Weekly News Round-Up: January 5th, 2018

 
Weekly News Round-Up: January 5th, 2018

Dear {{ recipient.first_name_or_friend }}, 

Happy New Year! Below please find news highlights from the past few weeks.

You may notice the new format for the news round-up, as we are now using our email system instead of the listserv for these weekly updates. We hope you like it; please send any feedback you may have.  (The listserv is still active for asking questions and interactive dialogue amongst the IEN community).

And, if you haven't already, don't forget to register for the 2018 Higher Education Climate Leadership Summit, Feb. 4-6 in Tempe, AZ! 

Have a great weekend,

Nicole

Program Manager
The Intentional Endowments Network

 
Sustainable Investing at Endowments & Foundations 

UNC Asheville Looks For Help With Sustainable Investing l Pensions & Investments

  • University of North Carolina, Asheville, is requesting information from investment managers about how to reinvest part of its endowment in sustainable investment options. UNC Asheville's $40.5 million endowment is managed by UNC Management Co., which handles the pooled assets within the UNC system. 

Future Ford Foundation Director Weighs in on Role, Impact Investing l Chief Investment Officer

  • While he wraps up 2017 as managing director and co-head of Morgan Stanley’s Global Sustainable Finance team, Roy Swan will open the new year at the Ford Foundation as director of its Mission Investments team.CIO caught up with Swan to talk about his accomplishments, his thoughts on where the most potential future impact investments appear, and more.

The Church Pension Fund Invests in $75 Million Off-Grid Solar and Financial Access Senior Debt Fund l Business Wire

  • The Church Pension Fund (CPF), a financial services organization that serves the Episcopal Church, announced this week that it invested $17 million in the Social Investment Managers & Advisors (SIMA) Off-Grid Solar and Financial Access Senior Debt Fund I, B.V. The $75 million fund will provide loans to microfinance institutions, distribution companies, and manufacturers in the off-grid solar sector located in sub-Saharan Africa and South Asia.

CalPERS Calls ESG Criticism ‘Laughable’ l Chief Investment Officer

  • The $344 billion California Public Employees’ Retirement System (CalPERS) has scoffed at a report from the American Council for Capital Formation (ACCF) that is highly critical of the systems’ ESG investments. CalPERS shot back at the accusations, saying that the CalPERS Investment Office’s investment decisions are based on its fiduciary responsibility to sustain the fund and pay the benefits public employees have earned.

 
Sustainable, Responsible, Impact & ESG Investing

Bloomberg Briefs l Sustainable Finance

  • This week's Bloomberg Brief highlights what trends to watch in the year ahead, from electric cars to carbon pricing; How SunEdison has emerged from bankruptcy; and that China's carbon market shows how far the U.S. is lagging behind, according to CDP's Paula DiPerna.

Women Leaders In Sustainable Finance: Modeling The Future l Financial Advisor

  • This is the first article is a series that highlights women leaders in sustainable finance and how they are using their industry experience to incorporate two trends into their roles as investment advisors, asset managers, research analysts and financial services executives. 

Break The Sustainable Investing Bottleneck l Investment News

  • This article outlines the various bottlenecks and barriers to adopting sustainable investing, including how Integrating sustainable investing requires understanding a new set of products, having deeper conversations with clients about personal values, and altering your own story about how you can deliver for the new investor.

2018 Sneak Peek: What to Expect of Impact Investing l Barron's

  • Impact investing—the strategy of investing in companies with the intent of bettering the environment and society while still earning a market rate-of-return—gained momentum in 2017 amid rising investor interest and high-profile opportunities from the likes of alternative-investment firms TPG and Bain Capital Management. This article shares the thoughts of executives at four leading institutions on what's in store for 2018.

2017 Was The Year That ... l Green Biz

  • As 2018 begins, there’s a renewed sense of commitment and forward movement on a range of fronts. In that spirit, this article, in no particular order, outlines some of the storylines that were covered at GreenBiz during 2017 that showed the promise and progress of sustainable business.

ESG, SRI & Impact Investing: Explaining the Difference to Clients l Investopedia

  • ESG, SRI and impact investing are industry terms often used interchangeably by clients and professionals alike, with the assumption that they all match in meaning and approach. This article describes the distinct differences between each term that will affect how client portfolios should be structured and which investments are suitable for meeting social impact goals.

Impact Investing: Conservation Gets Finance Boost l Euro Money

  • Conservation finance got a boost in December when the Global Environmental Facility (made up of 18 agencies) allocated over $8 million to the Coalition for Private Investment in Conservation (CPIC). CPIC brings together non-profits in the conservation area, including the Nature Conservancy, Rainforest Alliance and WWF, with consultants, impact investment managers and development agencies. Since coming together, the stakeholders have been forming working groups and sourcing projects suitable to be put into conservation investments for private investors. 

Impact Investing is Going Mainstream (Opinion) l CTech

  • According to this author, impact investing is no longer just a niche-- it’s going mainstream. That’s the message the Ford Foundation communicated earlier this year when it announced that $1 billion of its $12 billion portfolio would be devoted to mission-related investing. A significant chunk of the Foundation’s existing investment portfolio will be deployed over time into funds seeking to earn not only attractive financial returns but also concrete social returns. By doing so, the Ford Foundation seeks to align its investments with its mission to reduce poverty and injustice.

5 Impact Investing Trends That Emerged From 2017 l Iris

  • Impact investing drives social and environmental progress through investments, while screening for risk and creating competitive returns. This article outlines five impact investing trends that have emerged in 2017.

 
Green Bonds

Bonds Could Spur ESG ETF Growth l Investopedia

  • Bond funds represent a small percentage of the overall universe of ESG funds. When it comes to ESG exchange-traded funds (ETFs), fixed income is also a small, but growing part of that space. Importantly, the potential for ESG fixed income growth could be widespread across corporate bonds, sovereign debt and other parts of the bond market.

ESG & Bonds: A Compelling Combination l ETF Trends

  • With the universe of exchange traded funds following ESG poised to expand, investors should also expect to see more fixed income funds dedicated to virtuous investing. Some ESG bond ETFs came to market last year, according to iShares.

 
Investment Manager News

Colonial First State Prepared to Dump Managers ‘Lagging’ on Climate Change & ESG l Financial Review

  • Colonial First State (CFS), the wealth arm of Commonwealth Bank of Australia, has warned the fund managers it invests with to take the financial risks of climate change seriously or risk being dumped. Scott Tully, head of investments at CFS, which manages $87 billion on behalf of nearly 1 million superannuation fund clients, said the findings were lower than the wealth manager had hoped.

Goldman Throws Its Hat in the ESG Ring l Investopedia

  • Goldman Sachs Asset Management (GSAM), Goldman's asset management unit and the firm's ETF department, filed plans with the Securities and Exchange Commission (SEC) to launch an ETF tracking an index from JUST Capital Foundation that tracks companies with just business practices. Goldman “said earlier this year it had surpassed $10 billion in assets tied to ESG investing strategies, up from about $200 million when it acquired impact investing boutique Imprint Capital in 2015,” reports Bloomberg.

 
Climate Risk, Science & Regulation

Will 2018 Be The Year Investors Focus on Climate-Related Risk? l Market Watch

  • In 2018, investors may care as much about a company’s carbon footprint as they do its product lineup. That’s according to an analyst at Morningstar, who predicted that issues related to climate change would be one of the primary trends in so-called “sustainable” investing this year.

Jeremy Grantham and Lucas White on Climate-Change Investing l Advisor Perspectives

  • Jeremy Grantham co-founded GMO in 1977 and is a member of GMO’s Asset Allocation team, serving as the firm’s chief investment strategist. Along with his wife, Hannelore, he runs the Grantham Foundation for the Protection of the Environment. Lucas White is the lead portfolio manager for the GMO Climate Change Strategy and a member of GMO’s Focused Equity team. In this Q&A, they discuss the opportunities and risks related to climate change related investments.

Pipelines Protests will Likely Heat Up in 2018 l Vice News

  • This past year saw wins for pipeline companies that had projects approved in Canada and the U.S., but an end to construction as usual as opponents stalled new projects — something that’s likely to heat up in 2018. The problem of climate change became more severe in 2017, with historic flooding, wildfires consuming western North America, and massive deadly hurricanes sweeping the Atlantic. And as climate change intensified, the fossil fuel divestment movement gained steam, securing concrete victories by the end of the year.

On Its 100th Birthday in 1959, Edward Teller Warned the Oil Industry About Global Warming l The Guardian

  • At an American Petroleum Institute symposium in 1959 over 300 government officials, economists, historians, scientists, and industry executives were warned about the contributions the oil industry could make to climate change.This early history illuminates the American petroleum industry’s long-running awareness of the planetary warming caused by its products. 
 

 

General Endowment News

Mega-gifts Are Rising and Alumni Giving Is Shrinking. Which Means What, Exactly? l Inside Philanthropy

  • A new survey by Marts & Lundy, a fundraising consulting firm, looks at giving at the higher education level and presents a mixed bag for campus fundraisers. On one hand, "mega-gifts"—those exceeding $10 million—topped $6 billion in total for the first time. On the other hand, giving at the middle of the "gift pyramid" has dropped off somewhat, suggesting fundraisers are having a difficult time engaging younger alumni and growing the donor base. This article takes a deeper dive into the moving parts behind this shift and explores what it means moving forward.

Eluding the Endowment Tax l Inside Higher Ed

  • This article outlines how, despite unknowns, colleges and universities are looking at investment and spending strategies to dodge a new tax on net investment earnings.

Estimating the Endowment Tax’s Future l Inside Higher Ed

  • An economics professor at Wellesley College has run some numbers to come up with preliminary estimates on how many more colleges will be paying an excise tax in the revamped tax code in five years, 10 years or 15 years. The result: the number of institutions subject to the endowment tax could grow to a range of 31 to 41 in five years, depending on the speed at which endowments grow. Between 41 and 61 institutions could have to pay the tax in 10 years, and between 55 and 80 could have to pay it in 15 years.

The University of Chicago and Northwestern May Avoid New Endowment Tax For Now l Chicago Tribune

  • Northwestern University and the University of Chicago may get a reprieve from paying an endowment tax under the new federal tax overhaul, but both could end up shelling out millions in the near future. The legislation imposes a 1.4 percent tax on net investment income at private colleges and universities with more than 500 students and where the market value of endowments equals more than $500,000 per student. At $7.82 billion and $9.8 billion, respectively, the schools carry some of the largest endowments in the country.

The College Endowment Tax is More Dangerous Than You Think (Opinion) l Huff Post

  • This article outlines why the college endowment tax merits special attention, highlighting how the bill imposes an excise tax of 1.4% on colleges with endowments worth over $500,000 per student.

Why the University of Illinois Is Investing in Farmland l Bloomberg

  • Ellen Ellison, CIO of the University of Illinois Foundation, is aiming to make farmland about 10 percent of the $1.8 billion endowment portfolio she oversees. Part of the strategy is to draw more gifts of land. As a financial asset, land has done well for U of I. They also provide some diversification.
 
Fossil Fuel Divestment

New York Governor Seeks Fossil-Fuel Divestment, But Comptroller Has Other Plans l Wall Street Journal

  • Gov. Andrew Cuomo said he will push for the state pension fund to divest from fossil-fuel companies, but the official who controls the fund says the best way to address climate change is by leveraging shareholder power. The governor is creating a plan for divesting the New York State Common Retirement Fund from fossil-fuel investments as part of his 2018 agenda, he said. 

Cuomo is Right on Fossil Fuel Divestment (Opinion) l Times Union

  • According to the author of this opinion piece, NY Governor Cuomo has stepped into the comptroller's shoes because the comptroller has walked away from his fiduciary obligation with regard to fossil fuels. If DiNapoli heeds this call for action, there is still time for the New York governor, comptroller and state attorney general to lead the nation. 

Considering Fossil Fuel Divestment at the Alaska Permanent Fund Corporation (Opinion) l Daily News-Miner

  • Last month, The Alaska Climate Action Network drafted a petition calling on the Board of Trustees of the Alaska Permanent Fund Corporation to divest the fund from its fossil fuel assets. With little fanfare or press, the petition garnered 240 signatures in time for a Dec. 12 meeting in Anchorage.  After the Dec. 12 meeting, the Alaska Permanent Fund Corporation Board of Trustees directed its staff — in a historic move — to prepare an ESG Investment session for a future board meeting.

Clean Technica Divestment Year in Review 2017 l Clean Technica

  • This article reviews the biggest divestment stories of 2017, highlighting the major institutions around the globe that divested from fossil fuels and exploring the current rhetoric on the subject. 
 
Calendar of 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

  • Participants will hear from leaders at ICCR about 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. 
Winter Innovation Summit l Sorenson Impact, January 24-26, 2018, Salt Lake City, UT
  • This year’s Summit will bring together policymakers, funders, nonprofits, and social entrepreneurs to explore the future of social innovation across the globe. 
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
Responsible Investment Forum New York l Private Equity International, March 20-21, 2018, New York, NY
  • The Responsible Investment Forum will 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. IEN's Kristian Nammack will be presenting.