Weekly News Round-Up: December 16th, 2016

New IEN Members
New Resources
 
Recommendations for the Task Force on Climate-related Financial Disclosures | FSB Task Force on Climate-related Financial Disclosures
  • To help identify the information needed by investors, lenders, and insurance underwriters to appropriately assess and price climate-related risks and opportunities, the Financial Stability Board established an industry-led task force: the Task Force on Climate-related Financial Disclosures. The Task Force was asked to develop voluntary, consistent climate-related financial disclosures that would be useful to investors, lenders, and insurance underwriters in understanding material risks. This report outlines the Task Force's recommendations; a 60-day public consultation period started on Dec. 14, 2016. 
  • This two-page summary report highlights findings for educational institutions from the US SIF US Sustainable, Responsible and Impact Investing Trends Report 2016. Findings include that at the start of 2016, the US SIF Foundation identified $42.7 billion held by educational institutions that consider climate change in investment analysis, a dramatic increase over the comparable $1.3 billion identified in 2014. 
The Global Fossil Fuel Divestment and Clean Energy Investment Movement | Arabella Advisors
  • On the one-year anniversary of the Paris climate agreement, the value of assets represented by institutions and individuals committing to some sort of divestment from fossil fuel companies has reached $5 trillion.1 To date, 688 institutions and 58,399 individuals across 76 countries have committed to divest from fossil fuel companies, doubling the value of assets represented in the last 15 months.2 Pension funds and insurance companies now represent the largest sectors committing to divestment, reflecting increased financial and fiduciary risks of holding fossil fuels in a world committed to stay below 2° Celsius warming. 
  • Through this report, CDP provides a platform for states and regions from across the globe to disclose their environmental impacts and strategies to combat climate change. Over 65 state and regional governments now disclose to CDP, representing 375 million people, US $12.5 trillion and 3 gigatonnes of green house gas emissions (GtCO2e). 
Building Highways to SDG Investing l Dutch Financial Sector 
  • This report invites the Dutch government and DNB to collaborate with Dutch financial institutions to continue to take action in support of the 2030 SDG Agenda in four main areas.
Upcoming Events
Columbia University Energy Symposium: Disruptive Innovation: The New Status Quo? l Columbia University, February 2-3, 2017, New York City
  • The Columbia Energy Symposium brings together more than 300 energy professionals, students, faculty, leaders, and executives representing industry, government, and society, to explore and advance our insights into today’s challenging energy questions. 
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
  • This Summit celebrates the 10th anniversary Second Nature's Climate Leadership Network (formerly the ACUPCC). It is designed for campus sustainability teams, including specialized content for presidents, faculty, staff, and endowment professionals. IEN is partnering with Second Nature to design endowment-related sessions.
 
 
Academic News on Sustainable Investing 

Launching the Investment for Impact Research Prize l University of California Berkeley Haas School of Business

  • The Center for Responsible Business at UC Berkeley Haas School of Business has just launched a $5,000 research prize for work on the role of impact investment aimed at improving society or the environment. The deadline for submitting papers is 11:59 PM Pacific time on April 3, 2017.  A distinguished panel of judges will select the winning paper in late June 2017 and publicly award the prize in September. The competition is open to studies from all disciplines tied to business, economics, law, public policy, or other social sciences. Unpublished working papers suitable for publication in peer-reviewed journals are eligible, as well as papers published in peer-reviewed journals in or after 2016.
Sustainable / ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how Calpers considers end to tobacco investing ban; investors are increasingly wary about their investment exposure to cybersecurity risks; the CEO of Canadian uranium miner NexGen Energy says nuclear energy under Trump could keep the U.S. on track with the Paris Agreemen; and according to a report from the Task Force on Climate-Related Financial Disclosures, energy companies should consider telling investors how executive compensation is linked to climate change risks.
Investors Sharpen Focus on Social and Environmental Risks to Stocks l New York Times
  • Investing based on ESG factors has mushroomed in recent years, driven in part by big pension funds and European money managers that are trying new ways to evaluate potential investments. The idea has changed over the last three decades from managers’ simple exclusion from their portfolios of “sin stocks” such as tobacco, alcohol and firearms makers to incorporation of E.S.G. analysis into their stock and bond picks.
California Public Employees Retirement System (CalPERS) Issues Update on its ESG Expectations Guidance for External Asset Managers (Subscription) l Responsible Investor
  • The $300bn CalPERShas issued an update on its plans to develop ESG expectations for its asset managers, both internal and external. The plan included a review of definitions, data sources and “taking stock of current practices” of its managers. They were benchmarked against external sources such as the PRI, the International Corporate Governance Network (ICGN) guidelines and “global peers”.
UK’s Guardian Newspaper Seeds First Active Emerging Markets Fossil Free Investment Fund (Subscription) l Responsible Investor
  • The Guardian Media Group (GMG), the parent company of The Guardian newspaper in the UK, which has been leading a prominent fossil fuel divestment campaign called ‘Keep it in the ground’ have made an initial seed investment into what is believed to be the first actively managed emerging market fossil fuel free strategy. In 2015, GMG, which controls about £750m in investments, announced that it would sell all its investments in fossil fuels over the medium term due to concerns about climate change. The new investment is part of that strategy, which aims to go fossil free while maintaining investment returns. The value of the investment is not being disclosed, but has been described as “significant”.
Sweden’s Biggest Institutional Investors Commit to UN SDGs in Investment Approach (Subscription) l Responsible Investor
  • Six of Sweden’s biggest institutional investors: Alecta, Folksam, Sjunde AP fond (AP7), Skandia, Swedish pension insurer SPP, and The Church of Sweden have declared that they will integrate the Sustainable Development Goals (SDG) set by the UN’s Agenda 2030 in their business, corporate governance and investment approach, and called on other investors to look at possibilities to cooperate in reaching the SDG objectives.

Church of England’s Transition Pathway Initiative to Launch in January 2017 (Subscription) l Responsible Investor

  • The Transition Pathway Initiative, a data analysis tool project spearheaded by the Church of England (CoE) and the UK Environment Agency Pension Fund, will be launched in January next year, RI understands. The initiative was proposed as part of the CoE’s climate change and investment policy at the July 2015 Synod, where it agreed the development of an “engagement framework” for the following year.
Sustainability Disclosures Fall Short l CFO Magazine
  • The inaugural State of Disclosure report published by the Sustainability Accounting Standards Board finds that sustainability reporting is increasingly becoming a norm in SEC filings, but the environmentally minded investor shouldn’t hold his breath. There’s a long way to go before such reporting becomes as robust as other kinds of disclosures.
New Indicators for Investment Success Identified in CFA Institute Research l Asia Asset Management
  • The purpose, habits and incentives (phi) of investment professionals have a positive correlation with the success of investment outcomes, say the CFA Institute and the Centre for Applied Research at State Street Corporation in a new study. According to the study, a one-point increase in phi – which occurs where the goals and values of an individual or organization intersect – is associated with a 28% increase in odds of achieving greater organizational performance; a 55% increase in the probability of achieving client satisfaction; and a 57% higher chance of excellent employee engagement. Based on the findings, the researchers say that the investment industry and its professionals have to move from a performance-driven culture to a purpose-driven one in order to ensure that the long-term goals of their clients are met.

RI Americas 2016: $25trn Council of Institutional Investors Fears Trump-era Smackdown on Proxy Advisors (Subscription) l Responsible Investor

  • The powerful US investor group, the Council of Institutional Investors (CII), says its expects Congress and the SEC to row back on a number of critical investor protections under new president-elect Donald Trump, notably on shareholder voting advisory services, which it fears could wind up putting all but one of the proxy advisory firms out of business.
ESG ETFs Help Investment Portfolio’s Conform to Investors’ Attitudes l ETF Trends
  • As many seek to diversify their equity portfolios, consider a sustainable investing exchange traded fund strategy that locks on the potential benefits of ESG, principles. On a recent webcast, Sharon French, Head of Beta Solutions at OppenheimerFunds, explained that there is growing demand for ESG investments in response to rising standards for corporate business practices, demographic shifts and investing preferences, regulatory and policy developments, global sustainability challenges, and greater accessibility and proliferation of ESG data.
Financial Performance 
Morningstar Dispels Myth Of SRI Underperformance l Financial Advisor Magazine
  • The idea that sustainable investing is a recipe for underperformance is a myth, said Morningstar in a report issued Monday. In fact, sustainable or responsible funds and indexes perform on a par with similar conventional funds and indexes, despite the belief by many that investors have to be prepared for lower returns if they want to be socially responsible, Morningstar said in the Morningstar Manager Research report, in which it compared dozens of in-depth studies on the issue.
Barclays Researchers on “Green Bonds”: Small-but-Steady Performance Benefits Possible, With Little Evidence of Negative Impact l SAT Press Releases
  • The investment community — especially fiduciaries — continues to have a flow of more “green” products being made available from a growing number of issuers and their intermediaries; these include “green bonds.”  Charting this trend, a team of Barclays managers and researchers issued a report as part of the “Barclays Impact Series.”  Their findings: ESG investing can have a positive effect on portfolios for institutional and individual investors.  There are small-but-steady performance benefits and no evidence of a negative impact for such investing.
 
Climate Risk, Science & Regulation
 
Trump's Transition: Skeptics Guide Every Agency Dealing With Climate Change l The Guardian
  • The heads of Donald Trump’s transition teams for Nasa, the Environmental Protection Agency, the Department of the Interior and the Department of Energy, as well as his nominees to lead the EPA and the Department of the Interior, and for Secretary of State, all question the science of human-caused climate change, in a signal of the president-elect’s determination to embark upon an aggressively pro-fossil fuels agenda.
FSB Climate Disclosures Task Force Ascribes Key Role to Asset Owners l Investment & Pensions Europe
  • The disclosure framework unveiled today by the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD) envisages multiple roles for asset owners, which, in addition to being users of the recommended reporting, are also being asked to apply the recommendations and to help drive their adoption. Overall, the task force believes disclosures by the financial sector could “foster an early assessment of climate-related risks and opportunities, improve pricing of climate-related risks, and lead to more informed capital allocation decisions”.
How to Make a Profit from Defeating Climate Change l The Guardian
  • This article discusses a task force on climate-related financial disclosures that was created by the Financial Stability Board. Its purpose is to develop voluntary, consistent disclosures to help investors, lenders and insurance underwriters manage material climate risks. As befits a solution by the market for the market, the task force is led by members of the private sector, including major companies, large investors, global banks and insurers. The task force's recommendations are now publicly available. They concentrate on the practical, material disclosures most relevant to investors and creditors and which can be compiled by all companies that raise capital as well as financial institutions.
  • The Church of England is to launch a new data analysis tool to help investors monitor companies’ climate-related risks. The move comes as a student-led campaign to persuade institutions to withdraw investments from fossil fuels has reached $5.2 trillion USD. Meanwhile, a group of bishops in the US-based Episcopal Church have questioned President-elect Trump’s decision to appoint climate change sceptic Scott Pruitt as head of the Environmental Protection Agency.
Beijing Mulls Ban on Coal Trucks, Storage in Tianjin in Smog Fight l Reuters
  • Beijing's environmental watchdog is considering a ban on the use of trucks to transport coal and closing coal storage facilities in Tianjin, one of China's busiest ports, a researcher with the agency said, in what would be a drastic move to tackle smog.The city's Environmental Protection Bureau has not made a formal proposal to the municipal government of Tianjin, Zhou Yangsheng, researcher with the agency told a coal industry briefing on late Monday.
Clean Energy
 
Bill Gates, Others Launch Clean Energy Fund l The Wall Street Journal
  • Microsoft Corp. co-founder Bill Gates said Monday that he and other business leaders are launching a $1 billion clean-technology fund that will start investing next year in companies developing low-cost, low-carbon technologies. The fund, Breakthrough Energy Ventures, aims to invest in firms that have promising experimental technologies in power generation and storage, transportation, industrial applications, agriculture and energy system efficiency. Fellow investors include Amazon.com Inc. Chief Executive Jeff Bezos, LinkedIn Corp. Chairman Reid Hoffman, Alibaba Group Holding Ltd. Chairman Jack Ma, and retired hedge fund managerJohn Arnold.
  • The nation's first offshore wind farm has opened off the coast of Rhode Island, ushering in a new era in the U.S. for the industry. Deepwater Wind built five turbines 3 miles off Block Island to power about 17,000 homes, a project costing about $300 million. It announced Monday that the wind farm has begun producing energy for the grid.
The Solar Industry Has Paid Off Its Carbon Debts l The Atlantic
  • The solar industry paid off its long-term energy and climate “debts” in 2011, a study published this week in Nature Communications finds. Since its inception in 1975, the solar-panel industry has almost certainly prevented more greenhouse-gas emissions than it emitted. It has also cumulatively produced more energy than it initially required. In other words, the solar industry is now likely historically carbon-neutral, if not carbon-negative.
  • Upfront capital expenditures in new energy infrastructure will deliver healthy, long-term returns while reducing our annual fuel costs over time. Through 2050, businesses and consumers can expect an average of $366 billion per year in fuel savings. New local jobs will be created in manufacturing, construction and utilities. In construction alone, 800,000 new jobs are expected by 2050. Since 2008, rooftop solar costs have dropped by 54%. Over the past decade, the United States has spent $350 billion on computers and software every year. By comparison, we need investment in the clean energy economy to reach $320 billion annually.  If our next president refuses to take action, American business people must, more than ever, lead this transition for the sake of our climate, our country and our economic security -- and for their bottom lines.
Experts: Under Trump, States and Cities Must Lead on Energy l Midwest Energy News
  • There is growing sentiment that the country’s energy future will be decided largely at the state level and by markets, relatively independent of President-elect Trump’s positions. A study released Dec. 8 by the Brookings Institution furthers that argument by showing that a majority of states have “decoupled” their economies from carbon emissions, meaning their economies have continued to grow even when carbon emissions were reduced.
General Higher Education & Sustainability News
 
Keeping the Torch Lit: Higher Education During The Great Disruption l The Environmental Century
  • This article describes problems in higher education and four innovations that will improve our ability to rebuild a community of interdependent scholars and produce generations of problem solvers.
Make Colleges Diverse l The New York Times
  • This article outlines a new initiative of the Bloomberg Foundation called "American Talent Initiative" that aims to raise the number of Pell Grant recipients (who tend to come from the bottom two-fifths of the income distribution) attending the 270 colleges with the highest graduation rates by 50,000 within 10 years

Fossil Fuel Divestment
 
Investment Funds Worth Trillions Are Dropping Fossil Fuel Stocks l The New York Times
  • Investors controlling more than $5 trillion in assets have committed to dropping some or all fossil fuel stocks from their portfolios, according to a new report tracking the trend. The report, released Monday, said the new total was twice the amount measured 15 months ago — a remarkable rise for a movement that began on American college campuses in 2011. Since then, divestment has expanded to the business world and institutional world, and includes large pension funds, insurers, financial institutions and religious organizations. 
Divest Boston University Hosts Rally, Urges BU to Revisit Fossil Fuel Divestment Decision l The Daily Free Press
  • Nearly 100 BU community members and activists from other university joined Divest BU last week for the organization’s second rally of the semester. Divest BU, the coalition with the main goal of urging the university to divest endowment funds from fossil fuel, organized the rally to inspire other community members to participate in the cause. In a letter sent to the BU community in September, President Brown announced that the university will do its best to avoid investing in coal and tar sands extractors, The Daily Free Press reported on Sept. 20.
  • Last week Barnard College announced that a committee of trustees, professors and students has recommended that the college sell holdings in "all fossil fuel companies that deny climate science or otherwise seek to thwart efforts to mitigate the impact of climate change." The Barnard board's investment committee said that, pending a review, it expected to recommend adoption of the policy by the full board.
American Museum Of Natural History Reports Partial Fossil Fuel Divestment l Clean Technica
  • The American Museum of Natural History, the country’s oldest, largest, and one of the most popular museums in the country, has revealed it has partially divested its $650 million endowment from fossil fuel investments, in response to a letter signed by more than 150 of the world’s top scientists urging museums of science and natural history to divest.