Weekly News Round-Up: September 22nd, 2017

Upcoming Events
  • Five Fund Forum | Big Path Capital, September 26-28, 2017, Park City, UT (on 9/26); San Francisco, CA (on 9/27); and New York, NY (on 9/28) 
  • Pitzer College and investment firm BlackRock, Inc. announced this week the first ever global equity index fund that is both ESG-focused and fossil fuel-free. The fund is designed to help endowments, foundations and other nonprofit organizations meet their Responsible Investment goals. This August, Pitzer College became the founding investor in the MSCI ACWI ex-Fossil Fuels ESG Focus Index Fund B. This new fund uses a disciplined, quantitative approach to incorporate ESG factors in its portfolio construction while maintaining zero exposure to fossil fuel companies. The fund was developed with assistance from leading index provider MSCI and investment consulting firm Mercer.
  • The SUNY New Paltz Foundation board has voted overwhelmingly to remove endowment funds from direct investment in fossil fuel companies. “This divestment from fossil fuels is the right thing to do,” college President Donald Christian said Thursday. “Climate change resulting from the use of fossil fuels presents issues of significant concern to all, including the faculty, students, staff, alumni and supporters of SUNY New Paltz. This important action by the foundation points toward a future that recognizes the college’s sustainability goals while balancing its fiscal responsibility to donors.”
New Report
 
New Report Highlights Leading Corporate Practices For Sustainability-Competent Boards l Ceres
  • A new report released last week by Ceres argues that corporate boards must keep sustainability impacts at the forefront of the decision-making process in order to meet their fiduciary responsibilities to the corporations. The report, titled, “Lead From the Top: Building Sustainability Competence on Corporate Boards,” notes that boards have a legal responsibility to act when environmental and social issues pose material risks on business models and financial performance. Factoring in material risks in decision-making is key for corporations to achieve strong long-term financial performance goals and increase their competitive advantage.
 
 
Sustainable, Responsible, Impact and ESG Investing
 
Bloomberg Brief l Sustainable Finance
  • This week's Bloomberg Brief highlights how a watershed decision is due Friday in a U.S. federal trade case that threatens to double the price of solar panels; Renewable costs are plunging as technology advances; and internal controls could boost confidence in sustainability reports.
  • In a white paper released this week UBS' Chief Investment Office (CIO) argues firms should adopt a 'business with impact' strategy that uses enhanced sustainability standards to win round younger investors, customers, and stakeholders while also driving better financial returns. The report's executive summary sets out the basic premise. "Today the idea of business sustainability is evolving, as firms are increasingly empowered to adopt an approach that embeds simultaneous financial and social return generation as core objectives of their operations," it reads. "In this new 'business with impact' approach, firms regard social and environmental factors as opportunities to deliver commercial returns while proactively generating positive outcomes for society."
  • A growing number of academic studies have come out in support of incorporating ESG factors into investment processes. Many of these studies have concluded that integrating ESG factors at worst has no financial impact and at best can improve long-term risk-adjusted returns. In turn, investing in ESG strategies increasingly is being adopted by investors even in the face of an ever-expanding universe of available investing styles and themes. These investors have rationally come to appreciate the expected benefits of proactively identifying companies and management teams that are forward-thinking, focused on long-term trends, better at identifying and mitigating a broad spectrum of risks, and committed to best practices in governance and corporate culture.
Investors Turn Up Heat on Gender Balance l Institutional Investor
  • Asset managers are widening efforts on gender diversity by toughening up on voting and embracing new engagement approaches, including voting down boards that are all male.
ESG Roundup: Is There a Right Time for Corporate Disclosure? l Investments & Pensions Europe
  • The timing of a company’s disclosure of ESG information can make a difference to how that information is valued by professional investors, according to a new academic paper. The researchers concluded that corporate social responsibility (CSR) information “is not always treated entirely rationally by capital market participants”. Alexander Bassen, professor of capital markets and management at the University of Hamburg, Germany, was one of the authors of the paper. He told IPE the researchers chose the term CSR rather than ESG to address the corporate perspective. In academic literature, CSR is often understood as representing the perspective of corporates, while ESG represents the investor.
World Benchmarking Alliance Launches to Shine Spotlight on ESG Issues l Business Green
  • League table of major companies will give smaller investors more clarity over firms' social and environmental performance, says sponsor Aviva  A project to create a league table of the world's largest companies, ranked according to their social and environmental performance, will launch later today in New York as part of a major push to bring ESG issues to the investment mainstream. Sponsored by Aviva, the World Benchmarking Alliance will rank companies valued at $1bn or more on their ESG standards in the hope it will prompt investors to consider the wider impact of capital flow.
  • The sustainability reporting journey may take years as companies need time for the transition and to adopt sustainability reporting. The ultimate goal is for companies to view the sustainability agenda not just as a necessity, but an opportunity to stand out among peers and carve out an additional competitive edge by effectively bridging sustainability leadership and business results.
Going Sustainable: Six SRI ETFs to Consider l Investment Week
  • iShares and UBS are the only ETF providers to offer an extensive range of socially responsible ETFs. But we believe this will change as the demand for this type of product continues to grow. This article takes a look at six ETFs in which you may consider investing to make your portfolio more socially responsible.
  • The Church Pension Fund (CPF), a financial services organization that serves the Episcopal Church, has released a video highlighting an investment to provide affordable housing and community services to an underserved community. One of CPF’s many socially responsible investments, this investment supported the redevelopment of Northpointe Apartments, a multifamily affordable housing apartment complex located in Long Beach, CA. CPF served as an anchor investor in this investment, which was made with Avanath Capital Management, LLC, a minority-owned investment firm.
Investment Manager News
 
  • Barclays has launched an impact investing fund in order to meet 'growing demand' from clients for social and environmentally-conscious investments. The Barclays Multi-Impact Growth fund offers investors the opportunity to generate long-term capital growth while making a positive contribution to society. It is targeted towards investors who want to consider the societal effect of investments without compromising on their returns.  The UCITS fund of funds will be a liquid portfolio, diversified across equities and bonds as well as geographies. Funds for the portfolio are selected based on their potential for returns and consideration of their impact around social and environmental issues.
U.K. Firm Impax to Buy Pax World Management l Barron's
  • Pax World Management announced Monday that it agreed to be acquired by U.K. firm Impax Asset Management Group for about $52.5 million. In addition, Impax agreed to additional contingent payments of up to $37.5 million in 2021 based on Pax funds' performance. If approved by Pax World Funds trustees and shareholders, the combined entity would manage approximately $13.4 billion.

Climate Risk, Science, and Regulation
 
We Are Still In Website Launch l We Are Still In
  • We Are Still In is the broadest cross-section of the U.S. economy ever assembled in pursuit of climate action. Over 2,300 leaders strong and growing, We Are Still In shows the world that leaders from across America’s state houses, city halls, board rooms, and college campuses stand by the Paris Agreement and are committed to meeting its goals.
How Institutional Investors are Responding to Climate Change l MSCI
  • How are institutional investors tackling climate-change risk in their portfolios? Thanks partly to global initiatives such as the Montreal Pledge1 and the Portfolio Decarbonization Coalition,2 both launched in 2014, many institutional investors have moved quickly to understand the long-term portfolio implications of climate change and to adopt climate-risk management techniques. How have these commitments been reflected in their practices. In MSCI's recent consultation with global institutional investors, we found that the state of the art has advanced very rapidly.3 While carbon footprinting (basically, measuring and disclosing exposures to carbon risk) across asset classes was a priority for most institutional investors we consulted, we also observed a growing demand for integration of climate transition risk in portfolios.
 
General Higher Education Sustainability and Endowment News
 
UWinnipeg Launches New Institutional Sustainability Strategy l News Centre
  • The University of Winnipeg has made significant strides in reducing its environmental impact over the last decade. This week, the University launched a new Sustainability Strategy that builds on these successes and provides concrete, measurable targets for greenhouse gas emission (GHG) reduction, community building, academic programming, knowledge mobilization, and overall environmental impact.
Could Endowments Do Better With an All-ETF Portfolio? l Barron's
  • According to this article, small- and mid-size endowments and foundations that don't have economies of scale and access to star managers should consider moving to an all-ETF portfolio.
Yale Announces Collaboration With World Business Council for Sustainable Development to Improve Corporate Reporting l EurekAlert
  • Recognizing the critical role that private capital flows will play in moving society toward a more sustainable future, Yale University has launched the Yale Initiative on Sustainable Finance (YISF). This new academic effort will provide high-quality research on the flow of capital into sustainability-oriented projects and sustainable companies. As a starting point, YISF is working with the World Business Council for Sustainable Development (WBCSD) to help clarify the concept of ESG materiality for companies. YISF will bring together Yale's research expertise and WBCSD's convening power in their common efforts to improve the relevance of sustainability information in corporate reporting.
Brown Investment Advising Committee Seeks New Undergraduate Member l Brow Daily Herald
  • The Brown Undergraduate Council of Students announced an open position for the Advisory Committee on Corporate Responsibility in Investment Policies in an email to undergraduate students Sept. 12. The vacant position is for undergraduates, but the committee as a whole comprises faculty, staff, graduates, undergraduates and alums, said UCS President Chelse-Amoy Steele ’18. The committee is searching for “someone who is interested in contributing to the Brown community. They don’t need to have any specific technical knowledge of investing or of any specific social issue, but it helps if they’re a person who feels passionate about social good,” said Katie Silberman, interim chair of the committee.
 
 
Fossil Fuel Divestment
 
  • Fossil Free Universities, which is run by environmental organization 350.org and university divestment groups, released a report this week highlighting ties between Australian universities and the fossil fuel industry as part of its revitalized campaign. It is the first report released as part of the #ExposeTheTies campaign — new messaging that focuses on links forged between universities and the fossil fuel industry through research funding, and the relationship between members of university boards and companies with significant business in fossil fuels.
Pressure Mounts on Church of England to Divest from Exxon l Independent Catholic News
  • Christian campaigners are calling on the Church of England to disinvest from US oil giant ExxonMobil, on the basis of new evidence that the company intentionally misled the public on climate change. This week, supporters of Operation Noah and Christian Climate Action held a vigil outside Church House in London, the home of Church of England investors, to pray that they would cut financial ties with Exxon. A recent peer-reviewed study published by Harvard academics shows that ExxonMobil knew about climate change in the 1970s, yet its public communications intentionally cast doubt over whether climate change was real and caused by human activity. ExxonMobil is currently under investigation by the Attorneys General of New York and Massachusetts, as well as the FBI, over whether the company misled the public about the risks of climate change.
  • A group charged with considering the social impact of Johns Hopkins University's investments has made four specific recommendations, including that the university divest immediately from certain holdings in 200 publicly traded coal, oil, and gas companies—known collectively as the Carbon Underground 200—and take steps to reduce other such holdings over time. The full 41-page report issued by the Public Interest Investment Advisory Committee, or PIIAC—which comes in response to a December 2015 proposal from the student group Refuel Our Future asking the university to divest from fossil fuel companies—was published online last week.
  • After a busy past year, Mountain Justice is rebranding. They’ve joined Sunrise, a national “movement to stop climate change and create millions of jobs in the process,” according to their website. “Last year I remember hearing about Mountain Justice just about every week,” said Matt Palmer ’18, who has not been part of environmental groups at Swarthmore. From a campus-wide panel about divestment to a sit-in in President Smith’s office, the climate justice organization was incredibly visible last year. This year, they’re trying something different, but they hope their impact on campus will be even greater.