Weekly News Round-Up: October 25, 2019

In this week’s news, there’s an important call to action by six members of Congress to college and university endowments and their advisors. We also highlight an opportunity for endowments to improve transparency on the extent to which their investment managers reflect the rich diversity of our country and student populations.

If you’re inspired by the Financial Times special report on Responsible Business Education below, please join IEN’s SIILK Network activities!

We look forward to hearing from network members who are connecting at this week’s SOCAP19 conference, the AASHE conference this weekend (including IEN’s half-day workshop on Sunday October 27!), and SRI Conference in November. We’ll also have a chance to connect virtually on the next IEN webinar November 7th, Using Endowment Portfolios to Invest in Sustainable Forestry Strategies in the U.S. - register here to join that conversation!

 

IEN Member Survey

Your opinion matters! Please take 5-10 minutes to participate in this year’s IEN Annual Member Survey. The annual member survey is an essential way for us to assess what's working, what's not, and to set priorities for 2020.

Participate in the survey now for the chance to win a free registration to the Higher Education Climate Leadership Summit, taking place February 23-25, 2020 in Atlanta, GA–our flagship annual event bringing together presidents, trustees, CFOs, endowment staff, and sustainability leaders to explore the risks and opportunities climate change poses for colleges and universities and their endowments.

 

New IEN Members
 

Renewing IEN Members

The network appreciates the continued engagement of Investment Manager, Consultant, Non-profit, and Individual Members:

 

Opportunities for Action

Endowment Watch | Diverse Asset Managers Initiative

  • Higher education has been a sector of American economic society that fails to report on the demography of endowment fund managers. That’s why DAMI created Endowment Watch, a national campaign calling on universities to be transparent and intentional about who exactly is managing their assets. Join higher education institutions like Georgetown University in their efforts to track and report who manages their assets. Learn more about the Diverse Asset Managers Initiative here.

Call for Leadership Applications | AASHE

  • Deadline: November 6. AASHE is now accepting applications for its Board of Directors, Advisory Council and STARS Steering Committee. Since the approval of AASHE’s Diversity, Equity & Inclusion policy in 2018, the organization has continued to address the need to increase diversity and inclusion, and emphasize the interconnectedness of racial equity & social justice with sustainability. All members who are passionate and interested to apply, and AASHE particularly welcomes and encourages applications from people of color.

Global Investor Statement to Governments on Climate Change | The Investor Agenda

  • Deadline: November 22, 2019. For Climate Week, 515 investors managing $35 trillion in assets released the Global Investor Statement to Governments on Climate Change - that's the largest-ever group of investors calling on governments to step up climate ambition. The statement is still open for signature by institutional investors worldwide!

Sign-on Opportunities:

 

New Resources & Reports

Strategies to Address Climate Change Risk in Low- and Moderate-income Communities | Federal Reserve Bank of San Francisco

  • This issue of the Community Development Innovation Review offers strategies that address climate change risk in low- and moderate-income communities. As these communities begin to grapple with a changing environment, strategic investments can increase resiliency and support adaptation while simultaneously advancing community development priorities. The 19 articles in this issue of the Review consider these investment opportunities from a diverse set of community, financial, economic, and academic perspectives.

12 Reports on Carbon Pricing, Climate Security, and More | Yale Climate Connections

  • Over the last several months, many governmental agencies and nongovernmental organizations released major new reports, underlining the urgency of meeting the challenge of climate change and offering recommendations for ways to meet that challenge. Yale Climate Connections has summarized and linked to 24 reports; the first set of 12 was posted last week.
 

Sustainable Investing By Institutional Asset Owners

Fossil Fuels & the Smith Endowment | Smith College

  • The Smith College Board of Trustees voted at its October meeting to (1) exclude all future investments with fossil fuel-specific managers from its endowment, and (2) begin an immediate phaseout of all current investments with fossil fuel–specific managers in the Smith College endowment. This phaseout will be achieved through the sale, maturity or liquidation of investments held by fossil fuel–specific managers over a projected period of 15 years.

Duke Moves Toward Clean Energy Investments After Rejecting Fossil Fuel Divestment | The Chronicle

  • Duke will not stop investing in companies that use fossil fuels, but President Vincent Price has approved several steps to promote alternative energy sources: strengthening Duke Management Company’s corporate governance capabilities, such as using proxy votes, making requests and joining shareholder resolutions to encourage companies to look into alternative energy sources; more effectively marketing its social choice (ESG) fund, to which socially-conscious donors can contribute, and explore the creation of a “green” fund focusing on environmental issues; and allocating funding to the student Duke Impact Investment Group, which promotes socially- and environmentally-conscious investment.
 

Sustainable, Responsible, Impact & ESG Investing

70% of Institutional Investors Apply ESG to Investment Decisions – Survey | Pensions & Investments

  • Some 70% of institutional investors in Canada, the U.S. and the U.K. apply ESG principles to investment decisions, according to the 2019 Responsible Investing Survey from IEN member RBC Global Asset Management. A major reason for that is the belief that an ESG approach can mitigate risk and enhance returns, with 53% of respondents citing those factors. Read more coverage of the survey here.

Different Paths Lead to Sustainable Investing | Environmental Finance

  • Principles of Responsible Investment CEO Fiona Reynolds outlines her thoughts on the differences and similarities between ESG and impact approaches to investing.

The best investment? | London Business School

  • ESG investing is now mainstream – but measuring the performance of ‘green’ products and their asset managers is complex.

Terra Silva Has $90 Million in ‘Catalytic Capital’ for Carbon Reduction in Tropical Forests | Impact Alpha

  • Forests are climate-negative technology at scale. So investments in tropical forests should be investment-ready, and fund managers able to tap the opportunity should be rolling in capital.

ESG Hardliners Blacklist $16 Trillion U.S. Treasuries Market | Yahoo Finance

  • Some of Europe’s strictest ESG funds are snubbing the world’s most liquid investment -- the $16 trillion U.S. Treasuries market. A $36 billion French state pension plan and ESG funds run by the likes of Erste Asset Management, Joh. Berenberg Gossler & Co. and Union Investment all shun Treasuries based on the U.S. government’s stance on capital punishment or climate change.

3 Weapon-Free Funds Socially Responsible Investors Can Buy | Yahoo Finance

  • Weapon Free Funds calculate the total number of flagged holdings in a fund’s portfolio by taking into account the total amount and percentage of a fund’s assets invested in such companies.

Can You Really Make an Impact in Listed Equities? | Environmental Finance

  • One of the big debates among impact investors is about whether listed equities investments can really help meet the SDGs. This article explores the issue.
 

Shareholder Engagement

Major Environmental Groups Call on Businesses to Lead on Climate Policy | Ceres

  • Eleven leading environmental and sustainable business organizations published an open letter in the New York Times, urging the CEOs of Corporate America to step up their engagement on climate policy. The letter calls on businesses to adopt a science-based climate policy agenda that is aligned with the recommendations of the Intergovernmental Panel on Climate Change, and with the goal of achieving net-zero emissions by 2050.

Exxon and Oil Sands Go on Trial in New York Climate Fraud Case | Inside Climate News

  • Exxon is accused of disclosing one set of projected carbon costs to investors while planners used an entirely different set internally for evaluating investments. The public set was more conservative and projected that climate policies would be more stringent, while the internal one assumed more modest attempts to limit emissions. The effect of using these dueling estimates, the New York attorney general says, was that Exxon hid tens of billions of dollars in potential costs, downplaying the risk to investors and inflating the company's value. Another climate-related suit may be on its way from the Massachusetts attorney general as well. 

Fisher Fallout Could Top $2.6 Billion | Chief Investment Officer

  • The cost of Fisher Investments founder Ken Fisher’s reportedly sexist and misogynistic comments continues to mount and could top $2.6 billion or more after several institutional investors said they were looking for the exits. Read more about from the perspective of the CEOs who were willing to speak up about inappropriate behavior here.

NYC Comptroller Calls on 56 Firms to Adopt Rooney Rule | Chief Investment Officer

  • New York City Comptroller Scott Stringer is calling on 56 companies to adopt the so-called “Rooney Rule” and establish policies to consider women and minorities when hiring CEOs and board of trustee members.

SEC Issues Legal Bulletin Regarding Shareholder Proposals Exclusion | National Law Review

  • The Division of Corporation Finance (Staff) of the Securities and Exchange Commission issued Staff Legal Bulletin No. 14K (SLB). The SLB provides new guidance regarding the Staff’s views as to when registrants may properly exclude shareholder proposals under the “ordinary business” exception.
 

Sustainable Business Spotlight

Read the latest observations on sustainable business trends from Greenbiz:

Good Business | Bloomberg

  • In Bloomberg’s weekly guide to sustainable finance, read about water-related exchange-traded funds, the case for US regulations to catch up with 21st century definitions of fiduciary duty, and the fact that female CFOs are outperforming their male peers by $1.8 trillion.
 

Community Impact Investing

Gov. Northam Announces Launch of Opportunity Virginia | NBC

  • Gov. Ralph Northam has announced the official launch of Opportunity Virginia, a new initiative designed to leverage the federal Opportunity Zone program. The program was launched at the University of Virginia’s Darden School of Business and was developed by Virginia Community Capital, with leadership from LOCUS Impact Investing and others.

Calvert Impact Capital Passes $500 Million Milestone in Distribution of Community Investment Notes via Incapital Network | PR Newswire

  • Calvert Impact Capital, the mission-driven financial institution dedicated to creating a more equitable and sustainable world, announced that it has surpassed $500 million in distribution of its Community Investment Notes through Incapital's network of broker-dealers and financial advisors.
 

Diversity, Equity, & Inclusion

The Case for Diversity Has Been Made. Let’s Move Past It | Fortune

  • In Fortune’s raceAhead newsletter, business champions discuss how to move beyond simply making the case for diversity, towards effective action.
 

Gender Lens Investing

Gender-Smart Investing: More than Two Dozen New Funds Investing with a Gender Lens | Impact Alpha

  • (Subscription required) This article provides a summary of the growth of gender lens investing options.

2X Gender Equality Challenge Adopted by European Investment Bank | Government Europa

  • The 2X Challenge commits the G7’s development finance institutions (DFIs) to unlock a collective total of $3bn in investment in projects supporting the economic empowerment of women in developing countries by 2020. DFIs are encouraged to utilise their own funds, as well as mobilising private capital investment, to support gender equality in development finance through offering leadership opportunities for women, improving women’s quality of life and access to employment; and providing financial and enterprise support.
 

Student Managed Funds & Sustainable Finance Curriculum

Special Report: Responsible Business Education | Financial Times

Penn State Smeal to Open Center for the Business of Sustainability in 2020 | Penn State

  • The Penn State Smeal College of Business will launch the Center for the Business of Sustainability in 2020 to support how business meets the growing demand for resources in a socially just and environmentally sustainable manner.
 

Investment Firm News

Morgan Stanley Wins Three Industry Awards from Money Management Institute and Barron’s for Innovation in Investment Advisory Solutions | BusinessWire

  • Morgan Stanley announced that it has won three industry awards from the Money Management Institute (MMI) and Barron’s, including for Sustainable Investing for Morgan Stanley Impact Quotient.

Morgan Stanley Wealth Management Introduces New Tool Kit to Effectively Integrate Jewish Values into Charitable Giving and Investing Strategies | Business Wire

  • The Jewish Values Tool Kit, a collaboration between Morgan Stanley’s Investing with Impact and Philanthropy Management groups, is designed to enable Financial Advisors to guide their clients in creating investment and strategic grant making portfolios that are consistent with their long-term financial goals and reflect a personalized vision of aligning with their Jewish values.

UBS Eliminating SMA Management Fees | Investment News

  • In an internal memo, the Swiss bank announced it is eliminating management fees on select separately managed accounts. While there is no specific price set on SMAs, clients typically pay a 1% management fee. Investors in so-called premium strategies such as tax management and sustainable investing will still be charged incremental fees.

Entelligent, Societe Generale Partner to Offer First-of-its-Kind Climate Change Investment Product | Yahoo Finance

  • Societe Generale is the first major financial institution to market a product that incorporates Entelligent's proprietary, predictive climate model, Smart Climate E-Scores, in an effort to improve financial performance. Societe Generale is a founding signatory of the Principles for Responsible Banking, and has committed to reducing its exposure to the thermal coal sector to zero by 2040.
 

Economic & Policy Shifts

Marc Benioff: We Need a New Capitalism | New York Times

  • In this op-ed, Salesforce chairman and co-chief executive Marc Benioff argues that the current system has led to profound inequality, and to fix it, we need businesses and executives to value purpose alongside profit.

We're Not "Polarized" Everywhere. In Maine, Democracy and Green Energy Win Big | Common Dreams

  • This post profiles Maine State Rep. Chloe Maxmin, a co-founder of the Divest Harvard campaign elected to the state legislature in part on her commitment to climate and economic justice.

No. 1 Economy-Affecting Trend for the Next 30 Years: Aging Populations | Chief Investment Officer

  • In a poll by Ivestcorp of 185 institutional investors, representing more than $10 trillion in assets, the top trend that 78% of them named, an aging populace, trumped the No. 2 trend, artificial intelligence (No. 2), climate change (No.3), urbanization (No.4), and trade (No. 5).
 
 

Climate Risk, Science, and Clean Energy

Climate Change Will Cost Us Even More Than We Think | New York Times

  • Experts from Harvard University and the Grantham Research Institute on Climate Change and the Environment explore why economists greatly underestimate the price tag on harsher weather and higher seas.

IMF to Examine Climate Risk to Financial Markets: Official | Reuters

  • The International Monetary Fund is examining the impact of climate on the world’s financial markets and whether it is priced into market valuations, the head of the global lender’s markets division said.

Climate Risk in Private Real Estate Portfolios: What’s the Exposure? | MSCI

  • As a long-term asset class, private real estate is especially vulnerable to climate-related events, such as water stress, hurricanes and flooding. The impact for investors could range from increased operational costs (e.g., damage to the property, repair costs) to the potential for higher insurance costs, property devaluation and in some extreme cases, the complete loss of the property.

Are Wildfires Caused by Utilities or Climate Change? Yes | New York Times

  • An expert writes that both contribute to California’s increasingly dire problem.
 
 

General Higher Education Endowment News

Legislators Urge Endowments to Boost Asset Manager Diversity | Chief Investment Officer

  • Six members of Congress have sent a letter to the National Association of College and University Business Officers (NACUBO) calling for greater diversity among asset managers handling endowment funds of higher education institutions. The letter cited recent research from the Knight Foundation that found that women and minorities manage a mere 1.3% of the $69 trillion asset management industry. The letter also cited a 2018 NACUBO-TIAA survey of 802 institutions in which only 4% had a diversity and inclusion policy for hiring managers. Read NACUBO’s full response here.

Penn CIO Peter Ammon on Why ‘People Matter Immensely’ to Successful Investing | The Wharton School University of Pennsylvania

  • In this interview, Peter Ammon, the University of Pennsylvania’s chief investment officer, discusses his work, investment approach, and the qualities of a great investor. The Penn Office of Investments is responsible for investing Penn’s endowment and pension assets. The endowment is made up of some 7,000 individual endowment funds, benefiting the university’s schools, research centers and the University of Pennsylvania Health System. Penn’s endowment produced an investment return of 6.5% for the year ending June 30, 2019, which was a decrease from 12.9% last year, and total endowment assets increased by $873 million during the year, reaching $14.7 billion as of June 30.

Slowing Returns Throw ‘Endowment Model’ of Investing into Doubt | Financial News

  • Barron’s takes a look at the fate of the much-touted ‘Yale model’ of investment.

Case Study: Seeking More Agility, University of California Redesigns Fintech Platform | Chief Investment Officer

  • Collaborating with Solovis to transform data and processes, the university expects to save $2 million annually over 10 years with more agile platform.

New Federal Taxes Will Cost Harvard $50 Million | Boston Globe

  • Harvard University is preparing to pay the federal government an estimated $50 million in new taxes, including one for the first time levied on its massive endowment. The anticipated cost of the new taxes, approved by President Trump and the Republican-controlled Congress in late 2017, was included in Harvard’s annual financial report. The university estimates that the tax burden accounts for about 1 percent of its operating revenue.

Math Professor’s Legacy Lives on Through $300,000 Endowment for Sustainability | Penn State

  • Fueled by faith and a passion for sustainability, the late John Roe created a legacy at Penn State that will continue to inspire students for years to come, thanks to a $300,000 endowment. The Dr. John Roe Fund for a Just and Sustainable Future in Penn State Outreach will help to ensure the continuation of Roe’s unique approach to teaching mathematics through applications to sustainability.

Princeton, Columbia Endowments Return 6.2%, 3.8% | Chief Investment Officer

Shrinking Enrollments Force Model Change on Colleges and Universities | Nonprofit Quarterly

  • Leaders of colleges and universities face an existential problem: since 2011, enrollment in two- and four-year programs has declined by more than 2.9 million students. Only a small number of schools, about 11 a year, have been unable to enroll enough students to remain sustainable, but what’s not small is the economic pressure that builds as student bodies shrink. It pushes against the traditional nature and culture that has marked the core purpose of higher education.
 

General Higher Education Sustainability News

UMass Lowell Unveils New Sustainability Program with $1 Million Gift | Sentinel and Enterprise

  • Continuing its celebration highlighting 125 years of existence, UMass Lowell honored its sustainability amenities by introducing an expanded program funded by a former student. Brian Rist, a member of the college’s class of 1977, donated $5 million with his wife Kim to the school last year with about $1 million dedicated to the university’s sustainability efforts.

A Road Map for Climate Action and Sustainability | University of Pennsylvania

  • Ten years after releasing its original Climate Action Plan, the University of Pennsylvania has launched the Climate & Sustainability Action Plan 3.0, outlining Penn’s goals for improved environmental performance from 2019 to 2024.

College Signs 20-Year Pact to Acquire Renewable Electricity | Grinnell College

  • Grinnell College has signed a 20-year purchase agreement with Iowa-based Trusted Energy, which will provide renewable electricity from a solar installation to be built on 30 acres of farmland adjacent to campus. The agreement will enable the College to save approximately $3 million in electricity costs over 20 years. In addition, the College will reduce its yearly carbon footprint by 18%.
 

Private Prison Divestment

Harvard Prison Divestment Campaign Delivers Report to Mass. Hall | Harvard Crimson

  • Members of the Harvard Prison Divestment Campaign delivered their 64-page report detailing the University’s alleged investments in companies tied to the prison industry to Massachusetts Hall Monday.

CalPERS Sells Holdings in Private Prison Firms | Pensions & Investments

  • CalPERS sold its $8.86 million position in private prison management companies CoreCivic and GEO Group as part of the narrowing of its passively managed customized benchmark of public stock, according to a spokeswoman for the $381.5 billion Sacramento-based pension plan, noting that, “It was not a divestment. They were removed from the benchmark.”
 

Fossil Fuel Divestment

How Climate Divestment Won Converts With Deep Pockets | Washington Post

  • This Q&A article provides an overview of the fossil fuel divestment movement.

Fossil Fuels & the Smith Endowment | Smith College

  • The Smith College Board of Trustees voted at its October meeting to (1) exclude all future investments with fossil fuel-specific managers from its endowment, and (2) begin an immediate phaseout of all current investments with fossil fuel–specific managers in the Smith College endowment. This phaseout will be achieved through the sale, maturity or liquidation of investments held by fossil fuel–specific managers over a projected period of 15 years.

U.K. Politicians Push for Divestment of BP and Shell Shares | Bloomberg

  • A group of 300 British politicians are pushing the trustees of the Parliamentary Pension Fund to sell shares of BP Plc and Royal Dutch Shell Plc to ward off the risks of climate change.

Harvard Faces Protests over Its Amazon Land Holding | Chief Investment Officer

  • The Harvard Management Company, which oversees the university’s investments, is under fire for owning environmentally sensitive land near the Amazon in Brazil, which critics say leads to environmental devastation. Activist students are demanding that the university sell 300,000 hectares of wooded grass that borders the rainforest.

SSMU Passes Moratorium on Auxiliary Fees to Achieve Divestment | McGill Tribune

  • The Student’s Society of McGill University (SSMU) debated a motion preventing the creation of new auxiliary fees and increases to existing fees, which are collected from students to be used by the McGill administration for various projects and departments. By withholding the creation or increase of these fees, SSMU hopes to financially constrain and pressure the McGill administration into divesting from fossil fuel companies. 

Read the case for divestment being made at the following schools:

 

Partnership Opportunities
 
Calendar of Upcoming Events

IEN Events:

IEN Webinar: Using Endowment Portfolios to Invest in Sustainable Forestry Strategies in the U.S. | Intentional Endowments Network, November 7, 2019, 1-2pm EST (webinar)

2020 Higher Education Climate Leadership Summit | Intentional Endowments Network and Second Nature, February 23-25, 2020, Atlanta, GA. Registration is now live, with early bird rates available! 

Other Events:

Campus Sustainability Month | AASHE, October 2019

Protecting Our Great Lakes: The Great Water Challenge & Opportunity for Investors and Policymakers | Ceres, October 25, 2019 8am PT / 10am CT / 11am ET (webinar)

Color of Education Summit | Public School Forum of NC, The Samuel DuBois Cook Center on Social Equity, and Policy Bridge at Duke University’s Sanford School of Public Policy, October 26, 2019, Raleigh, NC

2019 AASHE Conference & Expo: Co-Creating a Sustainable Economy | AASHE, October 27-30, 2019, Spokane, WA Join us for a special IEN half-day workshop on October 27 - Using Endowment Investing to Help Create a Sustainable Economy

Investing for Impact Symposium | High Water Women, October 29, 2019, New York, NY

Agrifood Conversations | iSelect Fund, October 31, 2019, 3pm CT (webinar)

Appetite for Disruption: How Leading Food Companies Are Responding to the Alternative Protein Boom | FAIRR, Manulife Investment Management, and BASIC, October 31, 2019 12:00-13:30, Boston, MA

21st Annual Endowment and Foundation Forum | Opal, November 7-8, 2019, Boston, MA IEN members are eligible for 15% off registration,.

Everyone Should Get it — ESG | Pathstone, November 12, 2019, Boston, MA. Contact Events@Pathstone.com to request an invitation.

SRI Conference l SRI Conference & Community, November 13-15, 2019, Colorado Springs, CO IEN Members can use code 'SRI30IEN' for a discount when registering.

2nd Impact Summit America | Phenix Capital, November 14, 2019, New York, NY. Asset owner IEN members are eligible for complementary registration.

Center for Financial Services Conference 2019: ESG Investing | Lehigh University, November 18, 2019, New York, NY

Using Internal Sustainability Funds to Drive ESG Performance | Greenbuild International Conference and Expo, November 19-22, 2019, Atlanta, GA

GreenBiz 20 | GreenBiz, February 4-6, 2020, Phoenix, AZ, IEN Members can use Discount Code GB20IE to receive 10% off registration. 

Washington & Oregon Higher Education Sustainability Conference | Social Enterprises, March 2-4, 2020, Eugene, Oregon, IEN Members can use Discount Code IENCOMMCOMP20 to receive 30% off the cost of registration.

Croatan Forum 2020 | Croatan Institute, April 27-29, 2020, Durham, NC

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