Weekly News Round-Up: October 14th, 2016

Call for Letters of Interest

Jessie Smith Noyes Announces Open Call for Investment Advisors to Lead Next Evolution of Social Justice Investing l Jesse Smith Noyes Foundation

  • Jessie Smith Noyes Foundation (Noyes), a pioneer in the field of sustainable, responsible and impact investing for social justice today announced an open call for letters of interest (LOI) from investment advisors to advance its mission-aligned investing strategy. LOIs are due by November 1st. Noyes will review the LOI and then select up to five firms to receive a more detailed request for proposal, and publish a broad analysis and share learnings with philanthropic and investment institutions.
New Resources / Reports
 
  • According to a recent study, just 90 companies have produced and marketed the fossil fuels and cement responsible for almost two-thirds of the world’s industrial carbon emissions over the past two and a half centuries. Fifty are investor owned coal, oil, and natural gas companies. All companies in this analysis must do more to distance themselves from the spread of climate disinformation. 
  • In its 2014 biennial report on assets under management, US SIF, The Forum for Sustainable and Responsible Investment, identified $6.6 trillion invested in the field in the United States, a 76% increase from its 2012 study. This report outlines potential challenges in the continued growth of sustainable investing and proposed solutions.
  • The ImPact is a membership network of family enterprises (family offices, foundations, and businesses) that are committed to making investments with measurable social impact. This case study explores the Rockefeller Brothers Fund’s mission-aligned and impact investing strategies. 
 

Sustainable / ESG Investing

The SEC Revisits Sustainability: Will Sustainability Reporting Become Mandatory for Publicly-Traded U.S. Corporations? l Lexology

  • The United States Securities and Exchange Commission (“SEC”) is reviewing sustainability. On April 13, 2016 the SEC issued a “Concept Release” seeking public comments on 340 topics relating to business and financial disclosure requirements for publicly-traded companies under Regulation S-K. At issue is to what extent ESG reporting by publicly-traded companies should be required by SEC regulations.
  • Out of more than 1,700 ETFs, just 35 check the sustainable box, according to Morningstar, and 10 of those made their debut this year. While ETFs as a whole are steadily winning market share from mutual funds, assets in sustainable ETFs—a mere $4 billion as of the end of August—are a far cry from the $174 billion in their mutual fund counterparts.
Clean Energy Investment Dropped 43% in Worst Quarter Since 2013 l Bloomberg
  • Global investment in clean energy fell to the lowest in more than three years as demand for new renewable energy sources slumped in China, Japan and Europe. Third-quarter spending was $42.4 billion, down 43% from the same period last year and the lowest since the $41.8 billion reported in the first quarter of 2013, Bloomberg New Energy Finance said.
Human Rights Most Important Issue in Corporate Supply Chains l Social Funds
  • Ethical Corporation reports on the results of its survey of corporations and other stakeholders, addressing risk and opportunity in corporate supply chains. Asked what the biggest supply chain issues are, respondents cited human rights (although for supply chain professionals, human rights were second, following traceability). Fifty percent of CSR professionals consider human rights to be the most important issue. 
Sustainable Investing an Opportunity for Asset Managers to Generate Value and Sustain Active Management Fees l Moody's Investor Services
  • Global assets under management (AUM) linked to firms that have become signatories to the PRI rose 195% to $62 trillion in April 2016 from $21 trillion in 2010. Investor expectations and regulations are driving demand for sustainable investing, says Moody's Investors Service.
The Top 200 Sustainable Mutual Funds l Barron's
  •  A company’s efforts toward sustainability, such as fair labor practices, good environmental stewardship, and diverse internal leadership, improves returns, according to research by index provider MSCI. And funds that invest in these sustainable companies are top performers themselves, Barron’s finds in it's first annual performance ranking of the 200 most sustainable funds.
Bloomberg Brief l Sustainable Finance
  • This weeks Bloomberg Brief highlights how index funds impact your overall investment strategy, third quarter clean energy investment drops, soda taxes around the globe, and India's first corporate carbon price from conglomerate Mahindra & Mahindra.
A New Threshold for Sustainable and Impact Investing: What Investors Need to Know l Pensions and Investments
  • Compared with a decade ago, sustainable and responsible investors today encompass a much wider array of managers and institutions that are seeking to manage risk and find opportunities in a complex, globalized marketplace. According to a 2014 US SIF Foundation report, the most recent survey data available, assets managed in the U.S. with strategies that consider environmental, social or corporate governance issues in investment analysis or shareholder engagement grew 76% to $6.57 trillion from 2012. This article highlights what investors need to know about this growing field.
Higher Sustainability Ratings Can Mean Lower Risk | Morningstar 
  • There is a tendency to assume that sustainable investing is only about those who want their investments to reflect their values. But large numbers of institutional investors and asset managers are incorporating into their investment processes the consideration of how companies address material ESG issues not to make any kind of statement about values but because they find company ESG evaluations pertinent information that should be considered in any complete investment analysis.
 
 
Shareholder Engagement
 
Trillium Files Workplace Diversity Shareholder Proposal with Visa, Inc. l Trillium Asset Management
  •  Trillium Asset Management filed a shareholder proposal with Visa, Inc. (NYSE: V) asking the company to prepare a diversity report available to investors to include: “A chart identifying employees according to gender and race in major EEOC-defined job categories, listing numbers or percentages in each category, and a description of policies/programs focused on increasing gender and racial diversity in the workplace.”
2017 Proxy Season Roll Out -- What's Next For Shareholder Engagement? l Forbes
  • The enactment of the Dodd–Frank Wall Street Reform and Consumer Protection Act transformed the corporate atmosphere in 2010. The 2,300-word document produced a greater level of transparency for stakeholders, and subsequently, an ever-increasing number of repercussions in the boardroom and beyond. The standard for disclosure has reached new heights—or more accurately, lengths—over the last six years in terms of content, which can discourage effective shareholder communications. A 2015 Investor Survey conducted by Stanford, RR Donnelley and Equilar found that only 38% institutional investors believe that corporate disclosure on executive competition is clear, easy to understand and effectively disclosed.
 

Climate Risk, Science & Regulation
 
Global Demand for Energy will Peak in 2030, Says World Energy Council The Guardian
  • Global demand for energy per capita will peak in 2030 thanks to new technology and stricter government policies, the World Energy Council has predicted. In a report on a range of scenarios for global energy use, the group of academics, energy companies and public sector bodies outlined a “fundamentally new world for the energy industry” calling it the “grand transition”.
Global Aviation Deal Seen as Long-Term Carbon Market Boost l Reuters
  • A new global pollution deal for aviation is seen providing a long-term boost for carbon markets by generating demand for environmental offset projects. The carbon offsetting scheme will start in 2021 with at least 65 participating countries in its voluntary phases, following the deal's approval on Thursday by the International Civil Aviation Organization, a U.N. agency.
Mahindra & Mahindra first Indian company to announce Carbon Price l Web India 123
  • Mahindra & Mahindra today became the first Indian company to announce its internal Carbon Price of 10 dollar per tonne of carbon emitted. Mahindra's carbon price is aligned with its business commitment to reduce its Greenhouse Gas emissions by 25% over the next three years.
World Bank Says Paris Climate Goals at Risk From New Coal Schemes l The Guardian
  • Slowing down construction of coal-fired power stations will be vital to hit globally agreed climate change goals, the World Bank president, Jim Yong Kim, said as he outlined a five-point plan to flesh out last year’s Paris agreement to reduce CO2emissions.
  • The Bundesrat, the upper house of Germany’s parliament, passed a resolution on Monday that calls for the elimination of vehicles powered by gasoline and diesel engines by 2030. The resolution is nonbinding and needs the approval of the European Union, as it would also apply to vehicles from other EU nations.
Southwestern U.S. Faces ‘Mega-Drought’ by End of Century l Time 
  • The U.S. Southwest could face destructive mega-droughts unless dramatic action is taken to curb emissions of the greenhouse gases that cause climate change, according to new research. Researchers behind the study, published in the journal Science Advances, found that expected temperature increases will lead to a 70% chance of a mega-drought assuming a moderate increase in precipitation. If rainfall remains constant or falls, the chance of a mega-drought soars above 90%, according to the study.
Climate Change Blamed for Half of Increased Forest Fire Danger l The New York Times
  • In a new study published in Proceedings of the National Academy of Sciences, scientists from the University of Idaho and Columbia University have calculated how much of the increased scope and intensity of Western wildfires can be attributed to human-caused climate change and its effects. They state that, since 1979, climate change is responsible for more than half of the dryness of Western forests and the increased length of the fire season. Since 1984, those factors have enlarged the cumulative forest fire area by 16,000 square miles, about the size of Massachusetts and Connecticut combined, they found.
 
 
Fossil Fuel Divestment
 
  • Columbia University's Advisory Committee on Socially Responsible Investing will close its survey on whether the University should divest from companies that mine tar sands. This fall ACSRI released an internal proposal that would call for divestment from companies that mine tar sands. While students remain divided on the merits of such an approach, activist group Columbia Divest for Climate Justice has criticized the proposal for being inadequate and has pressed students to reject the proposal entirely.
Fossil-Fuel Divestment is Essential to Macalester College’s Identity l The Mac Weekly
  • “Our investments should reflect our values. If we value urban sustainability, we must divest.” This was the message chalked outside of Carnegie Hall last Friday, calling for the Board of Trustees to divest the endowment from fossil fuels. Macalester invests 25 million dollars in the Carbon Underground 200, the two-hundred largest coal, oil and gas companies.
McGill University Remains Apathetic Towards Climate Change (Opinion) l The McGill Daily
  • For nearly four years, Divest McGill has been campaigning for McGill University to withdraw the over $70 million it has invested in the fossil fuel industry. Divest McGill student activists are disappointed with the administration's support.
Climate Justice at Boston College Holds Week-Long Demonstration for Divestment l The Heights
  • Eleven demonstrators stood in silence Tuesday morning on O’Neill Lawn holding signs that read “No Coal” and “BC: Whose Side Are You On,” at a silent protest hosted by Climate Justice at Boston College (CJBC). This week, organizers from CJBC will hold 15-minute long demonstrations each day between classes to publicize its stance on climate justice.
Occupy Northeastern: Journalism Students Cover Divestment Protests As They Go Into 2nd Week l WGBHNews
  • Starting October 3, more than 100 students took part in a week long protest, with some of them camping out on the university’s Centennial Common. The action was organized by the student group DivestNU. "The reason we are here is to push our university to reconcile its relationship to the fossil-fuel industry and answer the calls of its student body,” DivestNU co-founder Austin Williams said.

California State Teachers Retirement System Ponders Emerging Market Coal Divestment l Top 1000 Funds

  • The $188.8 billion California State Teachers Retirement System, CalSTRS, will decide next April whether or not to divest from non-US thermal coal. The giant US fund only has a small exposure to emerging market coal, but the decision, which would follow on from the fund divesting from US thermal coal, and investing in a low carbon index strategy earlier this year, isn’t straightforward.
  • The Massachusetts Appeals Court has unanimously rejected a lawsuit by Harvard University students seeking to force the university to sell its holdings in the fossil fuel industry. The appeals court found that the students failed “to show that they have been accorded a personal right in the management or administration of Harvard’s endowment that is individual to them or distinct from the student body or public at large.”
Salem State University Trustees Vote for Partial Divestment From Coal l The Salem News
  • Salem State University trustees voted Thursday night to stop investing in coal companies but fell short of a long-standing demand by hundreds of students and faculty to fully divest from all fossil fuels. In a meeting that drew a standing-room-only crowd of about 100 people, trustees said it would not be “financially prudent” to freeze all of the university’s investments in energy companies.