Endowment and Foundation Forum 2017 l Opal Group, November 6-7, 2017, Boston, MACelebrating Sustainability: A Leadership Networking Event l Natixis Global Asset Management, November 9, 2017, Boston, MA
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.
Global Investment to Address Climate Change Increases to $410 Billion Annual Average l Climate Policy Initiative
- 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.
- 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 HeraldClimate Risk, Science & Regulation
Helping Universities and Colleges Navigate the Fossil Fuel Divestment Debate l Rathbones
- 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.
- 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 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.
- 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.
- 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.
- 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.
- 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.
- 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.
On the Farm, Investors Get Their Hands Dirty l The New York Times
- 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 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.
- 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.
- 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, 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 Change Is Bad for Your Health l The New York Times
- 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.
- 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.
Risk Expert Bob Litterman on Climate Risk l The Niskanen Center
- 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, 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
College Endowments on Table in Tax Overhaul l Inside Higher Ed
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
Fossil Fuel Divestment
- 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.
- 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.
- 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.
- 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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