gurtin Municipal Bond Management unveiled a Municipal Social Advancement strategy designed in part to meet investor demand for sustainable investment products.

 
General Higher Education Endowment News

  • Harvard University will soon sell off its real estate, private equity and venture capital assets as part of a plan to shed more than $2 billion worth of holdings from its endowment. The company that handles the university’s $35.7 billion endowment, Harvard Management Company, has committed to sell the interests in real estate funds to Landmark Partners, Bloomberg reported, citing sources. The assets are worth around $1.6 billion, according to the publication.
Far From Campus, Universities Put Their Money into Farms, Railroads, Oil Rigs l Boston Globe
  • This article explores how the country’s elite universities, sitting atop multibillion-dollar endowments, venture into far more exotic and potentially risky realms than individual investors as they chase higher returns to fund day-to-day operations, from scholarships for students to salaries for superstar professors, and where they put that money.
Fossil Fuel Divestment
 
Divest-Invest: Foundations Urged to Back Climate Solutions While Divesting from Fossil Fuels l Democracy Now
  • The Wallace Global Fund recently awarded the Standing Rock Sioux Tribe the inaugural Henry A. Wallace Award and a $1 million investment in renewable energy projects led by the tribe. In this Q&A Amy Godman talks to the fund’s executive director, Ellen Dorsey, about the "Divest-Invest" movement.

 

 

 

 

 

 

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Weekly News Round-Up: June 30th, 2017

New Members


New Reports
 
 
Upcoming Events
 
Webinar: First-time Fund Managers in Emerging Markets Bring a New Model to PE in Africa l Intentional Endowments Network, July 11th, 2017, 1:00 PM EDT
  • Speak to any capital provider and they will tell you the standard private equity model is not structurally sound for the African ecosystem – as evident by the too few deals, limited human capital to run portfolio companies, and constrained levers for liquidity events. So, can the Find-Fund-Support value chain be deconstructed to build a new model for investing in Africa? In this webinar, four first-time fund managers will discuss how they tweaked different elements across the Find, Fund and Support value chain to create a new model for investment in Africa.
  • On July 12, 2017, The Investment Integration Project (TIIP) and the Center for Applied Research (CAR) at State Street, in conjunction with Ceres, will co-host an event that explores the intersection between efficiency and intentionality, and how the alignment of the two leads to effective investing.
Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.
The SRI ConferenceThe SRI Conference l November 1-3, 2017, San Diego, CA
  • The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
Sustainable, Responsible, Impact & ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how companies around the globe with a combined market value of more than $3.3 trillion threw their support behind Bank of England Governor Mark Carney's final report on climate change that weighs the financial risks to investors implied by global warming; Shareholder support for environmental proposals at big U.S. companies reaches record levels; UPS to boost electric and alternative fuel vehicle purchases; Men join corporate boards with less experience than women do.
Institutional Investors More Likely to Invest in Companies with Business-Driven ESG Disclosures, According to New White Paper l PR News Wire
  • 98% of institutional investors say a company with strong ESG initiatives makes for a more attractive investment, according to the newly released white paper, Is Your ESG Report Getting Noticed?, developed by Burson-Marsteller, a strategic communications and global public relations firm, and research firm PSB. The white paper revealed results of a survey conducted among institutional investors at banks, insurance companies and hedge/mutual funds that have investments of at least 10,000 shares on the stock exchange. Respondents have worked at their current company for at least one year. PSB conducted the research on behalf of Burson-Marsteller from December 2016 to January 2017.
  • Buying into companies based on environmental, social and governance factors, has become a hot trend on Wall Street, spawning a new industry that sells investors company ratings based on those factors and funds dedicated to rated companies. However, some investors and funds may rely too much on the scores of one rating firm, said Dan Hanson, a portfolio manager at Jarislowsky Fraser Global Investment Management. "The scores are in some cases being used in a way they are not really designed for," Hanson said. "It's problematic to bolt them on to an investment process." There are no set criteria for who is bad and who is good and so-called ESG ratings vary widely, meaning investors may be less protected than they think, for example, from a scandal over labor practices or board pay.
  • Taking ESG factors into account leads to a more comprehensive analyses and better-informed investment decisions, according to a report by Colonial First State Global Asset Management (CFSGAM). he ‘Responsible Investment and Stewardship Report’, which surveyed CFSGAM’s staff on their investment beliefs relating to sustainability and ESG factors, found that 80 percent believed that considering these issues might help to conduct more complete analyses and lead to better-informed investment decisions.
  • The 2016 African Investing for Impact Barometer shows that investments that seek to combine financial returns with positive social, environmental and/or governance outcomes are flourishing on the African continent. The study identified that more than $350 billion is committed to investing for impact strategies across nine countries. 
Alternative Food Production Needs Fresh Bread l The New Food Economy
  • Food is relocalizing. But powering smaller-scale ag will require a shift in financial thinking—and a new type of lender willing to fork over the dough.
A History of Impact Investing l Investopedia
  • Impact investing is the latest topic on investors’ radar screen, boasting double-digit growth and widespread acceptance among those seeking to align their portfolios with their personal values. But it’s much more than a fad, impact investing has a rich history.
Can Good Corporate Citizenship Be Measured? l The New York Times
  • A new study, developed by a team of quantitative strategists led by Savita Subramanian at Bank of America’s Merrill Lynch Global Research unit, appears to be the most expansive, looking at several hundred companies over a decade starting in 2005. The study found that investors who look at ESG metrics are less likely to buy shares in companies with volatile stocks. Those investors are also significantly less likely to buy into companies headed toward bankruptcies. And “stocks that ranked within the top third by ESG scores relative to their peers would have outperformed stocks in the bottom third by about 18 percentage points from 2005 to today,” the authors reported. But the study also found, repeatedly, that if you’re looking for stocks that outperform their peers, simply looking at ESG issues isn’t a panacea.
One Pension Fund Manager Is Going Against the Grain l Bloomberg
  • Hiroichi Yagi filled the Secom Corporate Pension Fund with stocks when his peers hid in bonds, considering it his duty to support Japanese equities. He embraced environmental, social and governance investing as a way to reduce volatility. And he signed Japan’s stewardship code for institutional investors right at the start, making Secom the only corporate pension fund outside of financial firms to accept the voluntary standards.
10 Reasons ESG Investing Is Growing l Pimco
  • According to the Global Sustainable Investment Alliance, over $22 trillion of assets were managed under responsible investment strategies globally in 2016, up 25% from two years before. This is one of many statistics showing Environmental, Social and Governance (ESG) investing moving into the mainstream. This article outlines 10 major trends contributing to the rise.
Pensions are Starting to Judge Hedge Funds on ESG l Bloomberg Professional Services
  • As many of the world’s biggest investors, including public pension funds, foundations, endowments, family offices, and sovereign wealth funds increase their focus on responsible investing, they are starting to ask whether hedge funds they invest in are incorporating sustainable strategies. “When investors like us are looking at a hedge funds investment, we look at it from a perspective of what we are doing in responsible investing more broadly,” Marta Jankovic, sustainability and governance specialist at pension fund manager APG Asset Management said at panel discussion organized by the United Nations-supported Principles for Responsible Investment in New York June 12.
Investors Focus on Making an Impact, but What’s the Strategy? l CNBC
  • Assets under management using SRI strategies grew to $8.72 trillion by 2016, a 33 percent rise over two years. SRI strategies have evolved from simply avoidance of "sin stocks" to "environmental, social and governance" investing and "impact investing."
Cities Looking to ‘Green Banks’ to Help Fund Sustainable Infrastructure l EcoBusiness
  • Cities are exploring how “green banks” can help fulfil their pledges not only under the Paris Agreement but also under the new Sustainable Development Goals (SDGs). What exactly are “green banks”?
Fiduciary Duty
 
'No Legal Barrier' for UK Funds on ESG Investments: Law Commission l Investments and Pensions Europe
  • Defined contribution (DC) pension schemes in the UK have invested much less than peers abroad in socially and environmentally beneficial investments because trustees seem unsure whether they are allowed to, according to a new report. The Law Commission, a non-political body that recommends legal reform where needed, has confirmed in a government-prompted report that there are no legal or regulatory barriers to pension schemes making socially responsible investments. Law Commissioner Stephen Lewis said: “Defined contribution pension schemes will be investing billions of pounds over the next decade, and it’s only right that they seek to get the best returns for their clients.”
  • The Law Commission has called on the government to clarify investment rules which can make it hard for schemes to make socially responsible investments. The report called Pension Funds and Social Investment, published last week, is in response to the government's request for the commission to look at how far pension funds may consider ESG issues.

Climate Risk, Science & Regulation
  • A panel of top financial institutions and companies has launched guidelines to push for more disclosure about the impact of climate change—highlighting rising concern about the potential investment risks posed by global warming. The task force, which was commissioned by a group of global regulators known as the Financial Stability Board and led by former New York City Mayor Michael Bloomberg, said companies should disclose in financial filings how they are planning for risks and opportunities related to climate change. It also called for companies to develop specific metrics and targets to measure performance in that area.
  • Just 5% of European pension funds have considered financial impact of climate change, despite extreme weather changes, according to a new report.  According to the European Asset Allocation Report, published by fund administration and research experts Mercer, despite a slight improvement since 2016, the vast majority of responding funds are “still not active” on climate issues.
Exxon investors want a bank-style stress test for climate change | NPR Marketplace
  • Representatives from Wespath, Bloomberg and Ceres comment on recent shareholder resolutions at Exxon and Occidental calling for more transparency and disclosure around the risks climate change poses to the companies. Nearly two-thirds of Exxon’s shareholders voted to make the company disclose its plans around possible increases in climate change regulation. Some of Exxon’s biggest shareholders — BlackRock and Vanguard — are thought to be the driving force in the climate change vote. Neither company would confirm how they voted.
General Higher Education Endowments News
 
BlackRock Tapped to Run Arizona State's $600 Million Endowment l Bloomberg
  • BlackRock Inc., the world’s biggest money manager, is making headway in investing for U.S. college endowments. BlackRock will manage Arizona State University Foundation’s $600 million endowment, succeeding Perella Weinberg Partners’ Agility unit. The transition starts July 1, the foundation and BlackRock said.
NEW BOOK: 'Endowment Management for Higher Education' Outlines Best Practices for Higher Education Investment Committees l CrossRoads Today
  • The numerous challenges of investing are both technical and human and to overcome them, endowment stewards must be as attentive to potential landmines in governance as they are to those in global markets. Endowment Management for Higher Education, written by Nicole Wellmann Kraus, CFA and Hilda Ochoa-Brillembourg, CFA, both of Strategic Investment Group, and Jay A. Yoder, CFA and published by the Association of Governing Boards of Universities and Colleges (AGB), aims to set a framework for best practices around endowment management.   
Fossil Fuel Divestment
 
Council Workers’ Largest Trade Union Votes for Divesting Pensions l Platform London
  • After two years of impressive mobilisation by UNISON grassroots members across England, Scotland and Wales, the trade union has officially taken on fossil fuel divestment policy. This week, the union’s National Delegate Conference voted unanimously to seek divestment of Local Government Pension Schemes from fossil fuels over five years giving due regard to fiduciary duty UNISON is one of the two largest trade unions in the UK, with over 1.3 million members, and the first to adopt formal divest policy.
North Dakota Insurance Commissioner Asks for End to California Coal Divestment Initiative l West Fargo Pioneer
  • The North Dakota insurance commissioner urged a California official this week to cease an initiative that calls for insurance companies to divest from coal. Jon Godfread, a Republican, sent the letter with officials from five other states to California Insurance Commissioner Dave Jones Wednesday, June 21, according to a news release. "Commissioner Jones's attempt to dissuade insurance companies from investing in the coal industry is a deeply misguided overreach," Godfread said in a statement. "Our job as insurance commissioners is to protect consumers and serve the greater public interest through the effective and unbiased regulation of the insurance marketplace." The letter asked Jones to end the so-called "Climate Risk Carbon Initiative."

 

 

 

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Weekly News Round-Up: June 23rd, 2017

IEN in the News

Cambridge Associates and the Intentional Endowments Network Outline a Blueprint for Action for Investors Wishing to Uphold Aims of Paris Climate Agreement and Implement Environmental Factors Into Portfolios l Market Wired

  • Though the United States government is no longer supporting the Paris Climate Agreement, hundreds of American institutions -- including endowments and foundations -- have joined businesses, philanthropists, cities and states across the country in remaining committed to the international accord. Many institutions struggle to integrate environmental objectives and considerations (including ESG factors) into their investment portfolios, and the language of the Paris Agreement provides a good framework for moving forward.  IEN and Cambridge Associates have created related resources for institutions, "Considerations for ESG Policy Development" and "Paris Agreement in the Investment Policy."
3 Ps Critical to Investing in Aftermath of US Withdrawal from Paris Agreement l Chief Investment Officer
  • Despite President Trump’s decision to pull the US out of the Paris Agreement, institutional investors have united with businesses, philanthropists, cities, and states across the nation to pledge their allegiance to the international accord. For many institutions finding it difficult to integrate environmental objectives and considerations (including ESG factors) into their investment portfolios, the blueprints can be found in the Paris Agreement. Cambridge Associates’ Tom Mitchell, managing director in the Mission-Related Investing Practice and Georges Dyer, principal of the Intentional Endowments Network (IEN), have outlined a simple strategy to aid institutions with investment issues.
 
 
Upcoming Events
 
  • There are now 1,700 PRI signatories, from over 50 countries, with assets approaching US$62 trillion, committed to incorporating ESG issues into investment analysis and decision-making. This webinar will explore how SASB standards can help PRI signatories fulfill their commitments and adhere to the values that undergird the PRI principles.
Webinar: Introduction to Impact Investing l Intentional Endowments Network, June 29th, 2017, 2:00 PM EDT
  • In this webinar, Fran Seegull, Executive Director at the U.S. Impact Investing Alliance at The Ford Foundation, Allison Spector, Senior Manager of Investors' Council & Membership Programming at The Global Impact Investing Network, and Shawn Wischmeier, CIO of Margaret A. Cargill Philanthropies, will offer an introduction to impact investing for institutional investors.
ESG in Infrastructure & Private Market Investing l UN PRI, June 29th, 2017, New York, NY
  • Join the PRI at an event on ESG in Infrastructure & Private Market Investing on June 29th at The University Club of New York. The agenda includes a keynote speech on why LPs are increasingly seeking ESG strategies, as well as effective frameworks and themes being applied in infrastructure investing.
  • On July 12, 2017, The Investment Integration Project (TIIP) and the Center for Applied Research (CAR) at State Street, in conjunction with Ceres, will co-host an event that explores the intersection between efficiency and intentionality, and how the alignment of the two leads to effective investing.
Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.
New Reports
 
Paris Agreement in the Investment Policy l Intentional Endowments Network and Cambridge Associates
  • Developing effective sustainable investment policies requires a process of stakeholder engagement that includes education about and exploration of the sustainable investing thesis, field, and opportunity set. Through such a process investors can articulate their purpose, priorities, and principles and integrated these pillars within their investment policies and decision criteria. Climate change is a critical sustainability priority, which presents a range of risks and opportunities for investors. One potential framework for integrating climate considerations into investment policies is the 2015 Paris Climate Agreement. Here we list the three aims of the Agreement and offer examples of language that may be included in a statement of priorities.
Considerations for ESG Policy Development l The Intentional Endowments Network & Cambridge Associates
  • At the highest level, investors with policies they consider to be effective and broadly supported share some common traits. They have articulated their purpose, priorities, and principles and integrated these pillars within their investment policies and decision criteria. One key to arriving at this point is the investment of time. Effective ESG policy creation requires a process of stakeholder engagement that includes education about and exploration of the sustainable investing thesis, field, and opportunity set. This resource contains descriptions of the key elements of purpose, priorities, and principles and some examples of language that may be useful for spurring dialogue, thinking, and policy development.
New Energy Outlook 2017 l Bloomberg New Energy Finance
  • Focused on the electricity system, NEO combines the expertise of over 80 market and technology specialists in 12 countries to provide a unique view of how the market will evolve What sets NEO apart is that our assessment is focused on the parts of the system that are driving rapid change in markets, grid systems and business models. This includes the cost of wind and solar technology, battery storage, electricity demand and the uptake of EVs among others.
 
 
Endowment SRI/ESG News
  • The University of Winnipeg Foundation has created a responsible investing policy to guide its endowments, the school's revenue development arm announced Friday. Sparked by a "divest from fossil fuels" student movement which began in 2014, the foundation has also committed to establishing a renewable energy (green) investment fund as an option for investors, it said. "The adoption of our responsible investing policy and the related initiatives... are a welcome evolution," foundation president and chief executive officer Brian Daly said in a news release. "While adhering to our mandate, we are keen to continue demonstrating alignment with, and sensitivity to, the values and concerns of our stakeholders and fellow members of the UWinnipeg community."
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how the green-bond market has boomed on the allure of investments that help the environment and the industry is now trying to show that the reality matches these ambitions; Hedge fund Man Group Plc named a head of responsible investing; Vivint Solar Inc. leads solar stock rally; Women lose ground on board seats; and oil majors risk wasting $2.3 trillion if peak demand looms.
  • In this Q&A, Suzanne Fallender, Director of Corporate Responsibility for Intel Corporation and Irving S. Gomez, Assistant Corporate Secretary and Managing Counsel in the Corporate Legal Group for Intel Corporation explore how Intel engages in ESG conversations with investors, their approach to disclosure, and how the ESG conversation has evolved in the governance community in recent years.
ESG ETFs Could Find Support from Institutional Investors l ETF Trends
  • According to a recent survey conducted by BNP Paribas Securities Services, titled “Great Expectations: ESG – What’s next for asset owners and managers,”almost 80% of asset managers and asset owners use ESG factors in their decision making, and among those incorporating ESG, 46% plan to invest at least half of their assets in funds that incorporate ESG by 2019, reports Michael Katz for Chief Investment Officer. “This represents a significant shift from today,” according to the report, “where for 45% of asset owners and for 40% of asset managers, 25% or less of their funds is either invested in or marketed as ESG/RI funds.”
High ESG Performance Translates Into High Financial Performance l Forbes
  • This Q&A with Chris McKnett, Managing Director of State Street Global Advisors and Mirtha D. Kastrapeli, Global Head of State Street’s Center for Applied Research explores recent trends that show that investors are actively seeking to align their investments with their values to create a positive outcome.
The Truth is Finally Starting to Emerge About Socially Responsible Investing l CNBC
  • This article discusses how socially responsible investing funds perform as well as traditional stock funds, algorithms to identify ESG factors are continually improving, the main hurdles SRI funds continue to face, and how socially responsible funds that focus on excluding stocks, rather than identifying stocks that score highly on ESG metrics, have a harder time generating good long-term performance.
Consultants, Rules, and Jargon: the ‘Roadblocks’ to Impact Investing l Investments & Pensions Europe
  • Pension fund consultants have been standing in the way of greater adoption of impact investment by their clients, it was argued at a conference yesterday. Katherine Garrett-Cox, member of the supervisory board at Deutsche Bank and former chief executive and chief investment officer of Alliance Trust, said pension fund consultants were “a roadblock that needs to be broken down”. David Scott, chairman at Tribe Impact Capital, an impact-focused wealth manager, argued that trustees needed to take more responsibility and challenge consultants. Fiduciary duty was about the financial return and societal impact of investments, he added.
Survey Suggests ESG Investing Can Boost Plan Participation l Napa Net
  • Environmental, social and governance (ESG) considerations in investment decisions are growing in importance and could help increase retirement plan participation and contribution rates, according to results from Natixis Global Asset Management’s 2017 ESG Report. The survey of 7,100 individuals from 22 countries consists of institutional decision makers, global financial advisors and individual investors, and U.S.-based DC plan participants. The objective was to develop a picture of how both professional and individual investors feel about the role and impact of ESG.
Shareholder Engagement
  • This piece highlights the shareholder engagement work of Natasha Lamb, managing partner at the Boston investing company Arjuna Capital (a founding member of IEN), specifically in relation to the gender pay gap. It also profiles several other leaders in the field of shareholder engagement and fair pay activism.
Shareholders Force ExxonMobil to Plan for a World with Paris Agreement's Emissions Restrictions l World Resources Institute
  • Lost in the announcement earlier this month that the United States would withdraw from the Paris Agreement, there was another potentially high-stakes climate change development: 62 percent of ExxonMobil's shareholders voted to instruct the oil giant to report on the business impact of global measures designed to limit warming to 2 degrees C (3.6 degrees F) above pre-industrial levels. This follows a similar successful shareholder vote at Occidental and PPL, a large utility holding company.

General Higher Education Endowment News
  • The University of Texas Investment Management Co. named Thomas Britton “Britt” Harris, who runs one of the largest U.S. pension plans, as chief executive officer to help boost performance at the $40 billion fund. Harris, 59, chief investment officer at the Teacher Retirement System of Texas, succeeds Bruce Zimmerman, who stepped down last year from Utimco, as the university endowment money manager is known. The Utimco board approved the appointment Friday at a board meeting in Austin.
 
 
General Higher Ed Sustainability News 
  • The city of Phoenix and nearby Arizona State University are teaming up to launch a public-private incubator focused on finding new uses for waste from textiles, food scraps, batteries and more. Housed at the university's Resource Innovation and Solutions Network (RISN), the program, announced Wednesday, officially will be called the RISN Incubator. There, organizers will look to harness momentum around the concept of a circular economy, or business models built on eliminating waste by continually cycling materials back through supply chains.
Climate Risk, Science, and Regulation
 
The Energy 202: Exxon, GM and Pepsi Plan to Back Carbon Tax Floated by Ex-GOP Officials l Washington Post
  • A group of nearly a dozen multinational corporations is backing a plan from senior Republican statesmen to replace President Obama's greenhouse-gas regulations with a carbon tax. The coalition of former GOP officials -- which includes three former secretaries of the Treasury, James A. Baker, Henry Paulson and George P. Shultz, and calls itself the Climate Leadership Council -- made headlines in February when it proposed eliminating nearly all Obama-era climate policies in exchange for a tax on carbon emissions starting at $40 per ton. Framing the proposal as a "carbon dividend," revenue raised by the tax would be redistributed as a quarterly check to Americans under their plan.
Global Valuation Standards Body Says it’s Open to Exploring Impact of Climate Change (Subscription) l Responsible Investor
  • The International Valuation Standards Council (IVSC), a global standards body chaired by accounting industry veteran Sir David Tweedie, has launched a consultation aimed at shaping its agenda and technical work, which could lead to the inclusion of sustainability topics – such as the impact of climate change – in the valuation of businesses and assets. Among the IVSC’s Agenda Consultation Paper there are topics that could affect ESG practitioners and investors. For example, the IVSC is looking for input on non-financial liabilities, an area which could be related to accounting standards such IAS 36 (impairment of assets) and IAS 37 (provision, contingent liabilities and contingent assets). Other topics of the IVSC’s consultation are the valuation of biological assets and extractives, which could strike a chord with ESG concepts such as natural capital and stranded assets.

Investment Manager News
 
Saudi Arabia's Sedco Capital Launches Green Investment Strategy l Nasdaq
  • Saudi Arabia'sSedco Capital said on Thursday it has launched an investment strategy combining environment-conscious and sharia-compliant principles, as Islamic financial firms gradually embrace socially responsible investing. The move by Jeddah-based Sedco, an Islamic firm managing $1.8 billion worth of Luxembourg-listed funds, could help develop green investing in the Middle East and make Islamic finance appeal to a wider client base.
One Billion Dollar Impact-Investing Team Joins Vanderbilt Financial Group, the Sustainable Broker Dealer and RIA l Market Wired
  • Vanderbilt Financial Group, also known as The Sustainable Broker Dealer and RIA, continues their recruiting streak making their voice heard in the Impact Investing community and shaking up the Investment world with their passion for, "Teaching clients how to do good with the money they invest," as Chief Disruption Officer and CEO, Steve Distante says. Vanderbilt has seen an increase of over 30% in Financial Advisors over the past year. The 20 new Registered Representatives are located in three branch offices in New Jersey and New York City. This team is well aligned with Vanderbilt's intense focus on Impact Investing (also known as ESG or Environmental Social Governance focused and as SRI or Socially Responsible Impact Investing).
Fossil Fuel Divestment & Other Divestment Campaigns
 
Oklahoma Attorney General, Others Blast California Insurance Regulator's Call to Divest From Coal l NewsOK
  • Oklahoma Attorney General Mike Hunter and fellow Republican attorneys general in 11 other states want to stop an effort by a California regulator to get insurance companies operating in that state to divest from coal and disclose their fossil fuel investments. Hunter and the attorneys general — as well as one governor — sent a letter Monday to California Insurance Commissioner Dave Jones accusing him of trying to "publicly shame those who invest in American energy." The letter threatens legal action if Jones doesn't revise his policies.
  • Exxon Mobil, the world's largest public oil and gas company remains a prime target for fossil-fuel divestment campaigns. Divestment, as a strategy used to effect political change, is increasingly used by influential institutions. The prospect of large-scale, institutional divestment makes Exxon Mobil an unattractive long-term investment. However, Exxon Mobil continues to be an attractive medium-term investment for investors seeking healthy dividend payments and regular dividend increases. Exxon Mobil faces a growing, long-term threat from campaigns which promote divestment from fossil-fuel companies. Investors who plan to hold Exxon Mobil for long periods of time should vigilantly monitor divestment campaigns targeting the company.
Sweden’s Largest Pension Divests From Paris Accord Violators ExxonMobil and TransCanada l Common Dreams
  • In a major win for the fossil fuel divestment movement, the #ExxonKnew campaign, and efforts to block investments in the companies backing fossil fuel pipelines, Sweden’s largest pension fund, AP7, announced this week that it will divest from six companies that are in violation of the Paris climate agreement. This includes particularly bad actors ExxonMobil and TransCanada, making AP7 the first pension fund to divest specifically from Exxon.
Socially Responsible Investing: Divesting from Fossil Fuels l The Bill Fold
  • In this Q&A, Reverend Jenny Phillips, a woman who has been on the forefront of the movement, helping push a global religious organization with a $21 billion investment fund towards divestment from fossil fuels, discusses how she got started, what kind of action she’s taken to further this cause, and how you can get involved in the climate change movement in your own community, including divestment from fossil fuels.
University of Winnipeg Students Camp Outside for the Night to Support Fuel Divestment l CBC
  • Dozens of students are braving the rain and chilly temperatures while camping outside for the night on the front lawn of the University of Winnipeg to draw more attention to fossil fuel divestment. The event was organized by Divest UWinnipeg, an environmental group that's part of a divestment movement across Canada, pushing universities to stop investing in the fossil fuel sector. The campaign comes just as the  University's Board of Regents gets ready to vote Monday on a motion to implement a policy on fossil fuel divestment.
Students Gear up for Battle After University of Winnipeg Board Rejects Fossil Fuel Divestment l CBC
  • The University of Winnipeg Students' Association promises to continue its fight against fossil fuels after a decision by the university's board fell short of complete divestment on Monday night. The University of Winnipeg's board of regents had received a new policy guiding investments for endowments to the University of Winnipeg Foundation. The university said in a news release the new policy is similar to those of other universities across Canada. The policy is responsible and commits to establishing a renewable energy investment portfolio known as a green fund as an option for investors, the news release says.
Auckland University Staff Demand Fossil Fuel Divestment l Auckland Now
  • Auckland University is being called on by its own staff to sell its fossil fuel investments. An open letter signed by 240 staff from eight faculties released publicly on Wednesdayurged the University of Auckland (UoA) to sell its coal, oil and gas investments. The letter comes after two years of campaigning against the university's fossil fuel investments by university group Fossil Free UoA. The campaign has included marches, petitions and a 12 hour occupation of Vice Chancellor Stuart McCutcheon's wing in May.
Dissonance and Divestment: Profile of An Activist l Resilience
  • This piece is an updated excerpt from Chuck Collins’ new book, Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good (Chelsea Green). Chuck Collins is director of the Program on Inequality at the Institute for Policy Studies where he co-edits Inequality.org.

UK Insurer Aviva to Halt Tobacco Investments l Financial Times

  • Aviva, one of the UK’s biggest life insurance companies, is to ditch its tobacco investments. The group joins a growing wave of companies which have divested from tobacco. Axa promised to get rid of its tobacco investments last year, and more recently Scor and the Irish sovereign wealth fund have agreed to do the same. Aviva had about £1bn of investments in the industry. The equities have almost all been sold, while the bond investments will be left to run off.

 

 

 

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Weekly News Round-Up: June 16th, 2017


New IEN Member
Upcoming Events

  • There are now 1,700 PRI signatories, from over 50 countries, with assets approaching US$62 trillion, committed to incorporating ESG issues into investment analysis and decision-making. This webinar will explore how SASB standards can help PRI signatories fulfill their commitments and adhere to the values that undergird the PRI principles.
ESG in Infrastructure & Private Market Investing l UN PRI, June 29th, 2017, New York, NY
  • Join the PRI at an event on ESG in Infrastructure & Private Market Investing on June 29th at The University Club of New York. The agenda includes a keynote speech on why LPs are increasingly seeking ESG strategies, as well as effective frameworks and themes being applied in infrastructure investing.
Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.
 
 
Opportunities for Action
 
Grand Coalition Statement on Paris Agreement l Second Nature
  • The Administration announced that the United States is withdrawing from the Paris Agreement. It is clear that higher education, in alignment with a grand coalition of other vital sectors of the US economy, must continue to lead the nation’s climate actions. Join mayors, governors, and business leaders in demonstrating our national commitment to the principles and targets of the Paris Agreement. This joint statement is the first time that these sectors have joined together publicly in a strong show of support for climate action that is so vital to the future of our country.
  • IEN is pleased to support The SRI Conference Student Scholarship. The scholarship is run by a group of First Affirmative Financial Network alumni and longtime affiliates to bring qualified young people to The SRI Conference. Their goal is to insure that the culture, commitment, and competence of the pioneer SRI movement be sustained into the next generation. Applications are accepted through September 11thclick here to apply. Winners are announced in late September.  For questions or additional information on this program, please contact SRIscholarship15@gmail.com
 
 
New Resources
 
  • A lot of people find the idea of sustainable investing appealing, but what does it really mean and how can you start investing this way? The concept originally had its roots in socially responsible investing, but as it’s grown in popularity, it has also grown more complex. The differences in approaches come from what each aims to accomplish and how, as outlined in this report.
Best of Sustainable Finance l Bloomberg Reports
  • This special edition of Sustainable Finance presents the best stories from the brief this year -- from green bond sales to the gender pay gap.
SRI & ESG Investing at Endowments
 
Board of Directors Approves New Socially Responsible Investing Policy | Georgetown University
  • Georgetown’s board approved an SRI Policy that further aligns the university’s investment strategy with its commitment to social justice, protection of human life and dignity, stewardship for the planet and promotion of the common good. “This SRI Policy is an important step forward for Georgetown,” says Paul Tagliabue (C’62), the board’s vice chair and leader of its working group on SRI. “It formalizes and strengthens the university’s investment policies. Recognizing that the university’s endowment is not to be used for advocating political interests, we are committed to both meeting our fiduciary responsibilities and generating resources to advance the university’s academic mission in a manner consistent with our identity as a Catholic and Jesuit institution.” See the SRI Policy here
University of Toronto Asset Management releases first-ever report on responsible investing | The Varsity
  • UTAM, the non-profit corporation responsible for handling the University of Toronto’s investments, has released its first Responsible Investing Report, outlining its plans to pursue responsible investment strategies. UTAM’s primary effort to encourage responsible investing has been through the analyses of ESG factors when making direct and indirect investment decisions. See the report here
Statement of Investment Principles | Board of Trustees of the University of Oregon 
  • From the policy: Academic research supports the practice of incorporating environmental, social, and governance (“ESG”) factors with other conventional financial analytical tools when evaluating investment opportunities as these factors may help identify potential opportunities and risks which conventional tools miss. The UO encourages its advisors and managers to include ESG factors in their analytical processes.
  • Wespath Benefits and Investments was commended by Responsible Investor for the quality of its sustainable investment report, 2015-2016 Sustainable Investment Report: Global Investor—Sustainable Investor. The award recognizes best practices and promotes transparency in sustainable investment reporting. Wespath was the only U.S.-based asset owner nominated in the "Best RI Report by an Asset Owner" category; it is the second time RI has recognized Wespath for its sustainable investment reporting.
  • CalPERs has won Responsible Investor's inaugural award for Innovation & Industry Leadership for its Environmental, Social, and Governance 5-Year Strategic Plan. 
 
 
Sustainable, Responsible, Impact & ESG Investing
 
Bloomberg Briefs l Sustainable Finance
  • This week's Bloomberg Brief highlights how, as many of the world's biggest asset owners increase their focus on responsible investing, they are starting to ask more of hedge funds they invest in if they are incorporating sustainable strategies;  Apple returns to the green bond market; family offices could fill funding gaps for minority-owned businesses; and gender diversity in Asian boardrooms is among the lowest in the world. 
Individuals and Institutions Split on Benefits of ESG Investing: Survey l Investments & Pensions Europe
  • More precise language about ESG investing and a more thorough conversation about the purpose it plays in portfolios may be the key to bridging the “gulf” between how professional and individual investors view its role and impact, according to Natixis Global Asset Management. In a report based on a set of investor surveys it carried out last year, the asset manager said it found a “distinct split” in the views of professional and individual investors that challenges conventional thinking about ESG investing. Individuals believe the environmental, social, and ethical records of the companies they invest in are important, said Natixis, while professionals at institutions and within “the investment community” were more sceptical about the efficacy of these strategies, for example having concerns about performance measurement.
  • Some 82 percent of S&P 500 Index companies published a sustainability or corporate responsibility report last year, according to new research data. “If asset owners like CalPERS, New York State Common Fund and the New York City pension system and others are increasingly requiring asset managers to demonstrate their commitment to sustainable investing, then that influence is shaping the direction of the capital market,” said Hank Boerner, chairman & co-founder of the GAI.
UN PRI: Transparency Holds the Key to Sustainable Markets l IR Markets
  • Transparency is a key driver for creating sustainable capital markets and should form a core part of the business model of every player within the financial services sector, including stock exchanges. Global stock exchanges list more than $70 tn of market capitalization, ideally placing them to drive long-term value creation through improved market transparency. The UN Sustainable Stock Exchanges Initiative (SSE), launched in 2009 and co-organized by a number of other UN programs, including the UN-supported PRI, has been successful in bringing global exchanges together, along with investors, regulators and companies, to enhance corporate transparency on ESG issues.  Eight years after launch, the SSE today includes 60 stock exchanges, representing more than 30,000 listed companies.  
  • As institutional investors increasingly turn to alternative investments, including private equity to seek additional return and diversification, the pressure is now on private equity managers to step up and offer sustainable investment solutions, says Mirja Lehmler-Brown, Senior Investment Manager at Aberdeen Private Equity.
  • This article discusses how one can evaluate different ETFs using MSCI’s ESG ratings data on ETF.com.
 
 
Shareholder Engagement
  • Recently, hundreds of Facebook shareholders at the company’s annual meeting listened politely as top executives discussed the social media giant’s performance metrics and goals–until Natasha Lamb, Managing Partner at Arjuna Capital, got up out of her chair and stood to face the board. She demanded that the company address its fake news problem by publishing a formal report about its prevalence on the site and its impact. While the firm has spent years trying to pressure corporate boards to address social and environmental issues, in recent months there’s been a clear increase in such investor-driven proposals.
Investment Manager News
 
  • Broadridge Financial Solutions is to add MSCI ESG Research’s ESG Fund Metrics to its Global Market Intelligence, a platform for domestic and cross-border fund data and analytics. Under the agreement, key MSCI ESG Fund Metrics will be available on the platform to provide an increased level of transparency on the (ESG quality and characteristics of over 26,000 mutual funds and ETFs covered by MSCI ESG Research.
TFC Financial Management Launches Sustainable and Responsible Investment Strategy l Wire Update
  • TFC Financial Management (TFC), an independent, majority employee-owned registered investment advisory and financial planning firm has announced the launch of its Sustainable and Responsible Investment Strategy (SRI). “Our clients, their families and prospective clients are increasingly expressing interest in SRI and their desire to have investment portfolios be more aligned with their personal values and social impact priorities,” said TFC Chief Executive Officer Renée Kwok. “We are pleased to be able to offer this strategy, designed to provide long-term investment returns as well as positive social and environmental impact, as both dimensions are important to these clients.”
  • Morgan Stanley recently announced that it has launched a sustainable investing e-learning education program directly to the desktops of each of its approximately 16,000 Financial Advisors. Morgan Stanley offers individual and institutional clients sustainable and impact investing solutions through its proprietary Investing with Impact Platform. Built in collaboration between Morgan Stanley Wealth Management and the Institute for Sustainable Investing, the web-based curriculum provides an immersive educational experience through a series of five themes covered in the course.

General Higher Education & Endowment News
 

 

  • A new report on operations at the University of Louisville Foundation describes in devastating detail a series of excessive spending practices, unbudgeted expenses, unapproved actions, high executive compensation and unrecorded endowment losses. The foundation’s Board of Directors in many cases did not approve foundation activities or were not aware of them, according to the 135-page report, which was produced by an independent investigating firm and released Thursday
  • The University of Michigan's endowment is looking for yield by boosting its holdings in two Texas-based energy funds. The University said it plans to add to its investment in Denham Oil & Gas, a Houston-based fund that focuses on upstream exploration. The endowment committed $30 million to Denham in March. It's also seeking to bolster its co-investment in Dallas-based Four Rivers Resources. The school committed $5 million in April to the fund, which acquires assets from an operator in the San Juan basin in Colorado. The university's fund had 8.3 percent of assets invested in natural resources as of April, up from 6 percent as of June 2015, according to public filings.

 

Climate Risk, Science & Regulation
 
Bullish Forecasts Create Liability Risk, ClientEarth Warns Fossil Fuel Giants l Client Earth
  • ClientEarth has written to BP, Glencore and investors warning of the risk of investor lawsuits based on statements about future fossil fuel demand in their reporting. Both companies publish scenarios for future commodity demand in official reporting documents that paint a picture at odds with expert analysis. They are also optimistic when compared to competitors’ forecasts. According to ClientEarth, this suggests a risk of evidence materializing which demonstrates that the companies’ management were reckless as to the truth or accuracy of statements relating to these scenarios. Such evidence could be an internal memo, email correspondence or consultant reports.If this happens, and investors have suffered loss as a result of relying on the statement, investors can sue.
Fossil Fuel Divestment
 

Pensions, CIOs Rebuke Fossil Fuel Divestment Report l Chief Investment Officer

  • A new study that was commissioned and financed by the Independent Petroleum Association of America (IPAA) suggests fossil fuel divestment could cost the top US pension funds up to $5 trillion over the next 50 years. Using available data on the current holdings of each fund, the study analyzes 11 funds including CalPERS and municipal funds. “This may be looking at valuations and fossil fuels as our main energy source currently. However, the growth of technology within energy is unreal,” said Matthew Sherwood Ph.D, senior manager, public markets investments, MMBB Financial Services. “Even further than that, new technology is constantly being created with certain coals and more reliable oil, and investing those technologies with a further upside is a lot more money. That’s where you generate true alpha, like investing in Tesla when it was a startup. I think the opportunities that these technologies create within energy makes it much more attractive.”
Major US Pension Fund Divests Australian Coal l Financial Standard
  • The largest educator-only pension fund in the world is divesting from all non-US thermal coal holdings, including Australia-based Whitehaven Coal. The US$206.5 billion California State Teachers' Retirement System (CalSTRS) teachers' retirement board reached the decision last week, based upon its long-term global perspective and fiduciary duty, including consideration of environmental risks - both current and those projected over the next 10 to 25+ years.
  • Georgetown will make efforts to avoid investments in companies involved in providing abortion services, as well as companies deemed to violate “human dignity,” after the university’s board of directors approved a new Socially Responsible Investing Policy on Thursday. The policy is a general framework for the university’s investment strategy, laying out ethical guidelines that the university must follow consistent with the its academic mission and Catholic and Jesuit identity. The new guidelines broadly require the university to consider the social and environmental impact of companies in which it invests.

 

 

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Weekly News Round-Up: June 9th, 2017

New IEN Member

Upcoming Events

Breakfast Briefing: Environmental, Social & Governance Investing l Fund Intelligence, June 15, 2017, New York, NY
  • The US Breakfast Briefing, a free to attend event, featuring a panel-led discussion and informal networking. Join for an in-depth discussion with representatives from foundations, endowments, and asset management firms on socially responsible investing.
  • There are now 1,700 PRI signatories, from over 50 countries, with assets approaching US$62 trillion, committed to incorporating ESG issues into investment analysis and decision-making. This webinar will explore how SASB standards can help PRI signatories fulfill their commitments and adhere to the values that undergird the PRI principles.
Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.
 
Opportunities for Action
 
Grand Coalition Statement on Paris Agreement l Second Nature
  • The Administration announced that the United States is withdrawing from the Paris Agreement. It is clear that higher education, in alignment with a grand coalition of other vital sectors of the US economy, must continue to lead the nation’s climate actions. Join mayors, governors, and business leaders in demonstrating our national commitment to the principles and targets of the Paris Agreement. This joint statement is the first time that these sectors have joined together publicly in a strong show of support for climate action that is so vital to the future of our country.
  • IEN is pleased to support The SRI Conference Student Scholarship. The scholarship is run by a group of First Affirmative Financial Network alumni and longtime affiliates to bring qualified young people to The SRI Conference. Their goal is to insure that the culture, commitment, and competence of the pioneer SRI movement be sustained into the next generation. Applications are accepted through September 11thclick here to apply. Winners are announced in late September.  For questions or additional information on this program, please contact SRIscholarship15@gmail.com

 

Sustainable, Responsible, Impact & ESG Investing
 
  • The National Geographic Society announced Wednesday it will invest $50 million of its $1.2 billion endowment in impact investments. "At National Geographic, we are committed to changing the world through science, exploration, education and storytelling," said Gary E. Knell, president and CEO, in a news release. "We recognized the opportunity to double down on our ability to make an impact — contributing to a better society not just through the grants we make, but by making investments that deliver both financial and societal returns."
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how  U.S. municipalities are expected to ramp up issuance of green bonds even as President Donald Trump plans to exit the Paris agreement on global warming, according to the Climate Bonds Initiative; The market for renewables in Africa is drawing strong investor interest, says African Infrastructure Investment Managers CEO Jurie Swart; and the U.S. House of Representatives moved ahead this week on a plan to consider a bill that would block all but the largest investors from putting proposals up for consideration at a company's annual meeting.
ESG: You Don't Need To Give Up Performance To Invest In A Sustainable Way l Forbes
  • In this Q&A with Janet Brown, President and CEO of FundX Investment Group, Brown explains what ESG is, trends in the space and opportunities for investment.
Private Real Asset Funds on Par with ESG Investments l Chief Investment Officer
  • Funds that invest in private real assets, such as timber, real estate, and infrastructure, can offer similar objectives and returns as environmental, social, and governance (ESG) investments, according to a report from nonprofit organization Global Impact Investing Network (GIIN). The “Financial Performance of Real Assets Impact Investments” report analyzed the financial performance of private real assets impact investment funds in three sectors: timber, real estate, and infrastructure.
  • The International Trade Union Confederation Global Poll this year reveals that 85 percent of the world’s people say the world would be a better place if their government were more committed to action on climate change. In order to have a chance to stay as far below the 2°C limit as possible, emissions must be reduced to zero as soon as can be achieved. Entire economic sectors must transform their carbon footprint to reach that goal. If we are to live within planetary boundaries, all economic activity has to contribute to realizing a circular economy – one that reduces waste, reuses, and recycles.
Impact Investing Entering the Mainstream: The impact on Asia l Asia Asset Management
  • Impact investing, according to a canonical definition developed by the Global Impact Investing Network (GIIN) and Cambridge Associates, means investing “made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return”. This article discusses what the characteristics and growth opportunities are of impact investing and how far they are appropriate and already implemented in Asia.
  • This formerly niche corner of investing has become increasingly mainstream, partly because it offers a tantalizing opportunity to target millennial customers. Big-name players are getting involved, such as Morgan Stanley, which has created an Institute for Sustainable Investing and recently raised more than $125 million for a global impact fund. The prominent venture-capital firm Andreessen Horowitz is backing OpenInvest, which matches people with socially responsible investments. All the new entrants are bringing more credibility to the field, but they’ve also coincided with some growing pains.
Shareholder Engagement
Why is the Business Roundtable Working So Hard to Destroy Shareholder Proposals? l Huffington Post
  • Co-authored by Tim Smith, Director of ESG Shareowner Engagement, Walden Asset Management, this piece discusses how earlier this year, the Business Roundtable (BRT) sent a letter to the Administration highlighting 16 regulations that the organization thought were “of most concern” to its members, noting that the regulations “directly and negatively impact economic growth.” One of those was the shareholder proposal process, which the letter described as “activist investors with insignificant stakes in public companies make shareholder proposals that pursue social or political agendas unrelated to the interests of the shareholders as a whole.” What is motivating the BRT, an organization with almost 200 CEO members, to try to essentially eliminate this fundamental right of shareholders?
  • Facebook shareholders have once again rejected a proposal for Facebook to prepare a gender pay equity report to assess pay between men and women across race and ethnicity. A stockholder proposal called for Facebook to prepare a report by December 2017 around the company’s policies and goals to reduce the gender pay gap. Shareholders rejected a similar proposal last year. Facebook, whose board of directors recommended a vote against the proposal, argued that it has already been reviewing compensation fairness to ensure pay equity for years. However, as noted on Facebook’s annual shareholder call today by Natasha Lamb, managing partner at Arjuna Capital, a 2014 Glassdoor study found that female software engineers at Facebook make $5,949 less than their male counterparts.
A Big Climate Change Vote aAgainst Exxon Mobil, With Some Heavyweight Investors Behind it l CNBC
  • On the same day the news broke that President Trump will reportedly opt out of the Paris climate change deal, preliminary voting results showed that Exxon Mobil shareholders won a battle against the oil and gas company's management to finally require a report on climate change. A big voice hidden in the victory for Exxon Mobil shareholders, according to one report, was the votes of the world's largest asset managers and ETF companies. The Washington Post reported that BlackRock, State Street Global Advisors and Vanguard Group all voted against Exxon Mobilmanagement and required that the company report on climate change.
  • Forget President Donald Trump's planned Rose Garden announcement Thursday of his policy on the Paris climate accord. The more important decision happened in a Dallas concert hall, with far less fanfare, the previous day. More than 60 percent of shareholders in Exxon Mobil Corp. backed a resolution calling for the world's biggest publicly traded oil company to disclose how technological advances and action on climate change could affect its portfolio of assets. Most significant were some of the major investors reported to have supported the proposal, which was opposed by Exxon's board. BlackRock Inc. voted in favor, while State Street Corp. and Vanguard Group likely did the same, the Washington Post wrote Wednesday.
  • Norway's $960bn sovereign wealth fund is to start pushing banks it has invested in to provide much greater disclosure on the climate impact of their lending, according to reports.
Paris Agreement and the Sustainable Development Goals News
 
  • At most of the nearly 120 colleges and universities whose presidents had signed a pledge Friday to meet the goals laid out in the Paris Climate Agreement, the signatures won’t lead to a sea change. These are institutions, by and large, that have already committed to reduce their carbon footprint. But in joining a coalition of business leaders, mayors, and governors set on helping the United States meet international targets for greenhouse-gas emissions, the institutions are attempting to send a clear message: Now that President Trump has pulled the United States out of the climate accord, we’ll fill a leadership void on a global issue. Or, as the pledge’s headline puts it: "We Are Still In."
Withdrawal From Paris Accord Will Spur Interest in ESG, Advisers Say l Investment News
  • President Donald J. Trump's decision to withdraw from the Paris climate accord and renegotiate its terms won't lessen the need for environmental, social and governance investing, financial advisers say. Rather, it will increase it. In the United States, at least $7 trillion was focused on ESG in 2016, according to The Forum for Sustainable and Responsible Investment. That's up from $3.7 trillion in 2012 and $639 billion in 1995, according to Envestnet PMC. "My first reaction is that it's  bad day for the planet, a sad day for the economy, but a great day for sustainable investing," said Andrei Cherny, CEO of Aspiration, an ESG advisory firm. "ESG will matter more than ever before."
  • Investors have said that President Trump's decision to turn his back on the Paris Climate Agreement ignores the economic benefits that renewable energy brings. Trump’s decision to remove America from the Paris Climate deal, a non-legally binding pact made between members of the United Nations Framework Convention on Climate Change to curb global warming, was met with widespread condemnation domestically and abroad.  While the move was not an off-brand for the 45th president, many noted it was a poor choice for the US economy. That is because investment into renewable, clean energy has been on the rise in the US and around the globe.
US Withdrawal From Paris Accord no Threat to ESG Investing l Pensions Expert
  • US president Donald Trump’s decision to pull out of the Paris climate accord will not affect the UK’s growing implementation of environmental, social and governance criteria on investment strategies, experts have said.
Paris Pullout Pits Chamber Against Some of Its Biggest Members l Bloomberg
  • As President Donald Trump mulled whether to exit the Paris climate accord, companies as varied as Dow Chemical Corp., Exxon Mobil Corp. and Citigroup Inc. prodded him to stay in. But when Trump announced his decision, he cited research from one business behemoth that’s issued a steady stream of criticism to the Paris deal, the U.S. Chamber of Commerce that counts all three companies as members. That disconnect between corporate executives and the nation’s top corporate lobbying force is reviving pressure on the Chamber -- and on the companies that remain members despite their differences over climate policy.
  • Many have sounded off on President Trump's decision to withdraw from the Paris climate agreement. This article offers a roundup of the most interesting assessments, including Tesla and Disney CEOs distancing themselves from the Trump Administration.
Bloomberg Commits $15 Million to UN Climate Change Framework l Philanthropy News Digest
  • In response to President Donald Trump's decision to pull the United States out of the 2015 Paris Climate Agreement, Bloomberg Philanthropies has announced a $15 million commitment to the United Nations Framework Convention on Climate Change (UNFCCC) Executive Secretariat.
  • Writing for Fast Company, Ben Paynter offers an update on how impact investing relates to the United Nations’ 2015 Sustainable Development Goals (SDGs). Paynter references the Global Impact Investing Network’s 2017 Annual Impact Investor Survey in making his point that the SDGs are serving to advance and shape this relatively new form of philanthropy. At least, this was the case for the 209 impact investing groups surveyed, which together have at least $114 billion under management. These investors (fund managers, banks, foundations, pension funds, etc.) committed $22.1 billion to 8,000 impact investments in 2016.
  • Donald Trump's announcement that the U.S. will not honor the Paris Climate Accord is a move that damages the international effort to confront global warming and yanks American policy and leadership back a generation. This article outlines how this affects risks and opportunities in the sector.
Climate Risk, Science & Regulation
 
  • Monday, a grand total of 1,219 governors, mayors, businesses, investors, and colleges and universities from across the U.S. or with significant operations in the U.S., representing the broadest cross-section of the American economy yet assembled in pursuit of climate action, declared their intent to continue to ensure the U.S. remains a global leader in reducing carbon emissions. Signatories include leaders from 125 cities, 9 states, 902 businesses and investors, and 183 colleges and universities. Participating cities and states represent 120 million Americans and contribute $6.2 trillion to the U.S. economy.
  • Just a few years ago, the world watched nervously as India went on a building spree of coal-fired power plants, more than doubling its capacity and claiming that more were needed. Coal output, officials said, would almost triple, to 1.5 billion tons, by 2020. Rather than building coal-fired plants, it is now canceling many in the early planning stages. And last month, the government lowered its annual production target for coal to 600 million tons from 660 million. The sharp reversal, welcome news to world leaders trying to avert the potentially deadly effects of global warming, is a reflection both of the changing economics of renewable energy and a growing environmental consciousness in a country with some of the worst air pollution in the world.
Carbon Dioxide Set an All-Time Monthly High l Climate Central
  • With May in the books, it’s official: carbon dioxide set an all-time monthly record. It’s a sobering annual reminder that humans are pushing the climate into a state unseen in millions of years. Carbon dioxide peaked at 409.65 parts per million for the year, according to data from the National Oceanic and Atmospheric Administration.
Clean Energy
 
China Looks to Capitalize on Clean Energy as U.S. Retreats l The New York Times
  • China is capitalizing on the leadership vacuum left after President Trump said last week that he would pull the United States out of the Paris accord to limit climate change. China has already started an expensive campaign at home and abroad to solidify its considerable hold on solar, wind and other energy-saving businesses. If successful, China would win the economic and diplomatic spoils that the United States and some European countries have long enjoyed from dominating businesses like software, computer chips and airplanes.
Governor Cuomo Announces Major Climate and Jobs Initiative in Partnership with the Worker Institute at Cornell University ILR's School and Climate Jobs NY to Help Create 40,000 Clean Energy Jobs by 2020 l New York State
  • Governor Andrew M. Cuomo recently announced the Clean Climate Careers initiative following the U.S. decision to withdraw from the Paris Accord. The initiative is a multi-pronged strategy to grow New York's emerging clean energy economy and prepare the workforce for the long-term careers associated with this industry. In partnership with the ILR School's Worker Institute at Cornell University and Climate Jobs NY, this initiative focuses on accelerating energy efficiency and renewable energy growth to make New York a magnet for new energy technologies and creating 40,000 new, good-paying clean energy jobs by 2020.
General Endowment News
 
  • Endowments and foundations have turned to passive investments after hedge funds disappointed with high fees and poor performance. Now, the plan is to stay put for the next 12 months, according to a survey. More than 40 percent of business officers said they increased passive investment strategies in the past three years, according to the survey released June 5 by NEPC, a Boston-based consulting firm with 109 endowment and foundation clients with assets of $60 billion. More than 50 percent of 74 endowments and foundations questioned said they plan to maintain their strategy in the next year.
  • Robert Wallace, the head of Stanford University’s $25 billion endowment, urged caution when investing in private equity and venture capital, saying that an excess of capital is driving some company valuations higher. Wallace, who trained at Yale University under David Swensen, said that while the two asset classes offer the best opportunities for outsize market returns, or so-called alpha, investors need to be selective in choosing managers.
Fossil Fuel Divestment
 
CalSTRS Takes Action to Divest of All Non-U.S. Thermal Coal Holdings l Globe News Wire
  • The Teachers’ Retirement Board recently announced the decision to divest the fund of all non-U.S. thermal coal holdings, effective July 1, 2017. The board’s action aligns with CalSTRS’ long-term global perspective and its fiduciary duty, including consideration of environmental risks – both current and those projected over the next 10 to 25+ years.
  • This article explores how, when we live in a globally integrated economy where national governments are often unwilling or unable to control corporations, governments, trade unions or environmental groups can protect people and environments from exploitation or abuse. It specifically focuses on 'shaming campaigns', divestment, and next steps.
Hundreds of Lawmakers call for NY State Pension Fund to Divest From Fossil Fuels l Times Union
  • Elected officials from across New York state are strengthening their call for the state pension system to divest from fossil fuels. Citing the environmental, economic and political ramifications of President Donald Trump's pullout from the Paris climate accord — as well as the perilous effects of inconsistent weather and more intense storms that have already befallen their cities and counties — more than 200 New York officials on Monday called on state Comptroller Thomas DiNapoli to divest the state Common Retirement Fund of companies that contribute to man-made climate change.
NY State Comptroller: Divestment not the Answer to Cleaner Energy l Press Republican
  • Under pressure from environmental activists to phase out billions of dollars in investments in fossil fuel companies, State Comptroller Tom DiNapoli said Tuesday that he is in a better position to nudge companies to come up with cleaner energy solutions by holding onto the shares in them. "We believe in engagement with companies, and at this point we have no plans to divest completely," DiNapoli said in an interview. "But we have been moving more of our money into companies that are working to reduce greenhouse gas emissions."
  • A study from an oil and gas trade group suggests it would be a bad idea for New York state to end its investments in fossil fuel companies. The report was co-authored by a University of Chicago law professor and underwritten by the Independent Petroleum Association of America. It concludes that divesting from fossil fuels would reduce the diversification of pension investments, decrease returns and increase risk.
  • Yale’s responsible investments committee will not recommend divestment from Exxon Mobil, dealing a major blow to campus activism surrounding the issue. “Exxon does not appear to be engaging in any conduct or activity that would warrant divestment,” chairman of the Advisory Committee on Investor Responsibility Jonathan Macey LAW ’82 told the News on Friday, less than a day after President Donald Trump withdrew from the Paris climate accord.
Maryland Schools Must Divest (Opinion) l The Baltimore Sun
  • With President Donald Trump's recent announcement that he will pull the United States from the Paris climate agreement, it is more important now than ever that academic institutions demonstrate their commitment to climate action through investments in clean renewable energy and divestment from fossil fuels. Despite the University of Maryland's commitments to carbon neutral emissions and renewable energy power, the system is profiting from the major emitters of greenhouse gases and is even making a profit from companies that help dirty energy companies evade environmental compliance regulations.
UPenn Reaffirming its Commitment to the Environment Smells like Hypocrisy (Opinion) l Philly.com
  • With the University of Pennsylvania continuing to heavily invest in the fossil fuel and coal industries, you couldn’t help but notice the hypocrisy when Penn president Amy Gutmann signed a pledge with 11 other university leaders on Monday reaffirming its commitment to the environment. Penn Fossil Free, a student group spearheading the campaign for divestment, estimates roughly $300 million of the university’s endowment is invested in fossil fuel assets based on the university’s most recent financial report in 2014. Ever since this report was published, the student body has campaigned for the university’s divestment from fossil-fuel companies – a struggle that continues today.
Private Prison Divestment
 

NYC's Pension Fund Becomes First In Country To Divest From Private Prisons l Gothamist

  • New York City's pension fund is the first in the nation to fully divest from private prisons, according to Comptroller Scott Stringer. Trustees of the city's pension fund voted unanimously to divest in mid-May, and have since pulled $48 million of stocks and bonds from three companies: GEO Group, CoreCivic, and G4S.

 

 

 

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