Weekly News Round-Up: April 14th, 2017

New IEN Members
Upcoming Events
 
 
Opportunities for Action
 
Higher Education Carbon Pricing Endorsement Initiative l Our Climate
  • Our Climate, joined by the presidents of Dickinson College, Pitzer College, Swarthmore College, Vassar College, and Wesleyan University, are inviting other college and university presidents to sign a letter calling on national and state elected officials to put a price on carbon. Putting a price on carbon creates a powerful incentive for individuals, communities, investors, and businesses to reduce greenhouse gas emissions and transition to a clean energy economy.
Sign-On: Bangladesh Accord for Fire and Building Safety l The Interfaith Center on Corporate Responsibility & Boston Common Asset Management
  • The Accord for Fire and Building Safety has made important strides to address the risk to garment factory workers in the 1,600 factories covered under the program.  To complete the work however, requires the extension of the original 5-year agreement.  In addition, the Alliance for Bangladesh Worker Safety needs to complete remediation of all outstanding issues identified in its inspections and publicly report on progress so that investors and other stakeholders are informed. We invite you all to join other investors in signing the statement.  Please provide your information by filling out the online form hereThe deadline is close of business, Friday, April 21st.
  • The annual Second Nature Climate Leadership Awards recognize innovative and advanced leadership in sustainability, climate mitigation, and resilience at signatory campuses of the Climate Leadership Commitments. They do so based on demonstrated advances in innovation, embedded opportunities, and student preparedness with relation to sustainability and climate action. Second Nature offers these awards in partnership with the U.S. Green Building Council (USGBC) since 2015. Award winners are recognized as part of the Greenbuild Leadership Awards Program, benefiting from global publicity opportunities.
 
 
New Resources
 
  • It makes commercial sense to embed the SDGs in operations and strategy, but how ready is business to support governments achieve these global goals? This report answers that question. Some key take aways include 71% of businesses say they are already planning how they will engage with the SDGs, and 41% of businesses say they will embed SDGs into strategy and the way they do business, within five years.
IEN-Member News
 
PRI Sets out Sustainable Financial System Programme l Principles for Responsible Investment
  • The PRI set out its Sustainable Financial System (SFS) programme to US signatories at an event hosted by IEX in New York on 29 March. The SFS programme has been established with a long-term view – to better align the financial system with sustainable and equitable economies. In doing so, the aim is to reinforce ESG integration and responsible investment approaches. IEX was chosen for the event because of its commitment to a fair, simple, transparent listed equities market.
Etho Capital Named one of the Most Innovative Companies of 2017 in the Energy Sector l Fast Company
  • Etho Capital was named one of the Most Innovative Companies of 2017 in the energy sector for offering a fossil fuel free ETF.
  • Having successfully hired a senior portfolio manager last year, Zevin Asset Management is seeking to add yet another senior investor to their team who is committed to serving both individual and institutional clients’ financial needs while being dedicated to social change. Experience of managing assets of individual clients in individual public securities is essential.
UBS, a $2.7 Trillion Money Manager, is Preaching Sustainable Investing to its 7,000 Financial Advisors l Business Insider
  • One of the largest financial firms in the world is positioning itself to be the greenest bank on Wall Street. UBS, which manages over 2.7 trillion Swiss francs ($2.7 trillion) has made sustainability the cornerstone of its business. As such, the bank has taken a number of steps to be the go-to firm for sustainable and impact investment offerings. The Swiss-based bank told Business Insider its sustainable investments grew by about 40 billion Swiss francs in 2016. Those investments now make up about 35%, or more than $970 billion Swiss francs, of the bank's "total invested assets."  This year, they will sustainably invest one trillion Swiss francs of its managed assets, according to this article.
Sustainable, Responsible, Impact & ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how some sustainable investors are flipping their focus from fossil fuels to forests, betting that trees pulling carbon from the air can have a bigger impact than other investments; renewable energy investment in developing countries dropped faster last year than in richer nations; Tesla Inc. searches for new independent directors; and Bank of New York Mellon looks at products that help women.
Ford Foundation Is an Unlikely Convert to ‘Impact’ Investing l The New York Times
  • This article describes the history and decision making behind the Ford Foundation's recent  announcement that it would commit $1 billion to investments that “earn not only attractive financial returns but concrete social returns as well.”
Kellogg - Morgan Stanley Sustainable Investing Challenge Winner: Flexible Finance for Low-Income Schools l Impact Alpha
  • A team of MBA students from Northwestern University’s Kellogg School of Management that proposed a low-interest loan fund for India’s 400,000 low-fee private schools took first place in last week’s Kellogg Morgan Stanley Sustainable Investing Challenge. Now in its seventh year, the tone at the finals in New York suggested the tide is shifting towards long-term, sustainable investing.
  • Regardless of their specific approach to impact investing, the 11 foundation leaders featured in this series share the same refrain: We can’t make meaningful progress against the most important social and environmental challenges of our time without taking risks, and foundations are uniquely positioned to take such risks. While each individual foundation has its own risk tolerance, all foundations should be able to find a comfortable spot along the risk spectrum to commit more of their capital toward mission.
Consultants, Asset Managers Tout Holistic Approach In Carbon Footprint Analysis l Money Management Report
  • This article discusses how carbon footprint analysis relates to ESG criteria and advises investors to carefully consider the objectives and the goals they are trying to achieve when making such considerations a part of their investment analysis. 
SDG Round-Up, April 13 (Subsciption) l Responsible Investor
  • This article is a compilation of the latest developments in relation to the sustainable development goals, including Denmark’s Ministry of Foreign Affairs having reportedly announced that “all relevant aspects of new Danish legislation will be assessed in relation to the Global Goals,” and IEN Member Oekom Research’s Corporate Responsibility Review 2017 citing global pressures from such initiatives as the SDGs as drivers of the ‘slight’ improvement in corporate governance practices.
  • New Research shows private equity activity in Africa will inject billions of US dollars of sustainable investment over the next five years. Private equity deals in Africa are growing from a low base equivalent to 0.18 percent of Africa’s GDP in 2016. Every 0.01 percent increase will mean $200 million (R2.75 billion) more investment and could easily reach $1.1 billion over the next five years.
The “Why” Question in Investment Theory l Harvard Law School Forum on Corporate Governance and Financial Regulation
  • Economics has developed as a science, conveniently forgetting its roots in political philosophy. Unfortunately that “science” is severely dated, and the functioning of the global capital markets has become separated from the real world. A simple thought experiment throws light on the theoretically correct strategies for a rational saver, but leaves us with unsatisfactory answers. Neglecting the societal context of our saving activity only serves to further isolate the capital markets. Instead, a self-perpetuating system requires investors to evolve from simple allocators of capital to its steward, with far broader responsibilities. Maximising holistic returns represents practical action of the responsibility by investors, and stretches far beyond creating wealth simply for its own sake.
Shareholder Engagement
 
Proxy Season 2017 Blog l As You Sow, Proxy Impact, & SI2
  • This blog is the place where active shareholders can stay up-to-date on the inside scoop of what's happening at selected annual meetings being voted on each week, as well as the most relevant advocacy position and expert insight articles from Proxy Preview 2017. For the dates of April 10 to April 21 there is a meeting at Bank of New York Mellon on April 11, 2017 as well as a meeting at Kraft Heinz Company on April 19, 2017. Read the blog for more information on the votes taking place at these meetings.
Adam Kanzer: The Business Roundtable’s Unreasonable Proposal
 (Subscription) l Responsible Investor
  • Last year, the Business Roundtable published a proposal to “modernize” the process shareholders use to submit shareholder proposals in the United States. If fully implemented, it would eliminate virtually all proposals. In this article, Adam Kanzer explains why.
ICCR Statement in Support of In-Person Annual Stockholder Meetings l Interfaith Center on Corporate Responsibility 
  • This statement reflects ICCR's view that in-person shareholder meetings are a critical component of good corporate governance. They enable long-term investors to share information and voice concerns about financial risks they believe the company may not be adequately managing. Virtual-only meetings can significantly reduce this additional input, fostering a dangerous insularity that exposes the company to even greater risk. Further, they fear the move to virtual meetings will be used by management and board to avoid challenges, filter out negative feedback, cherry-pick questions, and downplay opposition to business decisions and plans.
  • Institutional investors are not yet satisfied with Rio Tinto’s response to a shareholder resolution passed last year that asked the mining company to provide more information about its approach to climate change risk. The resolution was co-filed by the Aiming for A investor coalition, an initiative of UK charity fund manager CCLA, along with a wider group of institutional investors with over $4trn (€3.8trn) of assets. Similar resolutions were filed at Anglo American and Glencore.
Fixed Income & Green Bonds
 
Investors Warm to ‘Green Bonds’ l Wall Street Journal
  • “Green bond” issuance is growing fast, part of the overall trend of do-good investments becoming more popular. About $81 billion of green bonds were issued last year, according to the Climate Bonds Initiative, a nonprofit that promotes the debt market as a way to raise money for projects related to climate change. It expects $150 billion of green bonds to be issued this year, compared with just $3 billion were issued in 2012.
A New Asset Class is Gaining Ground as Investors Turn Socially and Environmentally Conscious l CNBC
  • Green Bonds, though not new in the finance world, saw demand rise at a faster pace after the Paris climate change agreement was reached in December 2015. The accord, which came into effect in November 2016, will see nearly 200 countries work to reduce greenhouse gas emissions with the aim of containing climate change. Moody's Investors Service said in January this year that green bond issuance rose 120 percent in 2016 to a record $93.4 billion, and it has the potential to hit $206 billion in 2017.
  • The Pimco Environmental, Social and Governance Global Bond Fund will be benchmarked against the company’s global bond model, and will plough investor cash into a range of sovereign and investment-grade bonds around the world. The launch comes amid a broader push for ethical investment frameworks. Last month Australia’s largest wealth manager AMP dumped $600 million worth of investments in big tobacco, cluster munitions and landmines after overhauling its ethical guidelines.
Sustainable Development Goals: Common Goals, Our Approach, Your Impact
 l Pimco
  • The United Nations Sustainable Development Goals (SDGs) can serve as a framework for measuring impact in environmental, social and governance (ESG)-focused investing. Establishing a common approach, and understanding how to measure progress towards meeting the goals, is key to unlocking core fixed income capital for the purpose of positive change.
 
 
Higher Education Endowment & General News
Yale Endowment Blasts Low-Fee Critics, Says Gains Would Lag l Bloomberg
  • Yale University, one of the most-watched and best-performing college endowments, defended the fees it pays to external managers, saying in an annual investment report that a low-cost passive strategy would have “shortchanged’’ the Ivy League school’s students and faculty. While declining to provide details about how much the fund pays, its managers earn “large performance-based fees,’’ the report said. The $25.4 billion endowment, the second largest in higher education behind Harvard, has been run since 1985 by David Swensen and returned 3.4 percent for the most recent fiscal year when college endowments lost 2 percent on average.
How Yale's Endowment Negotiates Fees l Institutional Investor
  • This article describes how Yale's endowment managers negotiates and structures fees and terms by asset class, according to its 2016 investment report.
Gonzaga Environmental Organization of Gonzaga University Speaker Series Opener Advocates for Responsible Investing l The Gonzaga Bulletin
  • Last year Gonzaga President Thayne McCulloh asked director of sustainability Jim Simon to create conversations around ways the university can invest in a sustainable, “responsible” way. At the second of two events in the The SRI Speaker Series this year, Jason Henning, Vice President of Investor/Donor relations at Seattle based Global Partnerships—a nonprofit ‘impact-led’ investment firm that focuses on subsidizing necessary supplies in poverty stricken areas across the globe spoke.
Open Letter to President Donald Trump, Secretary of State Rex Tillerson, and EPA Administrator Scott Pruitt l Chaplains for Earth
  • In this open letter, Deans and Directors of college and university religious and spiritual life departments call upon the United States government to honor the commitments it made at the 2015 United Nations Climate Conference in Paris. More broadly, they encourage the U.S. to continue engaging in international talks and actions as well as domestic measures to mitigate the human-made impact on climate change.  
Climate Risk, Science & Regulation
 
California's Cap-and Trade Program Wins in Court, Program's Future Still Unclear l Van Ness Feldman
  • In 2016, the California Legislature enacted an aggressive target for the state: reduce greenhouse gas (GHG) emissions 40 percent below 1990 levels by 2030.  However, the state’s climate policies have been subject to ongoing judicial and legislative uncertainty. On April 6, 2017, a California appellate court lifted one of those clouds of uncertainty, issuing a 2-1 decision that preserves the state’s landmark cap-and-trade program – at least through 2020.  California Chamber of Commerce v. CARB.  Thereafter, the fate of the cap-and-trade program is in the hands of the California Legislature, which is considering whether cap-and-trade will play a role in the state’s future climate policies – and, if so, in what form.
  • This year, University of California Retirement Systemwas the highest rated US Endowment for managing climate risk per the AODP Global Climate Index. The AODP Global Climate Index is the world standard for assessing the world’s largest investors on climate-risk management. The Index has been produced by assessing the world’s largest 500 asset owners including pension funds, sovereign wealth funds, insurance companies, foundations and endowments. 

Clean Energy
 
Kentucky Coal Mining Museum Converts to Solar Power l Mountain News
  • The Kentucky Coal Mining Museum in Benham is owned by Southeast Kentucky Community and Technical College. "We believe that this project will help save at least eight to ten thousand dollars, off the energy costs on this building alone, so it's a very worthy effort and it's going to save the college money in the long run," said Communications Director Brandon Robinson.
NRG, a Power Company Leaning Green, Faces Activist Challenge l The New York Times
  • Over the years, NRG, a leading independent power producer whose fleet once depended heavily on coal, has made big bets on low-carbon energy technologies. It pursued developing renewable energy for customers large and small and set aggressive goals to reduce its emissions of carbon dioxide — 50 percent by 2030, and 90 percent by 2050. Activist hedge-fund investors have installed two directors on the board who, in one potential approach, would push to sell off some of the company’s renewable-power projects, raising questions about how it would meet its clean-energy goals.
  • Ohio State University’s endowment will jump 25% in size with a $1 billion payment from two companies that will lease the school’s energy assets for 50 years. The school’s board of trustees on Friday approved a public-private partnership with French company Engie SA and Montreal-based Axium Infrastructure Inc. to run and manage its energy and electricity systems in exchange for annual payments expected to exceed $54 million.
 
 
Fossil Fuel Divestment
 

University of Auckland and Auckland Council Called on to Divest From Fossil Fuels l Fairfax Media

  • Auckland Council and the University of Auckland are being called on to pull investments in coal, oil and gas. On Tuesday climate group 350 Aotearoa will ask Auckland Council to halt all new investments in fossil fuels and divest existing investments within three years. Last week more than 100 students from the Auckland University Medical Students Association rallied against the University of Auckland for investing in fossil fuels.
SUNY New Paltz Foundation Should Divest From Fossil Fuels (Opinion) l Daily Freeman
  • In this letter to the editor, a current student at SUNY New Paltz discusses the reasons he believes the foundation should divest from fossil fuels.
Yale Approaches Exxon Divestment Decision l Yale Daily News
  • The Yale Advisory Committee on Investor Responsibility met with three senior executives at Exxon Mobil Corp. in March, a major step in the committee’s efforts to determine whether the University should divest from Exxon Mobil, the largest oil company in the world. ACIR Chair Jonathan Macey LAW ’82 described the conversation with Exxon Mobil to members of Fossil Free Yale, Yale Students for Prison Divestment and the Dwight Hall Socially Responsible Investment Fund at a meeting in Luce Hall on Saturday. Catherine Hill GRD ’85, a University trustee who was on campus for the Yale Corporation’s meeting this weekend, was also in attendance.

Western University Makes First Move to Divest From Fossil Fuels l The Gazette

  • Western University has taken its first real step towards divestment from fossil fuels by moving a portion of its reserve funds towards investing in companies which are “sustainability leaders in the areas of water, energy, waste and food & agriculture.”The University will be moving approximately $800,000 (out of approximately $4 million overall in its reserve funds) from Canadian equities in its reserves to a new Canadian sustainability fund called “NEI Environment Leaders Fund.”
UNC Asheville Student Organization Seeks to Divest University Funds From Fossil Fuels l The Blue Banner
  • As funding and political support continues to flow for controversial pipeline projects, like the Keystone and Dakota Access, a group of dedicated UNC Asheville students actively try to convince students and university officials to take their money away from financial institutions supporting extractive energy. UNCA Divest, formerly Divestment Coalition, is a long-standing student group having historically advocated for the university to divest totally from fossil fuels like coal or natural gas.

Johns Hopkins Provost Hosts Discussion Forum on Divesting From Fossil Fuel Companies l JHU Hub

  • In response to mounting evidence of the environmental and public health impacts of the fossil fuel industry, Johns Hopkins University will hold a forum to discuss the issue of fossil fuel divestment. The JHU Forum on Divestment from Fossil Fuels will take place Monday, April 17 in Hodson Hall. Experts will discuss the social, ethical, and financial implications institutions should consider when deciding whether or not to end investments with fossil fuel companies. A question and answer session will follow the panel. Nearly a third of the university's $3.8 billion endowment is privately invested.
Faculty Senate Unable to Vote on Univeristy of Buffalo (UB) Fossil Free’s Divestment Proposal l The Spectrum
  • By the time UB Fossil Free presented to Faculty Senate, the proposal already had 1,600 signatures from the Student Association and Graduate Student Association, and is currently pending approval from the Professional Staff Senate.This week the Faculty Senate postponed the vote on UB Fossil Free’s divestment proposal. A student organizer presented the 20-minute divestment proposal and took questions from the Senate. The Senate was preparing to vote until one senator realized there weren’t enough members present at the meeting to make the proceedings valid. The vote is postponed until April 26.
  • Interest in socially responsible investment policies has been growing on a global, national, and campus-wide scale. On Tuesday, April 4, an expert in this field came to talk to an attentive Sewanee audience. Charlie Bohlen, the Chief Investment Officer of SFE Investment Counsel, gave a lecture hosted by the Babson Center for Global Commerce, the Divestment Club, and the Sewanee Investment Club.