Weekly News Round-Up: March 9th, 2018

 
Weekly News Round-Up: March 9th, 2018

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

In case you missed it - be sure to view the recording from this week's IEN webinar on Long Short ESG Strategies for Endowments.

Have a great weekend,

Nicole

Program Manager
The Intentional Endowments Network

 
Sustainable Investing at Endowments

New George Washington University Sustainable Fund Will Test Limits of SRI, Experts Say l The GW Hatchet

  • Officials revealed plans last week to invest $2 million of the University’s $1.7 billion endowment in a fund dedicated to sustainable companies. Experts said there is a common misperception that these types of funds are not economically viable, but they said even if the fund underperforms, it’s not large enough to affect the University’s overall financial well-being. IEN is quoted in this article, and The Business Case for ESG Briefing Paper is referenced when discussing how SRI strategies help diversify investments and typically perform similarly compared to traditional funds.
 
New Reports and Opportunities

Proxy Preview 2018 l Proxy Preview

  • Proxy Preview 2018 is the 14th annual edition of the insider’s guide to social and environmental shareholder proposals. This free publication is the #1 resource for shareholders looking to align their values and investments.

How to Divest Invest: A Guide for Institutional Investors l Divest Invest

  • A guide by and for institutional investors on how to Divest from fossil fuel extraction companies and invest in solutions to climate change is now available. It provides the practical information for decision makers on how to integrate a DivestInvest strategy with the overall mission and asset allocation strategies of a fund. The guide also features case studies from a range of institutional investors including the Church of Sweden, Trinity College Dublin, RS Group and Rockefeller Brothers Fund.

Spending Against Change: Key Metrics Assessment of Climate Change Governance and Political Influence Spending in the Energy and Utility Sectors l Sustainable Investments Institute & The 50-50 Climate Project

  • According to this report, twenty-one of the biggest energy and utility companies in the United States have minimal board oversight of climate risk and almost no board members with relevant climate-related expertise. These companies spent $673 million dollars over six years to influence the political system, predominantly with shareholder money. Companies directed three-quarters of the spending to lobbying, but only six of the 21 corporations voluntarily disclose these expenditures to their investors.
 
 
Sustainable, Responsible, Impact & ESG Investing

Bloomberg Brief l Sustainable Finance

  • This week's Bloomberg Brief highlights how State Street's Fearless Girl statue has faced down Wall Street's bull for a year, and in that time the firm says more than 150 companies without women on their boards have added female directors; China's energy weapon is the color green; and government-invested funds and pensions are leading the push to expand ESG investing, says Chicago Treasurer Kurt Summers.

Webinar: Long Short ESG Strategies for Endowments l Intentional Endowments Network, ICYMI

  • 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.

ESG Strategy Hits Norway’s Sovereign Wealth Fund l International Adviser

  • Norway’s giant sovereign wealth fund has returned 1.6 percentage points less on an annualized basis over the last 12 years because it excluded some stocks on ethical grounds.

ESG, Sustainable and Impact Investing: An Advisor’s Guide l Think Advisor

  • The assets under management in the SRI categories are exploding. By early 2016, they had climbed to $8.72 trillion in the U.S., equivalent to a 20% share of total assets under professional management, and to $23 trillion globally, according to the latest available macro data. This article lists sources that can provide a good introduction to ESG, sustainable, socially responsible and impact strategies.

Taking the Mystery Out of Impact Investing l Barron's

  • One mission of ImpactAssets, a U.S. nonprofit financial services firm, is to make it easier for individuals, families, and the advisors who serve them to get their hands on the information required to understand and evaluate potential impact investments—those that aim to generate social and environmental value as well as a market-based return. Central to this effort is ImpactAssets 50 a free, searchable database of 50 fund managers with at least US $10 million in assets and a three-year track record.

A Passionate Defense of ESG Investing from Connecticut Treasurer l Plan Adviser

  • While the investing rules controlling the Connecticut public pension fund are different from those governing corporate retirement plans, the argumentation in this article as to why gun manufacturer divestment may be the right thing to do offers some food for thought for anyone charged with the fiduciary management of retirement plan assets.

Buffett vs. Ivy League Endowments: Who is the Best in Class? l The Washington Post

  • This article explores performance results from Berkshire Hathaway and university endowments. Berkshire, the holding company run by Warren Buffett, and American colleges, both are quintessential long-term investors.

Why It’s So Hard to Invest With a Social Conscience l The New York Times

  • This article outlines the various options for SRI investing and describes solutions to seven challenges in the field including cost, diversification, and performance.

Why Some Investors Are Refusing to Buy Walmart Stock l Fortune

  • Since the school shooting in Parkland, Fla. killed 17 in February, gun retailers including Walmart, Kroger, and Dick’s Sporting Goods have ramped up restrictions on firearm sales. Amid a debate about the weapons regulations, Dick’s ended sales of assault-style weapons, while the country’s largest retailer, Walmart, raised the minimum age of such purchases to 21. Yet, firms like Walmart may still be keeping a growing class of investors at bay with its reputation as the country’s largest gun retailer: funds that choose based on ESG criteria.

In Impact Investing, a Generation Gap Persists l The Wall Street Journal

  • This article explores how older managers tend to adhere to strategy that eschews social and governance considerations, but today’s firms are remiss if they don’t factor in values.

More than 150 Companies Have Added Women to Their Previously All-Male Boards: State Street l MarketWatch

  • According to State Street Global Advisors, 152 companies that previously had all-male boards have added at least one woman director over the past year, while another 34 have “committed to adding at least one woman to their board in the near term.” The asset-managing giant credited this trend to its own stewardship on gender diversity issues.

Institutional Investors Turn to Alternatives l Super Review

  • Institutional investors have continued to turn to active management and alternative investments to meet long-term return assumptions and diversify portfolio risks in the face of growing volatility, according to survey findings by Natixis Investment Managers. The survey found that seven in 10 investors found that the addition of alternative was important for diversifying portfolio risk, with another 57% saying that investing in alternatives was necessary to outperform the broader market.
 
Investment Manager News
  • This article explores Parnassus Investments. Since 1984, Parnassus has grown to $26.5 billion in assets under management—more than twice that of the next-largest sustainability-focused asset manager—and has become an unequivocal leader in sustainable investing. 

Russell Investments Launches New Material ESG Scores l Institutional Asset Manager

  • Global asset manager Russell Investments has created a material ESG score, which it says more accurately identifies ESG factors that could impact the financial performance of publicly-traded companies.
 
Green Bonds

Green Bonds Need Definitions and Standards First l Pensions & Investments

  • While some institutional investors are buying green bonds, sources said work is still needed around standards, wording and definitions before green bond investment becomes mainstream.
 
Climate Risk, Science and Regulation

U.N. Chief Picks a Very Rich New Yorker (Not Named Trump) for Climate Job l The New York Times

  • The United Nations secretary general, António Guterres, on Monday appointedMichael Bloomberg to be his special envoy for climate action. This appointment comes a year ahead of a summit meeting on global warming that the secretary general is planning.

Climate Mitigation Finance Update: From Divestment to Investment, Renewable Energy and Energy Efficiency l IISD

  • The past month has seen the launch of new renewable energy and energy efficiency projects, investment in the green economy and capacity building, and climate finance approvals through the Green Climate Fund. Projects in the Ukraine have been launched to build four new solar plants and improve energy efficiency in buildings and street lighting, strategic planning projects for sustainable development and renewable energy capacity in Southeast Asia have been announced, a global insurance company has announced a major divestment from coal, and local communities in Ghana are set to benefit from a five-year climate-smart land-use capacity building project.

Apparently, We Can Let The Stock Market Fight Climate Change l Wired

  • This article explores the probability and financial soundness of mobilizing the $53 trillion that is needed according to the International Energy Agency invested in energy supply and efficiency by 2035 to keep global warming below 2 degrees C. 
 
General Higher Education Endowment & Climate Risk News

Letter From David Swensen: The Endowment & the Activists l Yale Daily News

  • In this letter, Yale's CIO responds to student calls for private prison divestment, stating that Yale’s endowment has no exposure to private prison management companies. 

U Virginia Endowment Hires New CIO l Institutional Investor

  • The University of Virginia Investment Management Company (UVIMCO) has hired a new leader. Robert Durden, currently chief investment officer for Texas Children’s Hospital in Houston, will take over as UVIMCO’s chief investment officer and chief executive officer in April, according to an announcement published late Friday.

College Republicans Propose an Unusual Idea From the Right: A Carbon Tax l The New York Times

  • A group called Students for Carbon Dividend, led by Yale College Republicans, the main campus student organization for young Republicans at Yale, and other prominent Republican groups at 22 other schools around the country including Clemson University in South Carolina, North Carolina State University and Texas Christian University in Fort Worth, Texas, is backing an idea first broached by Republican heavyweights including former Secretary of State James A. Baker III and former Secretary of State George P. Shultz: Tax the carbon pollution produced by burning fossil fuels and then return the money to consumers as a dividend in the form of monthly cash payments to individuals, both adults and children.

Congress Introduces Bill to Repeal Endowment Tax l Institutional Investor

  • Members of the House of Representatives introduced a bipartisan bill Thursday to eliminate the new excise tax on university endowments. The bill, sponsored by Reps. John Delaney (D-Md.) and Bradley Byrne (R-Al.), would repeal the 1.4 percent excise tax under the Tax Cuts and Jobs Act signed by President Donald Trump in December. The proposed legislation follows a letter that 49 college presidents sent yesterday to Congress, urging lawmakers to do away with the tax in order to preserve their resources. 
 
Fossil Fuel Divestment

Can NYC Dump Fossil Fuels? l Institutional Investors

  • In January, New York City Mayor Bill de Blasio and Comptroller Scott Stringer called on the city’s pension trustees to begin analyzing ways to divest their funds of fossil fuels. Fossil fuel investments account for roughly $5 billion of the city’s combined $189 billion in pension assets. The five-year divestment plan will begin with an analysis of the anticipated impact on the portfolios’ risk and return characteristics. At present, it’s unclear what divestment mechanisms the pension trustees will recommend. 

Cambridge Student Quits Working Group Over ‘Sham’ Divestment Report l The Varsity

  • Cambridge Zero Carbon Society has condemned a draft report by the University’s Divestment Working Group, saying that it “exposes a deeply anti-democratic and wilfully blind attitude amongst university management” toward divestment. A counsel to the society and its student representative on the Divestment Working Group, resigned from the group yesterday in protest of the draft. 

As Cuomo Backs Divestment, More Fracking Investments Revealed at University of Buffalo Foundation l Eyes on the Ties

  • According to this article, The University at Buffalo’s fossil fuel investments – and the UB Foundation’s unwillingness to make its investments public – undermine the school’s stated commitment to sustainability. As more and more data shows that institutions must make bold changes if they are serious about addressing climate change, UB and other public institutions will face greater and greater pressure to honestly account for their contributions to global warming and to demonstrate that their environmental talk is more than just branding.

Clark Trustees, Student Group at Odds Over Fossil Fuel Investments l Telegram

  • Despite pressure from a campus student group, Clark University will not divest from fossil fuels, the school’s board of trustees recently announced.

The Fight for Fossil Fuel Divestment Rests in Limbo at Concordia l The Link

  • Divest Concordia has been pressuring the school to sell its investments in fossil fuel industries since 2013. Years of negotiations later, it remains clear the school won’t be conceding to the group’s demands, at least not in the immediate future.
 
Calendar of Upcoming Events

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.

The 7th Annual OCIO and Investment Outsourcing Summit l Financial Research Associates, March 20-21, 2018, New York, NY

  • From governance and fiduciary responsibility to vendor selection and various outsourcing models, this event will delve deeply into the specifics of investment outsourcing. Hear directly from investors who have gone through the outsourcing process, as well as from leading providers of outsourcing services. Alice DonnaSelva will be moderating a panel on ESG integration and how it relates to OCIO selection.
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 Alice DonnaSelva will be presenting.