Weekly News Round-Up: September 23rd, 2016

IEN News

Press Release: Hank Paulson to speak at Intentionally Designed Endowments Forum at Loyola University Chicago l September, 23rd, 2016

  • Hank Paulson, former U.S. Secretary of the Treasury, Chairman of the Paulson Institute, and Co-Chair of the Risky Business Project will be the keynote speaker at the Intentional Endowments Network (IEN) and Loyola University Chicago’s Intentionally Designed Endowments Forum. Paulson and other speakers, including David Blood, co-founder of Generation Investment Management and former CEO of Goldman Sachs Asset Management will address endowment decision makers about climate risk and the growing interest in ESG investing. 

 


Resources, Reports, White Papers 

 ESG and Sustainable Hedge Fund Investing: Observations l Alternative Investment Group

  • This brief discusses credit opportunities, risk mitigation, and sustainable investing strategies on how hedge funds can capitalize on the significant stock dispersion and mitigate the volatility inherent in certain sustainability sectors.
  • This brief is aimed at institutional investors facing the possibility or necessity of divesting from some type of fossil fuel holdings. Approaches to explicit divestment have multiplied since the early days of the Carbon Tracker 200 list, as investors now have a better understanding of mechanisms to manage carbon in portfolios, including using revenue and power generation data in addition to reserves ownership. We found that the most common approaches are designed to optimize for fossil fuel elimination, carbon reduction, engagement, and stranded asset risk mitigation using narrow, moderate, or broad exclusionary criteria.

Report: Canadians Who Divested Fossil Fuels Three Years Ago Dispel Myth That Sustainable Investments Under perform l Market Wired

  • Dispelling the myth that sustainable investing comes with sacrifices to investors' bottom lines, Genus Capital Management recently released a Fossil Fuel Divestment Report, which shows that divesting from fossil fuels in 2013 would have produced stronger returns than global stock market indexes.

  

Climate Risk, Science & Regulation

Climate Deal Comes One Step Closer to Reality at United Nations | Fortune

  • An agreement to fight global warming came one step closer to taking effect on Wednesday when dozens of countries deposited their ratification of the deal at the United Nations, taking the total to 60, U.N. Secretary-General Ban Ki-moon said. The deal, agreed by nearly 200 countries in Paris last December, needs ratification by at least 55 countries representing 55% of global carbon dioxide emissions to take effect. Ban said the 60 countries represented more than 47.5%.

Canada will Impose a Nationwide Carbon Price, According to Environmental Minister l Reuters

  • Canada will impose a carbon price on provinces that do not adequately regulate emissions by themselves, Environment Minister Catherine McKenna said on Sundaywithout giving details on how the Liberal government will do so. McKenna said the new emissions regime will be in place sometime in October, before a federal-provincial meeting on the matter.

An Open Letter Regarding Climate Change From Concerned Members of the U.S. National Academy of Sciences l Responsiblescientists.org

  • On September 20, 2016, 375 members of the National Academy of Sciences, including 30 Nobel laureates, published an open letter to draw attention to the serious risks of climate change. The letter warns that the consequences of opting out of the Paris agreement would be severe and long-lasting for our planet’s climate and for the international credibility of the United States.

SEC Probes Exxon Over Accounting for Climate Change l The Wall Street Journal

  • The U.S. Securities and Exchange Commission is investigating how Exxon Mobil Corp. values its assets in a world of increasing climate-change regulations, a probe that could have far-reaching consequences for the oil and gas industry. The SEC’s probe is homing in on how Exxon calculates the impact to its business from the world’s mounting response to climate change, including what figures the company uses to account for the future costs of complying with regulations to curb greenhouse gases as it evaluates the economic viability of its projects.

Financiers Want Climate Risk Integrated into EU’s Capital Markets Union l EurActiv

  • Investors managing over €13 trillion in assets have called on EU regulators to foster a financial system that better takes climate risk into account when the European Commission reviews its Capital Markets Union next year.

 

Shareholder Engagement

Your Mutual Fund Has Your Proxy, Like It or Not | NY Times

  • The voting of fund managers is infected by conflicts of interest, said Erik Gordon, a professor at the Ross School of Business at the University of Michigan. That is because these giant mutual fund operators don’t just own shares in many of the biggest American companies, they also do business with them.

 

Sustainable & ESG Investing

The Morning Risk Report: Better Performance Follows ESG Proposals l Wall Street Journal (Subscription)

  • Shareholder resolutions addressing environmental and social issues were followed by improved corporate performance not only on sustainability matters but also- in cases where the proposal concerns a financially material issue- on the target's market valuation over the long term, according to a recent Harvard Business School study.

Duke Energy Bounced From Norway Sovereign Wealth Fund l Oilprice.com (Opinion)

  • Norway’s sovereign wealth fund, the biggest in the world, has just sold all the equity shares of Duke Energy it owned from its portfolio. Duke did not meet the fund’s stringent ethical standards according to press reports, joining 110 other companies on the do-not-own list. 

Bloomberg Brief l Sustainable Finance

  • Inside this weeks Bloomberg Brief, as investors put more money behind gender diversity investing strategies, some wonder how to weigh the effect of a female CEO on market returns. Overblown concerns that green bonds add an additional cost to borrowers are also discussed, as well as an increase in green ETFs, and policy outlooks of the CEO and Special Representative of the UN Secretary General for Sustainable Energy for All.

New Campaign Aims to Leverage Private Investment Capital to Help Achieve SDGs | Sustainable Brands

  • A new campaign is calling on investors and money managers everywhere to make their investments part of a “tremendous force for good in effecting positive change.” Launched by the Global Impact Investing Network (GIIN), the campaign asks investors and money managers to commit capital to impact investing efforts aimed at meeting theSustainable Development Goals (SDGs, or Global Goals) agreed upon by the United Nations roughly one year ago.

Impact Investing

The Timing Is Right for Impact Investing in Latin America l EconoMonitor

  • In Latin America, capital committed by impact-investment funds increased to roughly $2 billion by the end of 2013, from $160 million in 2008, representing a 12-fold growth in just five years.

  

Fossil Fuel Divestment

BU Vows to Avoid But Not Ban Fossil Fuel Holdings l The Boston Globe

  • Boston University announced Tuesday that it would avoid investing in coal and tar sands in an effort to combat climate change. Robert A. Brown, the university’s president, announced the decision in a letter to the BU community, making his school the latest to take on complex financial and environmental issues that have reverberated on campuses around Massachusetts and the nation.

The University of Toronto: Beyond Divestment l The Varsity

  • In this interview, The University of Toronto's (U of T) President Meric Gertler and Chief Investment Officer Daren Smith discuss the U of T's Asset Management Corporation and its development of principles related to ESG factors.

The University of Pennsylvania Will Not Divest From Fossil Fuel Companies l The Daily Pennsylvanian

  • The University of Pennsylvania will not divest from fossil fuel industries, the Board of Trustees announced on Thursday. The decision came upon the unanimous recommendation of an Ad Hoc Advisory Committee on Divestment assigned to review divestment. The committee consisted of faculty, students, staff and alumni.

CalSTRS to Dump Coal in Move to Sustainable Investing | Bloomberg

  • Video interview with Chris Ailman, CIO of CalSTRS, in which he discusses the pension fund's views on coal and other fossil fuel holdings from the perspective of a long-term investor. 

Divestment Debate Gains Momentum at Yale | Yale Daily News

  • Yale climate activists are calling for even greater changes to the fossil fuel industry after a small group of undergraduates challenged oil giant ExxonMobil through a shareholder resolution in May, one which ultimately failed but added one more voice to the divestment discussion on campus.

Students' Representative Council passes motion recognising University of St. Andrews divestment policy | The Saint

  • Last Tuesday 13 September, the Students’ Representative Council (SRC) discussed a motion to “Recommend that the University of St Andrews Divests its Endowment Fund from Fossil Fuel Extraction Companies Within Three Years” The endowment fund generates financing for student scholarships, bursaries, CAPOD support and University developments. The motion argues that “It is inherently linked to research and participation here at St Andrews.”

Notre Dame rejects pulling out of fossil fuel investments, promises to end coal use by 2020 | Washington Examiner 

  • Two major universities decided against divesting from fossil fuels this week, continuing the trend of higher education institutions declining to accede to pressure from students. The University of Pennsylvania and University of Notre Dame announced they would keep their fossil fuel investments despite pushes from student groups. Both universities said their schools would be harmed by completely moving away from fossil fuels. Notre Dame promised to cease using coal by 2020. 

A seat at the table: Continuing the fight for divestment | The Williams Record (Opinion) 

  • A Williams College student and an alum continue calls for divestment: "One year ago, President Adam Falk announced in a campus-wide email that the College would not divest its multi-billion dollar endowment’s fossil fuel holdings. The Board of Trustees decided to remain invested in the fossil fuel industry despite overwhelming calls for divestment from hundreds of students, faculty, staff and alumni. Since this decision was issued, Divest Williams and the Williams Endowment Initiative continued to fight for divestment, and have been largely ignored. There’s been no acknowledged role for us at the decision-making table, no direct consultation."
 
 

Investment Managers, Strategies, Data News

RobecoSAM Makes Corporate Sustainability Rankings Public on Bloomberg Professional Service | 3BL Media

  • RobecoSAM, an investment specialist focused exclusively on Sustainability Investing, and Bloomberg published the percentile rankings of almost 2000 companies on the Bloomberg Professional service this week. These percentile rankings come from RobecoSAM’s 2016 Corporate Sustainability Assessment, the research backbone for the Dow Jones Sustainability Indices. The data will be available across a number of the Bloomberg Professional service’s investment tools, supporting company, industry and portfolio analysis, including ESG <GO> - the new company ESG analysis page.