Weekly News Round-Up: December 8th, 2017

Upcoming Events
Webinar: Understanding & Applying Evidence on the Financial Performance of Impact Investments l The Global Impact Investing Network (GIIN), December 12, 2017, 10:30 - 11:30 EST 
  • As institutional investors, among others, begin to explore opportunities in impact investing, they often question the ability of impact investments to generate strong financial returns. On this webinar, co-hosted by the GIIN Research Team and the GIIN Initiative for Institutional Impact Investment, participants will hear key findings from a new report, GIIN Perspectives: Evidence on the Financial Performance of Impact Investments, which synthesizes available data across asset classes, namely private equity, private debt, and real assets, and individual portfolios to address this knowledge gap. Speakers will discuss the implications of this body of research for the industry as well as key considerations in developing a balanced portfolio.
IEN Session + Workshop at the 2018 Foundation Leadership Forum l AGB, January 21-23, 2018, Los Angeles, CA
  • IEN Principal, Tony Cortese will be leading sessions examining mission-aligned investing, and a post-conference peer learning workshop going deeper into all aspects of aligning ESG goals to the foundation’s mission while meeting the financial and advancement requirements of each institution.
Winter Innovation Summit l Sorenson Impact, January 24-26, 2018, Salt Lake City, UT
  • The Winter Innovation Summit is the premier cross-industry event in social impact, innovation, and investing. This year’s Summit will bring together policymakers, funders, nonprofits, and social entrepreneurs to explore the future of social innovation across the globe. Join us for the latest breakthroughs in social impact, innovation, and investing; ski the greatest snow on Earth; and experience the 2018 Sundance Film Festival.
2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
  • Second Nature and the Intentional Endowments Network are pleased to host the 2018 Higher Education Climate Leadership Summit. Join your peers from February 4-6, 2018 in Tempe, Arizona for the largest national gathering of higher education presidents, chancellors, trustees, and other senior leaders committed to accelerating climate solutions. 

8th Annual Practitioners Gathering l Confluence Philanthropy, March 12-15, 2018, Berkeley, CA

  • The Practitioners Gathering is a four-day conference where asset owners and their advisors meet at the cutting edge of mission-related investing. The Gathering represents the most advanced foundations, investment managers, and advisors in impact investing today—and those looking to learn more. Sessions are led by funder-practitioners, investment experts, and other thought leaders.
New Reports
  • Investment consultants advise on the investment practices of trillions of dollars worldwide. They are a recognized source of authority and knowledge. However, most consultants and their asset owner clients are failing to consider environmental, social and governance (ESG) issues in investment practice – despite a growing evidence base that demonstrates the financial materiality of ESG issues to portfolio value. The report sets out these barriers in detail and identifies a set of preliminary interventions that the PRI will develop over the coming months.
Sustainable Investing at Endowments and Foundations
  • Roy Swan was named director of the Ford Foundation's mission-related investments team, said a foundation news release. It is a new position. In April, the New York-based foundation announced it would be allocating up to $1 billion of its $12 billion endowment to mission-related investments over the next 10 years, with affordable housing in the U.S. and access to financial services in emerging markets serving as two initial areas of focus. Since that time, $40 million has already been allocated, a foundation spokeswoman said in an email. 
  • “Fossil fuel divestment is both ethically and fiscally responsible,” said John A. Lanier, executive director of the Ray C. Anderson Foundation and one of Ray’s five grandchildren. “Investment has consequences, and we intend for our assets to grow by fueling renewable energy and other clean technologies that will combat climate change.” The Foundation believes that divestment is not only ethically responsible, but “also fiscally responsible,” according to a statement. By divesting, the Foundation is not “exposed to the risk of a significant decline in the value of fossil fuel companies.”

Sustainable, Responsible, Impact & ESG Investing

Bloomberg Briefs l Sustainable Finance
  • This week's Bloomberg Brief highlights how U.S. clean energy developer shares dropped this week as the Senate tax bill threatens to erode the $12 billion tax-equity financing market for wind and solar; Corporate boards are ignoring the risks of sexual harassment says Pax World CEO Joe Keefe; and sustainability disclosure still mostly boilerplate: SASB.
  • This story profiles Brown Advisory - the $1.1 billion manager devoted to sustainable investing strategies.
  • In this article the author discusses some of the reasons she's heard for not talking about gender — and why she thinks talking about gender matters.
  • Regulation is one of the risks that investors should be aware of when investing in environmental-focused listed equities, according to Bruce Jenkyn-Jones, London-based co-head of listed equities and senior portfolio manager at Impax Asset Management.
Impact Investing in Fisheries Evolving Slowly But Surely l Seafood Source
  • A movement in impact investing seeks to fund efforts by improving fisheries management, gathering reliable data, controlling overfishing, and reducing bycatch and waste, all while protecting artisanal fishers from losing their livelihoods.  Projects aimed at these goals have been funded with grants from governments and government-supported organizations, and from private foundations. In the past few years, to bring more capital to the challenge, and create a financially stable business model that is not dependent on unpredictable short-term infusions of grant money, the field of “impact investing for sustainable fisheries” has been developed.
  • For investors, assessing water risk should be part of a disciplined investment regime, says Monika Freyman, Ceres director of investor engagement in water. The Boston-based non-profit organization works with institutional investors to explain environmentally sustainable investments and is launching a “tool kit” to help investors understand their exposure to water risk. After deep discussions with nearly 90 institutional investors (managing $6 trillion) three themes emerged: there was a lack of data and public disclosure regarding water risk, most people were not aware of the problem, as documented by a lack of client demand, and there was no clear method to “invest” in water. The goal of the website and toolkit is not so much to show institutional investors how to invest in water – it is difficult and complex – but rather to illustrate how water risk might impact their individual equity, municipal bond and other private equity exposures.
Investment Manager News
  • Aniket Shah was named head of sustainable investing at OppenheimerFunds, spokesman Patrick Phalon said. The position is new. Mr. Shah will work with OppenheimerFunds' portfolio managers and investment strategy specialists to further integrate sustainable investing practices across the firm's business activities. He will report to Sharon French, head of beta solutions.
UBS Poaches for Impact Investing l FI News Asia
  • UBS is bulking up its sustainable money management with several key hires, finews.asia has learned. This article details who the new hires are.
  • Following on from its global offering, BetaShares has launched an exchange-traded fund targeting ASX companies meeting specific sustainability criteria. The BetaShares Australian Sustainability ETF, traded under the ticker code FAIR, screens out ASX stocks engaged in the fossil fuel industry as well as "gambling, tobacco, armaments, uranium and nuclear energy, destruction of valuable environments, animal cruelty, chemicals of concern, mandatory detention of asylum seekers, alcohol, junk foods, pornography, human rights and supply chain concerns and payday lending."
Shareholder Engagement
Shareholders Should Help Deliver Decarbonization l Financial Times
  • In this letter to the editor, the author describes how shareholders have powerful levers they can pull; whether through robust dialogue with company directors; voting against directors that fail to act and/or auditors that fail to challenge management on shareholders’ behalf; or publicly speaking out to demand changes to strategy.
General Endowments News
The GOP Tax Bill Will Hurt U.S. Universities l Politico
  • TheTax Cut and Jobs Act takes the unprecedented step of taxing the income of certain private universities—specifically, it imposes a 1.4 percent tax on net endowment income for universities with endowments larger than $250,000 per full-time student.
University Endowments in the Crosshairs l Washington Examiner
  • The U.S. has the greatest university system in the world. But it’s expensive. And Congress is about to make matters worse by taxing the endowment earning of “large” private college and university endowments. The latest congressional proposal aims to slap a 1.4 percent excise tax on the net investment income of any private university with an endowment of more than $250,000 per full-time student, about 70 universities.
Texas Endowment Wants ‘Fair and Just’ Fees and Hedge Funds Are Complying l Bloomberg
  • The University of Texas Investment Management Co. is trying to change how its hedge fund managers are paid using a model known as 1-or-30 which charges a 1 percent management fee or 30 percent of performance -- whichever is higher. The plan, begun in recent months, follows a similar effort started last year by the Teacher Retirement System of Texas.
Fossil Fuel Divestment
Leading Economists Demand that Not a Penny More Goes to Fossil Fuels l Common Dreams
  • Over 80 world-renowned economists from 20 countries have issued a declaration demanding that not a penny more is spent on fossil fuels production and projects, while encouraging a dramatic increase in investments in renewable energy, ahead of President Macron’s international summit on climate finance. On December 12, two years after the Paris Climate Agreement passed, President Macron of France is presiding over the One World summit, which will focus on the mobilization of climate finance. Unfortunately, despite the promises made two years ago, many governments, public and private financial institutions continue to invest in fossil fuels. These projects are bad for the planet, bad for people, and bad for the economy.
Fossil Free Penn Wraps up a Semester of Activism With no Policy Changes But Plenty of Hope l The Daily Pennsylvanian
  • Three years after its founding, Fossil Free Penn has solidified itself as a campus organization pushing for University divestment from fossil fuels. But despite a diversified array of efforts to sway the administration, Penn has not budged since FFP's launch in 2014. After another rejection of its open letter to the University in June, FFP officially decided to rebrand. The group began the semester with a rally and reached out to the Board of Trustees again. Despite Cohen's reiteration of the University's decision, FFP members have continued to protest at Board of Trustees meetings and focus on expanding the group's membership. 
  • On Wednesday evening, Stanford in Government (SIG) hosted its first Stanford Student Debate Night on the topic of fossil fuel divestment. Representatives from the Stanford College Republicans (SCR) and Fossil Free Stanford (FFS) debated for nearly an hour before answering questions from an audience of over 200. Stanford College Republicans was represented by John Rice-Cameron ’20 and Ben Esposito ’21, while Fossil Free Stanford was represented by Rebecca Behrens ’19 and Justin Wilck ’20.
NYU Divest Halts Demonstration After NYU Administration Reveals They Dropped Investments in Anadarko Petroleum and Noble Energy l NYU Local
  • NYU Divest suspended their occupation of the Bobst executive elevator on Friday evening after it was revealed NYU had already satisfied one of their major demands. As reported by NYU Local, NYU Divest occupied the elevator, demanding that the NYU Board of Trustees divest from Anadarko Petroleum and Noble Energy. But the morning of their protest, Martin Dorph, CFO of NYU, delivered a letter stating that NYU had already dropped these investments.
Fossil Free Notre Dame Prepares Proposal for Office of Investment l The Observer
  • In the past, Fossil Free ND has resorted to standard activism and peaceful protest behavior, such as petitioning and rallying on campus. This proposal, club member and junior Adam Wiechman said, marks a change for the group — which is now working through institutional means and with Notre Dame’s Chief Investment Officer, Scott Malpass. The proposal is still in its final stages, but will be sent to the Investment Office within the next few weeks, Wiechman said. Club member and senior Carolyn Yvellez said the Investment Office holds the ability to help the University take a stronger stance against fossil fuel companies. While the Investment Office abides by investment guidelines from the United States Conference of Catholic Bishops, Yvellez said these guidelines are relatively loose and haven’t been updated recently.
Group Urges Salem State University Divest From Fossil Fuels l North of Boston
  • Salem State University Board of Trustees said no to a five-year plan for fossil fuel divestment, and no to financial divestment from companies involved in fossil fuels extraction, as of Wednesday, Nov. 28. The trustees held their final November meeting - to discuss not just matters of importance to the university - but also issues of fossil fuel divestment.
McGill Association of University Teachers Votes to Divest From Fossil Fuels l McGill Tribune
  • The McGill Association of University Teachers’ (MAUT) Council voted unanimously to divest from fossil fuels, moving approximately $500,000 out of its investment portfolios which include holdings in fossil fuel companies. The MAUT also passed a motion by a vote of 13-3 calling on McGill’s Board of Governors (BoG) to follow suit with the university’s endowment and pension fund.




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Weekly News Round-Up: December 1st, 2017

New IEN Member
Upcoming Events

Sustainable Food Systems: Investment Risks & Opportunities l FAIRR Initiative, December 7, 2017, 4:15-5:45pm, New York, NY

  • The food system is under increasing pressure due to population increases and demographic shifts. Rising demand for meat is linked to a range of investment risks from deforestation, water and air pollution, to cancer, antibiotic resistance and obesity. The event will be a forum for investors to understand and discuss strategies to address the material risks and opportunities presented by protein production, and to share questions with experts in the field.   

RI Americas 2017 l Responsible Investor, December 6-7, 2017, New York, NY

  • The topics and themes for the RI Americas 2017 agenda are based around demonstrating sustainability risk and return implications for investors in the light of finding solutions to the major ESG problems of our time including: What the Taskforce on Climate-related Financial Disclosure (TCFD) recommendations mean for corporate and investor reporting, investment strategy, and climate solutions, Disruptive initiatives like the World Benchmarking Alliance, and more.
Webinar: Understanding & Applying Evidence on the Financial Performance of Impact Investments l The Global Impact Investing Network (GIIN), December 12, 2017, 10:30 - 11:30 EST 
  • As institutional investors, among others, begin to explore opportunities in impact investing, they often question the ability of impact investments to generate strong financial returns. On this webinar, co-hosted by the GIIN Research Team and the GIIN Initiative for Institutional Impact Investment, participants will hear key findings from a new report, GIIN Perspectives: Evidence on the Financial Performance of Impact Investments, which synthesizes available data across asset classes, namely private equity, private debt, and real assets, and individual portfolios to address this knowledge gap. Speakers will discuss the implications of this body of research for the industry as well as key considerations in developing a balanced portfolio.
IEN Session + Workshop at the 2018 Foundation Leadership Forum l AGB, January 21-23, 2018, Los Angeles, CA
  • IEN Principal, Tony Cortese will be leading sessions examining mission-aligned investing, and a post-conference peer learning workshop going deeper into all aspects of aligning ESG goals to the foundation’s mission while meeting the financial and advancement requirements of each institution.
Winter Innovation Summit l Sorenson Impact, January 24-26, 2018, Salt Lake City, UT
  • The Winter Innovation Summit is the premier cross-industry event in social impact, innovation, and investing. This year’s Summit will bring together policymakers, funders, nonprofits, and social entrepreneurs to explore the future of social innovation across the globe. Join us for the latest breakthroughs in social impact, innovation, and investing; ski the greatest snow on Earth; and experience the 2018 Sundance Film Festival.
2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
  • Second Nature and the Intentional Endowments Network are pleased to host the 2018 Higher Education Climate Leadership Summit. Join your peers from February 4-6, 2018 in Tempe, Arizona for the largest national gathering of higher education presidents, chancellors, trustees, and other senior leaders committed to accelerating climate solutions. 

8th Annual Practitioners Gathering l Confluence Philanthropy, March 12-15, 2018, Berkeley, CA

  • The Practitioners Gathering is a four-day conference where asset owners and their advisors meet at the cutting edge of mission-related investing. The Gathering represents the most advanced foundations, investment managers, and advisors in impact investing today—and those looking to learn more. Sessions are led by funder-practitioners, investment experts, and other thought leaders.
Sustainable Investing at Endowments

Financial Report Shows Northeastern University is 'Poised for Investing in Our Future' l News at Northeastern

  • Northeastern is “poised for investing in our future,” Tom Nedell, university treasurer and senior vice president for finance, told members of the Faculty Senate on Wednesday. Nedell emphasized the university’s commitment to environmental sustainability, noting the university’s decision to direct $25 million of its endowment to investments with a focus on sustainability, including clean energy, renewables, green building, and sustainable water and agriculture. The university indicated in July 2016 that it would complete that goal in five years. To date, less than two years later, it already has invested $18 million into sustainable funds.
This Class at Brown University is an Object Lesson in Sustainable Investing l Green Biz
  • Concentrated stock portfolios continue to outperform significantly when combining sustainability and financial criteria. That's the major blinking-in-very-large-neon-lights headline from the portfolios our students at Brown University have been constructing in our classes on sustainable investing. Inspired by the student-run club at Brown University on socially responsible investing (or Brown SRIF), its own financially outperforming portfolio is available on their Facebook page. Our sustainable investing class began in spring 2016 and was the outcome of the divestment movement on campus in 2013, leading to university president Christina Paxson’s desire to do what Brown can to research, teach and invest in a positive way. Her letter to the Brown community in October 2013 was thoughtful and laid out what continues to be an unfolding strategy. A taskforce is meeting to consider further steps that the university might make in this regard, which is exciting to see.
  • The University, sitting on an endowment of $3.5 billion each year, invests at least $26 million of that into an offshore fossil fuel fund, according to information the University released to the Fossil Free Pitt Coalition in February 2016. After several protests against Pitt’s controversial investments in the fossil fuel industry, the University is creating a socially responsible investing ad hoc committee. The ad hoc committee will focus on changing Pitt’s investment priorities.
New Reports

  • Corporations have far-reaching impacts on society and economic growth through the decisions they make about their employees, products and services, operations and management practices. By considering implications of those choices on inclusive growth, corporations can contribute to economic gains that are broad-based and sustainable over time, while achieving business benefits through new market opportunities, reduced costs and enhanced investor interest.
Death of Diesel: A Scenario Analysis OF Which Automakers Will Pay Higher Emissions Fines l MSCI
  • Regulators are considering banning diesel cars in various countries and cities to lower levels of toxic nitrogen oxides. This trend has already impacted auto markets in Europe. Declining diesel vehicle sales reflect a shrinking trust in customers who fear increased restrictions on use and lower resale values.  This analysis assumed a moderate 30% decline in diesel vehicles in a company’s fleet by 2021 and modeled two different scenarios. Under scenario 1, customers buy petrol models in place of diesel models of the same carmaker. Under scenario 2, customers buy petrol models and vehicles with alternative drives instead of diesel models. We projected future fleet emissions based on fuel efficiency improvements in diesel and petrol fleets of the three previous years.
Sustainable, Responsible, Impact & ESG Investing
Crane Board Chair, Natasha Lamb, Named one of 2017's Top 50 Most Influential l IEN Blog
  • Natasha Lamb, Chair of the Board of The Crane Institute of Sustainability -- the 501(c)(3) non-profit organization that is home to the Intentional Endowments Network -- has been named one of 2017's Top 50 Most Influential People by Bloomberg Businessweek. Visit the Bloomberg Top 50 to read more about this honor and watch a video featuring Natasha and the other changemakers helping to shape our society. 
What It’s Like to Be a Sustainable Investor Under Trump l Bloomberg
  • This article ontains interviews from several investors who focus on ESG  matters about their insights into how the U.S. administration is affecting their strategies.
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how French bank BNP Paribas said it will stop funding and advising tobacco companies over health concerns; solar capacity in developing nations surged last year; and plastic recycling faces challenging economics.
Bloomberg Brief l Sustainable Finance
  • Last week's Bloomberg Brief highlights how Norway's $1 trillion wealth fund proposed divesting oil and gas stocks; Big data could bring upside for renewables; and energy storage market seen taking off.
How Companies Are Pushing Ahead on Climate-Change Targets l Wall Street Journal
  • More of the world’s biggest corporations are taking the fight against climate change into their own hands, aiming to cut their energy costs, pre-empt regulation or burnish their reputations with investors and customers. Only 14% of the companies in the CDP study have committed to emissions-cutting goals that align with the U.N. target—an effort backed by the World Resources Institute—although another 30% have vowed to set such targets in the next two years. Some companies have resisted the trend. According to the CDP’s survey, the natural-resource and financial sectors have the greatest number of companies with no targets at all.
MythBusters: Further Proof That Impact Investments Reap Healthy Returns l Forbes
  • More evidence pointing to the potential for impact investors to make healthy returns from their investments. The Global Impact Investing Network (GIIN) just came out with a report reviewing available research on the financial performance of impact investments. Its conclusion: Across private market strategies, such as private equity, fixed income and real assets, the distribution of impact investing fund returns is similar to results for conventional markets.
Zurich Plans $5 Billion Allocation to Impact Investments l Bloomberg
  • Zurich Insurance Group AG plans to more than double its allocation to impact investments, earmarking $5 billion for a broader range of assets after devoting $2 billion to green bonds in recent years. While it didn’t specify a period, Zurich plans to buy bonds that finance social projects and the sustainable use of resources, as well as investments in private equity geared to these goals, Switzerland’s biggest insurer said in a statement on Thursday. The allocation represents about 2.6 percent of Zurich’s $190 billion portfolio, mainly consisting of debt securities.
Socially Responsible Investing: The Next Paradigm for Businesses l Live Minted
  • According to this article, the need of the hour is to start the process of moving towards sustainable investing practices and being socially responsible, instead of a knee-jerk reaction when regulatory compliance becomes mandatory. Corporates need to be at the helm of implementing policies in the true spirit and being transparent in disclosing their actions.
Societe Generale Securities Services launches ESG Reporting l Wealth Advisor
  • Societe Generale Securities Services (SGSS) has launched a new service for its clients – ESG Reporting – a system to gauge investment strategies’ impact on the environment and the society. The new ESG reporting solution allows institutional investors and asset managers to rate their investments against a broad set of ESG indicators using MSCI data and methodology. These indicators include criteria, such as CO2 emissions, board composition, and executives’ salary as well as workforce management and producer responsibility.
Sustainable Investment Joins the Mainstream l The Economist
  • The US Forum for Sustainable and Responsible Investment, a lobby group, estimates that more than a fifth ($8.7trn) of the funds under professional management in America is screened on SRI criteria, broadly defined, up from a ninth in 2012 (see chart). Growing demand has spurred Wall Street into action. Goldman Sachs now manages $10.5bn in assets dedicated to “ESG” (ie, meeting environmental, social and governance criteria) and a further $70bn in “negatively screened” assets that exclude the manifestly unvirtuous. This generational change is already visible at universities. Under pressure from students and alumni, several endowments have promised to clean up their investment portfolios. Business schools say classes related to ESG investment are oversubscribed. 
Green Firm Impax Eyes Post-Merger Future l Institutional Investor
  • In this year’s flurry of fund firm mergers, the proposal to combine the U.K.’s Impax Asset Management with U.S. peer Pax World Management, has been under the radar for many investors. But, once complete, the newly combined business will be handling some £10.3 billion ($13.4 billion) in assets, all in dedicated sustainable investment mandates. On Wednesday, the U.K. business is to publish its results to the London Stock Exchange. Chief executive Ian Simm is hoping to give shareholders an update on the merger’s progress, which he wants to close before the end of February 2018, Simm told Institutional Investor in an interview.
Where is the S in ESG Investing? l Financial Times
  • The Economist magazine published a piece in September that pointed to the increased consideration of environmental, social and governance factors in mainstream investing. The piece noted correctly that, for a variety of reasons, including ease of measurement, the E- and G-factors have gained more traction than the S-factor, which is often associated with employment rights. However, it is evident from recent events that mainstream investors would be unwise to discount the impact of S-factors on company performance strictly because of measurement difficulties.
CIBC Asset Management Becomes a Signatory of the United Nations-Supported Principles for Responsible Investment l Market Insider
  • CIBC Asset Management Inc. announced this week it has become a signatory of the United Nations-supported Principles for Responsible Investment (PRI). The PRI is the world's leading proponent of responsible investment, bringing together a global network of asset owners, investment managers and service providers. They are committed to integrating environmental, social and governance (ESG) factors into their investment practices, analysis and decision-making processes.
New ETF Joins Fight Against Sexual Harassment in Workplace l U.S. News
  • A new exchange-traded fund is being introduced for investors who want their money kept far away from sexual harassment in the workplace. The Impact Shares YWCA Women's Empowerment ETF is expected to launch in the first quarter of 2018, and enable people to invest with companies that promote women's interests and take strong stands against workplace harassment. "When women thrive, whole economies thrive," said Dorri McWhorter, chief executive of YWCA Metropolitan Chicago.
Commentary: Active Investing v.2.0 l Pensions & Investments
  • A wave of change is coming to the asset management industry, which at its core has not materially changed its practices, processes, and approach over the past decades. Still, a portfolio manager is in control of vast amounts of assets, following investment approaches that utilize financial information that is now standardized, common and well understood by most market actors. It should not be surprising then that long-term alpha generation has become so much more difficult. How can managers differentiate themselves and ensure they are on the winning side of the equation? This article explores three forces the authors see acting as catalysts: integrating ESG data, utilizing technological advancement, and being transparent and representing beneficiaries' preferences.
  • Millennials are increasingly interested in sustainable investing and in many cases are instilling their social and environmental values in their parents. These are two of the more recent trends observed by Matthew Koch, executive director of Morgan Stanley Wealth Management, and his colleague, head of research Nathan Lim. Koch's team manages about $1.5 billion on behalf of 55 wealthy clients – typically with between $5 million and $150 million of investable assets – and as those clients increasingly introduce their offspring to the global investment bank, investment shifts are starting to occur.
  • Investors and boards of listed companies are neither friends nor foes, but their interests align in differing ways over time, and this requires an array of engagement approaches to achieve desired outcomes. This is the conclusion of a panel of engagement experts speaking at the Responsible Investment Association Australasia (RIAA) annual conference in Sydney. Michael Jantzi, CEO of Sustainalytics noted that he thinks of engagement as a toolbox of various tools, and that those tools have been deployed in successful ways recently.
Interview with Eva Halvarsson, Chief Executive Officer, AP2 l Climate Action
  • Climate Action caught up with Eva Halvarsson, Chief Executive Officer, Second Swedish National Pension Fund (AP2), on scaling up low carbon investment and her participation in the first Sustainable Investment Forum Europe.
FTSE Russell Launches Two New Index Series To Support ESG Integration Into Passive Investment l Mondo Visione
  • FTSE Russell, the global index, analytics and data provider, announces the expansion of its Sustainable Investment index offering with the launch of the FTSE Global Climate Index Series and the FTSE ESG Index Series. The new index series build on the launch of the award-winning FTSE All-World ex CW Climate Balanced Factor Index, the first FTSE Russell index to combine a smart beta factor approach alongside climate change considerations.
Real Estate 
Real Estate’s Growing Commitment to Sustainability l The Investor JLL
  • The global real estate industry continues to make significant advances in its sustainability performance, according to GRESB’s latest survey results. The 2017 GRESB Real Estate Assessment – which featured 850 real estate entities across 62 countries – gauged the ESG performance of participating organizations. The sector’s average score this year rose to 63, up three points on the 2016 results, with participants reducing their “like-for-like” energy consumption by 1.1percent, carbon emissions by 2.2 percent, and water consumption by 0.5 percent.
  • Toyota Financial Services (TFS) issued its first-ever euro-denominated unsecured Green Bond today, expanding its industry-leading commitment to the sale of environmentally friendly vehicles.  The €600 million bond will be used to fund the acquisition of new retail finance contracts and beneficial interests in lease contracts for Toyota and Lexus vehicles that meet specific clean air criteria, including powertrain, fuel efficiency and emissions.  There are currently nine vehicles in the Toyota and Lexus lineup that qualify. 
Supply Chain Management
  • US clothing importers are cleaning up their sourcing acts largely in response to investor choices, with some 85% of institutional investors saying that nonfinancial information is critical to their buy decisions. Investors are also aware that spending decisions are also undergoing a generational shift, with ageing baby boomers transferring some US$30 trillion in wealth to more socially and environmentally conscious millennials.
Climate Risk, Science & Regulation
We Are Still In and We're More Committed than Ever l Forbes
  • In this piece by Ceres President Mindy Lubber, she describes how and why, now that COP23 has concluded, she is grounded in a renewed affirmation of where we stand -- as both Americans and as global citizens -- and is more energized than ever to move faster and more boldly into the future.
Shell, to Cut Carbon Output, Will Be Less of an Oil Company l The New York Times
  • Bowing to pressure from shareholders and the Paris international climate accord, Royal Dutch Shell pledged on Tuesday to increase its investment in renewable fuels and to cut its carbon emissions in half by 2050. Shell and other big oil companies have moved only sporadically over the last decade toward greater production of wind and solar energy. Now there are signs of a commitment to take climate change more seriously. In comments to investors, Ben van Beurden, Shell’s chief executive, said that from 2018 to 2020, the company’s new-energies division would spend up to $2 billion a year on renewable energy sources like wind, solar and hydrogen power and on electric-car charging stations.
Who Will Pay For Nature? How To Catalyze Private Investment In Sustainability l Forbes
  • As more and more world leaders call for action on climate change, a difficult challenge arises: How do we pay for it?It will take an estimated $5-7 trillion per year over the next 15 years to solve climate change and to meet the other U.N. Sustainable Development Goals ("SDGs"), from ending extreme poverty to ensuring clean water and sanitation for all. That’s a staggering amount of money. Annual government grants today only punch in at $142.6 billion. Philanthropy produces about $400 billion per year in the U.S., though only a small percentage of this goes to environment or sustainability issues. That leaves a huge financing gap. Closing that gap is likely the most important thing an environmental CEO can focus on.
  • November 4th marked one year since the Paris Agreement, which seeks to implement measures against climate change, took effect. A range of measures are steadily being implemented at a pace almost unthinkable two years ago, when the agreement was adopted. The United Nations’ adoption of economic, social and environmental sustainability targets just before the agreement was reached also seems to have had a positive impact. This article contains interviews with three people plugged into the business world to get their take.
How Companies Are Pushing Ahead on Climate-Change Targets l The Wall Street Jounral
  • Among just over 1,000 of the world’s biggest publicly listed companies, accounting for about 12% of total greenhouse-gas emissions, 89% have plans to cut those emissions, according to a survey from the CDP, a nonprofit platform for corporate environmental disclosures. That is a 16 percentage-point increase since 2011, said the CDP, formerly known as the Carbon Disclosure Project. Earlier this month, a group led by former New York Mayor Michael Bloomberg and California Gov. Jerry Brown presented a climate pledge under which 1,400 businesses have set emissions-reduction targets. This article explores more business that are setting goals and cutting their own carbon emissions.
The Energy 202: Trump Expected to Sign Bill Calling Climate Change a "Direct Threat." l The Washington Post
  • Since taking office, President Trump has failed to make good on some high-profile campaign promises, such as appointing a special prosecutor to investigate Hillary Clinton and banning all Muslims from entering the country (not from lack of trying, however). But one area in which Trump has achieved tangible success is slashing energy and environmental regulations. Trump said he would withdraw the United States from the Paris climate agreement, and he began doing so. He said he would undo the Clean Power Plan and other Obama administration rules, and he began doing that, too. So it may come as a surprise to hear that before the end of the year, Trump is expected to sign a bill saying that “climate change is a direct threat to the national security of the United States.”
Moody's Warns Cities to Address Climate Risks or Face Downgrades l Bloomberg


  • Coastal communities from Maine to California have been put on notice from one of the top credit rating agencies: Start preparing for climate change or risk losing access to cheap credit. In a report to its clients Tuesday, Moody’s Investors Service Inc. explained how it incorporates climate change into its credit ratings for state and local bonds. If cities and states don’t deal with risks from surging seas or intense storms, they are at greater risk of default.


  • Technology and big data will change how electric grids are organized and water is transported, creating upside for sustainable investors that may not be priced in today, says Lara Banks, a managing director at Makena Capital Management, which oversees about $19 billion. Banks, who oversees portfolio management and manager selection for natural resources at the Menlo Park, California-based firm spoke to Emily Chasan on Nov. 6. Comments have been edited and condensed.
Cargill’s Solar Investment Strengthens Cocoa Production in Ghana l Food Ingredients First
  • Cargill has taken steps to modernize renewable energy infrastructure in Ghana by investing in innovative solar energy at a plant in the West African country.  By investing in renewable energy, Cargill says it is living up to its responsibility to find ways to continuously decrease the environmental impact of its businesses.
 General Endowment News
To Tax Or Not To Tax University Endowments l NPR
  • In this interview, NPR's Lulu Garcia-Navarro talks to Grinnell College President Raynard Kington about the proposed excise tax on endowment income. The small Iowa school has a very large endowment.
University of Buffalo Foundation Invests in Fracking as UB Talks Sustainability l Buffalo News
  • The University at Buffalo Foundation used an offshore fund to invest in fracking and fossil fuels, even as university officials sought to portray UB as a national leader in climate-change and sustainability research. The foundation invested through EnCap Flatrock Midstream, a venture capital firm that focuses solely on North American oil and gas extraction and production. The foundation, a private entity that manages contributions on behalf of the public university, had investments totaling more than $940 million in 2016-17, although it's not clear how much of that was in the fossil fuel industry.
Harvard Moves to Outsource Real Estate Management to Bain Capital l The Harvard Crimson
  • Harvard Management Company is moving to outsource the management of its real estate assets to Bain Capital—the largest Boston-based private equity firm—according to a Bloomberg News report published last week. HMC, which manages Harvard’s $37.1 billion endowment, has been considering spinning off its real estate team since January. At the beginning of 2017, N.P. Narvekar, the firm’s CEO, wrote in a letter to Harvard affiliates that the “the team responsible for managing HMC’s direct real estate investments is expected to spin out and become an external manager by the end of calendar year 2017.
  • The global campaign to divest from fossil fuels may have just picked up its most significant ally to date – the largest sovereign wealth fund in the world. Norway’s trillion-dollar sovereign wealth fund has proposed dropping investment for oil and gas companies. The plan, backed by the central bank, still needs approval by the finance ministry, but it would see the fund gradually divesting itself of oil and gas stocks over time. Currently, fossil fuel investments account for about 6 percent of the fund’s assets, or $37 billion.
Brandeis University Students Rally for Divestment l The Justice
  • In a call to action, students marched from the Rabb Steps to the administration buildings last Wednesday, the same day the Board of Trustees was meeting, and urged University President Ron Liebowitz to engage with the Board and discuss fossil fuel divestment. Organized by Brandeis Climate Justice, a group of about 40 students and faculty members held up signs that read “Climate Justice = Social Justice,” “Don’t invest in death” and “‘There is no such thing as an innocent purchaser of stock’ — Louis Brandeis.” Making their way to lower campus, they chanted “UMass did it, so can we, let’s make Brandeis fossil-free!” and “Hey, Brandeis, step off it! There’s poison in your profit!”
Why Canadian Pension Plans Must Divest of Fossil Fuel Investments l The Conversation
  • According to this author, oil-and-gas assets are unreliable commodities primarily controlled by international interests. Because the industry is not Canadian-controlled, it has no stake in working in the best interests of Canadian communities. In this article, they argue that when Canadian pension plans divest and refocus on sustainable investing, local economies will experience an increase in needed capital investment to grow and develop, setting an example for the world.
University of Cambridge Protestors Seek to Clear the Air Around Divestment l The Varsity
  • Cambridge Zero Carbon Society staged a protest on Wednesday in front of King’s College Chapel, with around a dozen protesters calling on the University to withdraw its investments in fossil fuel companies. Campaigners dressed in black set off smoke grenades and shouted through megaphones. The protest was part of a coordinated ‘National Day of Action’, alongside similar societies at other universities including East Anglia, Leeds, Manchester, Oxford, UCL, Bristol and Plymouth.




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Weekly News Round-Up: November 17, 2017

New Reports
Hampshire College Case Study l Intentional Endowments Network 
  • We are pleased to share with you our new case study on Hampshire College’s journey in considering social responsibility, sustainability, and institutional mission in its endowment investing. As many schools and nonprofits grapple with these issues, or face scrutiny from stakeholders, this case study offers details on how Hampshire College undertook ESG criteria and aligning with mission. Read the press release outlining the report, and access the full report here.
Responding to Resistance l Farm Animal Investment Risk and Return (FAIRR) Initiative
  • The FAIRR Initiative has just launched a new report titled Responding to Resistance which includes an update on our collaborative investor engagement, the FAIRRGlobal Investor Antibiotics Statement and Best Practice Guidance for Producers and Purchasers. The report shows the growing engagement on this issue from both investors and companies. The FAIRR Antibiotics Overuse collaborative engagement launched in April 2016 with 54 investors with just over $1 trillion in combined assets - this has risen to 73 investors with $2.3 trillion combined AUM in active dialogue with 20 companies.

Tracing Who’s Responsible for Temperature Increase and Sea Level Rise l Union of Concerned Scientists

  • A peer-reviewed study, authored by Brenda Ekwurzel, James Boneham, Mike Dalton, Rick Heede, Roberto Mera, Myles Allen and Peter Frumhoff and published in Climatic Change, analyzed and quantified the climate change impacts of carbon dioxide and methane emissions traced to each company for two time-periods: 1880 to 2010 and 1980 to 2010.
  • This paper makes the case that the opportunities for investing in early stage clean energy technology companies have changed significantly and favorably in recent years to offer the potential for greater risk adjusted returns in the sector than ever before. The authors examine what went wrong in prior cycles of venture capital investing in this sector and how markets, teams, and strategies have changed recently to fundamentally improve the investment landscape.
Upcoming Events
Webinar: Developing Your Cleantech 2.0 Investment Strategy | Climate Solutions Collaborative, Tuesday, November 28th 1:00pm ET
  • The Climate Solutions Collaborative and CREO present a primer for foundations, endowment managers, family offices, and high net individuals to help inform the development of a cleantech investment strategy. Speakers include Rob Day, Spring Lane Capital, Shawn Lesser, Big Path Capital, Ken Allston, CALCEF and Bed Gaddy, Clean Energy Trust.
Investing for Impact Symposium l High Water Women, November 30, 2017, New York, NY

 RI Americas 2017 l Responsible Investor, December 6-7, 2017, New York, NY

  • The topics and themes for the RI Americas 2017 agenda are based around demonstrating sustainability risk and return implications for investors in the light of finding solutions to the major ESG problems of our time including: What the Taskforce on Climate-related Financial Disclosure (TCFD) recommendations mean for corporate and investor reporting, investment strategy, and climate solutions, Disruptive initiatives like the World Benchmarking Alliance, and more.
2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
Sustainable, Responsible, Impact and ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how clean energy stocks have gained in the past year, despite political headwinds; The U.S. met protests at the U.N. climate summit in Bonn; and global growth is creating an opportunity for inclusive finance.
Generation Y Takes The Moral High Ground When Investing l The Times
  • What lies behind the rise in socially responsible investing? The desire among millennials for their hard-earned cash to be put to socially useful purposes. Only a minority of those aged 45 or over want their money invested in a more ethical way, yet this is the ambition of more than a third of those between 25 and 34, according to research by Triodos, the ethical bank.
HSBC Pledges to Invest $100bn In Sustainable Finance l Consumer & Society
  • HSBC has announced plans that it will be investing $100bn on sustainable finance by the year 2020 to help combat climate change. The bank claims that it will “intensify its support for clean energy and lower-carbon technologies, as well as projects that support the implementation of the United Nation’s Sustainable Development Goals”. It has also pledged to “discontinue financing of new thermal coal mines or new customers dependent on thermal coal mining”
As Women Speak Out on Sexual Harassment, Investors Take Note l Marketplace
  • As more and more sexual harassment claims come to light against powerful men, it's been a wake-up call across our culture. Especially for for corporations and investors, according to a recent article from Barron's magazine. In this Q&A, Katherine Bell, Barron's editor-in-chief, joins Marketplace Weekend host Lizzie O'Leary to discuss how sexual harassment is playing out for the stock market, and why investors are now paying more attention to workplace culture. An edited version of their conversation follows.
How Europe Leads the Way on ESG Investing l Professional Pensions
  • Ethical and responsible investment is a much sought-after characteristic for managers of pension fund investments, and this view appears to be strongly shared across Europe. Stark differences in approach to ESG issues between Europe and North America show significant cultural markers, James Phillips writes in this article.
Will ESG Investing Become The New Normal? l Seeking Alpha
  • Even though there is a lot of talk in Europe around sustainable investments, also known as using ESG criteria, it seems the majority of investors still do not invest in sustainable products. In this regard, one needs to question why European investors are so reluctant to use sustainable investments. I was really surprised that the latest research shows that some investors still believe the inclusion of ESG criteria leads to lower portfolio performance. But even more surprising was the finding that professional investors also do not integrate ESG criteria or use such a specific approach in their portfolio management processes, since they feel they don’t understand the differences between the diverging approaches.
ESG Alive and Kicking l Pensions and Investments
  • Total ESG fund assets were about $460 billion as of Sept. 30 across 360 funds. Equity funds make up the majority of AUM, with $400 billion, followed by $52 billion in fixed-income AUM and about $8 billion in multiasset funds. There were 360 ESG funds at the end of 2016, 300 of which were equity funds and 47 that were debt focused.
  • Last week, Swiss bank UBS announced the launch of a new Global Impact Equity fund that’s focused on “long-term growth opportunities which aim to generate a positive social and environmental impact, alongside a consistent financial return”. The bank will invest in somewhere between forty to eighty publicly traded companies that have “positive and tangible impact on human well being and environment quality” — industries like clean energy, clean water and food security.
European Commission Seeks Feedback on How Institutional Investors Can Include ESG l Pensions & Investments
  • The European Commission has launched a consultation on how money managers and institutional investors could include environmental, social and governance factors into consideration when making decisions. The consultation is public, and the commission is seeking comment from beneficiaries and retirement plan participants, pension and insurance providers, insurance companies, money managers, financial advisers, service providers such as those providing indexes and research, and law firms. The consultation paper, "Public consultation on institutional investors and asset managers' duties regarding sustainability," follows up on a recommendation outlined by a High-Level Expert Group on Sustainable Finance in its interim report, published in July.

Impact Investing Can Achieve Market Rate Returns GIIN Report Says l Alpha Q

  • A new report, Global Impact Investing Network Perspectives: Evidence on the Financial Performance of Impact Investments, provides a comprehensive review of available research to date on the financial performance of impact investments. In addition to describing each study, the report synthesises findings across available research by asset class and surfaces implications for the industry. Key findings in the report include the fact that impact investors that target market-rate returns can achieve them, the firm says.
State Street Global Advisors Expands Board Diversity Guidance to Companies in Japan and Canada l Business Wire
  • State Street Global Advisors, the asset management business of State Street Corporation, today announced that the $2.67 trillion asset manager will expand its guidance on corporate board diversity to the public companies in which it invests in Japan and Canada.
Podcast: Three Views on Impact Investing l Goldman Sachs
  • Hugh Lawson, head of Goldman Sachs Asset Management’s Institutional Client Strategy and ESG and Impact investing efforts, is joined by Scott Brown, CEO of New Energy Capital, and Elizabeth McGeveran, Director of Impact Investing at the McKnight Foundation, to discuss how socially conscious investing has become mainstream and where it could be headed.

Investor Analysis Warns U.S. Falling Behind Europe on Antibiotics l Farm Animal Investment Risk and Return (FAIRR) Initiative

  • New investor analysis today highlights a growing policy gap between the US and Europe on action to reduce antibiotic use in livestock – seen as one of the biggest drivers of antibiotic resistance.  A group of 62 concerned investors have backed a new statement urging companies to act to close this policy gap. Antibiotic resistance is one of the world’s biggest public health threats, reported to kill 700,000 people each year; with overuse of antibiotics in livestock production recognised by the World Health Organization (WHO) as an important factor in its emergence.
Measuring Impact, Performance & Risk
How To Fix The Biggest Lie In Corporate America l Fast Company
  • Wages for the vast majority of workers have been stagnant for the past four decades, healthcare benefits and retirement security have been steadily shrinking, and most companies offer little, if any, training to the bulk of their employees. R. Paul Herman, CEO of HIP Investor, a firm that rates the human, social, and environmental impacts—and their links to profit—of more than 6,500 global companies, wants to fix that. This week, at the Sustainable Brands New Metrics conference in Philadelphia, Herman will again raise a question that he’s been asking for many years now: Why aren’t investments in employees counted as assets on the balance sheet? In fact, if you put money into upgrading your workers’ skills, that’s recorded as an expense on the income statement.
  • ESG have become critical issues in the way investors judge companies, but corporates face too many ESG measures suffering from too little standardisation. The author of this article  investigated 218 different ESG initiatives and interviewed 45 asset owners, asset managers and companies in the Netherlands, the UK and Germany. I found that reporting fatigue at company level is a substantial cost that is often overlooked. What makes matters worse is the lack of convergence of ESG ratings and rankings.
  • Arabesque announced today an agreement to work with State Street, one of the world's largest custody banks, to integrate ESG data into its service offerings through Arabesque's proprietary technology. State Street's ESG Solutions business will offer Arabesque S-Ray™, an algorithm-based technology that analyzes the sustainability performance of the world's largest listed corporations using self-learning quantitative models and data scores, as a risk management and compliance measure.
  • The UK’s corporate governance watchdog should explore ways to increase transparency in corporate reporting of company contributions towards the UN’s Sustainable Development Goals (SDGs), according to recommendations from an independent advisory group. The group’s report, Growing a culture of Social Impact Investing in the UK, details a number of recommendations—among them a call for companies to reveal how they perform against the SDGs. The report resulted from a perceived lack of progress in enabling individuals to make social impact investments.
Fiduciary Duty
  • The European Commission is considering whether to clarify that institutional investors’ duties include taking into account sustainability risks. The European Union’s executive has decided to start work on an impact assessment to assess whether and how such a clarification could contribute to a more efficient allocation of capital, and to sustainable and inclusive growth. The Commission launched a public consultation today to help it “gather and analyse the necessary evidence to determine possible action to improve the assessment and integration of sustainability factors in the relevant investment entities’ decision-making process”.
Shareholder Engagement
Gender Pay Equity: Costco Latest Retail Giant To Take Action, Following Leads Of Starbucks, Nike, And Gap - reports Arjuna Capital l 4-Traders
  • Following the examples of retailers Starbucks, Nike, and The Gap, Costco is taking public steps to be more transparent with investors about its gender pay gap. In response, Arjuna Capital announced today that it has withdrawn a shareholder resolution, co-filed with Zevin Asset Management, calling on Costco to produce a detailed report on measures to help achieve gender pay equity.
Vanguard's Sleepy Proxy Vote OKs Trustees; Human-Rights Divestment Proposal Fails l Philly.com
  • Vanguard Group shareholders voted Wednesday to approve a board of trustees for all its U.S.-based funds, while an activist shareholder group lost on a ballot question proposing that Vanguard divest from PetroChina and Sinopec, two Chinese energy firms doing business in Sudan and allegedly engaging in genocide. The votes came at a special shareholders meeting in Scottsdale, Ariz., the company said Wednesday afternoon.
Green Bonds
Money Managers and Greenwashing l Bloomberg Gadfly
  • As ESG issues become embedded in the architecture of money management, the custodians of wealth are discharging the "E" part of their obligations by buying green bonds. Sales of the securities, which promise to fund environmentally sustainable practices, are booming. Moody's Investors Service reckons issuance is likely to pass $120 billion in 2017 after sales in the first nine months of the year beat 2016's total of $93 billion. Returns on the bonds have outpaced those delivered by conventional investment-grade debt in the past year.
Climate Risk, Science & Regulation
There's One Unspeakable Fix That Would Help Pay for the GOP's Tax Cuts l Bloomberg
  • The White House and Congress may need revenue to pay for their tax cuts. Ex-Goldman risk manager and current Crane Institute of Sustainability Board Member Robert Litterman has the perfect solution outlined in this article, a carbon tax.
Keystone Pipeline Spills 210,000 Gallons of Oil on Eve of Permitting Decision for TransCanada l Washington Post 
  • The Keystone pipeline running from Canada across the Great Plains leaked Thursday morning, spilling about 5,000 barrels of oil — or 210,000 gallons — southeast of the small town of Amherst in northeast South Dakota. The spill comes just days before a crucial decision next Monday by the Public Service Commission in Nebraska over whether to grant a permit for a new, long-delayed sister pipeline called Keystone XL, which has been mired in controversy for several years. Both are owned by Calgary-based TransCanada.
  • More resources need to be dedicated to sustainable agriculture if the goals of the Paris Climate Change Agreement are to be met, according to sector leaders and experts speaking at the UN Climate Change Conference. During a session on Friday, a key takeaway was that investing in agricultural climate action, especially in terms of small-scale farmers and those in rural areas, will unlock much greater potential to curb emissions. The livestock sector, for example, could readily reduce emissions by about 30% with the adoption of best practices, according to the UN Food and Agriculture Organization.
A Shadow Delegation Stalks the Official U.S. Team at Climate Talks l The New York Times
  • The dueling American delegations in Bonn mirror a larger division within the United States over climate change. President Trump’s decision in June to withdraw from the Paris agreement was popular with his supporters. On Thursday, the State Department and the Interior Department sent high-level political officials to address a conference in Texas sponsored by the Heartland Institute, which rejects the scientific consensus that climate change is occurring and primarily caused by human emissions. Scott Pruitt, the administrator of the Environmental Protection Agency, sent a video message of support.
Koch-Funded Group Prods Trump’s EPA to Say Climate Change Not a Risk l Bloomberg
  • A lobbying group funded by Koch Industries Inc. and coal giant Peabody Energy Corp.is moving to prod the Environmental Protection Agency to rescind its earlier determination that climate change is a risk to human health and welfare. The American Legislative Exchange Council will consider a resolution that would be offered to state legislatures to adopt as a way of pressuring the Trump administration to uproot his predecessor’s efforts to address climate change, attacking the very science that shows temperatures rising and storms increasing.
General Endowment News
Endowment Tax Remains in Play, But Graduate Tax is Off the Table in Senate Plan l The Washington Post
  • Senate Republicans late Thursday released a tax overhaul plan that provides a mix of relief and worry for higher education stakeholders. The GOP senators are backing a Republican House proposal to impose a 1.4 percent excise tax on investment income at private schools with endowments worth at least $250,000 per full-time student. Analysts say the tax would affect some 60 to 70 private schools, from big names like Harvard University to lesser known liberal arts institutions like Agnes Scott College.
It’s Time to Clean Up Public and Non-Profit Endowments l LA Progressive
  • In this opinion piece, the author describes how private equity firms, hedge funds, off-shore investments, tax avoidance, and blocker corporations are not terms and enterprises that the public equates with public and non-profit endowment activities, and how higher education donors need to start asking questions about where their money is invested.
Their View: Taxing Nonprofit Endowments Taxes Our Nation’s Future l Times Leader
  • The tax bill recently introduced by Congress – House Resolution 1 or HR1 – aims to reduce tax rates and to close tax loopholes. As a nation, we often speak of expanding opportunity for the middle class. Current tax law has a number of provisions aimed at doing just that by supporting access to higher education. It is my hope the new bill will preserve and enhance those existing provisions, especially as they apply to endowments and the deductibility of charitable contributions. Higher education is unlike any other venture as it purposely operates at a loss. When we add tuition, fees and room and board to state and federal assistance grants and loans, our revenue typically does not equal our cost of doing business. Donors who give back to their communities by supporting future students most often bridge the resulting deficit. Many of those donors choose to fund scholarships that subsidize students’ education decades after the initial donation. In these instances, donors may never meet many of the beneficiaries of their long-lasting generosity. Universities only spend a given portion of the scholarship earnings, thereby preserving the initial investment or corpus, permanently.
Elite Universities Invest Endowments Via Tax Havens l University World News
  • Elite universities in the United States and the United Kingdom have been investing endowment funds offshore in order to pay little or no tax, according to details revealed in the so-called Paradise Papers, a series of leaked documents from Appleby, a legal firm based in Bermuda.  The Paradise Papers is the term for a global investigation into the offshore activities of some of the world’s most powerful people, companies and institutions. Some 13.4 million leaked files were obtained by the German newspaper Süddeutsche Zeitung and explored by the International Consortium of Investigative Journalists and 95 media partners.
Funds get Needed Bounce But Cautioned to Stay Nimble l Pensions & Investments
  • Strong equity markets and smart asset allocation helped U.S. endowments recover from what was a dismal fiscal 2016. But industry observers noted investment teams must remain vigilant if they want to maintain those strong returns. All 43 funds tracked by Pensions & Investments had positive returns for the fiscal year ended June 30, with all but two — Harvard University and University of Minnesota — posting double digits. "It was a good year. They've had a couple of struggling years, so they needed a good year," said Heather Myers, a partner, non-profit practice leader at Aon Hewitt Investment Consulting, Boston.
Universities to U.S. Senate: Endowment Tax Idea 'Fundamentally Flawed' l U.S. News
  • Tax legislation working its way through the U.S. Senate would put a new levy on endowments held by large private universities and colleges, a proposal that more than three dozen higher-education lobbying groups on Tuesday called "fundamentally flawed." The groups, led by the American Council on Education, wrote that "creating a new and unprecedented tax on endowments" would redirect large amounts of money to the federal government and "away from providing scholarships to our students and supporting research and education."
NEPC: Foundations and Endowments Upping Private Equity Despite Lower Expected Returns l Pensions and Investments
  • Foundations and endowments are increasing private equity allocations despite the expectations of lower returns in the future, according to the latest quarterly survey from investment consultant NEPC. In the survey conducted in October of its endowment and foundation clients, NEPC said 51% of respondents plan to increase their allocations to private equity over the next 12 months, while 39% plan to maintain those allocations and 10% plan to decrease. Almost 44% of respondents, however, expect private equity to generate lower returns going forward, while 39% believe they will be in line with past returns and 17% believe returns will get higher.
Why North Carolina Central University May Shake Up Its Investment Strategy l The Herald Sun
  • Like anyone with a nest egg to protect, N.C. Central University’s trustees and chancellor are wondering how long Wall Street’s bull market can continue to run. And they’re worried enough about the potential answer that, on a consultant’s advice, they appear likely to shuffle the university’ $34.1 million endowment to put more money with a UNC-linked investment manager that by its own admission “tends to play defense better than offense.”
  • In Maryland, the USM Foundation manages endowments, and this type of an endowment is called a quasi-endowment. Quasi-endowments are “accounts invested as an endowment, but funds are earmarked for a specific use.” We’ve created similar endowments for campus capital projects and to facilitate university development efforts, why not tuition? The initial seed money would come from three primary sources; an initial transfer from the USM fund balance, private funds raised from the 12 USM intuitions, and the general fund of the state of Maryland. At the beginning the endowment would support Pell Grant eligible transfer students from Maryland community colleges to a four-year USM institution. As the fund grows we would seek to cover all Pell eligible students in the USM. Eventually every Marylander admitted to a USM institution could attend tuition-free. Under this plan we would be well on our way to implementing a system in which students and families would finally be free from crushing student loan debt that has long handicapped the financial and professional prospects of too many Marylanders.
Fossil Fuel Divestment
Medibank to Dump Holdings in Fossil Fuels Over Climate Change Health Fears l The Sydney Morning Herald
  • Medibank, one of Australia's biggest health insurers, has announced it will dump its holdings in fossil fuel companies amid concern over the health effects of climate change. In a statement to the Australian Stock Exchange on Monday morning, Medibank said it would transition to low-carbon investments in its international portfolio within the next year, to reflect the global transition to clean energy.
  • California has seen a slew of calls for divestment this year, including against the DAPL, companies that could help build President Donald Trump’s border wall, and businesses with ties to Turkey. This week, State Treasurer John Chiang has proposed CalPERS and CalSTRS divest from companies that sell firearms used in the Las Vegas mass shooting, and 12 Democratic members of Congress from California called on the funds to divest from Trump Organization properties. But the most ardent opponent of these divestment efforts is often the funds themselves. “Taking us out of a particular company has zero impact to that company,” says CalSTRS chief investment officer Chris Ailman. “Somebody else buys the shares. It’s literally like a boycott of two out of thousands.” Even if divestment doesn’t immediately hit companies in the pocket book, it creates public stigma that can lead other shareholders and then even governments to pull out, too. The common example is when divestments and mass boycotts in the 1970s pressured South Africa to end apartheid. Welch says it’s hard to measure the effect of that kind of pressure, but divestment in South Africa did not put financial stress on the country.
  • Grinnell Student Resistance held a Divest Day of Action on Monday, Nov. 6, which inspired conversation about the controversial issue of divestment on campus through a variety of venues — from rallies to talks in the D-Hall to, quite notably, art. Divest Art took place in the Spencer Grill, and transformed the space into a hub of energy, information and action. The movement decorated the Grill’s walls and windows with banners and posters, including the “Wall,” a large poster covered in notes and sketches related to divestment and the environment. Tables were converted into stations to make signs for the rally later in the day, and to decorate binders for the trustees. Student band TGI Funkies also played, first building energy and drawing attention with their music and eventually transitioning to music-backed divestment chants. Essentially, it was a space for conversation, action and community to manifest through the shared medium of art.
Why the Southwark Council Pension Fund is Divesting £1.2bn Out of Fossil Fuels l The Guardian
  • Data released on 9 November shows that the UK’s local authorities invest more than £16bn into companies that extract oil, gas and coal. In December 2016,following more than a year of consultation, deliberation and work with community groups, Southwark council pension fund announced a decision to divest the £1.2bn fund from fossil fuels. This was a decision based not just on political and ethical concerns, but primarily on the belief that climate change and significant investments in fossil fuels present a long term financial risk to the fund. The action to reduce the carbon exposure of the fund is wholly consistent with fiduciary duties as pension fund trustees.
Oxbridge Must End Dirty Investments – Both Offshore and Oil l The Guardian
  • Students at Oxford and Cambridge are taught about the dangers of economic inequality, climate change, and the limits of burnable carbon. But the Paradise Papers have revealed that behind the scenes, the universities are investing tens of millions in projects that systematically exacerbate inequality and climate disaster. The scandal is not simply tax avoidance. It is the hypocrisy of universities that espouse their commitment to sustainability while financing environmental destruction offshore.
Norway’s Wealth Fund Considers Divesting From Oil Shares l The New York Times
  • Norway’s $1 trillion sovereign wealth fund is considering a divestment of holdings in international petroleum companies, a sign that even Europe’s dominant producer does not have full confidence in oil’s future. The recommendation on Thursday by the Norwegian Central Bank, which manages the fund, is potentially the biggest advance yet for a global fossil-fuel divestment campaign that has been promoted on college campuses and by environmental activists.
Divestment Protesters Keep the Pressure on With March Through Cambridge University l The Varsity
  • Cambridge Zero Carbon Society staged the second protest in a week against the University’s continued investment in fossil fuels, as academics called for discussion of the University’s investments.
  • In June 17, 1985, recent alum Perry Chang wrote a handwritten note to then-president of the College David Fraser. The letter enclosed, written by Chang and a few other students who had graduated in 1985, was a call for divestment from companies doing business in South Africa under Apartheid.  many ways, this process can be seen as analogous to the current movement for divestment from fossil fuels: in April of 1985, before the Committee came to a decision, the College held a referendum in which 79% of the students who voted called for total divestment to replace the Sullivan principles. Mountain Justice held a similar referendum last year. Then and now, divestment is no easy process — hoops must be jumped through; drawbacks must be considered. Even so, morality in investment has been a question the College has been struggling with for decades and will, I predict, for years to come.




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Weekly News Round-Up: November 10th, 2017

Upcoming Events
Sustainable Investing Seminar l CFA Society Boston, November 13th, Boston, MA

Investing for Impact Symposium l High Water Women, November 30, 2017, New York, NY

2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ

New Reports

AASHE Sustainable Campus Index 2017 l The Association for the Advancement of Sustainability in Higher Education
  • The 2017 Sustainable Campus Index recognizes top-performing colleges and universities overall by institution type and in 17 sustainability impact areas, as measured by the Sustainability Tracking, Assessment & Rating System (STARS). The Index also highlights innovative and high-impact initiatives from institutions that submitted STARS reports in the 12 months prior to July 1, 2017. Of note, the top 5 performers in the investing section are all IEN members, as are 2 of the 3 additional “highlights” (page 62). 
Engaging To Deepen Insight l Principles for Responsible Investment & Breckinridge Capital Advisors 
  • This piece highlights how the investor engagement process helps expand impact through three key levers: deepening insights regarding individual issuers, as well as their sectors, engagement discussions with issuers enabling an investor to provide feedback, and elevating the overall standards for the entire sustainability ecosystem, which may help accelerate the allocation of capital towards sustainably managed companies.

Effective Investing for the Long Term: Intentionality at Systems Levels l The Investment Integration Project (TIIP)

  • In this new report Effective Investing for the Long Term: Intentionality at Systems Level—written by Steve Lydenberg, William Burckart, and Jessica Ziegler—TIIP examines the strategies that more and more investors are utilizing to act with intentionality to balance efficiency in maximizing self-interested returns with maintaining the resilience of the environmental societal, and financial systems that are the ultimate source of this wealth creation. Also, check out a webinarIEN did with TIIP covering highlights from the paper.
Coping, Shifting, Changing 2.0 l United Nations Global Compact
  • Coping, Shifting, Changing features recommendations focused on measures that companies can adopt to address the problems caused by market short-termism, and actions that investors can take to support companies in those efforts.
Sustainable, Responsible, Impact and ESG Investing
Bloomberg Briefs l Sustainable Finance
  • This week's Bloomberg Brief highlights how wealthy nations are falling short on promises to help the developing world cut carbon emissions; Syria will sign the Paris climate accord; and the Climate Group's EV100 initiative aims to make electric cars the new normal.
Diversity: On, Up, or Off Investor and Consultant Agendas? l Investments & Pensions Europe
  • Diversity issues are beginning to influence manager selection decisions from asset owners and consultants, according to research from think-tank New Financial. The think tank carried out research on 100 asset owners from across the world and conducted 40 interviews with a wide range of investment market participants. It found that, although asset owners may have already been considering workforce diversity in some way as part of manager selection, the discussion was increasingly explicitly framed. Questions were more focused and came up more frequently, it said.
Sexual Harassment Is Becoming a Serious Investment Risk l Barron's
  • The list of prominent men recently accused of sexual harassment goes on, and on, and on. So, too, do the costs of such behavior, in ruined reputations, aborted careers, and shattered companies, not to mention dollars and cents. Investors also have a lot at stake. The greatest cost, of course, is borne by the targets of predatory behavior, mostly women, many of whom have been newly empowered to share their stories publicly in recent weeks. The numbers suggest that their experiences are just the tip of an ugly iceberg. According to the Equal Employment Opportunity Commission, one in four women in the U.S. experiences sexual harassment at work. Based on a recent Wall Street Journal/NBC news poll, that figure could be closer to 50%.
  • A new report, “Better Business, Better World,” identifies 60 specific opportunities, including low-income food markets, public transport in urban areas, energy storage and telehealth, that could account for 10 percent of global GDP and create 380 million new jobs by 2030. Affordable housing alone could account for 20 percent of the total. Altogether, four sectors central to the global Sustainable Development Goals – energy, cities, food and agriculture and health and well-being – offer $12 trillion in annual cost savings and revenues. It’s not just enhanced reputations: business investments in sustainable development are driven by the promise of major efficiency gains, the report says.
UN SDGs Are “Great” Investment Opportunity l Markets Media
  • Andrew Parry, head of equities & impact investing at Hermes Investment Management, said the United Nations’ Sustainable Development Goals represent the growth opportunities emerging over the next 15 years. Parry spoke on a panel at the Thomson Reuters Lipper Alpha Forum in London yesterday: “The UN SDG goals have 169 targets with a map for compliance for company activities and are the growth opportunities that will emerge over the next 15 years.” A recent ESG survey by BNP Paribas Securities Services found that 51% of asset managers and more 50% of owners intend to invest in ESG funds over the next year.
Improving The Quality Of ESG Data l Financial Advisor
  • On October 18, 2017, CFA Institute released updated findings in its Environmental, Social and Governance (ESG) Survey Report. This survey confirmed that, as in 2015, 73 percent of respondents take ESG into account in their investment analysis and decisions.
Impact Investing -- First Mover On Today And Tomorrow's Megatrends l Forbes
  • David Yeh’s career spans Wall Street, global venture capital and the White House. In this Q&A, Yeh discusses how he integrates his unique insights on business, innovation and government to develop impact solutions that often address critical needs in energy, infrastructure/real assets and sustainability. He founded Capitol Hill to work with global asset managers, high net worth families and game changing startups to develop mission-driven investment and business solutions.
  • The true market for ethical investing is hard to quantify given the nuances of definition and new products opening or repurposing regularly.  It is dominated by institutional investors but the retail segment is growing rapidly. A lot of historical criticism has been levied at ethical investing, stemming from the premise that restricting the investment universe of active managers of ethical mandates causes them to underperform their unconstrained counterparts. The evidence suggests this is not the case. This article outlines five reasons why.
  • As a major oil-producing country whose economic future depends on how it invests revenues from its most valuable natural resource, Norway has managed to strike a balance between meeting high standards of ESG objectives and a steady investment return. Norway’s $1.011 trillion Government Pension Fund Global has reported strong returns from oil and gas and basic materials stocks in its latest quarterly report, but also was recently named one of the top 25 responsible asset allocators in the Bretton Woods II Leaders List.
Investment Manager News
KBIGI Launches Global Sustainable Infrastructure Strategy l Alpha Q
  • KBI Global Investors has launched KBIGI Global Sustainable Infrastructure Strategy, part of its Natural Resources suite of strategies. The firm writes that an interest in an allocation to infrastructure has grown significantly in recent years as investors place a greater emphasis on real assets and look to achieve broader diversification.
FTSE Russell Bolsters Sustainable Investment Capabilities With Senior Hires l FTSE Russell
  • Aled Jones joins FTSE Russell as Head of Sustainable Investment for the EMEA region, working with FTSE Russell’s clients, especially, asset owners and asset managers, to support their ESG investment strategies. This will include input into new and evolving ESG methodologies and product development in collaboration with FTSE Russell’s research, product and business development teams. Dr Rory Sullivan has joined as Interim Head of ESG Standards and Innovation. He will be working with the team to develop research and to further define market standards and ESG methodologies, along with collaborations in the market place.
Appleseed Capital Named to Best for the World Changemakers List;  New Award Recognizes Top-Performing B Corps l Business Wire
  • Appleseed Capital, an investment and financial advisory firm that incorporates environmental, social, and governance (“ESG”) criteria into its investment decision-making process, has been named to the 2017 Best for the World: Changemakers Awards List. This is the first year Appleseed Capital has been nominated for the list, created by B Lab, the independent non-profit that certifies companies as B Corps based on rigorous standards for social and environmental performance, public transparency, and legal accountability. The list recognizes those Certified B Corps that have made verified, significant improvements in their business policies and standards.
  • In what may become a precedent-setting contract, Nike has agreed to give a watchdog group the right to inspect working conditions in overseas factories that make Husky apparel for the University of Washington. At issue was Nike’s refusal to allow a watchdog organization, the Worker Rights Consortium (WRC), to inspect the factories where it makes clothes. UW President Ana Mari Cauce agreed. In a statement, she said the UW is the first school to have such a contract with Nike, “and I’m confident it will serve as a model for other universities moving forward.” She said she believed that “UW leverage and advocacy made a significant difference in the final outcome.”
Green Bonds
Green Bond Pricing in the Primary Market l Investor Ideas
  • Climate Bonds Initiative has released their second full paper "Green Bond Pricing in the Primary Market" report analysing the performance of green bonds at issue April-June 2017. The analysis is based on a total sample of 131 bonds, 19 of which are green bonds and 112 are vanilla bonds. More details on the methodology can be found in pages 13 -15 of the report. The report is a continuation of our ongoing assessment of green bonds pricing. A preliminary 'Snapshot' briefing paper examining Q4 of 2016 was produced for the 2017 Climate Bonds Annual Conference and the first Green Bond Pricing Report examining eligible green bonds from 2016 & Q1 of 2017 was released in August.
Climate Risk, Science & Regulation
Syria to Join Paris Agreement, Isolating US l Climate Change News
  • Syria has announced that it will sign up to the Paris agreement at the COP23 climate summit in Bonn, meaning the US would be alone if it left the global pact to prevent climate catastrophe. The declaration was made by a Syrian delegate at a plenary session of the conference this morning.
  • The world’s 250 biggest listed companies account for a third of all man-made greenhouse gas emissions yet few have strong goals to limit rising temperatures, a study showed on Tuesday. Coal India, Gazprom and Exxon Mobil topped the list when measuring carbon dioxide emitted by companies and by consumers using their products, it said.
Falling Oil Demand May Eliminate a Quarter of the World’s Refining Capacity l Triple Pundit
  • In what is often called a “2⁰C world,” falling demand for oil means that a quarter of the world’s refining capacity may not be necessary by 2030. At least, that is the assessment offered by Carbon Tracker, a London-based think tank that studies the impact of the global energy transition on capital markets. The group partnered with the Danish pension fund PKA and Swedish pension fund AP7 on this report, Margin Call: Refining Capacity in a 2⁰C World. Carbon Tracker’s researchers analyzed 492 refineries, which combined account for 94 percent of the world’s total oil capacity. The think tank says its study is likely the first analysis that gauges how the energy sector would perform as governments and companies scramble to meet international objectives to limit climate change to 2°C by ramping up investments in clean energy and technology.
  • Carbon is rapidly becoming a central theme in a sustainability-driven investment landscape. Intensifying physical, regulatory, and reputational risks—with climate change now largely recognized as a global imperative—have elevated carbon considerations to the mainstream conversation. This expansion into the financial world follows the adoption of such concerns by corporations, building products, and services in the real economy. In response to increasing interest in and demand for clear carbon exposure information, S&P Dow Jones Indices now publishes carbon metrics for all standard equity indices as a matter of course. Carbon metrics are available for core headline indices such as the S&P Global LargeMidCap, S&P 500 Low Volatility Index, and the S&P Global 1200, as well as for more environmentally-focused indices, like the S&P 500 Carbon Efficient Index.
UK Council Pensions Investing £16.1 Billion In Fossil Fuels l Desmog UK
  • There has been no significant reduction in the level of fossil fuel investment by local council pensions since the Paris climate deal was agreed two years ago, according to new data. The research, compiled by environmental groups 350.org, Platform, Energy Democracy Project and Friends of the Earth, shows that councils currently have £16.1bn of their workers’ pensions invested in oil, gas and coal companies. This represents 5.5 percent of their total investments, worth £287.9bn. While the value of these investments has increased since 2015 (when the market value represented £14bn), the proportion of the pension funds invested in fossil fuels has stayed about the same.

General Endowment News
Endowments Boom as Colleges Bury Earnings Overseas l The New York Times
  • A trove of millions of leaked documents from a Bermuda-based law firm, Appleby, reflects some of the tax wizardry used by American colleges and universities. Schools have increasingly turned to secretive offshore investments, the files show, which let them swell their endowments with blocker corporations, and avoid scrutiny of ventures involving fossil fuels or other issues that could set off campus controversy. Buoyed by lucrative tax breaks, college endowments have amassed more than $500 billion nationwide. The wealth is concentrated in a small group of schools, tilting toward private institutions like those in the Ivy League and other highly selective colleges. About 11 percent of higher-education institutions in the United States hold 74 percent of the money, according to an analysis in 2015 by the Congressional Research Service.

Paradise Papers Investigation Calls Out Reed College Investments l Portland Tribune

  • In a series of investigative stories called The Paradise Papers, Southeast Portland's Reed College is named as an investor in a partnership for a Cayman Islands fossil fuels fund. The investment product, with nine other school investors, comes through EnCap, a financial firm providing venture capital to oil and gas companies. The reporting may spark new pressure on the college to consider social and environmental goals in its investment strategy. The Nov. 8 New York Times piece — Endowments Boom As Colleges Bury Earnings Overseas — is based on leaked data to the International Consortium of Investigative Journalists regarding trillions of dollars of investments in off-shore accounts.
Republican Tax Bill Would Kill Deductibility of Student Loan Interest l Trib Live
  • The tax deduction for student loan interest would be eliminated as part of the sweeping tax changes proposed by House Republicans on Thursday. The changes also call for levying a 1.4 percent tax on the investment income earned by private colleges and universities that have sizable endowments. The tax would not apply to state schools. More than 12 million Americans deducted student loan interest on their tax returns in 2015, the most recent year available, according to Internal Revenue Service data.
Wealthy Colleges Blast Republican Proposal to Tax Endowments l Houston Chronicle
  • Some of the most prominent American universities are assailing a proposal to tax their endowments, which have climbed in some cases into the tens of billions of dollars under tax protections envied by other fundraising institutions. The tax plan released this week by Republicans in the U.S. House of Representatives comes amid growing legislative scrutiny of the finances of higher education. It calls for a 1.4 percent tax on endowment income at the wealthiest private universities. For many colleges and universities, the proposal is a bid to raid resources used to provide financial aid, support teaching and research and carry out community service.
House Republicans Look to Ease Off College Endowment Tax Proposal l The Washington Examiner
  • Republicans' first amendment to their tax reform bill would ease off a proposal to institute a new tax on large college endowments. Almost six hours hours into the House Ways and Means Committee's markup of the Tax Cuts and Jobs Act, Chairman Kevin Brady, R-Texas, offered an amendment that would limit "carried interest" for hedge funds, change the treatment of international profits and make other substantive alterations to the bill in addition to the endowment tax. The panel later passed it on a party-line vote. Under the amendment, which Brady described as a package of "modest refinements," the 1.4 percent excise tax on university endowments proposed in the bill would apply only to schools with endowments of at least $250,000 per student, up from $100,000.
Fossil Fuel Divestment
New Divestment Tool: NGO Urgewald Launches Comprehensive Coal Database "Global Coal Exit List" l Business Insider
  • At the UN Climate Summit this week in Bonn, the German environment NGO Urgewald and its partners published the "Global Coal Exit List" (GCEL), a comprehensive database of companies participating in the thermal coal value chain. While most coal databases used by the finance industry only cover around 100 companies, the GCEL provides key statistics on over 770 companies whose activities range from coal exploration and mining, coal trading and transport, to coal power generation and manufacturing of coal plants.
  • The Church of England should “show moral leadership” and immediately sell its investments in the oil giant ExxonMobil, according to a group of bishops and other clergy. ExxonMobil is accused of misleading the public for decades over the dangers of climate change – the oil company denies the allegations – and has funded climate change denial, making its presence in the church’s £7.9bn investment fund of particular concern, the group argues. Investment funds worth more than $5tn have already committed to divest from fossil fuels. Archbishop Justin Welby, the leader of the Church of England who worked for a decade in the oil industry before becoming a priest, described climate change as a “moral crisis” on Saturday. “Climate change is pushing us toward disaster,” he wrote in the New York Times. “It is not a distant danger – it is already with us. As we continue to burn fossil fuels, its effects will only grow.”
University of Cambridge Divestment Movement Marches on, With Demonstrations and Town Hall Meetings l The Varsity
  • Cambridge’s divestment movement had a busy day on Thursday as they staged a protest at an Engineering careers event, shortly before the second town hall meeting was held on the issue. Protesters from Zero Carbon Society Cambridge interrupted an ‘Engineering, Science & Technology Event’ hosted by the Careers Service in the University Centre (UC) on Thursday afternoon. Shortly after 2pm, roughly a dozen demonstrators entered the main hall of the UC, shouting and chanting. The protesters, dressed largely in black and with black paint on their hands, proceeded walk towards the Shell and BP stalls, before lying down in front of them. They continued chanting for approximately ten minutes, as University security staff arrived at the scene.
Private Prison Divestment
Syracuse University Student Association Members Argue About Syracuse University Divestment From Private Prisons l Daily Orange
  • At Monday night’s Syracuse University Student Association meeting, assembly members argued about a movement urging SU to divest from companies that invest in private prisons. Janice Dowell, an SU philosophy professor, asked SA to write a resolution encouraging the university to divest from certain companies. Chief of Staff Andres Laguna presented an analysis of a meeting with Dowell. Some SA members said Andres should not have presented the subject because it was not an SA issue. Others said he was subjective and that he should have done more research.




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Weekly News Round-Up: November 3rd, 2017

Upcoming Events
Endowment and Foundation Forum 2017 l Opal Group, November 6-7, 2017, Boston, MA
Celebrating Sustainability: A Leadership Networking Event l Natixis Global Asset Management, November 9, 2017, Boston, MA

Sustainable Investing Seminar l CFA Society Boston, November 13th, Boston, MA

Investing for Impact Symposium l High Water Women, November 30, 2017, New York, NY

2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
Sustainable, Responsible & Impact Investing
  • Many foundation investment committees and boards are being asked to meet the financial needs of their respective institutions through investment strategies that also align with their environmental, social, and governance (ESG) goals. A recent Trusteeship article by trustees and the leaders of the Intentional Endowments Network explores these ideas. AGB’s 2018 Foundation Leadership Forum will tackle this issue and others. Join us in Los Angeles, California, Jan. 21-23. Concurrent sessions on Jan. 23 will examine mission-aligned investing, and a post-conference peer learning workshop that day will take a deeper dive into all aspects of aligning ESG goals to the foundation’s mission while meeting the financial and advancement requirements of each institution. 
  • Climate Policy Initiative’s Global Landscape of Climate Finance 2017 (Landscape 2017) shows that global investment toward low-carbon and climate-resilient actions reached a record high of USD $437 billion in 2015, before falling to $383 billion in 2016. The study, which for the first time provides a five-year trend analysis, found that the record in 2015 was driven by increased private investment in renewable energy, particularly in China, and in rooftop solar power in the U.S. and Japan. The decrease in 2016 can be explained by a combination of both falling renewable energy technology costs and lower capacity additions in some countries. Taking into account annual fluctuations, the annual average flows across 2015/2016, $410 billion, were 12% higher than during 2013/2014.
Bloomberg Briefs l Sustainable Finance
  • This week's Bloomberg Brief highlights how investors managing more than $1.3 trillion are pushing drug companies to limit risks from opioids and protect shareholders; U.S. trade panel proposes solar tariffs; and Calvert CEO John Streur says inequality is a bigger issue than climate change.
How to Win Over the Ethical-Investment Sceptics l The Financial Times
  • Nothing is buzzier than ESG right now. Global assets managed to ESG objectives have surged past $20tn, and three times as much is signed up to follow. This is fantastic news. But rather than disappearing into a bubble of self-congratulation, the ESG movement must acknowledge that some investors remain unconvinced. This article aims to answer the question of why some investors are skeptical and how the industry can win them round?
John Godfrey: Why Impact Investing Matters l The Herald
  • In this article, John Godfrey discusses how it is possible and desirable to include impact considerations when investing into listed securities. It is important to remember that investing with impact in mind can be catalytic, as it encourages behavioral change among businesses driving them to think about their overall outcomes beyond the immediate bottom line.
McKinsey: ESG No Longer Niche as Assets Soar Globally l Institutional Investor
  • More than a quarter of the $88 trillion assets under management globally are now invested according to environmental, social and governance principles known as ESG, a McKinsey & Co. study found. Sustainable investing has become “a large and fast-growing major market segment,” with ESG being integrated into portfolios at a growth rate of 17 percent a year, McKinsey said in a report published October 26. Japan’s Government Pension Investment Fund, Norway’s Government Pension Fund Global, and Dutch retirement fund ABP are among the large institutional investors that practice sustainable investing, the firm said.
The 300 Club & its Right Mix of ESG Strategies and Tools l Whatinvestment.co.uk
  • The 300 Club has released a paper highlighting what it views as the right mix of ESG strategies to make a difference to a portfolio. Club member, Pascal Blanqué, comments.
Why Investing in Workplace Gender Equality Is an Investment in Sustainability l Sustainable Brands
  • Much like sustainability, the business case for workplace gender equality may not be entirely apparent to organizations. Enter the EDGE Foundation, co-founded by Aniela Unguresanand Nicole Schwab, which in 2011 created the EDGE Certification, the leading global assessment methodology and business certification standard for gender equality. EDGE, which stands for Economic Dividends for Gender Equality, is distinguished by its rigor and focus on business impact. Unguresan and Schwab designed the system to help organizations not only create an optimal workplace for women and men, but also benefit from it.
Commentary: What’s Behind Asset Owners’ Slow Adoption of Responsible Investment l Pensions & Investments
  • To find what influences the rate of adoption on the asset owner level, the author of this article interviewed 10 major players in the United Kingdom, the Netherlands and Germany, focusing specifically on those that outsource at least part of their listed equity portfolio, to capture potential agency issues.
Investors Are Missing A Trick On ESG Criteria l Forbes
  • Analysis by the Boston Consulting Group released last week showed that those companies who score highly on ESG criteria are more profitable and command a higher market valuation than their peers. The analysis, which looked at more than 300 of the world’s largest companies showed earnings before interest, tax, depreciation and amortisation were 3.4% higher for these groups, and in some industries – such as the pharmaceutical industry – the difference was particularly marked.
Skytop Strategies: Reflection on ESG Trends, Hurdles, Generating Alpha l Chief Investment Officer
  • Navigating through the evolving landscape of sustainable investing and its obstacles dominated recent chatter by some ESG buffs. Trends within the ESG investing realm and understanding potential risks/opportunities were key focuses of attendees at Skytop Strategies’ Generating Alpha conference held on October 30 in New York City. This article shares some insights from conference attendees on the sustainable investing markets.
  • A recently published study by RBC Global Asset Management shows that investors around the world are divided when it comes to the value of environmental, social, and governance analysis. But most agree that the Fossil Fuel Free movement has legs.
Even Short Hedge Funds Can Be Green l Barron's
  • While ESG investing has been the domain of long-only, more traditional funds, this article describes how hedge funds can benefit from meeting increasing demand for sustainable products.
  • This article explores a few examples of the trend of investing in sustainable farming practices, a movement that offers a range of investment levels, from debt and equity ventures that require smaller contributions to farms and land that cost millions of dollars.
Private Equity Firms to Take up ESG Investing l Funds Europe
  • Private equity clients expect their fund providers to focus more on responsible investing in the next two years, research has found. Almost 80% of the 142 investors surveyed believed asset managers in the private equity industry would increase their environmental, social and governance (ESG) criteria when making investments, according to Intertrust, a fund services provider that surveyed clients of private equity firms. The finding comes a day after Hermes Investment Management released research that showed more investors were casting doubts on ESG investing as a source of extra return.
From Goldman To Impact Investing: How This MBA Is Helping Traditional Investors To Help The Poor l Forbes
  • In this Q&A with Clare Murray, she discusses how she is using her finance background and skills to contribute to social change. Prior to her current position, was already involved with BlackRock's Sustainable Investing work, but looking for a more direct connection to investments that would make life better in poor communities around the world. Now, Clare has successfully landed a great impact investing role - here are her tips for others looking to make a similar transition.
It’s Getting Easier to Be Green l Barron's
  • Sage Advisory launched the Sage ESG Intermediate Credit ETF, which is made up of corporate bonds that meet ESG criteria, adding one more tool to ESG investors' bond toolbox.
Vert Asset Management Launches the First Sustainable Real Estate Mutual Fund in the U.S. l Business Wire
  • Vert Asset Management, a dedicated ESG investment manager, today announced the launch of the Vert Global Sustainable Real Estate Fund (Ticker: VGSRX), an open-end mutual fund which seeks to achieve long-term capital appreciation. The Fund invests across the globe in publicly listed real estate investment trusts (REITs) using evidence-based environmental, social and governance (ESG) metrics.
Climate Risk, Science & Regulation
  • Climate change has largely been defined as an environmental issue, with the worst effects decades or centuries away. But a sobering new report from a commission convened by the medical journal The Lancet, released Monday evening, could change that assessment. The new report says that climate change is already harming human health on a vast scale. “Climate change is happening, and it’s a health issue today for millions worldwide,” said Anthony Costello, a co-chairman of the commission that produced the report, called The Lancet Countdown. The Lancet is one of the world’s most prestigious medical journals. It isn’t an environmental advocacy group, which is why this document could galvanize the public health community in ways that other reports on the consequences of the warming planet have not.
Record Surge in Atmospheric CO2 Seen in 2016 l BBC
  • Concentrations of CO2 in the Earth's atmosphere surged to a record high in 2016, according to the World Meteorological Organization (WMO). Last year's increase was 50% higher than the average of the past 10 years. Researchers say a combination of human activities and the El Niño weather phenomenon drove CO2 to a level not seen in 800,000 years.
  • In this article, Bob Litterman describes why now is the time to discuss climate change and implement an effective strategy to reduce emissions- a carbon tax.
China to Move Closer to Starting National Carbon Market l Bloomberg
  • China, the world’s biggest carbon emitter, pledged in 2015 to start a carbon market this year to help it cap emissions by about 2030. The nation is also making big bets on clean-energy projects in an effort to derive 20 percent of its energy from sources other than fossil fuels by that year.
General Higher Education Endowment & Sustainability News
  • The U.S. Senate Finance Committee is considering a 2 percent excise tax on university endowments, among a number of options to find revenue in an ambitious tax overhaul, according to multiple reports. The proposal would tax endowments valued at $100,000 per full-time student and would be limited to nonpublic institutions.
Experts Debate Endowment l Yale Daily News
  • This article discusses the inequality of endowment distribution the new tax cut plan, and how some experts have called into question the wisdom of maintaining tax exemptions on multibillion-dollar university endowments.
2017 Greenest Campuses in Canada Index l Corporate Knights
  • The University of Calgary was ranked as the nation’s top campus when it comes to sustainability, according to a new index released by Corporate Knights in October. It received high scores on a number of key performance indicators, including water management, sustainable investing and green certified building space. Following closely behind in second place was McGill University, bolstered by green purchasing policies, effective waste management and sustainable commuting practices. Wilfrid Laurier University, MacEwan University and Dalhousie University rounded out the top five. Academic institutions from five provinces were featured in the Top 10, including three each from British Columbia and Ontario.
Washington Universities Endowment Advisory Committee to Begin as New CIO Takes Office l Student Life
  • An initiative announced in April of last year, the advisory committee on Washington University’s endowment will be formed and begin its work when Scott Wilson, the University’s new chief investment officer, assumes his position Nov. 27. Although there was no change in the University’s policy, Wrighton announced the establishment of an advisory committee to the chancellor on the University’s $8 billion endowment in conjunction with the hiring of the new CIO, specifically looking at transparency of investments.
A University Endowment of Money Made in the Real World l The New York Times
  • This article describes the irony in how the University of Chicago is getting a $125 million gift from Ken Griffin, the founder of the hedge fund Citadel. The “Chicago school” of economics, as it is called, leans heavily toward free and efficient markets. Mr. Griffin’s name and cash — earned in a business that depends on markets being inefficient — will now endow the university’s economics department.
Grinnell College Selects Global Fintech Firm InvestCloud For Endowment Platform l Crowdfund Insider
  • Global fintech firm InvestCloud Inc. announced on Wednesday it has been selected by Grinnell College as its endowment platform. The company reported that the Iowa liberal arts college will use its InvestCloud Navy service to simplify investment management, improve efficiency and centralize data.
  • Taking inspiration from former UN Secretary General Ban Ki-moon’s rallying cry for a “clean industrial revolution” and a more sustainable path to future prosperity, Rathbones hosted an event, attended by representatives from UK universities and colleges, in London on 8 September 2017 to discuss the challenges facing higher education institutions considering divestment from fossil fuels. Rathbones outlined the background to the issue, after which attendees heard from Robert Kerse, the University of Bristol’s chief financial officer, who gave an insight into the history and development of the university’s plans to reduce its exposure to fossil fuels in its endowment funds.
  • An editorial in Tulane University's student newspaper takes aim at the fossil fuel industry for its role in coastal erosion. To reduce Tulane's own environmental footprint, the university should divest from fossil fuels, the Tulane Hullabaloo editorial said Wednesday.
Activists Renew Call for Fossil Fuel Divestment at Middlebury l The Middlebury Campus
  • As Middlebury’s board of trustees convened inside Old Chapel on Thursday, Oct. 19, members of the college community rallied outside to renew a years-long call for the college to divest from fossil fuels. The event, described as a teach-in, was organized by the student group Divest Middlebury. Scheduled to coincide with the trustees’ annual fall meeting, the event featured speeches by three students and three community members.
Ohio University Student Senate: Body May Ask University to Consider Fossil Fuel Divestment l The Post
  • At its Wednesday night meeting, members of Ohio University Student Senate will vote on six resolutions and three new bills brought before the body, including a bill that calls for OU to consider divesting from fossil fuels and investing in alternative energy sources. OU President Duane Nellis has pledged OU’s support for the Paris Climate agreement, saying “Ohio University chooses to lead by example by working toward a sustainable future in every capacity we can,” according to the bill. The bill Student Senate will discuss Wednesday would ask the university to create a plan to divest from fossil fuels.
Fossil Free Penn's New Focus is Recruitment and Education, Not 'Inflammation' l The Daily Pennsylvanian
  • After various failed attempts to get Penn to divest its endowment from fossil fuel companies, Fossil Free Penn is changing its protest tactics to adhere to University regulations.Starting Oct. 30, FFP has been collaborating with other student groups to host a week-long Divestfest on College Green that aims to promote student involvement and environmental awareness.




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Weekly News Round-Up: October 27th, 2017

Upcoming Events

The SRI Conference l November 1-3, 2017, San Diego, CA
Sustainable Investing Seminar l CFA Society Boston, November 13th, Boston, MA

Investing for Impact Symposium l High Water Women, November 30, 2017, New York, NY

2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ

IEN in the News
The Intentionally Designed Endowment l AGB Trusteeship Magazine
  • Written by IEN Executive Committee member, David Dinerman (Hampshire College), Tony Cortese (Green Mountain College, IEN), and Georges Dyer (IEN), this piece highlights the importance and trends of aligning endowment investing with the mission and goals of higher education institutions and considering material ESG factors. It explores some of the challenges and opportunities of doing so, provides some evidence of the benefits and ideas on how to institutionalize such investing, and helps trustees learn about the peer learning opportunities through IEN.
In Depth: ESG Investing Is Here to Stay l Chief Investment Officer
  • As asset owners’ fervor surrounding ESG and impact investing intensifies, sustainable investing has emerged as an integral part of investment frameworks. While the motivation behind the integration of ESG within the investment decision process varies, investors are nevertheless formalizing their commitment through policy and/or increasing their allocation of assets to sustainable investing. And asset managers are paying attention.
Sustainable Investing at Endowments
Smith Trustees Approve Recommendations on Climate Change, Endowment l Greycourt Gate
  • At its October 21 meeting, the Smith College Board of Trustees approved a comprehensive, holistic set of recommendations designed to support the college’s commitment to environmental sustainability while also ensuring the continued health of the endowment. The strategies were announced in an email and an FAQ to the community from President Kathleen McCartney and Board of Trustees Chair Deborah L. Duncan ’77 and were to increase impact investing,  favor managers and funds adhering to environmental, social and governance (ESG) principles, avoid future direct holdings in coal, and report regularly on socially responsible investment progress.
New Initiatives
  • The recent launch of the Interfaith Center on Corporate Responsibility’s new Investor Alliance for Human Rights indicates positive progress on addressing human rights abuse in supply chains. And also the clear need for companies to work harder to bolster efforts to look after people working throughout their entire value chains, spurred on by the investment community.

Sustainable, Responsible, Impact & ESG Investing
Reflections from a Field Builder: The Next 25 Years of Sustainable, Responsible and Impact Investing l Green Money
  • In this article, Lisa Woll, CEO of US SIF, offers some predictions for, and reflections about, the future of sustainable and impact investing.
  • This article describes how  Stephen Liberatore, lead portfolio manager for TIAA-CREF Social Choice Bond fund, is making money as well as social impact.
Systemic Risk Factors Next Focus of RI l Investment Executive
  • The Responsible Investment Association (RIA) organized the week's events in an effort to bring education and awareness to RI, particularly as it relates to environmental, social and governance (ESG) issues. "Systemic risk is the next frontier for ESG," said Michael Jantzi, CEO of Amsterdam-based Sustainalytics during the panel discussion, which was led by the RIA's incoming CEO, Dustyn Lanz. Although climate change is one of the largest systemic risk factors, less than half of the largest companies acknowledge it in their annual reports.
How Funds Are Positioned For a Low-Carbon Future l MSCI
  • As the world moves toward a low-carbon future, companies of many stripes are adopting renewable and clean-energy technologies. That, of course, has implications for stocks and the portfolios that hold them. How can asset owners understand the carbon-transition risks in their portfolios? One way is to categorize funds by different types of exposure to carbon-transition risk. Using a matrix approach, asset owners may be able to better understand what long-term bets — intended or not — are embedded in their portfolios. This approach may also help investors develop more resilient investment and risk management strategies as the global energy mix evolves. This article summarizes the findings from MSCI’s Low Carbon Transition Matrix.
Female-Friendly Work Environment Crucial in Sustainable Society, Pension Fund Executive Says l Korea BizWire
  • Japanese pension fund executive Hiromichi Mizuno has said investment directed by ESGe issues is necessary to encourage women to participate in the labor force and build a sustainable society. Mizuno, who is the chief investment officer of Japan’s Government Pension Investment Fund (GPIF), among the world’s biggest pension funds, called for South Korea to make investment decisions for the future generations, instead of short-sighted ones that focus on quick sales results, during a breakfast forum held in celebration of the first anniversary of the Korean unit of Women Corporate Directors (WCD) on Tuesday in Seoul.
  • Investors have ploughed more than $1.6 billion into socially responsible ETFs over the last year, prompting industry commentators to predict that SRI and ESG (environmental, social and governance) ETFs will become the mainstream. Data from TrackInsight shows that global ETF investors allocated $1.69 billion over the last 12 months and around $1.14 billion year to date to these funds.
Companies Taking ESG Seriously are Long-Term Winners l Financial Times Adviser
  • Inequality and climate change have created a challenging backdrop for companies, meaning a failure to incorporate these principles will provide a poor return for investors. This claim was made by Jessica Ground, global head of stewardship for Schroders, who said it was vital to think about environmental, sustainable and governance (ESG) investing in terms of "risk and return".  "We see it as the third dimension of investing. If you are going to be successful in allocating capital on a forward-looking way, then you are going to need to take ESG into account, and to hold these companies to account."  According to data from the S&P 500, the average tenure of a company has fallen from 50 years to 15. This means that companies operating with a view to long-term sustainability will be those who last the course.
  • When a Bank of America Merrill Lynch analyst downgraded Chipotle stock last week–claiming the company spends too much to pay workers and that it would have trouble cutting labor costs–it was the latest of many examples of Wall Street pressure on retailers to keep wages low. Of course, that response ignores the long-term benefits that come from fairer wages. “Wall Street’s time horizon for company earnings is very short–often one or two quarters,” says Michael Reich, a professor of economics at the University of California-Berkeley and chair of the Center on Wage and Employment Dynamics at the Institute for Research on Labor and Employment. “This short-termism often penalizes companies that raise their workers’ wages or invest in their employees’ skills. Wall Street thus ignores or is unaware of how higher pay reduces employee turnover and boosts worker productivity.”
Canada, Europe Lead List of Most Responsible Asset Allocators l Chief Investment Officer
  • Canadian and European funds lead the way among the most responsible asset allocators, according to a new report from non-partisan think tank New America. The recently released Bretton Woods II Leaders list of the 25 “most responsible” asset allocators was culled from among hundreds of sovereign wealth funds (SWFs) and government pension funds (GPFs) representing more than $20 trillion in assets under management. The top funds were chosen for their “high conviction in responsible investing,” and their belief that “ESG is material to long-term returns,” according to New America.
Investment Manager News
First Fossil Fuel-Free Mutual Fund Family Reaches $0.5 Billion l Green Century Capital Management
  • Green Century Capital Management today announced that its assets under management (AUM) reached a new landmark, exceeding $500 million as of October 20, 2017.   Green Century is the investment advisor to the first family of fossil fuel-free responsible and diversified mutual funds in the U.S. Green Century’s unique combination of three characteristics allows it to make an impact well beyond its size: Green Century invests in sustainable companies, leads a shareholder advocacy program and is owned by nonprofit organizations. Green Century has grown 435% from $114.9 million in AUM as of 9/30/12 to over $500 million as of 10/20/17.  Its growth has mirrored both the rise of interest in sustainable investing and the growth of global fossil fuel divestment campaigns.
With Competitors Making Cuts, BlackRock Looks to Grow in Boston l Boston Business Journal
  • The office is looking to add employees on its sales desk and to its sustainable-investing team.
David Rubenstein, Private Equity Titan, Passes the Torch l The New York Times
  • On Wednesday, David M. Rubenstein and the other two co-founders of Carlyle Group — William E. Conway Jr. and Daniel A. D’Aniello — announced they were handing over daily management of the firm to their chosen successors. The changing of the guard at Carlyle is part of a generational turnover at private equity firms, as the billionaires who pioneered the industry recognize that they must prepare their businesses for life after they have retired.
  • Frustrated with off-the-shelf ESG products, Bank of America Merrill Lynch’s U.K. retirement scheme is building its own sustainable investment strategy and seeking an asset manager to run the fund. The decision follows similar steps taken by major asset owners worldwide, including the Taiwan Bureau of Labor Funds and New Zealand Super Fund, according to index provider MSCI.
Meet 58 Venture Capital Funds That are Betting on Women Around the World l Impact Alpha
  • The rising social and economic power of women venture is global mega-trend that venture capital is beginning to notice. Suzanne Biegel, a longtime gender lens investor and advisor, and the team over at the Wharton Social Impact Initiative have pulled together one of the most comprehensive lists of private equity, venture capital and debt funds explicitly investing with a gender lens. Download their new report to view all 58 funds.
Climate Risk, Science & Regulation
Congressional Auditor Urges Action to Address Climate Change l The New Tork Times
  • Fires, floods and hurricanes are already costing the federal government tens of billions of dollars a year and climate change will drive those costs ever higher in coming years, a new federal study warns. The report by the Government Accountability Office, Congress’s auditing arm, urges the Trump administration to take climate change risks seriously and begin formulating a response. The study, scheduled to be released Tuesday, says that different sectors of the economy and different parts of the country will be harmed in ways that are difficult to predict. But one estimate projects that rising temperatures could cause losses in labor productivity of as much as $150 billion by 2099, while changes in some crop yields could cost as much as $53 billion.
General Higher Education Endowment News
Net Price Keeps Creeping Up l Inside Higher Ed
  • In what has become a familiar pattern in the last several years, published tuition and fee prices increased at a relatively low, steady rate this year -- but financial aid again failed to keep up, resulting in students paying more to attend college. Tuition and fees increased by less than 2 percent between 2016-17 and 2017-18 after adjusting for inflation, according to new College Board report released Wednesday. The reports, “Trends in Student Aid” and “Trends in College Pricing,” are released annually, showing both short-term changes and trends over longer periods of time.
Harvard Endowment Hit by $1 Billion Natural Resources Writedown l Bloomberg
  • Harvard University wrote down the value of its natural resources investments by $1.1 billion in the last fiscal year, contributing significantly to its poor endowment performance. The university revalued the portfolio to $2.9 billion from $4 billion in the year through June 30, according to an annual report released Thursday. The writedown is part of an ambitious attempt to overhaul the $37.1 billion endowment and helps explain why the world’s richest school trailed in performance against its peers.
The Endowments Ignoring Passive l Institutional Investor
  • Leading allocators are not only continuing their dogged pursuit of alpha – they’re doing it in a way that would make more timid investors weak in the knees. A small subset of allocators, including Verger Capital CEO Jim Dunn, have eschewed asset allocation in favor of risk allocation. Dunn explained on a recent podcast that “the problem with modern portfolio theory is that it’s not very modern.” His approach analyzes the factors that drive a manager’s returns and optimizes across factors rather than across asset classes. The resulting portfolio tends to look quite different from one that starts with allocations to asset classes and fills buckets and sizes managers accordingly.
  • A new study by University of Michigan sustainable enterprise professor Andy Hoffman and Temple University's Todd Schifeling, a former postdoc with U-M's Erb and Graham institutes, shows that media coverage of climate change increased during Bill McKibben's 350.org activism and that it influenced the public debate.
Fossil Free George Washington University Continues Divestment Protests Outside Board of Trustees Meeting l The GW Hatchet
  • About 30 members of Fossil Free GW held a silent protest during a Board of Trustees meeting Friday, urging the University to divest from fossil fuels. Members of the group gathered in the public viewing area of the meeting wearing white T-shirts emblazoned with the word “divest.” When the meeting was called to order, demonstrators stood up silently and unfurled a large banner. Protesters left the meeting after speaking with University Police Department Chief Rashall Brackney. Demonstrators walked out after being told holding the banner and standing during the meeting was creating a disruption, the group wrote in a Facebook statement.
Why Native American Women Are Going After Europe’s Banks to Divest From Big Oil l Yes Magazine
  • Last week, a delegation of Indigenous women returned from a trip to Europe where they met with leaders of financial institutions in Norway, Switzerland, and Germany, the “home bases for several of the world’s largest financial and insurance institutions supporting dangerous extraction developments,” according to the news release. The delegation was organized by Indigenous women leaders in partnership with the Women’s Earth and Climate Action Network. Jackie Fielder, who is Mnicoujou Lakota and Mandan-Hidatsa, was a member of that women’s delegation. Fielder is an enrolled member of the Three Affiliated Tribes and a campaign coordinator of Lakota People’s Law Project as well as an organizer with Mazaska Talks. Others in the delegation included LaDonna Brave Bull Allard, Michelle Cook, and Tara Houska. In this interview, Fielder talks about divestment, the delegation’s trip to Europe, and what’s next for the movement to defund fossil fuel projects that threaten Indigenous peoples.
University of Vermont Students Silently Protest at Board of Trustees Meeting; Support Divestment l The Vermont Cynic
  • University of Vermont student activists called upon the board of trustees to divest from fossil fuels in a silent protest at the board meeting Oct. 20. While the budget, finance and investment committee met, Student Climate Culture and Young Progressives entered Silver Maple Ballroom with signs demanding fossil fuel divestment. The students stood, without talking, while the board went through the agenda and raised their signs when they spoke about the University endowment. The protest came after SGA passed a resolution last week backed by a number of student environmental advocacy groups.
Brandeis University Faculty Votes on Gen Ed and Divestment Resolution l The Justice
  • Brandeis University’s faculty convened for their monthly assembly on Friday afternoon and passed both a resolution to divest from fossil fuels and the first of two votes on the general curriculum changes.  The resolution states, “We pledge to support the president and his team as Brandeis adopts increasingly ambitious climate action plans to help fulfill the [Paris Agreement’s] commitment to ‘take forceful action’ in support of ‘the global effort to hold warming to under 2°C.’" Senate Chair Susan Curnan (Heller) said that the Faculty Senate unanimously supported the resolution and that the resolution aims to put more commitment on the part of the faculty in supporting ambitious action planning. Several faculty members voiced concern about the final sentence of the resolution, which described the Trustees’ responsibility “to develop and implement a strategy for ending our university’s investments in fossil fuels at the fastest pace.” 
University of Missouri System President Declines Students' Request For Fossil Fuel Divestment l Missourian
  • Since 2015, a student environmental organization focused on divestment from fossil fuels has worked to revitalize a fossil fuel divestment campaign at MU.  In April, the Missouri Students Association passed a resolution asking that the UM System divest from fossil fuel companies. Frankie Hawkins, a representative for the coalition, said the UM System's estimated $10 million invested in fossil fuels represents about 1 percent of the system's $1.5 billion endowment pool. In a June response to the resolution, UM System President Mun Choi and Maurice B. Graham, the chair of the UM System Board of Curators, sent the coalition a letter emphasizing the importance of fossil fuels in the global economy.  
University of Cambridge Town Hall Meeting Debates Divestment l The Varsity
  • Members of the University of Cambridge gathered this week in a ‘town hall’ style meeting to discuss the issue of divestment, as part of an information-gathering exercise carried out by the University’s divestment working group. During the ticketed event, which was held at Lady Mitchell Hall on Sidgwick site, speakers proposed a range of arguments both in opposition to and in support of divestment. Twelve speakers, who had submitted speeches to the working group prior to the meeting, were invited to address the audience.




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Weekly News Round-Up: October 20th, 2017

Upcoming Events

The Oekom Impact Study 2017 and How to Measure Impact in Publicly Traded Investments l oekom, October 24, 2017, 8:00 - 10:30, New York, NY
  • This event will focus on the oekom Impact Study 2017 and the opportunities that exist in assessing impact in investment portfolios, and is free to attend.
Webinar: Path to Value Forum: Finding the Signal in the Noise l High Meadows Institute, October 24th, 2017, 12:00 - 1:00 p.m. EDT
Forest Resilience Bond Investor Roundtable l Blue Forest Conservation, Encourage Capital, Rockefeller Foundation, & WRI, October 30, 2017, New York, NY

The SRI Conference l November 1-3, 2017, San Diego, CA
The Case for Social Progress l Breckinridge Capital Advisors & Social Progress Imperative, November 1, 2017, San Francisco, CA
  • Please join Breckinridge and the Social Progress Imperative for a luncheon and panel discussion that will explore what social progress means today and how investors can help drive inclusive growth. Building off the success of the panel from the What Works 2017 conference, Breckinridge and the Social Progress Imperative are excited to continue the conversation on social progress. Our panelists will broadly introduce the Social Progress Index (SPI), explore the importance of inclusive growth today and discuss the investment case for the use of SPI.
Investing for Impact Symposium l High Water Women, November 30, 2017, New York, NY

2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
New Reports
Embracing Sustainability l Appleseed Capital
  • This report details how and why Appleseed Capital is always looking for useful tools which can help identify, mitigate, or avoid investment risk, and how ESG factors, help avoid investment risks, which, in turn, should reduce idiosyncratic business risk. 
Endowment and Foundation Sustainable Investing News
Pitzer College to Invest $58 Million in Non-Fossil Fuel Index Fund l The Student Life
  • Pitzer College, along with asset management firm BlackRock, has launched the first-ever ESG-focused global equity index fund that is completely divested from fossil fuels, the college announced Sept. 21. Pitzer is set to invest $58 million of its $135 million-endowment into the fund, which represents the entirety of the public equity portion of Pitzer’s endowment. The creation of the fund is a continuation of the climate action plan that Pitzer announced in 2014, which included a commitment to divest 99 percent of the college’s endowment and create a fund to facilitate the investment of endowment funds into environmentally responsible companies.
Sustainability Focus, Extraordinary Performance l McKnight Foundation
  • Humming the iconic bars to Pomp & Circumstance, the McKnight investment team celebrated the “graduation” of its first impact investment. On October 2, an early market-rate mission-related investment — Generation’s Global Equity Fund — “graduated” from the experimental impact portfolio to the main $2.2 billion endowment. Increasing the original $25 million to a $75 million investment is proof that an impact investing program can have financial success.  And it gets better. Since McKnight's initial investment three years ago, Generation Global Equity has been the best-performing equity fund in the entire McKnight endowment. McKnight’s investment has returned 17.3% against the MSCI World benchmark’s 6.6% (as of June 2017). In three years, the initial $25 million investment blossomed to over $38 million – extraordinary outperformance by any measure.


Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how investors are putting more money into metals needed to build electric-vehicle batteries; More companies are pricing carbon internally; and Pala Investments' New Energy Metals Fund targets decarbonization.
Asset Owners Push to Satisfy U.N. Goals l Pensions & Investments
  • Institutional investor executives said they are now reflecting on — or have already implemented — ways to align their investment portfolios with the goals. Some pension funds are further along in the journey. The $337.2 billion California Public Employees' Retirement System, Sacramento, is starting to map its current portfolio to the sustainable development goals to find "connectivity," said Anne Simpson, investment director of sustainable investments, speaking on a recent panel discussion at the annual Principles for Responsible Investment in Person conference, held in Berlin.
Impact Investing to Receive a GBP300 Billion Boost l AlphaQ
  • The UK National Advisory Board on Impact Investing is launching its report today with clear steps to create a more inclusive and sustainable economy. It reveals an opportunity to unlock an additional GBP300 billion over the next 10 years to directly help address social and environmental challenges including affordable housing, climate change and the social care crisis. The UK NAB is the UK’s voice in a Global Steering Group of 15-member states plus the EU, chaired by Sir Ronald Cohen, and was established as the successor to the Social Impact Investment Taskforce set up during the UK presidency of the G8.
U.K. Impact Investing Board Outlines Steps for Investors to Align With Sustainable Development Goals l Pensions & Investments
  • Institutional investors' capital should be aligned to the United Nations' sustainable development goals to promote an inclusive and sustainable economy, says a new report. The U.K. National Advisory Board on Impact Investing launched a report outlining five steps to reach this goal: adopt an inclusive and sustainable U.K. investment agenda; empower savers to invest in line with their values; put purpose at the heart of public procurement; accelerate the rise of purposeful business; and strengthen the U.K.'s role in international development finance.
  • Leading investor law firm Grant & Eisenhofer announced the launch of a new ESG Institute, a global thought leadership and advocacy group focused on legal considerations surrounding environmental, social and governance issues in institutional investing. The ESG Institute debuts as G&E marks its 20th anniversary as an advocate for investors internationally. Interest in sustainable and responsible investment continues to accelerate: in the past three years, global assets in the sector have soared by 25% to $23 trillion, according to the Global Sustainable Investment Review.
Betting on Social Progress l Breckinridge Capital Advisors
  • Traditional social and economic theory tends to link social stability to economic success, arguing that more economically prosperous societies are more socially stable. The argument goes that national wealth generates security and satisfaction, enabling citizens to move beyond basic needs to contribute to higher-order goals such as supporting their communities, helping develop and strengthen key institutions and generally driving humanity forward. But this line of thinking is being brought into question today. While most would agree the United States and many other developed countries have largely recovered from the global financial crisis, post-crisis economic improvements haven’t always translated into broader societal wellbeing because prosperity has not been sufficiently inclusive. This lack of inclusiveness presents broader challenges that can in turn undermine economic prosperity as well.
  • Canadian's investors dominate in a new ranking of the world's most responsible asset allocators. The list, which includes 25 sovereign wealth funds and pension funds responsible for $4.9 trillion in combined AUM, was developed by Breton Woods II, the impact investing initiative of non-partisan think tank New America.
Impact Investment: Foundations Go Deeper l Euro Money
  • While foundations may be known for their giving, their investment portfolios lack creativity when it comes to solving environmental and social challenges. Some are taking their missions further. According to the Foundation Center, at the last count there were 86,726 foundations in the US. Together they had more than $865 billion in assets. In Europe, there are some 130,000, according to Fondation de France, with a combined €22.5 billion. Whether in size of assets or in number, foundations are a large and powerful group of investors – because the majority of their money is indeed invested. European foundations allocate just 12% a year to their missions through grants and expenses, while US foundations allocate 7% on average.
oekom Impact Study 2017: The Impact of Responsible Investment on Companies Is Increasing l CSR Newswire
  • oekom research concluded in its Impact Study 2017 that the influence of the responsible capital markets is clearly positive. According to companies, the impact that responsible investors, banks and rating agencies have on the company’s sustainability efforts has increased considerably since the last survey in 2013. The sustainability rating agencies play a decisive role in this, whereas the UN SDGs (Sustainable Development Goals) are currently less significant for most companies. The study of almost 500 companies around the world was conducted in partnership with PRI (Principles of Responsible Investment). 
Millennials Love ESG, Just Not As Much As Their Parents, Grandparents l Financial Advisor
  • Sustainable and socially responsible investing isn’t just for the kids, according to a recent Allianz Global Investors study. In the AllianzGI ESG Clarity survey, investors aged 65 and older were more interested in environmental, social and corporate governance (ESG) investing than younger generations. While ESG strategies are often pitched as appeals to young, affluent investors, 68 percent of the respondents aged 65 and older expressed favorable views towards ESG investing, compared with 59 percent of those aged 25 to 44.
ESG Analysis Grows in All Regions for CFA Institute Members; EMEA Takes Biggest Leap l Pensions & Investments
  • Portfolio managers and data analysts in North and South America continue to fall behind the Europe, Middle East and Africa and Asia-Pacific regions in their use of ESG factors in their investment decisions and analysis, said a survey report released Wednesday by the CFA Institute. Although ESG consideration was up for all regions from the CFA Institute's 2015 survey, Europe, the Middle East and Africa replaced Asia-Pacific as the region where investors are most likely to take ESG issues into account at 85%, up from 74% in 2015. Meanwhile, some 81% and 68% of investors in the Asia-Pacific and Americas, respectively, said they take ESG factors into account, up from 78% and 59% in 2015.
General Endowments News
Harvard Endowment's Rebirth l Institutional Investor
  • After a decade of low returns and high turnover, the group responsible for managing Harvard's $37 billion endowment is beginning anew. Ushering in this era is CEO Nirmal Narvekar, an Ivy League Endowment Alum who joined in December.
United Nations Appoints New CIO l Chief Investment Officer
  • The United Nations has completed its search for the CIO position of its $62 billion staff pension fund, and announced it will hire Sudhir Rajkumar of India. The position is currently held by Carolyn Boykin, who reapplied for the job, according to Farhan Aziz Haq, deputy spokesman of UN secretary-general António Guterres. Haq was asked if the decision was made because of performance and he responded, “It is the Secretary-General’s prerogative to fill senior posts, and many senior posts have been advertised while there is still an incumbent in the post.”
Investment Manager News
Candriam Launches Academy for Sustainable and Responsible Investing l FTSE Global Markets
  • Candriam Investors Group, the pan-European multi-specialist asset manager owned by New York Life Investment Management (NYLIM), today launches the Candriam Academy, the world’s first free-to-access accredited training platform for Sustainable and Responsible Investing (SRI).
JPMorgan Mulls Further Sustainable Fund Launches l Fund Strategy
  • JPMorgan Asset Management is mulling further launches in the sustainable investing space, with global equity and Asian equity funds top of the list. The fund group currently has two ESG mandates; the Europe Sustainable Equity fund and the US-based Intrepid Sustainable Equity fund. Robert Hardy, head of the corporate governance team, says JPMAM has “an enormous amount of global expertise it could leverage” to launch further products.
Fossil Fuel-Free Fund Challenges Perceptions About Divestment With 16% Annualized Return l Benefits Canada
  • Carbon divestment doesn’t have to mean sacrificing investment returns, a Canadian asset manager is arguing.  On Monday, Genus Capital Management Inc. released a report on the four-year performance of its fossil-free Canadian and global equity fund. The results show from the end showed that from May 2013 to the end of last year, the fund saw returns of 16 per cent annually. That compares to the 13.3 per cent annual return reported by its benchmark over the period.
Caisse Aims to Cut Portfolio's Carbon Footprint 25% by 2025 l The Globe and Mail
  • The Caisse de dépôt et placement du Québec is setting bold targets to shelter its portfolio against the impact of climate change. The country's second-largest pension fund is seeking more profitable investment opportunities and means to avoid assets it forecasts will be left behind in a global marketplace being reshaped by an increasingly low-carbon world economy. The move comes as institutional investors around the world are reassessing climate risks and other so-called ESG factors in response to stakeholder pressures, marketplace shifts and new regulations.

Standard Live Investments Launches First Impact Fund l Portfolio Adviser

  • The SLI Global Equity Impact Fund, which is co-managed by Sarah Norris and Dominic Byrne, aims to invest in companies which have a truly positive impact to benefit the environment, society and clients. To achieve this SLI has used the universally accepted 17 United Nation’s Sustainable Development Goals (SDGs) as a framework to develop its own impact process and analysis. All 17 SDGs are incorporated into the portfolio, while the UN’s associated targets will also inform the investment process. According to the SLI the fund then invests in global companies whose activities, technologies or products are specifically to provide solutions in areas such as healthcare, education and poverty.
  • The University’s divestment working group will host two ‘town hall’ consultation meetings in the coming weeks, seeking to gauge opinions from students and staff on selling off Cambridge’s investments in oil and gas companies. All members can apply for a ticket to the two events, which will take place at 1pm on October 25th and 4pm on November 9th, both at Lady Mitchell Hall on the Sidgwick site. Professor Dame Athene Donald, who is chairing the group, said the consultations would “provide an opportunity for those concerned about these issues to voice their opinions in a respectful manner.”
University of Toronto Announces Sustainability Committee l The Medium
  • The University of Toronto has announced a Committee on the Environment, Climate Change and Sustainability amid calls to divest from fossil fuel by labour unions and student group Toronto350.org. According to John Robinson, the committee was formed as a result of the decision of U of T’s president, Meric Gertler, to not partially divest from fossil fuels last year, but instead search for alternative sustainability initiatives. The group aims to focus on implementing initiatives that emphasize sustainability through current work by the committee.
Indigenous Women’s Delegation Pursues Fossil Fuel Divestment Across Europe, Amidst Growing Global Movement l Common Dreams
  • In the face of many dire challenges, Indigenous women leaders of the Standing Rock movement and their allies remain unyielding in their quest for justice regarding the violations of Indigenous rights, human rights and the rights of the Earth and climate perpetrated through the development of the Dakota Access Pipeline (DAPL) and other fossil fuel projects across Indigenous territories in the U.S. and around the world. For the past two weeks, an Indigenous Women's Divestment Delegation to Europe has traveled through Norway, Switzerland and Germany to engage with political leaders, representatives of financial and insurance institutions, civil society groups, and members of the media to share personal accounts and calls to action for immediate divestment from fossil fuel companies that endanger rights and neglect Indigenous People’s right to Free, Prior, and Informed Consent (FPIC) as outlined in the United Nations Declaration on the Rights of Indigenous Peoples.
Doctors Call on Health Super Funds to pull $1.7 billion out of Coal and Oil Companies l The Age
  • Hundreds of Victorian doctors and medical staff are pressuring their super funds to quit investing in coal and oil for the sake of health, as they did with tobacco five years ago. The group, which includes some of Australia's leading health experts, says there is overwhelming evidence that climate change is already making people sick and causing thousands of deaths.
Vassar College Campus Investment Responsibility Committee Votes to Reccomend Fossil Fuel Divestment l Miscellany News
  • In a historic vote last May, the Campus Investment Responsibility Committee (CIRC), which is made up of faculty, students, alums and administrators, and makes recommendations to the Board of Trustees on endowment investment decisions, voted to officially recommend direct fossil fuel divestment. The next step is to bring this decision in front of the Trustee Investment Responsibility Committee (TIRC), and this (also unprecedented) meeting between CIRC and TIRC will happen this Friday, Oct. 20, when the Trustees are on campus for their tri-annual convening.


  • Smith College students organized in protest against the school's investment in fossil fuels at a campus rally Thursday. Wearing t-shirts that said "Divest" and holding signs that said "#leadwithus," a group of several dozen students stood outside College Hall, where the Board of Trustees regularly meets. The event was organized by Divest Smith College, a student run group that was formed in 2012. On its website, the group states its opposition to the school's investment in fossil fuels.  The college currently has over $100 million invested in fossil fuel industry, according to Divest Smith. 
University of Vermont  SGA Resolution on Divestment l The Vermont Cynic
  • At this week's meeting, the Student Government Association passed a resolution that called on the board of trustees to divest from fossil fuels. The resolution demanded UVM divest from the top 200 companies who contribute the most to carbon emissions as indexed by the Carbon Tracker Initiative. The resolution also called for board transparency on fossil fuel investment and where the University endowment is being invested.
Private Prison Divestment
Letter to the Editor: Board’s response to Stanford University Prison Divest l The Stanford Daily
  • Last week, Stanford's Board of Trustees provided its response to the request by SU Prison Divest to review investments in private prisons and related companies. Given some of the dialogue that has occurred since then, this open letter from the Chair of the Special Committee on Investment Responsibility of Board of Trustees provides the community with information about the Board’s response.




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Weekly News Round-Up: October 13th, 2017

Upcoming Events
AASHE Conference and Expo: Stronger in Solidarity l AASHE, October 15-18, 2017, San Antonio, TX
  • IEN will be hosting a session on investing in line with the goals of the Paris Agreement and the Sustainable Development Goals and participating in a session on investing in clean energy.
Roundtable - Antibiotic Risk and Sustainable Animal Agriculture:  The Path to Protecting Human Health l Farm Animal Investment Risk & Return, October 17, 2017, 8:30 - 4:30, New York, NY
  • FAIRR, in collaboration with ICCR, is organizing a Multi Stakeholder Roundtable on the Tuesday, October 17th in New York City.    The day will bring together investors, corporates, academics and others to discuss antibiotic use in the animal agriculture sector and to address the risks posed to the environment, human health as well as the broader impacts to the global food industry and investors’ portfolios. 
The Oekom Impact Study 2017 and How to Measure Impact in Publicly Traded Investments l oekom, October 24, 2017, 8:00 - 1:30, New York, NY
  • This event will focus on the oekom Impact Study 2017 and the opportunities that exist in assessing impact in investment portfolios, and is free to attend.
Webinar: Path to Value Forum: Finding the Signal in the Noise l High Meadows Institute, October 24th, 2017, 12:00 - 1:00 p.m. EDT

The SRI Conference l November 1-3, 2017, San Diego, CA

Investing for Impact Symposium l High Water Women, November 30, 2017, New York, NY

2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ


New Reports

The Rise of ESG Investing l Calvert Research & Management

  • As clients continue to assign importance to investments that meet certain environmental, social or governance standards, financial advisers will need to help their clients navigate through an expanding set of ESG considerations and strategies. This new research paper offers an outlook for ESG investing and addresses the primary drivers, motivators and educational needs that are re-shaping adviser-client conversations.
Morgan Stanley Releases New Report Finding Sustainability Communication Disconnect between Companies and Investors l Business Wire
  • This week, the Morgan Stanley Institute for Sustainable Investing released a new report analyzing the communications disconnect between the ESG information investors seek and what companies provide. The paper, Sustainable Value: Communicating ESG to the 21st Century Investor, identifies the communications opportunities and best practices for companies to better communicate their ESG stories to enhance their business and investor value.
Risk Reporting & Global ESG Framework Critical for Investor Interest l Environmental Leader
  • Nearly all (95%) of respondents from a recent study say they plan to engage with companies they invest in about issues related to the Sustainable Development Goals (SDGs), according to an S&P Global report. Investors say their assessment of a company’s environmental, social and governance (ESG) profiles have evolved from a simple measure of corporate responsibility to a key driver of an investor’s decision-making. So the standardization of an ESG framework – which the market currently lacks – is a critical part of an increasingly values-based economy, the report finds.
  • This document is intended to help higher education sustainability practitioners more powerfully articulate the value of sustainability to higher education leaders as well as the general public. As different points will be more or less relevant at individual institutions or with specific audiences, practitioners are welcome to create more targeted versions of this publication. After each point is a reference link that will take the reader to a list of supporting resources in the Campus Sustainability Hub, AASHE’s online resource center. AASHE will be adding new resources over time so the list of supporting resources will grow over time. As the reference links will not be accessible in printed copies, this publication is best used in electronic form. 
Sustainable Investing at Endowments
  • In this article, Stanford's Board of Trustees provides an update to the Stanford community on its consideration of investment responsibility issues – including an upcoming review of the university's investment responsibility statement and the conclusion of a review of investment issues around private prisons.
Smith College Investing in Environmental Sustainability l Grecourt Gate
  • Smith is providing $100,000 to the Smith College Investment Club to create and manage a new portfolio of fossil-fuel-free investments. The new fund—which grew out of a recommendation from the Study Group on Climate Change—offers a unique opportunity for students to gain hands-on experience in the growing field of impact investing. “Impact investing is about investments that achieve financial objectives while also accomplishing a social good,” said Mike Howard, Smith’s executive vice president for finance and administration and co-chair of the study group. “Our student club has been managing an investment portfolio here for some time. With these new unrestricted funds, students will have an opportunity to create a portfolio of socially responsible investing focused on climate change.”
Sustainable, Responsible, Impact & ESG Investing
  • Barron’s second annual survey of sustainable funds in Morningstar’s database found a similar trend toward outperformance, confirming last year’s study. Morningstar partner Sustainalytics evaluates the sustainability of 8,000 companies worldwide using more than 100 ESG factors, such as incidences of environmental accidents, fraud, and discriminatory behavior. Morningstar also uses Sustainalytics’ data to score 35,500 funds in its database based on their holdings. Barron’s used the Morningstar data to screen for large-company U.S. stock funds with sustainability grades of “above average” or “high.” A Standard & Poor’s 500 index fund has an “average” sustainability rating.
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how investors pumped $66.9 billion into clean energy globally in 3Q; The solar industry is courting Puerto Rico; The Sustainability Accounting Standards Board says the next phase in corporate disclosure is coming.
  • At the end of last year, the number of funds espousing virtuous and sustainable investing – including mutual funds and ETFs – was over 1,000, with $2.6 trillion in assets. ETFs are still a small part of the SRI equation, with many of the largest sustainable ETFs hovering around the neighborhood of $1 billion in assets. The largest ETF focusing on ESG and sustainability principles is the $903.6 million iShares MSCI KLD 400 Social ETF Just a month shy of its eleventh birthday, DSI is also one oldest ESG ETFs on the market. 
The Problem With ESG ETFs, and the Opportunities l Barron's
  • Whether index or active, the transparency of ETFs is particularly important in ESG investing, especially with regard to more controversial companies. For instance, McDonald’s effort to increase beef purchases from sustainable sources and to boost recycling has earned it a spot in the top 25 holdings of the $892 million iShares MSCI KLD 400 Social. Those who object to the firm’s products or labor practices, though, can decide if they want to invest in the iShares ETF or not. Sustainable ETFs may not come of age until the giants enter the market. Vanguard, which offers the largest ESG index fund, the $3.4 billion Vanguard FTSE Social Index, hasn’t launched an ETF version of the portfolio. Observers like Dave Nadig, CEO of ETF.com, don’t think that will be the case for long. “Looking 10 years out,” he says, “it seems inconceivable Vanguard won’t have an ETF sleeve on its fund.”
Sustainability Funds – the Real Achievers and the Fakes l Money Observer
  • A new report from Triodos Bank finds that two-thirds of investors would like their money to support companies which are profitable and at the same time make a positive contribution to society and the environment.  The easiest way to make such investments is to use an ethical or SRI fund; the UK’s ethical and environmental funds were valued £1.5 trillion in 2016, according to ethical financial adviser Castlefield. But it is important to test whether funds are actually as sustainable or ethical as they claim to be. For this purpose, Castlefield published a ‘winners’ and ‘spinners’ report to identify funds that really are sustainable and those that aren’t.
The Impact Investment Strategies That Helped Make These Funds Among the ‘Best for the World’ l Impact Alpha
  • More than 90 funds have now opted to have their portfolios independently measured and verified by B Lab’s GIIRS Impact Rating system, a rating system analogous to Morningstar. Of those, B Lab identified 28 funds for their outperformance in social and environmental impact. B Lab has assessed more than 30,000 companies, enough to allow fund portfolios to be benchmarked and compared. This year’s list recognized top performers in six categories: overall, environment, community, governance, workers and customers. The list includes many funds familiar to those who have followed impact investing in recent years, such as Leapfrog Investments, Village Capital, Deutsche Bank and Vox Capital (see the full list here). Here are five others with distinct impact strategies that helped them stand out.
Goldman Sachs: ESG Investing is No Mere Niche l Barron's
  • ESG and impact investing have gone from niches to the mainstream, according to Goldman Sachs Asset Management officials. So reports Financial Advisor. “There has been a dramatic increase and interest over the past four years in all sorts of our clients in ESG and impact investing,” Hugh Lawson, global head of ESG and impact investing for Goldman Sachs, said at a news conference at the company’s Manhattan headquarters. “What was once the province of a small number of family offices and foundations has drawn sharply increased participation among pension funds, insurance companies, non-profits and faith-based investors,” a Goldman paper says, according to Financial Advisor.
  • This article discusses how, according to Schroder's 2017 Institutional Investor Survey, 47% of investors in Europe cited long-term performance as a barrier to adopting ESG oriented investment strategies.
Performance, Transparency and Risk Cited as the Biggest Barriers to Sustainable Investing — Survey l Pensions & Investments
  • Seventy-seven percent of institutional investors globally believe sustainable investing remains a challenge, with performance, transparency and risk concerns cited as the biggest barriers to its incorporation, said a survey from Schroder Investment Management released Wednesday. Forty-four percent of respondents identified performance concerns as a hurdle to sustainable investing; 41% said "a lack of transparency and reported data"; and 28% cited risk measurement and management difficulties. Another 23% said cost was a challenge. (Multiple answers were allowed.) While challenges remain, 48% of respondents reported that they've increased their allocation to sustainable investments over the past five years, and 67% believe sustainable investing will become more important over the next five years. Globally, 17% of respondents said they do not invest in sustainable investment strategies.
  • There are certainly passive products available for investors which have an ethical or sustainable remit but whether they are indeed as low in price as other passive strategies is up for debate. Unlike other asset classes and themes, there are some limitations when it comes to using passive strategies to get access to ethical and ESG investments. In September, the MSCI launched the MSCI Factor ESG Target Indexes, which are designed to help investors incorporate environmental, social and corporate governance factors into their investment process.
Sustainable Funds Universe Continues to Expand l Morningstar
  • The universe of sustainable funds in the United States continued to grow in the third quarter, with five new fund launches and positive estimated net flows that keep the group on track for a record year of attracting new assets. The third quarter saw more funds reach viability, and more choice in emerging-markets equity and fixed income.
Investment Manager News
BlackRock Hires Former Obama Climate Adviser: Memo l Reuters
  • The world’s largest asset manager, BlackRock Inc, on Tuesday hired the Obama administration’s one-time adviser on climate change to lead an effort to appeal to people who want to invest in a way that helps society. BlackRock is bringing in Brian Deese to run its recently-renamed Sustainable Investing group, according to a company memo seen by Reuters.
New ETF Player Launches Diversified Socially Responsible Strategy l ETFTrends.com
  • Change Finance, a majority women-run money manager, has entered the ETF arena, launching its first ETF strategy that looks beyond fossil fuel-related companies to provide a comprehensive approach to socially responsible investing. On Tuesday, Change Finance rolled out the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free ETF. The Diversified Impact U.S. Large Cap Fossil Fuel Free ETF tries to reflect the performance of the Change Finance Diversified Impact U.S. Large Cap Fossil Fuel Free Index, which follows a rules-based methodology to measure the performance of an equally weighted portfolio of 100 large-cap U.S. companies that meet certain environmental, social and governance standards, according to a prospectus sheet.
Aeris Issues First Impact Managment Rating on a Mutual Fund l Aeris
  • Aeris has issued its first impact management rating of a publicly-traded, fixed-income mutual fund, Community Capital Management (CCM)’s CRA Qualified Investment Fund. The rating was announced at the 2017 Social Capital Markets (SOCAP) Conference today. “With a ballooning number of funds claiming to have positive environmental and social impacts, CCM was eager to participate in a third-party validation of our impact performance and metrics,” said David Sand, CCM’s Chief Impact Investment Strategist, who also serves as a member of the Aeris board of directors.
Northern Trust launches Northern Funds US Quality ESG Fund l Institutional Asset Manager
  • Northern Trust Asset Management has launched the Northern Funds US Quality ESG Fund (NUESX), which is designed to give investors access to Northern Trust Asset Management’s investment expertise in factor-based strategies and to a fund that will invest in companies that have favorable environmental, social, and governance (ESG) characteristics.
Green Bonds
ESG Investing? Don’t Forget About Bonds l Barron's
  • ESG investors may find bonds a better way to go: Fixed-income portfolio managers focus on mitigating risk. Avoiding blowups tied to corporate governance or environmental missteps fits right in to their process. What’s more, bonds that go in sustainable portfolios usually have the same yields and credit ratings as ones that don’t—sometimes better. “There is overlap between good social and good credit stories,” says James Dearborn, co-portfolio manager of the Columbia U.S. Social Bond Fund. The problem with fixed-income sustainable investing is that there aren’t a lot of funds to choose from—Morningstar tracks just 32—and many of the best are downright tiny. The current crop has a variety of strategies and risk profiles, and several more funds are slated to launch later this year. “It’s a little bit of a crazy quilt right now,” says Bob Smith, chief investment officer at Sage Advisory Services, which just launched an index that should help investors compare ESG investment-grade funds against a benchmark.
Why ‘ESG’ Bonds Better Than ‘Green’ Bonds l ETF.com
  • Sage Advisors, a well-known money manager with some 20 years’ experience in fixed-income investing, has created an ESG-focused bond index, the Sage ESG Intermediate Credit Index, with Wilshire Associates. According to the firm, the index, which picks some 110 investment-grade securities from the Barclays Intermediate Credit Bond Index through ESG factors, is designed to mitigate risk and generate better returns over time than a vanilla allocation. Bob Smith, Sage’s president and chief investment officer, and Ryan O’Malley, portfolio strategist, explain is this article why ESG in fixed income is important, and how investors can access this strategy.
GPIF, World Bank to Study Extending ESG Approach to Bond Investments l Pensions & Investments
  • Japan’s Government Pension Investment Fund and the World Bank Group pledged to partner on research aimed at extending the application of environmental, social and governance criteria to fixed-income investments and other asset segments. A GPIF news release Wednesday said a number of issues need to be resolved before ESG factors can be applied to bond investments the way they’ve come to be taken into account for equity investments.
General Higher Education Endowment News
Washington University in St. Louis Board of Trustees Meets, Hears Updates on Endowment, Plan for Excellence l The Source
  • At its Oct. 5-6 meeting, the Washington University in St. Louis Board of Trustees heard an update on the university’s endowment, welcomed new trustees and heard a presentation by Chancellor Mark S. Wrighton on the university’s Plan for Excellence. In a special presentation, Wrighton highlighted the goals achieved so far through the Plan for Excellence, the university’s long-range, strategic planning process that began in 2006 when deans, directors of various centers and initiatives, and heads of the university’s central fiscal units developed strategic plans for the decade from 2010 to 2020.
  • David McAuliffe was named president and chief investment officer of Berkeley Endowment Management Co., effective Dec. 1, said spokesman Jose Rodriguez in an email. Mr. McAuliffe replaces John-Austin Saviano, who left BEMCO in the spring to start his own investment advisory firm. Nicholas Werner, director of investments, has been serving as CIO in the interim.
Yale Endowment, Often a Pacesetter, Is a Laggard This Time l New York Times
  • Yale University’s endowment, the second largest among the nation’s colleges, has been distinguished in recent years for its handsome returns — and for turning out money managers who follow the investment principles of its chief, David F. Swensen. But its latest report card, issued Tuesday, was disappointing. At a time when many of the largest endowments are reporting gains in the midteens, Yale said it generated an 11.3 percent return for the fiscal year ended June 30, bringing its value to $27.2 billion. Among the better performers were the Massachusetts Institute of Technology, which registered a 14.3 percent increase; Stanford University, with a 13.1 percent return, and Princeton, with 12.5 percent growth. Dartmouth, a far smaller school with a $4.96 billion endowment, appeared a strong winner with a 14.6 percent return. A number of the larger schools have yet to release returns.
Climate Risk, Science & Regulation
California Fires Lay Waste to 140,000 Acres and Rage On l New York Times
  • The fires ravaging California’s wine country since Sunday night — part of an outbreak of blazes stretching almost the entire length of the state — continued to burn out of control on Wednesday, as the toll rose to at least 21 people confirmed dead, hundreds hospitalized, and thousands of buildings destroyed or damaged. But state and local officials warned that with several hundred people still missing and unaccounted for, and some areas still out of reach of emergency crews, those figures are almost certain to rise. The two biggest and most destructive fires had consumed more than 70,000 acres in Napa and Sonoma Counties by Wednesday morning, up from 52,000 on Tuesday afternoon, according to Cal Fire, the state’s firefighting agency. In all, six fires had burned more than 91,000 acres in the two counties, and Cal Fire rated all but the smallest of them as 3 percent contained, or less.
Investing In The Age Of Climate Change l Forbes
  • In this Q&A, Marija Kramer, Head of Responsible Investment Business at Institutional Shareholder Services (ISS), who is responsible for all aspects of responsible investing (RI) offerings, including policy development, as well as research and data screening services covering more than 13,000 global companies for institutions seeking to fully integrate ESG into their investment decision-making, discusses investing in the age of climate change.
Clean Energy
DONG Energy Re-Emerging as Ørsted to Commemorate Oil, Gas Divestment l Sustainable Brands
  • Over the past decade, Danish energy company DONG Energy has ambitiously transitioned away from oil and coal to transform itself into one of Europe’s cleanest, most sustainable energy companies. Since 2006, DONG Energy has reduced carbon emissions by 52 percent and is on track to achieve its 2023 Science-Based Target of reducing emissions by 96 percent. Now, following its recent divestment of upstream oil and gas production, the company has announced plans to change its name — which stands for Danish Oil and Natural Gas — to Ørsted.
Fossil Fuel Divestment
You Don't Need Hydrocarbons for Performance: Behind the Divestment Push l Financial Post
  • Over the winter, Quebec’s Université Laval committed to switch its endowment fund investments in fossil energy to other types of investments. The matter has been the subject at the other tertiary institutions including the University of British Columbia and the University of Ottawa. In other parts of the world a number of universities including, for example, Oxford but not Cambridge, have announced similar divestment plans. But what about the argument that a well-diversified portfolio requires an allocation to companies in the fossil fuel business? “The returns are good. We have got four years of live divestment and we have beaten all our benchmarks in both the equity funds and the balanced funds,” he said. “We are getting good performance (relative to our benchmark) and you don’t need hydrocarbons to get performance,” Wayne Wachell, chief executive at Vancouver-based Genus Capital Management, said. Other institutional investors have adopted a different approach, arguing for divestment and engagement.
Your Money or Your Morals: Capitalism and Fossil Fuel Divestment l Open Democracy
  • The fossil fuel divestment campaign has become one of the most rapidly growing divestment movements in history and has unified an impressive diversity of supporters—from liberal Californian universities to the Rockefeller’s family trust. But the contradictions between divestment and the logic of neoliberalism are enduring, and arguments between campaigners and their opponents are typically framed by questions relating to efficiency, feasibility, and the ethics of using fossil fuels. Such questions are certainly important to ask, but we should also look beyond them, because by doing so we can uncover the deeper ethical contradictions inherent to capitalism which shed important light on strategies for change.
Pressure Grows on £6.3bn Cambridge University Fund to Drop Fossil Fuels l Financial Times
  • Cambridge university’s £6.3bn endowment fund, the largest in the world outside the US, is facing renewed pressure to abandon its investments in fossil fuels after 60 academics and leading campaigners warned they posed huge financial and reputational risks. Academics including Rowan Williams, the former archbishop of Canterbury, as well as campaigners such as Noam Chomsky, a professor at the Massachusetts Institute of Technology, have stepped up efforts to push for action on carbon-intensive investments that are “incompatible with the Paris climate agreement”. Lord Williams said the university had to “think hard” about taking a “leading role in effecting the change we need in our attitude to fossil fuels”.
  • In this opinion piece, the author is writing to consider the following perspective: that the global discourse of climate change, including that of our Grinnell community, glosses over the stark political implications of the fossil fuel industry while simultaneously mythologizing which efforts are effective in protecting the environment.
Cambridge Academics and Activists Join Calls for Divestment l Varsity
  • Over 60 academics and activists have added their names to a submission calling for the University to divest from fossil fuels. The submission, co-written by the National Union of Students (NUS) and the campaigning group People & Planet, calls on the university to fully divest its £6.3 billion endowment. Among those to have signed the submission are the renowned academic Noam Chomsky, Shakira Martin, President of the NUS, and Daisy Eyre, President of CUSU.
Yale’s Climate Hypocrisy (Opinion) l Yale Daily News
  • In this opinion piece, two students discuss how, despite the University’s stated commitment to improving the world, Yale has failed to take any action commensurate with the magnitude of the problem of impending climate change. While the University announced in 2016 that it would divest holdings worth less than $10 million, research reveals that Yale increased its investments in fossil fuel companies by hundreds of millions of dollars in the past two years alone.
Boston College Climate Justice Responds to BC Endowment Growth News l The Heights
  • In this article, Climate Justice at BC (CJBC) explains how, while they support BC’s right to increase the university’s endowment, they fervently believe that investing in fossil fuels is in direct opposition to BC’s Jesuit Catholic values. BC needs to join the movement of nearly 800 institutions worldwide that have divested $5.5 trillion.




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Weekly News Round-Up: October 6th, 2017

Upcoming Events
  • AASHE Conference and Expo: Stronger in Solidarity l AASHE, October 15-18, 2017, San Antonio, TX
    • IEN will be hosting a session on investing in line with the goals of the Paris Agreement and the Sustainable Development Goals and participating in a session on investing in clean energy.
New Resources
  • In this webinar, we will be joined by two students who manage The Dwight Hall socially responsible investment (SRI) fund at Yale, Russell Heller and Gabe Malek. They will discuss the origin, history, and mission of the fund, as well as how the fund is organized and managed. Follow the link to view the recording.
UNH Pathway to Platinum Report l University of New Hampshire
  • In September 2017, the University of New Hampshire (UNH) at Durham became one of only three institutions of higher education in the country to earn a STARS Platinum rating from the Association for the Advancement of Sustainability in Higher Education (AASHE). This recognition places us at the highest level of sustainability performance among colleges and universities. UNH’s Platinum rating was made possible through a concerted, university-wide effort that engaged faculty, staff, and students over the past year. This report offers a snapshot of the metrics that underpin UNH’s accomplishments with regard to sustainability, the benefits that have come from the submission process, and a candid assessment of the challenges and opportunities that lay before us as we continue to work toward our shared vision of sustainability at UNH.
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how new pure electric vehicles coming to market will make for a crowded field where financial losses still loom large; ESG ETFs meet fixed income; and gender policies grab investor focus.
Steve Schueth on Dollars and Change l Wharton Business Radio
  • Steve Schueth, Director of SRI Conference and President of First Financial Affirmative Network, joins hosts Sandi Hunt and Nick Ashburn to discuss the upcoming Sustainable, Responsible, Impact (SRI) Conference on Dollars and Change.
  • Millenials are investing in ESG funds that invest in the stocks and bonds of companies that adhere to specific ESG guidelines. Each fund’s investment criteria differs slightly, but most look to invest in companies that promote issues such as supply chain transparency, a reduction on reliance on fossil fuels and a safe and fair workplace environment. By and large, they’ve been delivering competitive financial returns for their investors. Those in the 18 to 34 age range (as Pew defines the generation) have been leading the charge in increasing the popularity of these funds. The U.S. Census Bureau estimates that there are currently over 75 million millennials in the U.S.—the largest living generation in the country, and they also represent the largest group to invest in ESG funds.
Responsible Investing: Past, Present and the Next 25 Years l 3BL
  • This article contains Insights from the President of Parnassus Investments on the origins of values-based investing, how sustainability jobs are joining the mainstream, and expectations for broader and deeper ESG influences.
  • Natixis Global Asset Management has released the results of its 2017 Global Individual Investor survey. A total of 8,300 individual investors (750 in the UK) have been surveyed between February and March 2017 in 26 countries across Asia, Europe, the Americas and the Middle East, with minimum net investable assets of $100,000.
Cybersecurity Becoming Big ESG Concern l Pensions & Investments
  • Cybersecurity is moving up the agenda for institutional investors and their money managers as a responsible investment consideration, as several high-profile attacks and breaches bring the issue to the front of investors' minds. Sources at retirement plans and money management firms said the issue is being considered in particular when thinking through environmental, social and governance factors within investment portfolios. Some investors already are weaving cybersecurity into their expectations when it comes to money management. 
The Benchmark to End All Benchmarks? l Innovation Forum
  • The new World Benchmarking Alliance’s ranking of performance against the sustainable development goals might just become the list that CEOs worry about – but there are obvious pitfalls it must avoid.
Gender Focus Proves Rewarding for This ETF l Investopedia
  • The universe of exchange-traded funds (ETFs) dedicated to ESG investing principles is growing, and some members of this ETF sub-section are coming of age. That includes the SPDR SSGA Gender Diversity Index ETF SHE, which tracks the SSGA Gender Diversity Index, debuted in March 2016, and as highlighted by more than $341 million in assets under management, it has gained traction with investors. Components in SHE's index are ranked by three gender diversity metrics, with the ETF's objective being "to provide exposure to U.S. companies that demonstrate greater gender diversity within senior leadership than other firms in their sector," according to State Street. SHE is up 12% year to date and 15.5% over the past year.
  • Over the past two years, Salesforce founder and CEO Marc Benioff authorized spending of more than $6 million to close the pay gap between men and women at the cloud software firm. He's also closely aligned with B Team, a non-profit dedicated to the idea that businesses can be at the center of a "new era of sustainable, inclusive business for all." And he has taken a personal interest in causes related to ocean research. Now Salesforce Ventures — one of the most active investors in the corporate venture capital world — is creating a $50 million fund dedicated explicitly to software startups with working on services for workforce development; tools that promote opportunities for women or under-represented groups; companies creating better access to clean energy options or that improve supply chain performance; and apps that help non-profits or non-governmental organizations achieve their missions and interact with partners, donors and volunteers.

Investors Renew Push to get Sanderson Farms to cut Antibiotic Use l Reuters

  • Sanderson Farms Inc shareholders have filed another proposal aimed at convincing the third-largest U.S. poultry producer to stop giving medically important antibiotics to healthy chickens for disease prevention. Sanderson is the only large U.S. chicken producer that has not committed to curbing the use of those life-saving drugs. The new proposal from the non-profits As You Sow and Oxfam America will get a vote from investors at the company’s annual meeting in early 2018 if it is not successfully challenged by the company with regulators. More than 70 percent of medically important antibiotics in the United States are sold for use in farm animals. Scientists have warned that routine use of antibiotics in healthy chickens and other food animals contributes to the rise of dangerous antibiotic-resistant superbug infections, which kill at least 23,000 Americans each year and pose a significant threat to global health.
  • Last year, MSCI asked whether pay awards to U.S. chief executive officers reflected long-term shareholder returns, and found they did not. The bottom fifth of companies by equity incentive award outperformed the top fifth by nearly 39% on average on a 10-year cumulative basis. That study looked at awarded pay — of which 60%-70% reflected incentive stock awards. Awarded pay figures, which are based on the value of the company’s stock at grant date, lay out the range of potential CEO earnings, and are intended to align CEO and shareholder interests. We now extend that study to examine realized pay – how much compensation CEOs actually took home after exercising their equity grants. But realized pay was just as poorly aligned with long-term performance as awarded pay. More than 61% of the companies we studied exhibited poor alignment relative to their peers. We found little correlation overall between realized pay and long-term investment returns, as indicated by the very low R-squared value of 0.0093 shown in the article.
The Challenges of Passive ESG Investment l Pensions Expert
  • Bfinance's Joey Alcock outlines key considerations for schemes opting for passive ESG investment strategies, and says implementation should be adapted to the investor's specific preferences.
Investment Manager News
Northern Trust AM Launches Two ESG Index Funds l Real Estate Investment Times
  • Northern Trust Asset Management (AM) is launching two ESG funds, enabling investors to incorporate ESG principles into their portfolios. The Northern Trust World ESG Leaders Equity Index Fund and the Northern Trust Emerging Markets ESG Leaders Equity Index Fund will be managed by the MSCI ESG Leaders indices, and will enable investment into companies setting the standard in ESG criteria. The MSCI World ESG Leaders Index comprises best-in-class and mid-cap companies in 23 developed markets, while the MSCI Emerging Markets ESG Leaders Index will consider similar companies in 24 emerging market countries. The two funds will be the first in Europe to track the MSCI Leaders indices, in addition to a fund already available to US investors.
Introducing JF Fossil Fuel Free Funds l Jarislowsky Fraser
  • Jarislowsky Fraser and the University of British Columbia are pleased to announce their collaboration on the new UBC Sustainable Future Pool, which will invest in select Jarislowsky Fraser Fossil Fuel Free Funds, to offer a new choice for donors.
Green Bonds
BNP Paribas Launches Green Bond l Financial Times
  • A new bond is hoping to address climate change issues and boost the socially responsible investing market. BNP Paribas Asset Management has launched the Parvest Green Bond which identifies investments expected to have the most positive environmental impact.  It invests in bonds used to finance projects designed to mitigate or address climate change issues. Currently valued at €100m (£89m), it is managed by BNP Paribas AM’s fixed income team while leveraging proprietary analysis provided by its sustainability research team.
Sustainable Development Goals News
  • Enter the 2030 Sustainable Development Goals (SDGs) adopted by the United Nations General Assembly in September 2015— a list of 17 audacious initiatives, including eliminating poverty, fostering decent work and economic growth, and responsible consumption and production. Designed to track where (region, goal), how much and by whom (private, government, charitable) resources flow, they immediately resonated with member countries. The SDGs also provide advisors with a definition of the planetary and societal needs, as well as products to offer clients that align with individual values. The 17 global goals provided by the UN SDGs are therefore a win-win for all involved.  A new report from InvestorFlow finds the most popular UN SDGs—from an impact investing capital allocation standpoint—include No. 1 (no poverty), No. 3 (good health), No. 6 (clean water) and No. 7 (affordable and clean energy).
BoP Investor Unitus Seed Fund Mapping Its Impact To The UN's Sustainable Development Goals l Forbes
  • In case you haven’t noticed, many players in the impact investing universe, from accelerators to funds, are using the UN's Sustainable Development Goals as a framework for their efforts. That is, the 17 SDGs are becoming a standardized language for assessing impact. Unitus Seed Fund recently announced it’s joined the club. According to managing partner and co-founder, it's the first fund in India to do so.  “Impact investing has been held back by the complexity of how we talk about impact,” he says. “By coming together around these goals, you can communicate in a way that’s clearer to investors.”
Clean Energy
Origis Energy USA announces 32.5MW solar project for Georgetown University l PV Tech
  • Origis Energy USA has announced a power purchase agreement (PPA) to develop a 32.5MW PV project for Georgetown University — with the project set to be constructed in La Plata, Charles County, Maryland. Once completed, the solar plant will generate approximately 75,000 MWh of power annually and power 49% of Georgetown’s electricity load for campus operations located in Washington, D.C.
Fossil Fuel Divestment
Catholic Church to Make Record Divestment From Fossil Fuels l The Guardian
  • More than 40 Catholic institutions are to announce the largest ever faith-based divestment from fossil fuels, on the anniversary of the death of St Francis of Assisi. The sum involved has not been disclosed but the volume of divesting groups is four times higher than a previous church record, and adds to a global divestment movement, led by investors worth $5.5tn.
  • In 2013, HSU began the process to divest from fossil fuels. Since then, the goal of divesting has expanded and prompted growth within the university.
  • Chloe Maxmin and other Millennials pushing the Divest campaign are swiftly convincing Wall Street that investing in coal, oil, or natural gas is a sure-fire way to lose billions.
  • This past July the University of Toronto Asset Management (UTAM), the corporation responsible for UofT’s investments, released the 2016 Responsible Investing Report . President Gertler directed the UTAM to make this report back in April 2016, after he rejected a petition to divest the university from its fossil fuel holdings, after years of campus campaigning. This atricle explains why divestment should still be considered.




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Weekly News Round-Up: September 29th, 2017

Upcoming Events
  • IEN Webinar: Student Managed Fund Story - Dwight Hall at Yale SRI Fund l October 6th, 2017, 3:30 p.m.
    • In this webinar, we will be joined by two students who manage The Dwight Hall socially responsible investment (SRI) fund at Yale, Russell Heller and Gabe Malek. They will discuss the origin, history, and mission of the fund, as well as how the fund is organized and managed. Please join us for this presentation followed by a facilitated dialogue with audience questions.
New Reports

Lead From the Top: Building Sustainability Competence On Corporate Boards l Ceres

  • In a climate of increasing investor focus and company attention on the role of the board for sustainability, the report makes the business case for sustainability-competent corporate boards by arguing that factoring in these material risks in decision-making is key for boards to meet their fiduciary responsibilities, drive strong long-term financial performance goals, and help companies increase their competitive advantage. The report addresses three main ways to build sustainability competence on corporate boards: the proactive integration of sustainability into board recruitment, the importance of board education, and the need for directors to engage proactively with investors and other stakeholders on ESG.
EDF Releases Guidebook to Accelerate Investment in Sustainable Infrastructure l Business Insider
  • The Environmental Defense Fund (EDF) released a new framework that will help state and local governments mobilize private investment to repair existing and build new infrastructure that can help mitigate the effects of extreme weather events. The "Investment Design Framework" is part of a larger report, Unlocking Private Capital to Finance Sustainable Infrastructure, that introduces the first-ever roadmap for increasing collaboration with the private sector to fill critical public funding gaps.

Sustainable, Responsible, Impact & ESG Investing

Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how a federal trade panel concluded cheap foreign solar imports are hurting manufacturers, teeing up an opportunity for President Donald Trump to impose tariffs; California considers a ban on fossil-fuel vehicles; and women are missing from Asian boardrooms.
Passive Aggressive: The World of Index Investing is in Flux as Integration into Passive on Course to Become the Norm for New Mandates l Top 1,000 Funds
  • In the last year there has been a quiet revolution taking place as asset owners have been moving to integrate ESG into index designs for new mandates on core passive portfolios. Integrating sustainability into investment strategies was a “minority sport” when David Harris joined FTSE 15 years ago. “For many years all the action on ESG integration has been in active asset management, whilst for passive, the focus has been limited to engagement and voting – in the last year that has all changed – for new mandates integrating climate and sustainability parameters into index design is being applied at scale and to core portfolios,” said Harris.
  • Morningstar, a data-tracking firm, places any fund that uses terms such as sustainable investing, ESG and so on in its prospectus into a category that now has 204 members with $77bn in collective assets. The oldest fund in the Morningstar group dates back to 1971. But nearly half have been launched in the past three years. Two perennial questions have accompanied the deluge of money. The first is whether the approach comes with special costs: ie, is there a virtue discount? Second is the question of what should be measured. This article explores a few answers to each of the above questions.
The Future Role of Philanthropy: Mission-Aligned Investing l Local Investing for Impact
  • Innovative foundations such as Ford, Heron, Kresge, Gates and Rockefeller are leading the way, investing a percentage of their assets in affordable housing, enterprises that create employment in low-income communities and other revenue-producing ventures that serve a philanthropic purpose. What lofty purposes might we accomplish, should this nascent trend catch fire with charitable foundations more broadly? How would communities be transformed if place-focused foundations starting using more of their assets to invest locally to build vibrant, prosperous places?
Schroders: Sustainable Investment on the Rise as ESG Issues Gain Prominence l Investment Week
  • Sustainable investments are becoming an increasing part of investors' portfolios with over half of UK investors raising their allocations over the past five years, according to a global study conducted by Schroders. The study, which surveyed over 22,000 investors globally, including over 1,000 in the UK, found 54% of UK investors had increased their allocation to sustainable investments, while some 67% said sustainable investment was becoming more important to them.
  • A group of 12 investment consultants is publicly backing guidance by the U.K. Pensions Regulator stating that retirement plans should take environmental, social and governance factors into account in investment portfolios. The regulator said in guidance in March that most investments are exposed to long-term financial risks such as climate change and corporate governance. "We expect you to assess the financial materiality of these factors and to allow for them accordingly in the development and implementation of your investment strategy," said the regulator.
Silver Lining for ESG Seen in U.S. Withdrawal From Paris Accord l Pensions & Investments
  • The decision by President Donald Trump to withdraw the U.S. from a global climate pact and the U.K.'s departure from the European Union might not be as bearish for responsible investing as they appear. Glenn Davis, director of research at the Council of Institutional Investors, said while on the face of it the withdrawal looks like it has been a blow to sustainable investing, it is important to consider the attention from the investor community in terms of it being an "impetus" and leading to investors taking charge. Mr. Davis added this is "not as bearish" a situation as it might seem on the surface.
PRI in Person: Stewardship, ESG Policy, Climate Action l Investments & Pensions Europe
  • Japan’s financial services regulator expects the country’s investors to start working together on engagement with companies, according to the deputy director of its corporate accounting and disclosure division. Speaking at the PRI in Person conference in Berlin this week, Amame Fujimoto said the Financial Services Agency’s (FSA) original stewardship code did not explicitly mention collaborative engagement, meaning some Japanese investors might have misunderstood it to not be permitted. The FSA’s first stewardship code was launched in 2014. It was revised this year to remedy certain perceived shortcomings, including that some investors were felt to be engaging with companies only on a superficial level.
ESG or Else Clients Warn Pension Clients l Institutional Investor
  • Some of the U.K.'s largest pension consultants have have agreed to pressure asset owners to consider ESG factors in their investment decisions. In total, 12 major U.K. consultants signed on to remind schemes of the Pensions Regulator's ESG Guidance, where such factors are financially material.
The Real Impact of Impact Investing l GreenBiz
  • Whether it concerns climate change, supply chains, human rights or corruption, investors increasingly seek to better understand the impact that their investments are having. One recent Bank of America press release states that three-quarters of investors want to work with an advisor who offers investment strategies that result in competitive returns and positive impact. An even higher percentage of millennials want to make a connection between financial and societal outcomes — as high as 86 percent, according to a recent Morgan Stanley analysis. But can investors really have a positive impact with their investment dollars while also maximizing financial returns? This is no small matter. It is more than a trillion-dollar opportunity — consider that Bank of America alone has a client base representing over $2 trillion in assets. It is important is for investors to understand, arguably for the first time, how they can maximize their own positive impact — and that maximizing positive impact doesn’t mean having sacrificed financial performance at all.
Supply Chain and the Circular Economy
  • This is a story about an extraordinary effort to transform an ordinary piece of clothing. In June, C&A, the international Dutch chain of retail clothing stores, launched a line of T-shirts certified to the Cradle to Cradle standard, meaning that they were designed and manufactured in a way that is benign to the environment and human health, and whose materials can be recirculated safely back into industrial materials or composted into the soil.
Investment Manager News
MSCI Launches Four ESG Factor Indices l Investment Week
  • MSCI has launched four ESG factor target indices in response to increasing demand from clients. The MSCI Minimum Volatility, Quality, Value and Multiple-Factor ESG Target indices are designed for investors to gain exposure to the firm's existing factor indices, on which they are based, while integrating an ESG focus into their strategy. Rebalancing twice a year, the indices will look to mitigate short-term and long-term ESG risks by not investing in controversial weapons, while the framework enables client specific customization.
Sustainable Portfolio Building Blocks: 2 ESG Funds at the Top of Their Games l Morningstar
  • Interest in sustainable investing is growing, but many investors don’t know where to begin. This article shares two ESG funds–one stock, one bond–that would be solid building blocks for any sustainable portfolio.
Shareholder Engagement
Commentary: CHOICE Act Gives Investors No Voice l Pensions & Investments
  • The Financial CHOICE Act, which the House of Representatives passed in June on a largely party line vote, weakens many important provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and introduces a slew of changes that would harm U.S. capital markets, consumers and investors.  One of the most concerning aspects of the CHOICE Act is its treatment of the shareholder proposal rule, Section 14a-8 of the Securities Exchange Act of 1934. As long-term investors will attest, shareholder proposals are a vitally important, market-based mechanism for communicating with companies, directors and other shareholders. For decades now, the shareholder proposal rule has been highly constructive in facilitating dialogue between shareholders and companies. Yet, the CHOICE Act would eviscerate the rights of nearly all shareholders.
Climate Risk, Science & Regulation
Climate Shocks May Cost U.S. $1 Billion a Day l Bloomberg
  • Stronger hurricanes, hotter heat waves, more frequent wildfires and more severe public-health issues are all adding to the costs of climate change, which will reach almost $1 billion a day in the U.S. within a decade, according to a report released Wednesday. Total costs to address the impact of rising temperatures will swell 50 percent by 2027, to $360 billion annually, according to the study from the Universal Ecological Fund. That equates to about 55 percent of expected economic growth in the U.S.
  • Coming two years after the Paris Agreement, the initial public offering (IPO) of Saudi Aramco will be strongly shaped by climate change. Most analysts believe that Crown Prince Muhammad bin Salman’s US $2 trillion estimate of Aramco’s value was unrealistic, reckoning instead on somewhere in the range $1 to 1.5 trillion. But there has been a gap in commentary, on how moves to decarbonise the energy system will affect the IPO’s valuation. The report discussed in this article found that, compared to a base-case estimate of around $1.5 trillion, the value of Aramco could be between 25% to 40% lower in the IEA’s safer-climate scenarios (which correspond to the absolute minimum ambition within the range of the Paris goals); and if oil prices stay at $50 in real terms, Aramco’s value could be reduced to less than $700 billion, 55% below the base case.The IPO is thus a real test of whether investors are thinking seriously about climate change.
Commentary: Investing in Oil for Now, the Next Year and the Next Decade l Pensions & Investments
  • Although focusing on ESG-conscious oil businesses is beneficial for now, the secular decline in demand that is likely to stem from the wave of changes in policy and in public perception means investors need to look more broadly at their oil allocation. The cultural shift away from carbon-intensive energy production is already underway, with approximately 40% of Denmark's energy supply now coming from renewable sources. In this context, the decline in demand over the next two decades could be substantial. With the lead time on some projects extending across several decades, it is prudent for investors to look at the duration of businesses' projects alongside their sustainability. By investing in businesses with a shorter duration portfolio of projects, investors can benefit from the drivers now supporting the oil industry, without exposing themselves to businesses leveraged for an uncertain future.
  • $52 billion is invested in global environmental conservation annually, but research shows at least six times that sum is necessary to preserve the world's ecosystems. The Forest Resilience Bond could help meet this challenge. In their inaugural report, "Fighting Fire with Finance: A Roadmap for Collective Action," the FRB team details how conservation finance can be applied not just to forest restoration, but to other environmental contexts across the globe. With fire seasons getting longer and more severe, relying on public funds to maintain forest health is increasingly unsustainable. Instead, collaborative approaches like the FRB represent an alternate path forward that redefines how conservation is funded. It may be too late for the 2017 fire season, but there is still hope for the tens of millions of acres in need.
Nine Countries Agree to Reduce Deforestation by 80 Percent l Netral English
  • Members of the Governors' Climate and Forest Task Force (GCF) have agreed to reduce deforestation by 80 percent by 2020 which had been declared in the Rio Branco Declaration and signed at the 2014 GCF Annual Meeting. A quarter of the world's tropical forests are represented by GCF members consisting of 35 provinces in nine countries. To achieve the target, international funding and financing mechanisms are required to maximize investment quality.
General Endowment News
10 Universities With the Biggest Endowments l U.S. News
  • Among the 10 colleges with the largest endowments at the end of fiscal year 2016, the average endowment was $16.6 billion – this represents a drop of around $300 million compared with the prior year. The median U.S. college endowment among ranked institutions at the end of fiscal year 2016 was $56.7 million. All of the colleges with the largest endowments are National Universities, schools that emphasize research and offer not only bachelor's degrees but also master's and doctoral degrees. Below is a list of the 10 universities with the largest endowments at the end of fiscal year 2016. Endowments were examined by campus, not across public university systems. Unranked schools, which did not meet certain criteria required by U.S. News to be numerically ranked, were not considered for this report.
  • University of Missouri System's $1.5 billion endowment pool returned a net 13.7% in the fiscal year ended June 30, said Thomas Richards, treasurer and chief investment officer of the Columbia-based university system, in an e-mail. The return exceeded the policy benchmark of 10.9%. The best-performing asset class was global equity, which returned a net 21.5% in the fiscal year ended June 30, exceeding its 18.1% benchmark, followed by private equity, at 15.6%, above its 12.5% benchmark.
University of Houston Foundation Chalks up 16.06% Return l Pensions & Investments
  • University of Houston Foundation returned a net 16.06% on its approximately $129 million endowment for the year ended June 30, topping its 10.87% benchmark, said a performance report provided by Erik P. Littlejohn, senior vice president, wealth management, at Merrill Lynch, Pierce, Fenner & Smith, investment consultant to the foundation. By asset class, domestic equities returned 21.01% (vs. its 17.9% benchmark); global balanced (unconstrained domestic and foreign stocks, bonds, gold or gold-related securities and cash/cash equivalents), 13.4% (10.87%); global long/short equity hedge funds, 12.88% (3.66%); and total return fixed income, 9.61% (-0.13%).
Penn's 14.3% Return Was Boosted by 'Notable' Stock Performance l Bloomberg
  • The University of Pennsylvania’s endowment posted a 14.3 percent investment return for the 12 months through June, with equities fueling gains just like at other large college funds. The value of the endowment rose 14 percent to $12.2 billion. The fund’s growth of $1.5 billion includes investment returns and new gifts, the Ivy League school in Philadelphia said Thursday in a statement.
Caltech Gains 17.8%, Among Highest Endowment Returns l Bloomberg
  • California Institute of Technology’s endowment gained 17.8 percent in the year through June, placing it among the top performing college funds. The returns helped boost the value of Caltech’s fund to $2.6 billion as of June 30, according to a person with knowledge of the matter, who asked not to be identified because the information isn’t public. Only Grinnell College has posted a better return so far, at 18.8 percent, among at least two dozen of the largest college funds that began reporting, according to data compiled by Bloomberg. Grinnell’s endowment had a preliminary value of $1.8 billion at June 30. Harvard University has the lowest gain at 8.1 percent.
Fossil Fuel Divestment
Divestment From Fossil Fuels has not Caused Syracuse University’s Endowment to Suffer, Official Says l The Daily Orange
  • More than two years after Syracuse University announced it would divest from fossil fuel companies, the university’s chief financial officer said there is no evidence the endowment has suffered as a result of divestment. Amir Rahnamay-Azar, SU’s senior vice president and chief financial officer, said in an email that SU’s $1.25 billion endowment has increased investment performance by 12 percent in fiscal year 2017. The endowment is a pool of money collected from donors that is invested in the stock market. The funds are then used for scholarships and academic programs on campus. The university’s growing endowment, in the wake of its headline-grabbing decision to divest from fossil fuels, may be a signal to other schools that divestment is a viable option, experts said.
Friendship and Divestment at Amherst College l The Amherst Student
  • In this opinion piece, an Amherst College student discusses the College's Direct Action Coordinating Committee's campaign pressing for divestment from fossil fuels and private prisons, and how it relates to one of the three pillars of community life at Amherst: friendship.




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