- The corporate governance Framework articulates six principles that the ISG believes are fundamental to good corporate governance at U.S. listed companies. They reflect the common corporate governance beliefs that are embedded in each member’s proxy voting and engagement guidelines, and are designed to establish a foundational set of investor expectations about corporate governance practices in U.S. publicly-listed companies. The Framework goes into effect January 1, 2018 to give U.S. companies time to adjust to these standards in advance of the 2018 proxy season. ISG encourages other investors to sign up and support the framework.
- Nearly 20 leading global banks and investors, totaling $6.6 trillion in assets, launched today the Principles for Positive Impact Finance - a first of its kind set of criteria for investments to be considered sustainable.The Principles are part of a broader process under the Positive Impact Manifesto, launched in 2015 to call for a new, impact-based financing paradigm to bridge the gap in financing for sustainable development.
- First Peoples Worldwide has issued a call to action for investors to engage in shareholder advocacy with the companies and banks involved with the Dakota Access Pipeline (DAPL). Proxy season is from March to July. If you are an asset owner or asset manager interested in joining the Investors and Indigenous Peoples Working Group contact SHeim@BostonCommonAsset.com
- The 2016 NCSE results are based on 805 U.S. college and university endowments and affiliated foundations, representing $515 billion in endowment assets. Of the participants, 17% said they seek to include in their portfolios investments ranking high on ESG criteria, a 2% increase year over year. 27% said they exclude or screen out investments that are inconsistent with the institution’s mission, also up 2% from the previous Study, while 17% said that they allocate a portion of the endowment to investments that further the institution’s mission compared with 16% that did so last year. 8% said they were considering changing their investment policy to include integration of ESG practices in their investment process, up from 7%, while 69% said they were not doing so, compared with last year’s 70%.
- This new document from Ceres aims to increase understanding, transparency, and accountability regarding responsible palm oil production by providing a shared set of reporting guidance for companies across the supply chain. Its primary purpose is to inform the content of public corporate communications and transparency on responsible production and sourcing activities including and beyond certification.
- This report, published by GreenBiz Group in partnership with Trucost, provides a global view on sustainable business, from basic emissions to leadership attributes, such as how many stock exchanges around the world require listed companies to disclose environmental data, or the amount of money being divested from fossil fuel company stocks.
- Scaling up Green Bond Markets for Sustainable Development offers detailed action plans and best-practice examples on how to scale green bond markets. This Public Sector Guide is the result of a partnership between the Climate Bonds Initiative and the UNEP Inquiry into the Design of a Sustainable Financial System. The Guide includes an annex from the World Bank Group as an additional resource for policymakers in emerging economies to assist them in foundational bond market development.
2017 Presidential Climate Leadership Summit | Second Nature, February 13-15, 2017, Tempe, AZ
- 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.
Webinar: ICCR's 2017 Proxy Season Overview l Interfaith Center on Corporate Responsibility, February 13, 2017 11:30 AM ET
Join ICCR as they discuss which issues ICCR members are focused on this proxy season, and to feature new and interesting resolutions/campaigns being launched this year. Featured speakers include Tim Smith, Walden Asset Management; Austin Wilson, As You Sow; Mary Minette, Mercy Investment Services; and Cathy Rowan, Trinity Health.
- During this event Trillion Dollar Transformation will outline the results of their reports and offer useful advice and tips to take back to the boardroom. Trustees of public pension plans though staff and advisors may find the information relevant. The event is free to attend.
Webinar: Proxy Voting and Shareholder Engagement for Endowments l Intentional Endowments Network, February 27, 2017, 12:30 - 1:30 PM ET
The webinar will provide an overview of the value of proxy voting and additional forms of engagement for endowments that are involved in commingled funds through an outsourced CIO – including the current landscape, trends, specific issues, and why it is important for investors. Guidelines and opportunities of how to take action will also be provided.
Visit the website for more upcoming events.
Socially Responsible / ESG Investing
- This week's Bloomberg Brief highlights how investors may start asking retailers and restaurants for more transparency on their treatment of cows, pigs and chickens; banks and investors target sustainable development financing; Grantham, Mayo, Van Otterloo & Co. has plans for a new climate change fund; asset managers and owners team up on governance principles; and a Q&A with Green Century Capital Management's Leslie Samuelrich reveals that she prefers divestment to engagement with fossil fuel companies.
- Some of the world’s leading institutional investors have got together to set up a multi-point US stewardship code. Under the banner of the Investor Stewardship Group they have unveiled the ‘Framework for U.S. Stewardship and Governance’ after a two-year effort. The group is calling on “every institutional investor and asset management firm” investing in the the country to sign up to the framework. They are calling it a “historic, sustained initiative” to establish a framework of basic standards of investment stewardship and corporate governance for institutional investor and boardroom conduct. The framework features six fundamental principles for both investors and companies and is the latest ‘stewardship code’ since the first in the UK back in 2010.
- Investors - from individuals to institutional giants – are seeing the social and financial value of aligning purpose with profit and it’s increasingly important for your brand to define, measure and share your purpose driven-mission for the benefit of humanity and your bottom-line. This article lists five steps you can use to leverage your purpose to make your company more attractive to investors and improve financial performance.
- Institutional investors are voicing concern about the impact of U.S. President Donald Trump's administration on the environment and climate change. Participants at the December conference of the International Corporate Governance Network -- whose members comprise mainly large American and European institutional investors -- expressed interest in corporate ESG efforts and information disclosure. Their discussions generally suggested strong concern about the Trump administration.
- The UN Sustainable Development Goals, agreed by world leaders in September 2015, have captured the imagination of many in the European institutional investment community. In this article, Susanna Rust asks why.
- ESG issues are no longer just about excluding so-called sin stocks or applying value judgements-- they can be a source of added value, says Minsters and Missionaries Benefit Board's Matthew Sherwood in this Q&A.
- Sustainable, responsible and impact (SRI) investing is expanding, offering new opportunities for social enterprises, especially those registered as Benefit Corporations. Those are some of the implications of a recent study conducted by the Forum for Sustainable and Responsible Investment (US SIF) Foundation ‘s report, US Sustainable, Responsible and Impact Investing Trends 2016, according to Meg Voorhes, director of research. Specifically, the biennial report found that SRI assets have expanded to $8.72 trillion in the U.S., a 33% increase from 2014. That’s a significant portion of total assets under management.
- June this year will mark a decade since the very first green bond was issued by the European Investment Bank (EIB). 2016 has shown how far the market has developed, with annual issuance aligned with international definitions reaching a record USD81bn, equivalent to approximately USD9.2m raised every hour!
- College and university endowments’ net returns declined for the second straight year in 2016, dropping into negative territory and posting their worst results since the depths of the financial crisis. Endowments returned an average of -1.9 percent in the 2016 fiscal year that ended in June, net of fees, according to an annual survey released Tuesday by the National Association of College and University Business officers and the nonprofit asset management firm Commonfund. That’s significantly below last year’s return of 2.4 percent and follows a decade of volatile ups and downs.
- University endowments posted the lowest investment returns since the 2008 financial crisis, yet schools upped their spending in fiscal 2016, according to a survey released Tuesday by CommonFund and the National Association of College and University Business Officers. Endowments have been on shaky ground coming out of the recession. Average annual returns have volleyed since plummeting 18.7 percent in 2009. In the 12 months ending June 30, endowments at 805 colleges and universities recorded a negative 1.9 percent return, compared to 2.4 percent growth the prior fiscal year, according to the survey.
- School endowments contribute annually to student aid, faculty salaries and other costs in their operating budgets. Spending, which is often determined by three- or five-year averages of investment returns, is coming under increasing pressure as endowments struggle to keep up with historical results. Boards of trustees and investment committees are re-calibrating expectations for performance, said Paul Dimitruk, chairman of Partners Capital, which handles investments for clients including endowments and foundations.
- ExxonMobil has appointed a leading atmospheric scientist to its board as it bolsters its response to concerns about climate change. Susan Avery, a former director of the Woods Hole Oceanographic Institution in Massachusetts, was elected a director with effect from February 1. Ms. Avery is a respected scientist who has specialized in atmospheric dynamics and variability, and has worked extensively on climate change.
- US investor groups have called on President Donald Trump to ensure a swift transition to a low-carbon economy, as Trump advisor Myron Ebell says the US will clearly change its course on climate policy, withdraw from the Paris Agreement and remain a fossil fuel-based economy.
- A new report by CICERO Climate Finance identifies the biggest risks of climate change for investors. The report finds that some impacts are already happening earlier than anticipated and new ones are expected in the time horizon used by investors. The report shades climate risks red, orange or yellow, reflecting whether impacts are observed and likely to increase (red), are expected in the next decade (orange), or by mid-century (yellow).
- Surrounded by students, Colorado State University President Tony Frank signed a pledge Jan. 25 to commit the university to being powered by 100 percent renewable electricity by 2030. More than 4,300 students, faculty and staff had signed a petition encouraging the university to consider the pledge. Faculty, staff and students from The President’s Sustainability Committee, Live Green Teams, and the Green Guard also endorsed the pledge.
- SparkFund, a Washington D.C.-based financial technology company, announced today the close of a $7 million Series B investment led by Energy Impact Partners. Round participants include existing investor Vision Ridge Partners and new strategic partners in the energy and utility space, with a total expected raise of $10 million. The new funding will allow SparkFund to rapidly grow partnerships and customer reach, giving organizations across the U.S. a simpler way to access new energy technology. Customers understand that they can save money with energy-efficient equipment upgrades, such as LED lighting or smart HVAC technology, but widespread adoption in the commercial sector has been slow.
Fossil Fuel Divestment
Interview with Don Gould, Trustee at Pitzer College, About Their Decision to Divest From Fossil Fuels l Toward Ecological Civilization
- Don Gould is the president and chief investment officer of Gould Asset Management. He is also a trustee of Pitzer College, one of the five prestigious Claremont Colleges. Working together with other trustees, Mr. Gould played an important role in the recent board decision to divest Pitzer’s portfolio of fossil fuel stocks. In this interview, Mr. Gould describes the board and community process that led to the divestment decision, and the deeper values that motivated him to play a leadership role in this process.
- Hundreds of anti-pipeline demonstrators gathered Wednesday morning in downtown Seattle to encourage City Council members to pull $3 billion from Wells Fargo Bank because of its role as a Dakota Access Pipeline lender. The committee voted unanimously to forward the bill to the full City Council on Monday. In addition to terminating the city’s contract with Wells Fargo, the bill would also require that social-justice principles be considered when awarding all city contracts, including construction projects.
- “We’re all here today to make sure we divest from Wells Fargo,” said Councilmember Debra Juarez, of the Affordable Housing, Neighborhoods & Finance Committee. The question on councilmembers’ minds wasn’t whether or not to divest from Wells Fargo—which the committee voted unanimously to do. “The challenge,” a councilmember said, “is to find alternatives.” A full Council vote will take place next Monday, but if Wednesday’s committee discussion was any indication, Seattle will likely become the first city in the country to move all of its money from a financial institution in part for its ties with the Dakota Access Pipeline.
- The Navajo Nation is making moves to join a growing number of tribes that have already respectfully, but conclusively, shown Wells Fargo the door.
- Last week, Irish Parliament passed a historic bill that would lead Ireland to becoming the first country in the world to divest its sovereign wealth from coal, oil, and gas. The Fossil Fuel Divestment Bill will divest over $8.5 billion from the Ireland Strategic Investment Fund. The legislation passed in a 90 to 53 majority vote will be reviewed by the financial committee before becoming law.
- According to a report assembled by UW System Student Representatives, as of December 2016, 641 institutions across the nation have made a commitment to divest from fossil fuel companies, equaling an approximate value of $3.4 trillion. In the spring of 2016, a motion was introduced to the UW System Student Representatives calling for their support in total financial divestment from fossil fuel companies. The UW System Student Representatives passed the resolution, which was sent to all UW foundations and chancellors, demonstrating student backing in complete divestment from the top 200 fossil fuel companies by all UW System foundations by 2022. Students are currently waiting for a response from the foundations.
- Fossil Free WashU (FFWU), the Washington University chapter of a national Fossil Free movement, is calling for the University to divest from fossil fuels through an online petition launched last week that has garnered over 300 signatures. The group demands that Chancellor Mark Wrighton and the Board of Trustees immediately divest the University’s endowment from the 200 “dirtiest” fossil fuel companies headquartered in St. Louis. In addition, FFWU is calling for all endowment investments and proxy voting to be made completely transparent.
- Students at ASU gathered last week as part of a national day of action to petition ASU to reinvest its fossil fuel assets into more socially responsible alternatives.
- Last week students At Swarthmore College walked out of classes and gathered to send a message protesting the dangers of climate change denial. Around the nation, similar movements have been occurring in a myriad of academic institutions. This was the Walk out and Teach-in, organized by Mountain Justice, a group advocating divestment from fossil fuel industries to aid in the fight against climate change. Spurred by the recent political situation in our nation’s highest offices, the group endeavored to inform the attendants about the effects of climate change and emphasized the urgency they feel due to the recently appointed administration surrounding the new president, Trump.
- Last week roughly 100 students and a least a couple faculty members at the University of Montana demonstrated against the climate skepticism in Trump's administration by walking out of class and standing together. Reinvest Montana organized the event, part of a national walkout, as part of its campaign to urge the UM Foundation to divest of fossil fuels.
- Last Tuesday, the University of Denver’s board of trustees announced its decision not to divest. The board agreed with students’ concerns about climate climate and the need to develop alternative sources of energy. Instead of divestment, though, the university opted to establish a new “green fund” to investigate new sustainability efforts and will offer donors alternative investment options if they are morally opposed to making an endowment donation that might be invested in fossil fuels.
Investment Manager and Product News
UBS Launches Sustainable Corporate Bond ETF l FT Adviser
- UBS Asset Management has launched an exchange-traded fund (ETF) providing access to eurozone corporate bonds that have been screened for sustainability. The UBS ETF Barclays MSCI Euro Area Liquid Corporates Sustainable product seeks issuers with an MSCI ESG rating of BBB or higher from its index. Securities issued by corporations whose business activities are "inconsistent" with socially responsible investing (SRI) criteria are excluded. This includes alcohol, tobacco, gambling, civilian firearms and military weapons.
- Northern Trust Asset Management has launched the Northern Trust GRESB Developed Real Estate ESG Index, a unique sustainable real estate index tracking the performance of developed market real estate investment trusts (REITs) with strong responsible investment characteristics. It may serve as the basis for future investment products including exchange-traded funds. The index was created in collaboration with GRESB, an investor-driven organization committed to assessing the ESG performance of real assets globally, and representing over $3tn in assets under management.