Weekly News Round-Up: June 23rd, 2017

IEN in the News

Cambridge Associates and the Intentional Endowments Network Outline a Blueprint for Action for Investors Wishing to Uphold Aims of Paris Climate Agreement and Implement Environmental Factors Into Portfolios l Market Wired

  • Though the United States government is no longer supporting the Paris Climate Agreement, hundreds of American institutions -- including endowments and foundations -- have joined businesses, philanthropists, cities and states across the country in remaining committed to the international accord. Many institutions struggle to integrate environmental objectives and considerations (including ESG factors) into their investment portfolios, and the language of the Paris Agreement provides a good framework for moving forward.  IEN and Cambridge Associates have created related resources for institutions, "Considerations for ESG Policy Development" and "Paris Agreement in the Investment Policy."
3 Ps Critical to Investing in Aftermath of US Withdrawal from Paris Agreement l Chief Investment Officer
  • Despite President Trump’s decision to pull the US out of the Paris Agreement, institutional investors have united with businesses, philanthropists, cities, and states across the nation to pledge their allegiance to the international accord. For many institutions finding it difficult to integrate environmental objectives and considerations (including ESG factors) into their investment portfolios, the blueprints can be found in the Paris Agreement. Cambridge Associates’ Tom Mitchell, managing director in the Mission-Related Investing Practice and Georges Dyer, principal of the Intentional Endowments Network (IEN), have outlined a simple strategy to aid institutions with investment issues.
 
 
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.
Webinar: Introduction to Impact Investing l Intentional Endowments Network, June 29th, 2017, 2:00 PM EDT
  • In this webinar, Fran Seegull, Executive Director at the U.S. Impact Investing Alliance at The Ford Foundation, Allison Spector, Senior Manager of Investors' Council & Membership Programming at The Global Impact Investing Network, and Shawn Wischmeier, CIO of Margaret A. Cargill Philanthropies, will offer an introduction to impact investing for institutional investors.
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.
  • On July 12, 2017, The Investment Integration Project (TIIP) and the Center for Applied Research (CAR) at State Street, in conjunction with Ceres, will co-host an event that explores the intersection between efficiency and intentionality, and how the alignment of the two leads to effective 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.
New Reports
 
Paris Agreement in the Investment Policy l Intentional Endowments Network and Cambridge Associates
  • Developing effective sustainable investment policies requires a process of stakeholder engagement that includes education about and exploration of the sustainable investing thesis, field, and opportunity set. Through such a process investors can articulate their purpose, priorities, and principles and integrated these pillars within their investment policies and decision criteria. Climate change is a critical sustainability priority, which presents a range of risks and opportunities for investors. One potential framework for integrating climate considerations into investment policies is the 2015 Paris Climate Agreement. Here we list the three aims of the Agreement and offer examples of language that may be included in a statement of priorities.
Considerations for ESG Policy Development l The Intentional Endowments Network & Cambridge Associates
  • At the highest level, investors with policies they consider to be effective and broadly supported share some common traits. They have articulated their purpose, priorities, and principles and integrated these pillars within their investment policies and decision criteria. One key to arriving at this point is the investment of time. Effective ESG policy creation requires a process of stakeholder engagement that includes education about and exploration of the sustainable investing thesis, field, and opportunity set. This resource contains descriptions of the key elements of purpose, priorities, and principles and some examples of language that may be useful for spurring dialogue, thinking, and policy development.
New Energy Outlook 2017 l Bloomberg New Energy Finance
  • Focused on the electricity system, NEO combines the expertise of over 80 market and technology specialists in 12 countries to provide a unique view of how the market will evolve What sets NEO apart is that our assessment is focused on the parts of the system that are driving rapid change in markets, grid systems and business models. This includes the cost of wind and solar technology, battery storage, electricity demand and the uptake of EVs among others.
 
 
Endowment SRI/ESG News
  • The University of Winnipeg Foundation has created a responsible investing policy to guide its endowments, the school's revenue development arm announced Friday. Sparked by a "divest from fossil fuels" student movement which began in 2014, the foundation has also committed to establishing a renewable energy (green) investment fund as an option for investors, it said. "The adoption of our responsible investing policy and the related initiatives... are a welcome evolution," foundation president and chief executive officer Brian Daly said in a news release. "While adhering to our mandate, we are keen to continue demonstrating alignment with, and sensitivity to, the values and concerns of our stakeholders and fellow members of the UWinnipeg community."
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how the green-bond market has boomed on the allure of investments that help the environment and the industry is now trying to show that the reality matches these ambitions; Hedge fund Man Group Plc named a head of responsible investing; Vivint Solar Inc. leads solar stock rally; Women lose ground on board seats; and oil majors risk wasting $2.3 trillion if peak demand looms.
  • In this Q&A, Suzanne Fallender, Director of Corporate Responsibility for Intel Corporation and Irving S. Gomez, Assistant Corporate Secretary and Managing Counsel in the Corporate Legal Group for Intel Corporation explore how Intel engages in ESG conversations with investors, their approach to disclosure, and how the ESG conversation has evolved in the governance community in recent years.
ESG ETFs Could Find Support from Institutional Investors l ETF Trends
  • According to a recent survey conducted by BNP Paribas Securities Services, titled “Great Expectations: ESG – What’s next for asset owners and managers,”almost 80% of asset managers and asset owners use ESG factors in their decision making, and among those incorporating ESG, 46% plan to invest at least half of their assets in funds that incorporate ESG by 2019, reports Michael Katz for Chief Investment Officer. “This represents a significant shift from today,” according to the report, “where for 45% of asset owners and for 40% of asset managers, 25% or less of their funds is either invested in or marketed as ESG/RI funds.”
High ESG Performance Translates Into High Financial Performance l Forbes
  • This Q&A with Chris McKnett, Managing Director of State Street Global Advisors and Mirtha D. Kastrapeli, Global Head of State Street’s Center for Applied Research explores recent trends that show that investors are actively seeking to align their investments with their values to create a positive outcome.
The Truth is Finally Starting to Emerge About Socially Responsible Investing l CNBC
  • This article discusses how socially responsible investing funds perform as well as traditional stock funds, algorithms to identify ESG factors are continually improving, the main hurdles SRI funds continue to face, and how socially responsible funds that focus on excluding stocks, rather than identifying stocks that score highly on ESG metrics, have a harder time generating good long-term performance.
Consultants, Rules, and Jargon: the ‘Roadblocks’ to Impact Investing l Investments & Pensions Europe
  • Pension fund consultants have been standing in the way of greater adoption of impact investment by their clients, it was argued at a conference yesterday. Katherine Garrett-Cox, member of the supervisory board at Deutsche Bank and former chief executive and chief investment officer of Alliance Trust, said pension fund consultants were “a roadblock that needs to be broken down”. David Scott, chairman at Tribe Impact Capital, an impact-focused wealth manager, argued that trustees needed to take more responsibility and challenge consultants. Fiduciary duty was about the financial return and societal impact of investments, he added.
Survey Suggests ESG Investing Can Boost Plan Participation l Napa Net
  • Environmental, social and governance (ESG) considerations in investment decisions are growing in importance and could help increase retirement plan participation and contribution rates, according to results from Natixis Global Asset Management’s 2017 ESG Report. The survey of 7,100 individuals from 22 countries consists of institutional decision makers, global financial advisors and individual investors, and U.S.-based DC plan participants. The objective was to develop a picture of how both professional and individual investors feel about the role and impact of ESG.
Shareholder Engagement
  • This piece highlights the shareholder engagement work of Natasha Lamb, managing partner at the Boston investing company Arjuna Capital (a founding member of IEN), specifically in relation to the gender pay gap. It also profiles several other leaders in the field of shareholder engagement and fair pay activism.
Shareholders Force ExxonMobil to Plan for a World with Paris Agreement's Emissions Restrictions l World Resources Institute
  • Lost in the announcement earlier this month that the United States would withdraw from the Paris Agreement, there was another potentially high-stakes climate change development: 62 percent of ExxonMobil's shareholders voted to instruct the oil giant to report on the business impact of global measures designed to limit warming to 2 degrees C (3.6 degrees F) above pre-industrial levels. This follows a similar successful shareholder vote at Occidental and PPL, a large utility holding company.

General Higher Education Endowment News
  • The University of Texas Investment Management Co. named Thomas Britton “Britt” Harris, who runs one of the largest U.S. pension plans, as chief executive officer to help boost performance at the $40 billion fund. Harris, 59, chief investment officer at the Teacher Retirement System of Texas, succeeds Bruce Zimmerman, who stepped down last year from Utimco, as the university endowment money manager is known. The Utimco board approved the appointment Friday at a board meeting in Austin.
 
 
General Higher Ed Sustainability News 
  • The city of Phoenix and nearby Arizona State University are teaming up to launch a public-private incubator focused on finding new uses for waste from textiles, food scraps, batteries and more. Housed at the university's Resource Innovation and Solutions Network (RISN), the program, announced Wednesday, officially will be called the RISN Incubator. There, organizers will look to harness momentum around the concept of a circular economy, or business models built on eliminating waste by continually cycling materials back through supply chains.
Climate Risk, Science, and Regulation
 
The Energy 202: Exxon, GM and Pepsi Plan to Back Carbon Tax Floated by Ex-GOP Officials l Washington Post
  • A group of nearly a dozen multinational corporations is backing a plan from senior Republican statesmen to replace President Obama's greenhouse-gas regulations with a carbon tax. The coalition of former GOP officials -- which includes three former secretaries of the Treasury, James A. Baker, Henry Paulson and George P. Shultz, and calls itself the Climate Leadership Council -- made headlines in February when it proposed eliminating nearly all Obama-era climate policies in exchange for a tax on carbon emissions starting at $40 per ton. Framing the proposal as a "carbon dividend," revenue raised by the tax would be redistributed as a quarterly check to Americans under their plan.
Global Valuation Standards Body Says it’s Open to Exploring Impact of Climate Change (Subscription) l Responsible Investor
  • The International Valuation Standards Council (IVSC), a global standards body chaired by accounting industry veteran Sir David Tweedie, has launched a consultation aimed at shaping its agenda and technical work, which could lead to the inclusion of sustainability topics – such as the impact of climate change – in the valuation of businesses and assets. Among the IVSC’s Agenda Consultation Paper there are topics that could affect ESG practitioners and investors. For example, the IVSC is looking for input on non-financial liabilities, an area which could be related to accounting standards such IAS 36 (impairment of assets) and IAS 37 (provision, contingent liabilities and contingent assets). Other topics of the IVSC’s consultation are the valuation of biological assets and extractives, which could strike a chord with ESG concepts such as natural capital and stranded assets.

Investment Manager News
 
Saudi Arabia's Sedco Capital Launches Green Investment Strategy l Nasdaq
  • Saudi Arabia'sSedco Capital said on Thursday it has launched an investment strategy combining environment-conscious and sharia-compliant principles, as Islamic financial firms gradually embrace socially responsible investing. The move by Jeddah-based Sedco, an Islamic firm managing $1.8 billion worth of Luxembourg-listed funds, could help develop green investing in the Middle East and make Islamic finance appeal to a wider client base.
One Billion Dollar Impact-Investing Team Joins Vanderbilt Financial Group, the Sustainable Broker Dealer and RIA l Market Wired
  • Vanderbilt Financial Group, also known as The Sustainable Broker Dealer and RIA, continues their recruiting streak making their voice heard in the Impact Investing community and shaking up the Investment world with their passion for, "Teaching clients how to do good with the money they invest," as Chief Disruption Officer and CEO, Steve Distante says. Vanderbilt has seen an increase of over 30% in Financial Advisors over the past year. The 20 new Registered Representatives are located in three branch offices in New Jersey and New York City. This team is well aligned with Vanderbilt's intense focus on Impact Investing (also known as ESG or Environmental Social Governance focused and as SRI or Socially Responsible Impact Investing).
Fossil Fuel Divestment & Other Divestment Campaigns
 
Oklahoma Attorney General, Others Blast California Insurance Regulator's Call to Divest From Coal l NewsOK
  • Oklahoma Attorney General Mike Hunter and fellow Republican attorneys general in 11 other states want to stop an effort by a California regulator to get insurance companies operating in that state to divest from coal and disclose their fossil fuel investments. Hunter and the attorneys general — as well as one governor — sent a letter Monday to California Insurance Commissioner Dave Jones accusing him of trying to "publicly shame those who invest in American energy." The letter threatens legal action if Jones doesn't revise his policies.
  • Exxon Mobil, the world's largest public oil and gas company remains a prime target for fossil-fuel divestment campaigns. Divestment, as a strategy used to effect political change, is increasingly used by influential institutions. The prospect of large-scale, institutional divestment makes Exxon Mobil an unattractive long-term investment. However, Exxon Mobil continues to be an attractive medium-term investment for investors seeking healthy dividend payments and regular dividend increases. Exxon Mobil faces a growing, long-term threat from campaigns which promote divestment from fossil-fuel companies. Investors who plan to hold Exxon Mobil for long periods of time should vigilantly monitor divestment campaigns targeting the company.
Sweden’s Largest Pension Divests From Paris Accord Violators ExxonMobil and TransCanada l Common Dreams
  • In a major win for the fossil fuel divestment movement, the #ExxonKnew campaign, and efforts to block investments in the companies backing fossil fuel pipelines, Sweden’s largest pension fund, AP7, announced this week that it will divest from six companies that are in violation of the Paris climate agreement. This includes particularly bad actors ExxonMobil and TransCanada, making AP7 the first pension fund to divest specifically from Exxon.
Socially Responsible Investing: Divesting from Fossil Fuels l The Bill Fold
  • In this Q&A, Reverend Jenny Phillips, a woman who has been on the forefront of the movement, helping push a global religious organization with a $21 billion investment fund towards divestment from fossil fuels, discusses how she got started, what kind of action she’s taken to further this cause, and how you can get involved in the climate change movement in your own community, including divestment from fossil fuels.
University of Winnipeg Students Camp Outside for the Night to Support Fuel Divestment l CBC
  • Dozens of students are braving the rain and chilly temperatures while camping outside for the night on the front lawn of the University of Winnipeg to draw more attention to fossil fuel divestment. The event was organized by Divest UWinnipeg, an environmental group that's part of a divestment movement across Canada, pushing universities to stop investing in the fossil fuel sector. The campaign comes just as the  University's Board of Regents gets ready to vote Monday on a motion to implement a policy on fossil fuel divestment.
Students Gear up for Battle After University of Winnipeg Board Rejects Fossil Fuel Divestment l CBC
  • The University of Winnipeg Students' Association promises to continue its fight against fossil fuels after a decision by the university's board fell short of complete divestment on Monday night. The University of Winnipeg's board of regents had received a new policy guiding investments for endowments to the University of Winnipeg Foundation. The university said in a news release the new policy is similar to those of other universities across Canada. The policy is responsible and commits to establishing a renewable energy investment portfolio known as a green fund as an option for investors, the news release says.
Auckland University Staff Demand Fossil Fuel Divestment l Auckland Now
  • Auckland University is being called on by its own staff to sell its fossil fuel investments. An open letter signed by 240 staff from eight faculties released publicly on Wednesdayurged the University of Auckland (UoA) to sell its coal, oil and gas investments. The letter comes after two years of campaigning against the university's fossil fuel investments by university group Fossil Free UoA. The campaign has included marches, petitions and a 12 hour occupation of Vice Chancellor Stuart McCutcheon's wing in May.
Dissonance and Divestment: Profile of An Activist l Resilience
  • This piece is an updated excerpt from Chuck Collins’ new book, Born on Third Base: A One Percenter Makes the Case for Tackling Inequality, Bringing Wealth Home, and Committing to the Common Good (Chelsea Green). Chuck Collins is director of the Program on Inequality at the Institute for Policy Studies where he co-edits Inequality.org.

UK Insurer Aviva to Halt Tobacco Investments l Financial Times

  • Aviva, one of the UK’s biggest life insurance companies, is to ditch its tobacco investments. The group joins a growing wave of companies which have divested from tobacco. Axa promised to get rid of its tobacco investments last year, and more recently Scor and the Irish sovereign wealth fund have agreed to do the same. Aviva had about £1bn of investments in the industry. The equities have almost all been sold, while the bond investments will be left to run off.