Weekly News Round-Up: June 16th, 2017


New IEN Member
Upcoming Events

  • There are now 1,700 PRI signatories, from over 50 countries, with assets approaching US$62 trillion, committed to incorporating ESG issues into investment analysis and decision-making. This webinar will explore how SASB standards can help PRI signatories fulfill their commitments and adhere to the values that undergird the PRI principles.
ESG in Infrastructure & Private Market Investing l UN PRI, June 29th, 2017, New York, NY
  • Join the PRI at an event on ESG in Infrastructure & Private Market Investing on June 29th at The University Club of New York. The agenda includes a keynote speech on why LPs are increasingly seeking ESG strategies, as well as effective frameworks and themes being applied in infrastructure investing.
Impact Capitalism Summit - Nantucket | Big Path Capital, July 19-20, 2017, Nantucket, MA 
  • This Summit will focus on key factors that are changing the impact investing landscape. IEN will be partnering with Big Path, Ceres, and others to host a pre-Summit event focused on opportunities for investing in clean energy and climate solutions.
 
 
Opportunities for Action
 
Grand Coalition Statement on Paris Agreement l Second Nature
  • The Administration announced that the United States is withdrawing from the Paris Agreement. It is clear that higher education, in alignment with a grand coalition of other vital sectors of the US economy, must continue to lead the nation’s climate actions. Join mayors, governors, and business leaders in demonstrating our national commitment to the principles and targets of the Paris Agreement. This joint statement is the first time that these sectors have joined together publicly in a strong show of support for climate action that is so vital to the future of our country.
  • IEN is pleased to support The SRI Conference Student Scholarship. The scholarship is run by a group of First Affirmative Financial Network alumni and longtime affiliates to bring qualified young people to The SRI Conference. Their goal is to insure that the culture, commitment, and competence of the pioneer SRI movement be sustained into the next generation. Applications are accepted through September 11thclick here to apply. Winners are announced in late September.  For questions or additional information on this program, please contact SRIscholarship15@gmail.com
 
 
New Resources
 
  • A lot of people find the idea of sustainable investing appealing, but what does it really mean and how can you start investing this way? The concept originally had its roots in socially responsible investing, but as it’s grown in popularity, it has also grown more complex. The differences in approaches come from what each aims to accomplish and how, as outlined in this report.
Best of Sustainable Finance l Bloomberg Reports
  • This special edition of Sustainable Finance presents the best stories from the brief this year -- from green bond sales to the gender pay gap.
SRI & ESG Investing at Endowments
 
Board of Directors Approves New Socially Responsible Investing Policy | Georgetown University
  • Georgetown’s board approved an SRI Policy that further aligns the university’s investment strategy with its commitment to social justice, protection of human life and dignity, stewardship for the planet and promotion of the common good. “This SRI Policy is an important step forward for Georgetown,” says Paul Tagliabue (C’62), the board’s vice chair and leader of its working group on SRI. “It formalizes and strengthens the university’s investment policies. Recognizing that the university’s endowment is not to be used for advocating political interests, we are committed to both meeting our fiduciary responsibilities and generating resources to advance the university’s academic mission in a manner consistent with our identity as a Catholic and Jesuit institution.” See the SRI Policy here
University of Toronto Asset Management releases first-ever report on responsible investing | The Varsity
  • UTAM, the non-profit corporation responsible for handling the University of Toronto’s investments, has released its first Responsible Investing Report, outlining its plans to pursue responsible investment strategies. UTAM’s primary effort to encourage responsible investing has been through the analyses of ESG factors when making direct and indirect investment decisions. See the report here
Statement of Investment Principles | Board of Trustees of the University of Oregon 
  • From the policy: Academic research supports the practice of incorporating environmental, social, and governance (“ESG”) factors with other conventional financial analytical tools when evaluating investment opportunities as these factors may help identify potential opportunities and risks which conventional tools miss. The UO encourages its advisors and managers to include ESG factors in their analytical processes.
  • Wespath Benefits and Investments was commended by Responsible Investor for the quality of its sustainable investment report, 2015-2016 Sustainable Investment Report: Global Investor—Sustainable Investor. The award recognizes best practices and promotes transparency in sustainable investment reporting. Wespath was the only U.S.-based asset owner nominated in the "Best RI Report by an Asset Owner" category; it is the second time RI has recognized Wespath for its sustainable investment reporting.
  • CalPERs has won Responsible Investor's inaugural award for Innovation & Industry Leadership for its Environmental, Social, and Governance 5-Year Strategic Plan. 
 
 
Sustainable, Responsible, Impact & ESG Investing
 
Bloomberg Briefs l Sustainable Finance
  • This week's Bloomberg Brief highlights how, as many of the world's biggest asset owners increase their focus on responsible investing, they are starting to ask more of hedge funds they invest in if they are incorporating sustainable strategies;  Apple returns to the green bond market; family offices could fill funding gaps for minority-owned businesses; and gender diversity in Asian boardrooms is among the lowest in the world. 
Individuals and Institutions Split on Benefits of ESG Investing: Survey l Investments & Pensions Europe
  • More precise language about ESG investing and a more thorough conversation about the purpose it plays in portfolios may be the key to bridging the “gulf” between how professional and individual investors view its role and impact, according to Natixis Global Asset Management. In a report based on a set of investor surveys it carried out last year, the asset manager said it found a “distinct split” in the views of professional and individual investors that challenges conventional thinking about ESG investing. Individuals believe the environmental, social, and ethical records of the companies they invest in are important, said Natixis, while professionals at institutions and within “the investment community” were more sceptical about the efficacy of these strategies, for example having concerns about performance measurement.
  • Some 82 percent of S&P 500 Index companies published a sustainability or corporate responsibility report last year, according to new research data. “If asset owners like CalPERS, New York State Common Fund and the New York City pension system and others are increasingly requiring asset managers to demonstrate their commitment to sustainable investing, then that influence is shaping the direction of the capital market,” said Hank Boerner, chairman & co-founder of the GAI.
UN PRI: Transparency Holds the Key to Sustainable Markets l IR Markets
  • Transparency is a key driver for creating sustainable capital markets and should form a core part of the business model of every player within the financial services sector, including stock exchanges. Global stock exchanges list more than $70 tn of market capitalization, ideally placing them to drive long-term value creation through improved market transparency. The UN Sustainable Stock Exchanges Initiative (SSE), launched in 2009 and co-organized by a number of other UN programs, including the UN-supported PRI, has been successful in bringing global exchanges together, along with investors, regulators and companies, to enhance corporate transparency on ESG issues.  Eight years after launch, the SSE today includes 60 stock exchanges, representing more than 30,000 listed companies.  
  • As institutional investors increasingly turn to alternative investments, including private equity to seek additional return and diversification, the pressure is now on private equity managers to step up and offer sustainable investment solutions, says Mirja Lehmler-Brown, Senior Investment Manager at Aberdeen Private Equity.
  • This article discusses how one can evaluate different ETFs using MSCI’s ESG ratings data on ETF.com.
 
 
Shareholder Engagement
  • Recently, hundreds of Facebook shareholders at the company’s annual meeting listened politely as top executives discussed the social media giant’s performance metrics and goals–until Natasha Lamb, Managing Partner at Arjuna Capital, got up out of her chair and stood to face the board. She demanded that the company address its fake news problem by publishing a formal report about its prevalence on the site and its impact. While the firm has spent years trying to pressure corporate boards to address social and environmental issues, in recent months there’s been a clear increase in such investor-driven proposals.
Investment Manager News
 
  • Broadridge Financial Solutions is to add MSCI ESG Research’s ESG Fund Metrics to its Global Market Intelligence, a platform for domestic and cross-border fund data and analytics. Under the agreement, key MSCI ESG Fund Metrics will be available on the platform to provide an increased level of transparency on the (ESG quality and characteristics of over 26,000 mutual funds and ETFs covered by MSCI ESG Research.
TFC Financial Management Launches Sustainable and Responsible Investment Strategy l Wire Update
  • TFC Financial Management (TFC), an independent, majority employee-owned registered investment advisory and financial planning firm has announced the launch of its Sustainable and Responsible Investment Strategy (SRI). “Our clients, their families and prospective clients are increasingly expressing interest in SRI and their desire to have investment portfolios be more aligned with their personal values and social impact priorities,” said TFC Chief Executive Officer Renée Kwok. “We are pleased to be able to offer this strategy, designed to provide long-term investment returns as well as positive social and environmental impact, as both dimensions are important to these clients.”
  • Morgan Stanley recently announced that it has launched a sustainable investing e-learning education program directly to the desktops of each of its approximately 16,000 Financial Advisors. Morgan Stanley offers individual and institutional clients sustainable and impact investing solutions through its proprietary Investing with Impact Platform. Built in collaboration between Morgan Stanley Wealth Management and the Institute for Sustainable Investing, the web-based curriculum provides an immersive educational experience through a series of five themes covered in the course.

General Higher Education & Endowment News
 

 

  • A new report on operations at the University of Louisville Foundation describes in devastating detail a series of excessive spending practices, unbudgeted expenses, unapproved actions, high executive compensation and unrecorded endowment losses. The foundation’s Board of Directors in many cases did not approve foundation activities or were not aware of them, according to the 135-page report, which was produced by an independent investigating firm and released Thursday
  • The University of Michigan's endowment is looking for yield by boosting its holdings in two Texas-based energy funds. The University said it plans to add to its investment in Denham Oil & Gas, a Houston-based fund that focuses on upstream exploration. The endowment committed $30 million to Denham in March. It's also seeking to bolster its co-investment in Dallas-based Four Rivers Resources. The school committed $5 million in April to the fund, which acquires assets from an operator in the San Juan basin in Colorado. The university's fund had 8.3 percent of assets invested in natural resources as of April, up from 6 percent as of June 2015, according to public filings.

 

Climate Risk, Science & Regulation
 
Bullish Forecasts Create Liability Risk, ClientEarth Warns Fossil Fuel Giants l Client Earth
  • ClientEarth has written to BP, Glencore and investors warning of the risk of investor lawsuits based on statements about future fossil fuel demand in their reporting. Both companies publish scenarios for future commodity demand in official reporting documents that paint a picture at odds with expert analysis. They are also optimistic when compared to competitors’ forecasts. According to ClientEarth, this suggests a risk of evidence materializing which demonstrates that the companies’ management were reckless as to the truth or accuracy of statements relating to these scenarios. Such evidence could be an internal memo, email correspondence or consultant reports.If this happens, and investors have suffered loss as a result of relying on the statement, investors can sue.
Fossil Fuel Divestment
 

Pensions, CIOs Rebuke Fossil Fuel Divestment Report l Chief Investment Officer

  • A new study that was commissioned and financed by the Independent Petroleum Association of America (IPAA) suggests fossil fuel divestment could cost the top US pension funds up to $5 trillion over the next 50 years. Using available data on the current holdings of each fund, the study analyzes 11 funds including CalPERS and municipal funds. “This may be looking at valuations and fossil fuels as our main energy source currently. However, the growth of technology within energy is unreal,” said Matthew Sherwood Ph.D, senior manager, public markets investments, MMBB Financial Services. “Even further than that, new technology is constantly being created with certain coals and more reliable oil, and investing those technologies with a further upside is a lot more money. That’s where you generate true alpha, like investing in Tesla when it was a startup. I think the opportunities that these technologies create within energy makes it much more attractive.”
Major US Pension Fund Divests Australian Coal l Financial Standard
  • The largest educator-only pension fund in the world is divesting from all non-US thermal coal holdings, including Australia-based Whitehaven Coal. The US$206.5 billion California State Teachers' Retirement System (CalSTRS) teachers' retirement board reached the decision last week, based upon its long-term global perspective and fiduciary duty, including consideration of environmental risks - both current and those projected over the next 10 to 25+ years.
  • Georgetown will make efforts to avoid investments in companies involved in providing abortion services, as well as companies deemed to violate “human dignity,” after the university’s board of directors approved a new Socially Responsible Investing Policy on Thursday. The policy is a general framework for the university’s investment strategy, laying out ethical guidelines that the university must follow consistent with the its academic mission and Catholic and Jesuit identity. The new guidelines broadly require the university to consider the social and environmental impact of companies in which it invests.