Dear IEN Network,
Welcome to the third edition of your bi-monthly newsletter! This month Fred Rodgers, Vice President and Treasurer of Carleton College, gives his perspective on ESG Investing and Fossil Fuel Consumption.
We also highlight some of the University of California System's activities related to sustainable investing.
Your contributions to this conversation are welcome and needed. Please be in touch with any questions, news, or ideas for the IEN.
Tony Cortese & Georges Dyer
Updates from the Network
Steering Committee Working Groups
Since their inaugural meeting in June, the steering committee has been working in 6 working groups. The topics of these groups are Shareholder Engagement, Peer to Peer Networking, Fiduciary Duty, Sign On Initiatives, IEN Funding Strategy, and Business Case for ESG. These groups develop strategies to share information, influence endowment investment polices and practices, facilitating peer-to-peer learning, and so much more. For a complete list of the charges of each working group, as well as a list of all the steering committee members, click here.
Funding for IEN
The IEN is designed not to be an organization in the traditional sense, but a network - your network. As such, we wanted to provide a brief fundraising update. So for this year, the IEN has received grants from the Wallace Global Fund, The Denver Foundation, The Hanley Foundation, and the Robert Litterman Family Foundation. We are very grateful for this support, without which the IEN would not exist. Several of the institutions represented on the Steering Committee have also contributed to IEN financially, including Cal State University, Carleton College, Middlebury College, San Francisco State University, Brown Advisory, Calvert Investments, Terra Verde Capital, and Trillium Asset Management. These funds go towards supporting our small team and usual expenses like travel and conference registrations. As mentioned above, we have a Working Group of the Steering Committee working with the IEN team to develop a strong, long-term funding model. Please let us know if you have leads on potential funders who might be interested in supporting this work.
PRI Endowments Roundtable Discussion
On July 1st, PRI and the Intentional Endowments Network held a round table discussion as an opportunity to share insights amongst peers about addressing ESG and sustainability as an investor without sacrificing financial returns. For more details about the event, click here.
Global Investor Statement on Climate Change
As we approach the critical international climate negotiations (COP-21) in Paris this December, the IEN has been working to enlist a substantial number of endowments to sign a Global Investor Statement on Climate Change. In doing so these endowments add the powerful voice of higher education to the call for a strong international climate agreement. More than 370 global institutional investors, representing over $24 trillion in assets, including CalPERS Blackrock, and the University of California, have already signed the Statement. Please consider adding your endowment's name to this important statement and sharing with your colleagues. To sign,click here and provide your institution's name, assets under management and the appropriate contact person's name and email. Our target date for new endowment signatories is September 30th.
Schools in the Network sign the CDP and INCR
We also wish to highlight a few schools in our network that are beginning to change their investment fundamental practices by joining initiatives like the CDP and INCR. The University of Massachusetts recently signed the CDP. Amherst signed the INCR.
- SOCAP15: October 6-9, 2015, San Francisco, CA
AASHE Conference, October 25-28, 2015 | Minneapolis, MN
The SRI Conference, November 3-5, 2015 | Colorado Springs, CO
Portland State Forum: Save the date - November 9-10, 2015 for the Intentionally Designed Endowment Forum at Portland State University.
School Spotlight: University of California
The University of California School System has emerged as a leader in the realm of sustainability in college and university endowments. On September 10th, 2014 UC announced that they would invest $91 billion of their endowment portfolio in climate solutions. The decision was a direct result of the creation of the presidents Task Force on Sustainable Investing. UC also became the first university to sign the Montreal Carbon Pledge. In July, UC's CIO spoke to Pensions & Investments about their approach to socially responsible investing. Since 2008, UC Berkley as had a student-led socially responsible investment fund. This fund allows students to see first hand the connection between strong financial returns and positive social impact.
Thoughts on ESG Investing and Fossil Fuel Consumption
By Fred Rogers
The problem of climate change is real and its resolution requires a reduction in the consumption of fossil fuels worldwide. For this to occur, there must be a reduction in global demand, and thus both: (1) serious investment in alternative energy sources and (2) changes in social and economic behavior. While the UN Task Force is focused on GHG emissions and the socio-economic impacts of both climate change and the strategies of GHG reduction, much of the campus dialogue about climate change has been focused on the 350.Org initiative of divesting from the top 200 fossil fuel companies.
There are many reasons to not love the largest fossil fuel companies. In an effort to increase the value and market share of their companies, they have often been aligned with those who question the premise of GHG reduction goals. Divestment is seen as a political step to diminish the influence of these companies and to enable political support for more aggressive measure. Divestment proponents also assert that the current fossil fuel companies’ valuations are overstated because they assign unrealistically high values to their in-ground proven reserves of energy fuels, which ultimately cannot be consumed if we are to avoid drastic environmental consequences. This, they argue, makes such companies a bad investment risk. Continue Reading.
Addressing Climate Change and the Investment Implications l Morgan Stanley, August 2015
- ESG Issues in Investing: Investors Debunk the Myths l CFA Institute
In the news…
A few select news articles we've posted over the past two months…
Morningstar to Launch First Environmental, Social, and Governance (ESG) Scores for Funds Globally l Sustainalytics,August 13, 2015
- Bloomberg Brief -- Sustainable Finance l August 13, 2015
CIO calls for more social responsibility l Pensions & Investments, August 10, 2015
University of Otago Foundation Trust Divests from Fossil Fuel l Business Scoop, Press Release, July 15, 2015
Goldman Sachs Agrees to Buy Asset Manager Imprint Capital l BloombergBusiness, By Michael J Moore, July 13, 2015
- Private Equity Firm, KKR Deepens Its Commitment to Providing Solutions, Publishing Fifth ESG and Citizenship Report l MarketWatch, July 9, 2015
If you have an original piece you would like to submit for an upcoming newsletter, please email Peyton Siler Jones at[email protected]!
For more information about the Intentional Endowments Network and how you can support this work, please contact Georges Dyer at[email protected].