Weekly News Round-Up: December 23rd, 2016

Upcoming Events 

Webinar: KnowTheChain Benchmarking Findings l Intentional Endowments Network, January 19th, 2017, 12:30 - 1:30 pm EST

  • Benchmarks can play a powerful role in encouraging companies to uphold labor standards and protect workers’ rights. In 2016, KnowTheChain, a resource for businesses and investors to address forced labor abuses and human trafficking within their supply chains, has benchmarked 60 large global companies on their efforts to address these risks in sectors that are at high risk of forced labor: the Information & Technology Communication, Food & Beverage, and Apparel & Footwear.  This webinar will explore their findings.  
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.
 
 
New Resources
 
  • 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 (Task Force). 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. The Task Force developed four widely adoptable recommendations on climate-related financial disclosures that are applicable to organizations across sectors and jurisdictions. 
  • A new paper by World Resources Institute finds strong interest and opportunities for sustainable investing within the US institutional investor marketplace. But key barriers persist. A survey of over 100 investment professionals shows that institutional investors – including pensions, foundations, universities, and NGOs – are increasingly considering the material importance of social, environmental, and governance factors in constructing their portfolios.
  • Hospitals and health systems are recognizing that they have significant, untapped assets at their disposal to help address economic and environmental disparities in local communities: their investment portfolios. Through place-based investing, institutions can leverage these resources to improve their communities’ overall health and well-being. This toolkit will help you get started.
Financing for Better Growth and Development l The New Climate Economy
  • Investing in sustainable infrastructure is key to tackling the three central challenges facing the global community: reigniting growth, delivering on the Sustainable Development Goals, and reducing climate risk in line with the Paris Agreement. Transformative change is needed now in how we build our cities, produce and use energy, transport people and goods, and manage our landscapes. And the challenge is urgent.
Finding the Pipeline: Project Preparation for Sustainable Infrastructure l The New Climate Economy
  • Delivering the Sustainable Development Goals (SDGs) and achieving the Paris Agreement objectives will require increased investment in socially, economically and environmentally sustainable infrastructure. The main barrier to investment of the kind needed is not the lack of available finance, but rather a lack of well-prepared and investment-ready ‘bankable’ projects. Project preparation for sustainable infrastructure needs to be faster, greener and better to ensure sustainable development consistent with internationally agreed goals.

Sustainable / ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights Calpers widening its tobacco investment ban; Dimensional Fund Advisors removing palm oil producers from its sustainability funds; General Motors Co. working with utilities to increase efficiency; and Investors including Trillium Asset Management and Zevin Asset Management calling on U.S. companies to help the fight against income inequality, amid concerns the Trump White House won't support lifting the minimum wage to a "living wage."
  • Jeremy Coller launched the FAIRR (Farm Animal Investment Risk & Return) Initiative with the aim of raising awareness among investors about the material risks of the massive global growth in factory farming. As the initiative celebrates its one-year anniversary, we can reflect on a number of achievements – including a groundbreaking investment risk report, two major collaborative engagements with global food multinationals, the highlighting of investor best practice on this issue and several briefings on protein supply chains and antibiotic use.
Over a Third of Investors Employ ESG Factors l Chief Investment Officer
  • Nearly 40% of institutional investors now incorporate ESG factors into their investment decisions, according to Callan. In a survey of 84 asset owners representing $843 billion, the consultant found a significant increase in ESG investing. This year, 37% of respondents said they considered ESG factors when making investment decisions, up from 29% in 2015 and 22% in 2013.
Will ESG Survive Trump? l Forbes
  • This article about ESG investing under the incoming administration is a Q&A with Jon Lukomnik, one of the pioneers of modern corporate governance. He cofounded the International Corporate Governance Network (ICGN) and GovernanceMetrics International (now part of MSCI), and served as interim chair of the Council of Institutional Investors’ executive committee. He serves as executive director of the IRRC Institute, which funds corporate governance, sustainability and capital market research. 
Robeco Launches Ethical Fund l Financial Times Adviser
  • Dutch asset management firm Robeco has launched a sustainable investment fund, which aims to provide equity-like returns but with lower risk. The Robeco QI Global Sustainable Conservative Equities fund applies strict criteria based on ethical standards, as well as high environmental, social and governance (ESG) scores. 
  • Advisors who ignore the advent of ESG investing could miss out on some serious returns in their client’s portfolios. "Our chief executive, Peter Harrison, has identified this as one of the key strategic areas for Schroders and an area where, if we are doing this analysis, it can help us come to better investment decisions.” said Jessica Ground, global head of stewardship with Schroders. This article details three things advisors need to know about ESG investing.

 

  • Presidents and Chancellors from more than 170 Colleges and Universities, including 35 states in the U.S., have joined together to urge president-elect Trump and the incoming congressional representatives to accelerate progress towards a clean energy future. Through their open letter, organized by a diverse group of higher education institutions and the Boston-based nonprofit Second Nature, they call on elected officials to support participation in the Paris Agreement, climate research, and investment in the low carbon economy.
Scientists Sound the Alarm l Inside Higher Ed
  • A number of academics, physicians and medical students are speaking out against Trump’s pattern of selecting officials who deny climate science, oppose policies backed by many experts and scare scientists in federal agencies who disagree with Trump. In some cases, those voices are dissenting from large professional organizations that have endorsed at least some of his personnel decisions.

Oil Majors’ Survival Questioned by Former Senior Mobil Executive (Subscription) l Responsible Investor

  • The survival of oil majors has been questioned by a former senior executive who helped manage the Exxon-Mobil merger in 1999. Lou Allstadt, former Executive Vice President at Mobil Oil, said: “I don’t think they are going to survive, I personally divested from ExxonMobil three years ago, and reinvested in renewables.” Helena Morrissey, Chair of the Investment Association, said that the interpretation of fiduciary duty associated with climate change has turned on its head. “The investment community has shifted gears [so] that fiduciary duty now should compel or at the very least encourage divestment in fossil fuels. It’s not just the interpretation of our duties, it’s the risks that we have to manage around stranded assets.”

 

Clean Energy
 
Boone, NC Passes Historic Resolution: Ditch Fossil Fuels, Go 100% Clean Energy l EcoWatch
  • The North Carolina municipality of Boone approved a resolution by a 5-0 vote calling on the whole state—and the United States at large—to encourage green jobs and transition to 100 percent clean energy across all energy sectors. This makes Boone the first town in the country to officially demand that the U.S. completely ditch fossil fuels to "avoid climate catastrophe." Boone's resolution was inspired in part by the research of renewable energy expert Dr. Mark Z. Jacobson, a Stanford University professor and cofounder of The Solutions Project, a state-by-state roadmap to convert the country to 100 percent renewable energy by 2050.
Shifting to a Clean Energy Economy Would Bring Billions in Economic Benefits, Shows New Report l WRI
  • The United States and the world as a whole must reduce its greenhouse gas emissions by 80 percent or more by 2050 in order to significantly reduce the risks posed by unabated climate change. A new report from the Risky Business Project, From Risk to Return: Investing in a Clean Energy Economy, finds that achieving that reduction is both technically and economically feasible—and creates a huge business opportunity. The new report presents three pillars for how to transition to a clean energy economy: use electricity instead of fossil fuels, generate electricity from low- and zero-carbon sources, and use all energy more efficiently.

 

General Endowment News
 
  • This article addresses concerns for higher education endowment performance under the incoming administration. The author suggests that all stakeholders should have a voice in their endowment's objective, and decision makers should make bets on active managers and most likely private investments, hire a team of employees to find those investments and monitor them, and accept that those investments will occasionally lose to the market or to peers.

 

 
Fossil Fuel Divestment
  • The scale, reach and pace of the fossil fuel divestment sphere — confirmed at over $5 trillion, a doubling in size in just 15 months — is one of the most important financial stories of the past decade. This is the fastest divestment trend in history, even greater an accomplishment when you consider the rapid growth in divested dollars has been achieved against a backdrop of sluggish economic growth and political instability. In turbulent times, capital seeks safe havens, and for decades, fossil fuels were regarded as the safest of safe ports. For a large and growing chunk of the investment community, this is no longer true. This article outlines how the rapidly expanding divestment phenomenon is only the tip of the smoke stack.
As the Fossil Fuel Divestment Movement Gains Steam, It's Getting Harder for Foundations to Ignore l Inside Philanthropy 
  • When Divest-Invest Philanthropy launched in the beginning of 2014, an effort incubated by the Wallace Global Fund and modeled after the anti-apartheid divestment push, there were just 17 brave foundations on board. Now, almost three years later, that number has grown to 155, and the greater divestment movement, which started on college campuses about five years ago, has become impossible to shrug off. This article explores what's next for foundations.
Snowball Effect: Unity College Fossil Fuel Divestment the First in $5.2 Trillion Effort l Maine Public
  • Four years ago, Unity College became the first U.S. college to eliminate fossil fuels from its international investment portfolio. Now, Unity College President Dr. Melik Peter Khoury says the central Maine school is redoubling its efforts to create a “net-zero” campus and spread its message of energy sustainability to other higher education institutions. 

 

Private Prison Divestment
 
  •  A student-organized group at Georgetown University seeking  transparency in Georgetown’s endowment is demanding the university to divest from private prisons and companies that contribute to the “occupation of Palestine." According to a press release released by the campaign, students submitted a proposal to the Committee on Investment and Social Responsibility Oct. 12 requesting transparency on the university’s investments but have yet to receive a reply. The group, which is endorsed by 17 students groups,  has also sent a letter to University President John J. DeGioia requesting confirmation that the university’s endowment is not invested in any companies that support private prisons or the “occupation of Palestine.” The letter demands a response by Jan. 13.