Weekly News Round-Up: February 23rd, 2018

Weekly News Round-Up: February 23rd, 2018

Below please find this week's news round-up.

We are pleased to welcome two new members to the Network: Virginia Wesleyan University and Greentech Capital Advisors! To learn more about the leadership opportunities and benefits of IEN membership, click here.

Also, be sure to register for the next IEN Webinar exploring the topic of Long Short ESG Strategies for Endowments, taking place on March 6th.

Have a great weekend,


Program Manager
The Intentional Endowments Network

New IEN Members
Sustainable, Responsible, Impact & ESG Investing

Bloomberg Brief l Sustainable Finance

  • This week's Bloomberg brief highlights how the EU can boost the share of renewables to 34% of its energy mix by 2030, but would require investments of about $77 billion a year; BP raised its forecast for electric cars; and Sisa Ntshona, CEO of South African Tourism, discusses the sustainability lessons in Cape Town's drought.

Sustainable Investment, Show Me the Evidence l Willis Towers Watson

  • In this paper, “Sustainable Investment, Show me the Evidence“, Willis Towers Watson provides a sample of the academic evidence which demonstrates the value of doing so. The studies and meta-studies referenced at the end of the paper show reduced cost of equity, better stock performance, and lower fixed-income spreads as examples of how appropriate management of ESG factors can lead to improved risk and return outcomes.

Institutions Are Hungry for Dependable ESG Investing Data l Plan Sponsor

  • A new cut of data shared by Natixis Investment Managers is based on a broad survey of 500 institutional investors, including managers of corporate and public pension funds, foundations, endowments, insurance funds and sovereign wealth funds. Some investors cite the concern that publicly owned companies may be “greenwashing” reported data to enhance their image from the ESG investing perspective, cited by 37% of survey respondents.

Engagement and Divestment are Not Mutually Exclusive l Pensions Expert

  • The role and responsibility of fiduciary investors in accelerating low-carbon global prosperity has recently entered the public debate in a big way. Much of this success is due to the fossil fuel divestment movement. In only six years, 837 institutions with more than $6tn of assets have made a fossil fuel divestment commitment of some sort. The divestment movement, which has undoubtedly put pressure on both fossil fuel companies and their major investors, has opened the space for more ambitious and forceful investor engagement with companies about their approach to climate risks.

Want Strong Stocks That Also Have a Positive Impact on the World? Morgan Stanley Has 30 Candidates l Market Watch

  • Morgan Stanley analysts put together a list of 30 stocks that in their view “offer a strong fundamental investment case at the same time as creating a positive social or environmental impact.” The 30 were selected by the investment bank’s sustainability team, which evaluates securities through the lens of ESG investing.

ESG and Impact Investing: Do You Know the Difference? l Investment News

  • As investors increasingly rally behind the concept that their investment choices yield the ability to positively impact social or environmental issues, interest in impact investing has skyrocketed. This article takes a closer look at two terms we hear frequently — ESG and impact investing — and how they differ.

‘Green’ Investing Helps Shield Investors From Correction l Barron's

  • Investing in ‘green’ funds benefits more than just the environment; this type of investing can also be healthy for investors’ bottom line, recent data says. In the first nine days of February—during which the S&P slid 7.2%—two-thirds of all sustainable funds available in the U.S. finished in the top half of their respective categories—MarketWatch reports, citing Morningstar data.

Where Are The ESG Flows? l ETF.com

  • Despite the superstar-level hype around ESG ETFs the past few years, JUST A handful have become bona fide hits. Of the 65 ETFs classified as “socially responsible,” only one has broken $1 billion in assets under management: the iShares MSCI KLD 400 Social ETF (DSI). Fourteen others have topped $100 million in assets, a common liquidity threshold that many investors use to gauge a fund’s seaworthiness.

Kapor Capital’s New Partner Talks Health Startups, African-Americans in Venture Capital l Mercury News

  • The Mercury News talked recently with Onovakpuri about her new position at Kapor Capital. The Oakland-based venture firm has diversity at its core, focuses on funding underrepresented entrepreneurs and recently announced it has invested in more than 100 companies. The interview has been edited for length and clarity.
Climate Risk, Science and Regulation

Coal’s Continuing Decline l The New York Times

  • This article explores the three signal flares that went up for the American coal industry recently, all illuminating an inescapable conclusion: Despite President Trump’s campaign promise, coal-fired power is in trouble and in all likelihood won’t be reasserting itself in the United States. Nor should it.

How General Electric Gambled on Fossil Fuels and Lost l msn.com

  • Last March, executives at General Electric Co's power-plant business forecasted that despite flat demand for new natural gas power plants GE Power's revenue and profit would rise. Rather than rising, GE Power's profit fell 45% last year, forcing GE to slash its overall profit outlook and cut its dividend for only the second time since the Great Depression. Still, GE downplays the threat to its bulked up fossil fuel product line. Despite rapid growth of wind and solar, it says, two-thirds of power generation will come from gas, coal and nuclear plants over the next decade.

The Netherlands Looks to Ban All Non-Electric Cars by 2025 l The Christian Science Monitor

  • By 2025, the Netherlands may only allow electric vehicles on the road. A majority of elected officials in the Tweede Kamer, the lower house of Parliament, supported a motion proposed by the Labor Party to ban all diesel and petroleum cars from the Dutch market starting in 2025. If enacted, this proposal would allow existing fossil fuel-powered cars to stay on the road until they died, but when it comes to new sales, only electric cars would be permitted. 

Green Giant: Renewable Energy and Chinese Power l Foreign Affairs

  • This article explores how China already dominates the global solar-panel market, but now it is expanding its support for oil-saving technologies, funding the development and production of everything from batteries to electric cars. The goal is not just to reduce China’s dependence on foreign oil and gas but also to avoid putting the country at an economic disadvantage relative to the United States, which will see its own growth boosted by its exports of oil and gas to China. 
Investment Manager News

Arabesque Eyes Pension Funds as it Looks to Expand in Asia l Asia Asset Management

  • Arabesque Asset Management (Arabesque), a London-based boutique money manager, is looking to expand its presence in Asia and is setting its sights on pension funds in the region. The company, which specializes in ESG investments, had assets under management (AUM) of US$150 million as at end-2017. Most of its customers are family offices.

Russell Investments Links ESG to Returns l Investor Daily

  • Using ESG scores from data provider Sustainalytics, Russell Investments has developed a more material measure of ESG that it says is a stronger predictor of market returns. The new ESG methodology is based on the idea that, for example, fuel efficiency has a larger impact on the bottom line of an airline than an investment bank.
General Higher Education Endowment News

'Hard Lines to Draw': Harvard Balances Roles as University, Investor l Harvard Crimson

  • This article outlines how as both a major investor and an educational institution, Harvard seeks to strike a difficult balance between considering ethical responsibilities while remaining apolitical.

Harvard Alumni Write to Incoming President Bacow Urging New HMC Investment Strategy l Harvard Crimson

  • Eleven alumni from the Class of 1969 penned a letter to incoming University President Lawrence S. Bacow Thursday criticizing the Harvard Management Company’s investment strategy and urging a more passive approach to University funds. The alumni suggested Harvard may be losing billions of dollars by trying too hard to manage its endowment. Instead of using hedge funds to manage its money, the University should shift half of its $37.1 billion endowment into lower-cost funds tracking the S&P; 500, the letter’s signatories argued.
Fossil Fuel Divestment

Fossil Fuels and Higher Education in Texas l Trib Talk

  • In November 2017, Norway announced plans to consider dropping oil and gas stocks from its $1 trillion sovereign wealth fund. Last month, New York City announced a goal to divest $5B in fossil fuel assets from its $189B pension funds within five years. Even in major oil-producing states like Alaska, there have been calls to move on from fossil fuels. These developments call into question the future of the Texas Permanent University Fund, which derives massive revenues from oil and gas production. 

It Needn’t Rock Your Returns to Divest From Fossil Fuels l The Times

  • This article explores how the true litmus test for the exclusion of fossil fuels may be whether there is a positive environmental and social impact. There has been a large movement for asset managers to push for improved corporate behavior from fossil fuel companies. For many, this is a move in the right direction. For others, engagement is too little, too late, and divestment is the logical step to drive meaningful action against climate change.

Swarthmore Student Budget Committee to Move Surplus Funds into Fossil-Free Endowment l The Daily Gazette

  • The Student Budget Committee (SBC) is planning on moving its residual surplus funds from Swarthmore’s capital expenditures account into a fossil-free quasi-endowment, according to SBC Chair Roman Shemakov ‘20. The proposal, which still needs to be approved by the entire committee, would move the surpluses that SBC has accumulated over the years into a divested fund that three members of Swarthmore’s Board of Managers set up in 2015 with the investment management firm BlackRock.

Imperial College Need to Come Clean With Their Investments l Felix

  • This article acts as an update on Imperial College's fossil fuel divestment conversation, less than a year after the student group Divest Imperial was formed.

Campus Club Fights For Gonzaga University to Divest From Companies That Create Fossil Fuels l Gonzaga Bulletin

  • Earlier this month, the Faculty Senate moved to table the vote on Fossil Free Gonzaga’s divestment resolution until their April 4 meeting. Fossil Free Gonzaga (FFG) drafted a resolution that demands that GU divest from companies that are part of the Fossil Free Index report of the top-200 most carbon-intensive companies. The resolution was passed by the GSBA senate last spring and is currently being discussed by GU’s Board of Trustees and the Faculty Senate. 
Calendar of Upcoming Events

Webinar: The 100 Most Overpaid CEOs: Are Fund Managers Asleep at the Wheel? l As You Sow, March 1st, 2018, 11:00 am EST

  • The 100 Most Overpaid CEO highlights the fund managers who continue to approve these pay packages at staggering rates (many funds approve nearly 100% of the pay packages they vote on) and contrasts them with those who take a stance against excessive pay with their votes.

IEN Webinar: Long Short ESG Strategies for Endowments l Intentional Endowments Network, March 6th, 2018

  • In this webinar, participants will explore the idea of incorporating ESG criteria into long-short equity strategies, learn about the process behind incorporating hedge funds into ESG strategies, and hear discussion on implementation, including examples of investment policy statements, asset allocations, risk and return frameworks, and impact and ESG ratings for long short ESG strategies.

Webinar: Proxy Preview 2018: Helping Shareholders Vote Their Values l Proxy Preview, March 8th, 2018, 2:00 pm EST

  • Proxy Preview 2018, now in its 14th year, provides an overview of all ESG shareholder resolutions filed—as well as expert insights into resolutions filed ESG issues investors are raising at companies this year on and off proxy ballots.
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. Click here to apply to join the event as a non-member guest.

The Wall Street Green Summit l Global Change Associates, March 19, 2018, New York, NY

  • This year's Wall Street Green Summit will focus on the  Impact Economy-- where main street investors team up with corporations, entrepreneurs and government to solve environmental and social problems while generating financial returns.
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.