Weekly News Round-Up: September 1st, 2017

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Upcoming Events

2017 Bay Area Intentionally Designed Endowment Roundtable l Intentional Endowments Network and the Center for Responsible Business at Berkeley-Haas, September 8, 2017, Berkeley, CA 

PRI and Carbon Tracker Launch Events: 2 Degrees of Separation: Transition Risks for Oil & Gas in a Low-Carbon World l PRI

  • The Principles for Responsible Investment (PRI) invite investors for several launch events for a new research entitled: "2 degrees of separation: Transition risk for oil & gas in a low carbon world". The report is produced by the Carbon Tracker Initiative in partnership with Legal & General Investment Management, AP7, FRR, PGGM, PKA, and the Principles for Responsible Investment.
CEO Investor Forum l CECP’s Strategic Investor Initiative (SII), September 19, 2017, New York, NY
AASHE Conference and Expo: Stronger in Solidarity l AASHE, October 15-18, 2017, San Antonio, TX

The SRI Conference l November 1-3, 2017, San Diego, CA

2018 Higher Education Climate Leadership Summit l Second Nature & The Intentional Endowments Network, February 4-6, 2018, Phoenix, AZ
Sustainable, Responsible, Impact and ESG Investing
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how Japan is starting to play catch-up on green bonds; Swell Investing sees value in sustainability; and Index funds may give CEOs a raise.
The Sustainable Exchange-Traded Universe Continues to Expand l Morningstar
  • The universe of sustainable diversified ETFs is relatively new, small, and expensive when compared with conventional diversified equity ETFs. You can adjust for short performance records by examining the longer records of the indexes upon which a fund is based. If you are considering a small fund, take a look at the issuer and how well it is established in the ETF and sustainable investing spaces. Investing with better-situated issuers increases the odds that the fund will grow to scale and remain open. 
  • The boom in exchange-traded funds is leaving so-called sustainable investing behind. There are just 48 exchange-traded funds that invest based on environmental, social and governance factors, which are collectively known as ESG, according to data from research firm Morningstar. Those funds hold a total of $5.7 billion in assets - roughly a third of the $15.4 billion invested in the Parnassus Core Equity fund, the largest actively-managed, ESG-focused mutual fund. The relatively small total of assets invested in sustainable ETFs comes at a time when ETFs overall are rapidly expanding. Investors pulled $264.5 billion out of U.S. actively-managed equity mutual funds in 2016, while pumping a record $282 billion into exchange-traded funds, according to data from Morningstar and FactSet.
ESG: Sustainable Finance to the Rescue? l Investments and Pensions Europe
  • Last September, the European Commission announced it would establish a High Level Expert Group (HLEG) to advise it on developing a comprehensive EU strategy on sustainable finance. The group was established in December 2016 and comprises 20 members of the public, the finance sector and academia. It released an interim report in July, with a well-attended public hearing held shortly after in Brussels. The Commission welcomed the HLEG’s work. At the public hearing on the interim report, vice-president Jyrik Katainen, a former Finnish prime minister, described it as a “powerful and clear manifesto for change”. The European Commission has already started working on some measures the HLEG mentioned in its report, but it should decide on the concrete follow-up to the HLEG recommendations by the end of next year.
Shareholder Engagement
Vanguard Defies Companies to Back Climate Change Resolutions l Financial Times
  • Vanguard has broken with its past by throwing its weight behind shareholder resolutions on climate change and gender diversity as the world’s second-largest asset manager attempts to strengthen its corporate governance record. In a change of tack, Vanguard has for the first time supported two climate-related shareholder resolutions that were opposed by company management. This year, it voted against climate-risk disclosures by ExxonMobil and Occidental after judging that reports by the two US energy companies were not up to the standards now required by investors.
Investment Manager News
  • On August 8 Brown Advisory announced the launch of the Brown Advisory Sustainable Bond Fund.  The Fund invests in corporate, municipal, mortgage-backed and asset-backed fixed income securities that are primarily issued as “Green Bonds” or that otherwise meet the Fund’s ESG criteria.  The Fund is managed by Tom Graff and is supported by Amy Hauter, Brown Advisory's Fixed Income ESG research analyst.  Brown Advisory would welcome any questions or comments from the IEN network – please feel free to contact John Davis or Brigid Peterson for further information.
T. Rowe Price Adds Responsible Investing Director to Strengthen ESG Efforts l Pensions & Investments
  • Maria Elena Drew was named director of research, responsible investing at T. Rowe Price, said a spokeswoman for the firm. The position is new, and Ms. Drew started Aug. 14. The role deepens the firm's research on environmental, social and governance considerations. Ms. Drew partners with Donna Anderson, head of corporate governance, and works closely with the firm's investment teams to develop and integrate an ESG framework across geographies and asset classes.
General Higher Education & Endowment News
Wellesley Endowment Nabs MassPRIM's Deputy CIO l Institutional Investor
  • Sarah Samuels is leaving Massachusetts' $67 billion public pension fund after a decorated six-year tenure. 
Why Yale Owns a Forest l Bloomberg
  • For at least two decades, Yale and its celebrated endowment manager, David Swensen, have led a land rush by the richest colleges. Funds snapped up forests as a way to hedge against inflation and the risks of stocks and bonds, and to take advantage of endowments’ unusual ability to make investments that might not be easy to sell quickly. (Unlike most investors, big college endowments have “a time horizon measured in centuries,” Swensen once wrote.) It paid off handsomely until recently, when returns slumped and exposed more of the downsides of investments that literally grow.
A Merger Between Boston University and Wheelock College Brews in Boston l Inside Higher Ed
  • Boston University and Wheelock College have started formal discussions about merging, they announced Tuesday, a step coming after Wheelock evaluated its future this summer in the face of financial and enrollment pressures. The two institutions’ campuses sit about a mile apart. But a combination would would mean Wheelock merging into BU, not a merger of equals. Wheelock is a small private college that enrolled 726 undergraduates and 327 graduate students last fall and reported an endowment of $53.9 million in 2015. Boston University is a large private research university that enrolled almost 18,000 undergraduates and 14,751 graduate students last fall and had a $1.65 billion endowment in 2016.
Climate Risk, Science & Regulation
Grantham: Climate Change Offers Upside for Investors l Barron's
  • As climate change has become increasingly problematic for the world, the investment community is starting to pay attention to the investment risks it poses. In this paper, however, we focus on the exciting opportunities in companies involved in combating climate change (i.e., the climate change sector), either through climate change mitigation or helping the world adapt to climate change. Though there are risks to investing in the climate change sector, the risks this article worries about are the same risks investors face in other sectors: getting caught up in hype and stories, paying the wrong price, and investing in industries with poor competitive dynamics.
Three California Climate Lawsuits Target Fossil Fuel Industry Responsibility l CIEL
  • This week, three California municipalities – San Mateo County, Marin County, and Imperial Beach – filed complaints against thirty-seven fossil fuel companies, seeking damages for the impacts of climate change. The plaintiffs argue that sea level rise has already done damage and cost money to study and prepare for. These costs will only grow as the rising oceans threaten coastlines, sewer systems, and transportation systems. These suits allege that (1) fossil fuel companies knew about climate change for decades, and (2) actively sought to slow progress on regulation and change that would mitigate and combat its effects by sowing doubt about climate change among the public, and (3) profited immensely from doing so. The suits make claims under several theories of liability – including public nuisance, private nuisance, failure to warn, defective design, negligence, and trespass.
Northeast Strengthens Carbon Goals as Federal Rules Fade l Scientific American
  • Nine Northeastern states delivered a boost to U.S. climate efforts this week. The Regional Greenhouse Gas Initiative (RGGI) announced a proposal to cut power plant emissions 30 percent between 2021 and 2030. The plan puts the regional cap-and-trade program's members on pace to greatly exceed the emissions targets prescribed under former President Obama's carbon-cutting strategy, the Clean Power Plan. It also comes amid a rollback of climate initiatives under President Trump and a flurry of state pledges to comply with goals of the Paris climate accord.
Harvey is Already the Worst Rainstorm in U.S. History, and It’s Still Raining l Grist
  • Since Hurricane Harvey made landfall in Texas late Friday night, more than 40 inches of rain have fallen on parts of the Houston metro area, burying much of the city under water. With rainfall topping 50 inches in spots, Harvey now ranks the worst rainstorm in U.S. history. While Harvey’s rains appear unique in U.S. history, heavy rainstorms are increasing in frequency and intensity worldwide — a clear sign of climate change. A warmer atmosphere can speed evaporation rates and hold more moisture, and Harvey’s flood comes via a firehose of intense thunderstorms spawned off a warmer-than-usual Gulf of Mexico. 

The  Energy 202: Harvey Sparks New Debate over Hurricanes and Climate Change l Washinton Post

  • With at least nine dead and thousands displaced by floodwaters, the full extent of the damage wrought by --Hurricane Harvey --  the biggest storm to hit the U.S. mainland in more than a decade -- is just beginning to be tallied. Nothing quite like Harvey has hit the United States before. The National Weather Service said Harvey is "unprecedented & all impacts are unknown & beyond anything experienced.” The administrator of the Federal Emergency Management Agency said it is probably the worst disaster in Texas history. This article aims to answer the question: "Does climate change make storms like Harvey more likely?"
Connecting on Climate Change Research l Inside Higher Ed
  • Indiana University’s new “grand challenge” takes a practical approach by seeking to connect university research on environmental change to the lives and work of people across the conservative state. The ambitious environmental change project is the university’s second multidisciplinary research investment to tackle a “grand challenge,” following an ongoing attempt to better treat and prevent human diseases. Over all, the university plans to spend $300 million on its grand challenges.
Clean Energy
The Leaf Is the World’s Best-Selling Electric Car. Now, Nissan Needs to Catch Up With Tesla l Bloomberg
  • Nissan’s Leaf, which sent a jolt through the market with its 100-mile range, has been losing ground to longer-range rivals, especially Tesla. Nissan fights back with a souped-up Leaf on Sept. 6.
  • Almost one year ago, on September 12th, 2016, the UNF Student Government Senate voted in support of a joint resolution, “Declaring Support for the Mission of DivestUNF for Climate Justice. As has been the case at most universities that have been confronted by the Divest movement, the UNF administration has resisted DivestUNF demands. But it is important to recognize that the movement to divest from fossil fuel corporations is a long-term process and struggle. No single vote or resolution will produce immediate results. It will require the building of a broad-based social movement. The momentum in support of these actions will, and must, be fueled by students, faculty, and alumni. But it is equally vital for the movement to confront and contest the various arguments that are used as an excuse for inaction on divestment.




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