Weekly News Round-Up: December 22nd, 2017

Upcoming Events
IEN Session + Workshop at the 2018 Foundation Leadership Forum l AGB, January 21-23, 2018, Los Angeles, CA
  • IEN Principal, Tony Cortese will be leading sessions examining mission-aligned investing, and a post-conference peer learning workshop going deeper into all aspects of aligning ESG goals to the foundation’s mission while meeting the financial and advancement requirements of each institution.

Webinar: The Investor Case for Human Rights | Intentional Endowments Network, January 24th, 2018, 1:00 p.m. ET

  • In this webinar, participants will hear from Josh Zinner, CEO of The Interfaith Center on Corporate Responsibility (ICCR), David Schilling, Senior Program Director at ICCR, and Julie Tanner, Assistant Director of Socially Responsible Investing at Christian Brothers Investment Services, and an ICCR Board Member. They will discuss the potential for investor work on human rights, where investors can have impact and where they have had success in the past, and discuss next steps for those interested in engaging more deeply on this work. The panelists will also introduce a new initiative of the ICCR, The Investor Alliance for Human Rights, which was established to provide a collective action platform to facilitate investor advocacy on a full spectrum of human rights and labor rights issues.
Winter Innovation Summit l Sorenson Impact, January 24-26, 2018, Salt Lake City, UT
  • The Winter Innovation Summit is the premier cross-industry event in social impact, innovation, and investing. This year’s Summit will bring together policymakers, funders, nonprofits, and social entrepreneurs to explore the future of social innovation across the globe. Join us for the latest breakthroughs in social impact, innovation, and investing; ski the greatest snow on Earth; and experience the 2018 Sundance Film Festival.
2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
  • Second Nature and the Intentional Endowments Network are pleased to host the 2018 Higher Education Climate Leadership Summit. Join your peers from February 4-6, 2018 in Tempe, Arizona for the largest national gathering of higher education presidents, chancellors, trustees, and other senior leaders committed to accelerating climate solutions. 

8th Annual Practitioners Gathering l Confluence Philanthropy, March 12-15, 2018, Berkeley, CA

  • The Practitioners Gathering is a four-day conference where asset owners and their advisors meet at the cutting edge of mission-related investing. The Gathering represents the most advanced foundations, investment managers, and advisors in impact investing today—and those looking to learn more. Sessions are led by funder-practitioners, investment experts, and other thought leaders.
Responsible Investment Forum New York l Private Equity International, March 20-21, 2018, New York, NY
  • Building on the success of the longest-running ESG event in Europe, the Responsible Investment Forum comes to New York for its second year to bring together the most sophisticated LPs, GPs and service providers to discuss why, when, and how your firm should be implementing an effective ESG strategy.
 
 
 
New Report
 
  • In this paper, Walden explains what the Sustainable Development Goals (SDGs) are, why they are important to our clients and to our role as an investment manager, and where opportunities exist for us to advance their mission. There are two primary focus areas for the SDGs in Walden's work: (1) investment decision-making, and (2) active ownership. 
 
 
 

Sustainable, Responsible, Impact & ESG Investing

Bloomberg Briefs l Sustainable Finance
  • This week's Bloomberg Brief highlights how China unveiled plans for a national carbon trading system focused on the power sector; New York pension funds look at divesting fossil fuel holdings; and socially responsible quantitative investors deal with some data challenges, says Acadian Asset Management's Asha Mehta.
Impact Investing: A $250 Billion Game-Changer For Finance l CNN Money
  • Making money is the lifeblood of Wall Street. Making the world a better place not so much. Now that's starting to change, as some of the biggest names in finance adjust their businesses to reflect growing demand for impact investments. "It's a $250 billion market and it's growing fast," said Michael Baldinger, a 30-year industry veteran who joined UBS (UBS) Asset Management as head of sustainable and impact investing -- a new role -- just over a year ago. "It might really be a game-changer for the finance industry."
ESG Investing: Assessing the 'E,' 'S' and 'G' l Investment News
  • "There are two premises to ESG screens," said Steve Janachowski, CEO of Brouwer & Janachoski. The first one is that we shouldn't be supporting bad companies, however we define that. But that's a philosophical point of view; it's not an investment thesis. The other is that a company should perform better because its costs are lower or because people will support it."The best argument, then, for ESG is the G: Governance. Companies with consistently good governance tend not to be hit by disaster, such as the Equifax data breach and the Wells Fargo scandals.
Why Financial Performance Affects ESG Metrics l Forbes
  • Keir Gumbs is a partner in Washington, D.C. and vice chair of the Securities and Capital Markets Practice Group. Before Covington, Gumbs spent six years at the Securities and Exchange Commission (SEC) where he held numerous positions, including as counsel to an SEC Commissioner. Gumbs is recognized as a leading authority on securities regulation and corporate governance who represents a cross-section of constituencies, including Fortune 500 companies, venture-backed firms, public pension funds, hedge funds, faith-based investors and trade associations. In this Q&A, he discusses how the development of ESG rating analytics can come to fruition so that there are common metrics across the playing field, and how ESG metrics can show the value in an ESG investment strategy as a hard proposal.
5 Big Things About Sustainable Investing in 2017 l Morningstar
  • This article outlines five big things that happening in the sustainable investing space in 2017 including the Tump effect, The Fearless Girl, BlackRock, SSGA, and Vanguard ramping up their engagement activity, climate risk disclosure, and a focus on impact investing.
Divest or Engage? or Both? l Real Impact Tracker
  • In this opinion piece, Yale Alumni Gabe Rissman discusses his student leadership days at Yale, exploring fossil fuel divestment vs. shareholder engagement, and how both can be effective strategies.
Liontrust ESG Head Says Sustainable Investment Doesn't Mean Low Return l Wealth Manager
  • Sustainable investment is much more than a trend with all available startegies have shown growth in excess of 20% over the last three years, says Peter Michaelis, head of sustainable investement at Liontrust. Talking about the shift of ESG from a marginal part of the industry to a prominent consideration for investors, he cites his team's stock and sector preferences, and plans for 2018.
Shareholder Engagement
 
Exxon Faces Climate Change l Barron's
  • Last Monday, in a four-sentence filing with the Securities and Exchange Commission, Exxon Mobil's board acceded to a proxy request—one it had previously fought—to disclose more about what tightening climate-change regulations might do to the long-term value of its hydrocarbon assets in the ground. The brevity of its statement belies the potential for change, not only for the supertanker that is Exxon, but also for the energy industry as a whole and even further afield, since the company is so influential around the world.

Four Mutual Fund Giants Begin to Address Climate Change Risks in Proxy Votes: How About Your Funds? l Ceres

  • Each year, Ceres partners with Fund Votes to rank the largest mutual fund companies based on how strongly they support climate-related shareholder proposals. (See methodology note at the end of the blog for more details.) The results for 2016 and 2017 are shared in this article, and the big news is that four of the top ten largest asset managers, together accounting for $12.8 trillion in assets under management, voted for a climate proposal for the first time ever. This has important implications.
  • BlackRock Inc., the world’s biggest asset manager, is telling companies that now is the time to start reporting clear information on climate risk to their businesses. The firm, which oversees almost $6 trillion in assets, sent letters from its corporate-governance team to about 120 companies this week, urging them to report climate dangers in line with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, set up by Bank of England Governor Mark Carney.
  • Since the $2.6 trillion asset manager installed a bronze statue of a girl staring down the Wall Street bull, the firm has actually stared down companies lacking gender diversity on their boards. The Boston-based firm has voted against the re-election of the chair or other senior members of male-only boards 400 times so far in 2017, reportsBloomberg. “In some cases we had to agree to disagree and in some cases we got commitments to enhance board quality by increasing diversity,” said State Street’s Rakhi Kumar. “We will work with companies, but of course not forever.”
Investment Manager and Finance News
 
Amalgamated Bank Announces Agreement to Acquire New Resource Bank l Amalgamated Bank
  • Amalgamated Bank (“Amalgamated”) and New Resource Bancorp, the parent company of New Resource Bank (OTC: NRBC; together, “New Resource”) today announced the signing of a definitive merger agreement by which Amalgamated will acquire New Resource for a total consideration of approximately $58.5 million, in a 100% stock consideration transaction for New Resource shareholders and the cash out of existing New Resource stock options. Under the terms of the agreement, New Resource shareholders will receive 0.0315 shares of Amalgamated common stock for each share of New Resource, or a purchase price of $9.67 per share. The acquisition of New Resource represents the opportunity to expand Amalgamated’s geographic presence to the San Francisco Bay Area as well as deepen its model of impact banking.

Climate Risk, Science & Regulation
 
Trump Drops Climate Change From US National Security Strategy l The Guardian
  • The Trump administration has dropped climate change from a list of global threats in a new national security strategy the president unveiled on Monday. Instead, Trump’s NSS paper emphasised the need for the US to regain its economic competitiveness in the world. That stance represents a sharp change from the Obama administration’s NSS, which placed climate change as one of the main dangers facing the nation and made building international consensus on containing global warming a national security priority.
Six SWFs Unite to Address Climate Change Issues l Investments and Pensions Europe
  • Six sovereign wealth funds governing $2trn (€1.7trn) have formed an alliance to address climate change issues. The group includes the Abu Dhabi Investment Authority, the Kuwait Investment Authority, the New Zealand Superannuation Fund, Norges Bank Investment Management (NBIM), the Public Investment Fund of the Kingdom of Saudi Arabia, and the Qatar Investment Authority. Together they have formed the One Planet Sovereign Wealth Fund Working Group to integrate financial risks and opportunities related to climate change in the management of large, long-term asset pools.
Let it Go: The Arctic Will Never be Frozen Again l Grist
  • Last week, at a New Orleans conference center that once doubled as a storm shelter for thousands during Hurricane Katrina, a group of polar scientists made a startling declaration: The Arctic as we once knew it is no more. The region is now definitively trending toward an ice-free state, the scientists said, with wide-ranging ramifications for ecosystems, national security, and the stability of the global climate system. It was a fitting venue for an eye-opening reminder that, on its current path, civilization is engaged in an existential gamble with the planet’s life-support system. In an accompanying annual report on the Arctic’s health — titled “Arctic shows no sign of returning to reliably frozen region of recent past decades” — the National Oceanic and Atmospheric Administration, which oversees all official U.S. research in the region, coined a term: “New Arctic.”
B.H.P. Billiton, Acknowledging Climate Change, to Quit Coal Group l The New York Times
  • One of the world’s largest coal companies, acknowledging the growing momentum toward addressing climate change, said it planned to pull out of a major industry group over its environmental stances. B.H.P. Billiton, the British-Australian mining company, said in a reportTuesday that it planned to withdraw from the World Coal Association, an international lobbying group, because of differences in climate and energy policies. The report also noted that B.H.P. would review its relationship with the U.S. Chamber of Commerce in light of the Trump administration’s decision to withdraw from the Paris climate accord.
Jakarta Is Sinking So Fast, It Could End Up Underwater l The New York Times
  • A tsunami of human-made troubles in the Indonesian capital poses an imminent threat to the city’s survival. And it has to deal with mounting threats from climate change. This article covers how it got so bad and potential solutions.
General Endowment News
 
Final GOP Deal Would Tax Large Endowments l Inside Higher Ed
  • A proposal to tax some large private college endowments made it into the final version of a tax reform bill agreed to by House and Senate negotiators last week. The provision matches the more modest proposal included in the Senate tax bill passed this month, rather than a House proposal that would have affected many more institutions. But many college leaders have said the tax is bad policy and sets a dangerous precedent. At the same time, many provisions in the tax legislation that alarmed colleges and students were left out of the final bill.
  • Berea College in Kentucky uses a $1 billion endowment to cover tuition for all of its roughly 1,600 students. Because of that mission, Senate Republicans exempted the school from a proposal to tax the endowments of dozens of private schools. But that exemption was one of three provisions removed Tuesday from the federal tax overhaul because they violated congressional rules. So, Berea will once again join the list of schools seeing their tax burden rise under the GOP plan.
Wall Street Is Making Even More Billionaires of U.S. Colleges l Bloomberg
  • American universities are the richest they’ve ever been, with more schools than ever sitting on endowments valued at $1 billion. Endowments are riding the bull market to riches, but some question whether students should get more help.
 
 
 
Fossil Fuel Divestment
Coal Divestment isn’t Enough, Says CarbonTracker l Triple Pundit
  • By 2030, the coal industry will effectively be operating in the red. That’s the latest analysis from the CarbonTracker Initiative, an independent think tank that looks at the economic implications of today’s coal energy and other markets. But what analysts were really looking at in its study Lignite of the Walking Dead, which was released this week, was what the scenario would look like economically if the 28 countries that comprise the European Union were to actually limit global warming to below 2℃ by 2050.
The Movement to Divest from Fossil Fuels Gains Momentum l The New Yorker
  • This week, a news release went out from Governor Andrew Cuomo’s office, saying that New York was going to divest its vast pension-fund investments in fossil fuels. The state, Cuomo said, would be “ceasing all new investments in entities with significant fossil-fuel-related activities,” and he would set up a committee with Thomas DiNapoli, the state comptroller, to figure out how to “decarbonize” the existing portfolio. Cuomo’s office even provided a handy little Twitter meme of the type that activists often create: it showed three smoke-belching stacks and the legend “New York Is Divesting from Fossil Fuels.” The pension fund under Albany’s control totals two hundred billion dollars, making it one of the twenty largest pools of money on Earth. It would make the most sense, of course, to have a concerted global battle against climate change—it is, after all, the first truly global problem we’ve ever faced. But this Administration will not fight it, as Trump’s recent pullout from the Paris climate accords showed. So if the battle, instead, is going to be local, three hundred and ninety billion dollars is a pretty good haul for one day. New York may be an empire in name only, but on Tuesday it demonstrated a global reach.
  • Norway’s main municipal pensions provider KLP has decided to exclude companies from its investments that have more than 30% of their revenue stemming from oil sands activities, and use the proceeds of these asset sales for new renewable energy investments in the developing world. The NOK641bn (€64.9bn) pension provider made the decision after commissioning research that showed the consequences of oil sands production — also known as tar sands — were just as harmful to the environment as those of coal.
  • New York City Comptroller Scott Stringer said this week his office would propose to the trustees of the NYC pension funds to explore stopping additional investments in fossil fuels and increasing investments in clean energy. The proposals in the coming weeks will also include divesting current holdings in fossil fuel companies as part of efforts to reduce carbon footprint in various portfolios, Stringer said in a statement.
Cuomo Wants To End Fossil Fuel Investment By Pension Fund l State of Politics
  • The state should stop making new investments from its $200 billion public pension fund in fossil fuel companies, Gov. Andrew Cuomo annonuced this week. The push, part of the 2018 State of the State agenda, will also lead to the creation of an advisory panel to develop a “de-carbonization roadmap” for new investments that bolster fighting climate change and green technology.
After Months of Student Protest, Reed Declines to Divest From Wells Fargo l The Oregonian
  • After nearly three months of a student occupation of administrative offices, Reed College announced today it will continue to work with Wells Fargo, against the protesters' wishes. The student group Reedies Against Racism pitched tents in the offices and hallways of Eliot Hall in October, after demanding that Reed divest immediately from Wells Fargo, listing concerns such as investment in "private prisons," as well as "the Dakota Access Pipeline, the fossil fuel industry, and companies that profit from the Israeli Occupation Crimes."