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.
- 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
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.
- 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 LeaderSustainable, Responsible, Impact & ESG InvestingBlackRock Hires Former Obama Climate Adviser: Memo l ReutersESG Investing? Don’t Forget About Bonds l Barron'sWashington University in St. Louis Board of Trustees Meets, Hears Updates on Endowment, Plan for Excellence l The SourceCalifornia Fires Lay Waste to 140,000 Acres and Rage On l New York TimesDONG Energy Re-Emerging as Ørsted to Commemorate Oil, Gas Divestment l Sustainable BrandsYou Don't Need Hydrocarbons for Performance: Behind the Divestment Push l Financial Post
- 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 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.”
The Top-Performing Sustainable Funds l Barron's
- 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.
A Look at the Largest Sustainable Investing ETF l Investopedia
- 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.
- 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.”
- 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.
- 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.
- 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.
ESG Focus Dents Returns, Investors Fear l Institutional Investor
- 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.
- 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.
Investing Ethically via Passives l FT Adviser
- 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.
- 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
- 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.
- 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 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 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.
- 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.
- 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.
- 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
- 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.
Berkeley Endowment Management Co. selects new CIO l Pensions & Investments
- 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 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
- 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.
- 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.
- 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
- 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.
- 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.
- 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”.
Letter to the Editor: The Case for Divestment at Grinnell College l The Scarlet and Black
- 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.
- 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.
- 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.
- 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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