Webinar: KnowTheChain Benchmarking Findings l IEN, January 19, 2017, 2:30-1:30pm 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, benchmarked 60 large global companies on their efforts to address these risks. In this webinar, we will review the 2016 KnowTheChain benchmark findings and discuss how forced labor and human trafficking risks affect investors and can be addressed in their portfolios.
- 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 members will be delivering a plenary panel on factoring climate and sustainability considerations into the endowment investment process; and IEN will be hosting a half-day workshop on endowment investing.
- This conference brings a CEO led speaker line up of innovative and inspiring brands in responsible business to New York, where attendees learn how to deliver purpose for commercial success, the environment and stakeholders. Last day for early bird pricing is today!
Climate-Related Investment for Resilient Communities: Divest-Invest Opportunities in Community-Oriented Climate Solutions l Croatan Institute
- This paper seeks to support institutional investors, and in particular philanthropic foundations, with aligning investment portfolios with the transition to a just, low-carbon economy. It presents an extensive overview of investment opportunities in climate change solutions across asset classes, geographies, themes, and risk/return profiles, that pursue positive environmental and social, community-level impacts, as well as a variety of case studies of foundations, funds, and initiatives that proactively and explicitly integrate both climate and community impact considerations into their investment activities.
Sustainable / ESG Investing
Bloomberg Brief l Sustainable Finance
- This week's Bloomberg Brief highlights how investors led by Walden Asset Management and Zevin Asset Management (Founding Members of IEN) have filed half a dozen proposals at mutual fund companies this year asking the much bigger asset managers, including BlackRock Inc., Bank of New York Mellon Corp., JPMorgan Chase & Co., T.Rowe Price Group, and Franklin Resources Inc. to review their proxy voting on climate issues. Natixis registering first sustainable target-date funds; France heading out on a green bonds road show; and predictions for the year ahead in sustainable finance are also discussed.
- Interviews with three sustainable investment professionals — all graduates of Columbia University’s Sustainability Management graduate program — indicate a growing demand for investing that accounts for sustainability performance, but also obstacles to discerning the best investments.
Companies With Higher ESG Scores Are Better Investment Picks l Economic Times
Companies Challenged to Adopt Science-Based Climate Goals l Social Funds
Solar Could Beat Coal to Become the Cheapest Power on Earth l BloombergNew York Governor Revives Free Tuition Idea l Inside Higher EdRich College Donors' Big Tax Break Is Suddenly in Danger | BloombergFossil-Fuel Divestment Campaigns Hit Boston's College Campuses l WGBH NewsInvestor Waves Goodbye to Palm Oil l Climate News Network
- According to the Morningstar India Sustainability Index, Indian companies that factor in ESG related risks fare better than those in other emerging markets. The Morningstar India Sustainability Index has returned 14.8% from 2012 to 2016, compared to 13.7% for the Morningstar India Index.
- The rising demand for ESG information has been adding considerable momentum to the development of the ESG ratings market. After long years of modest growth, it is now said to have a potential value of US$1 billion. The ESG ratings market is likely to grow and consolidate further, leaving ever-greater attention on the part of the financial world in its wake.
- The €200bn Dutch asset manager PGGM has called for more regulatory leeway for pension funds and other institutional investors when it comes to sustainable investing. A spokesman said pension funds would increase their sustainable allocations if the investments were deemed by the regulator (DNB) to pose less risk. They argued that regulatory changes in support of sustainability stand to increase institutional investment in private equity, infrastructure and real estate.
- Despite the tumultuous geopolitical events of 2016, in the medium-to-long term, four underlying fundamental trends remain unchanged, which means that ESG investing will continue to grow globally. This article outlines those unchanged trends.
- This article outlines how firms that pursue better ESG practices have higher quality management and better stock performance, citing a 2014 research paper by Oxford University concluded that out of 190 academic studies, 90% of the studies demonstrated that sound sustainability standards lowered companies’ cost of capital, 80% of the studies observed that stock performance and good sustainability practices are positively correlated, and 88% of the studies showed that robust ESG practices improved companies’ operational performance.
- While market growth is clear, the SRI field is still young. Market holes prevent investors from fully embedding sustainability factors into practical investment decision-making. This article lays out three critical steps asset managers and other investment professionals can take to overcome these barriers.
Fiduciary Duty & Shareholder Engagement
Department of Labor (DOL) Restates Fiduciary Voting, ESG Considerations l ASPPA Net NewsTrillium’s Statement on Department of Labor Interpretive Bulletin Regarding Shareholder Rights l Trillium Asset Management
- The DOL has issued new guidance in their "Interpretive Bulletin Relating to the Exercise of Shareholder Rights and Written Statements of Investment Policy, including Proxy Voting Policies or Guidelines" to clarify the agency’s longstanding position that the fiduciary act of managing plan assets which are shares of corporate stock includes decisions on the voting of proxies and other exercises of shareholder rights.”
- Last month, the Department of Labor (DOL) issued Interpretive Bulletin 2016-1 on Shareholder Rights, recognizing the importance of proxy voting and fiduciaries engaging portfolio companies on ESG matters. According to Trillium’s Director of Shareholder Advocacy, Jonas Kron, “Yesterday’s action by the Department of Labor gives further support to the validity, significance, and productivity of fiduciaries exercising shareholder rights and engaging portfolio companies on ESG matters."
- This is the first in a series of posts on UPMIFA, outlining some of the basic aspects of the Act. Future posts will address the standards for delegation of management and investment of institutional funds to an external agent such as an out-sourced chief investment officer, and the rules for release or modification of restrictions contained in gift agreements.
Climate Science, Risk & Regulation
- Over 100 publicly traded companies have reported to CDP that they will adopt science-based emissions reduction plans, and letters from members of the Interfaith Center on Corporate Responsibility intend to hold them to their promises.
Record Number of Oil and Gas Firms Go Bust as Renewable Energy Revolution Begins to Bite l The Independent
- A record number of oil and gas companies became insolvent last year, according to a new study. The study by accountancy firm Moore Stephens found 16 oil and gas companies went insolvent last year, compared to none at all in 2012. Even if oil demand continues to climb until 2025, its price could drop to $10 a barrel.
- According to a new study in the journal Nature Climate Change, extreme rain storms that now occur about once a season could happen five times a season by the century’s end, a 400% increase. These storms could produce up to 70% more rain. Such massive amounts of rain occurring more often would put significant strain on infrastructure and agriculture.
- This article presents some much needed optimism for the new year, sharing 10 shining lights for the irresistibility and inevitability of the low-carbon future.
Clean Energy & Technology
- Solar power is now cheaper than coal in some parts of the world. In less than a decade, it’s likely to be the lowest-cost option almost everywhere. Since 2009, solar prices are down 62 percent, with every part of the supply chain trimming costs. By 2025, solar may be cheaper than using coal on average globally, according to Bloomberg New Energy Finance.
- Transitioning our electricity sector away from fossil fuels is no longer just an environmental imperative; it’s an economic one. Free markets now favor solar and wind. This article discusses the institutional barriers that need to be overcome before a rapid transition to renewable energy can be realized.
- In 2015, Ford announced a $4.5 billion investment in electric vehicles in order to introduce 13 new models. This week Ford CEO Mark Field confirmed several new models will receive electric drivetrain options, including its flagship F-150 pickup truck that will double as an on-site generator.
General Higher Education & Endowment News
- New York governor Andrew Cuomo presented a proposal this week for tuition free college for New York State's middle class. Cuomo’s plan, called the Excelsior Scholarship, would ensure free tuition at New York’s public two and four year institutions to students whose families make up to $125,000 per year. The scholarship would be phased in over three years, ending in 2019.
- Congress will soon be considering a plan that would require a quarter of gifts to the wealthiest colleges be used for middle-class financial aid. Otherwise, the donations wouldn’t be fully deductible, and the schools risk their charitable status. Through his tax proposal, Tom Reed, a Western NY Republican and vice chair of President-elect Donald Trump’s transition team, is taking aim at the richest schools. The plan would apply to the roughly 100 colleges with endowments exceeding $1 billion
Stanford Reboots Its $22.4 Billion Portfolio l Investopedia
- This article discusses how Stanford and other ivy institutions including Harvard are working to reverse negative returns by hiring new analysts and restructuring their portfolios.
Fossil Fuel & Other Divestment Campaigns
- This article summarizes the divestment movement at different colleges in the Boston area, the context of the fossil fuel divestment movement, and why it is more important now then ever.
Water Protectors Drop Banner in US Bank Stadium As #DefundDAPL Divestment Campaign Reaches $40 Million l Commondreams.org
- On January 1st, 2017, during the Vikings/Bears football game at US Bank Stadium, two water protectors rappelled from the rafters to display a large banner urging US Bank to divest from the Dakota Access Pipeline. According to a counter on DefundDAPL.org, individuals have pulled over $40.5 million from the various banks that back the project.
- A report released last year named companies with heavy investments that make billions of dollars in profits by clear-felling forests for palm oil plantations. Rainforest destruction is the second biggest driver of climate change after burning fossil fuels. This put pressure on fund managers who claimed that their investments were sustainable, and one of them, Dimensional (managing investments of $445bn), has divested two of its portfolios of all palm oil plantation companies.
- Seattle is moving forward with a proposal which would Wells Fargo for both its fossil fuel investments and unscrupulous business practices. However, it is unclear where the city plans to take its business. A Council Member's statement argued that the new policy was a justified response to both the bank’s investment in the Dakota Access Pipeline and other fossil fuel projects and its unscrupulous corporate policies.
Investment Manager & Strategies News
Grow Takes ESG Investing Mobile l Opalesque
- In order to address the difficulty many investors face trying to find adequate benchmarks and data on how best to screen for sustainability, Grow, a San Francisco-based SRI/ESG investment firm recently released a set of ratings that looks at sustainability in terms of how it impacts the bottom line of a business and not just how green an industry is.The company has also launched a mobile app so that investors can have access to their accounts as well as new ESG data anytime.
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