The MacArthur Foundation was founded in 1970 by John D. MacArthur, the owner of Bankers Life. The organization makes grants and impact investments to support non-profit organizations furthering social good in Chicago and across the world. The Foundation managed an endowment of US$ 6.6 billion of assets as at December 31, 2018, making it one of the largest private foundations in the United States.
In 1983, the MacArthur Foundation decided to complement its grant-making program with program-related investments, a type of impact investment that seeks to accomplish the organization's purposes. For example, the Foundation provides low-cost loans, equity investments and guarantees to community development financial institutions in Chicago and across the United States to invest in affordable housing. Furthermore, the MacArthur Foundation launched the Catalytic Capital Consortium with The Rockefeller Foundation and Omidyar Network to provide capital to facilitate additional impact investments and help achieve the UN Sustainable Development Goals.
MarketWatch: S&P Global and RobecoSAM, an affiliate of Robeco, announced today that S&P Global will acquire the ESG Ratings Business from RobecoSAM which includes the widely followed SAM* Corporate Sustainability Assessment (CSA) – an annual evaluation of companies' sustainability practices.
Top 1000 Funds: The investment arm of one of Australia’s state governments, TCorp, has issued a A$1.8 billion sustainability bond reflecting the appetite of investors which are increasingly hungry for bonds that are issued to fund social and environmental projects.
MarketWatch: Some 73 major U.S. companies recorded material hits to earnings from extreme weather events in one year, while supply-chain disruptions from climate change jumped 29% over the past six years.
Funds Europe: Gender inequality remains rife in the UK funds industry, according to a report which found that there are more fund managers named Dave or David than there are women at the helm.
Hedgeweek: In the UK, over 500 candidates are already signed up to complete the course; they will be able to take the exam from 2 December 2019.
IPE: Pension funds in Sweden are increasing their alternative investments, but the quality of their sustainability management for these investments is poorer than the efforts they are making for traditional asset classes, a new report concludes.
IPE: In India, where there is next to no focus on ESG, there is a growing realisation that externalities matter in areas like water management or rice production, which is highly water intensive.
IPE: Green bonds may be the poster child of ESG approaches to emerging market debt (EMD) but a focus on ESG criteria goes deeper. Indeed, the rationale for investing in emerging market sovereign debt is to gain exposure to improving economies.
Founded in 1992, Kåpan Pensioner is a mutual insurance society managing the occupational pension for Swedish government workers. Kåpan had over 800,000 beneficiaries and US$ 9.3 billion of assets under management as at December 31, 2018.
The public pension fund's responsible investment strategy is guided by international conventions the Swedish Parliament has signed such as the UN Global Compact, the OECD's guidelines for multinational companies, the Oslo (Cluster Munition) and Ottawa (Anti-Personnel Mines) Conventions, and the UN Sustainable Development Goals. Furthermore, security selection is done using a positive screen so that companies included in their portfolio reach a minimum threshold of ESG performance. As part of its Climate neutral strategy, Kåpan has been making investments in forestry and land to compensate the negative impact of its holdings.
IPE: ERAFP, the French civil service pension fund, has adopted criteria for divesting holdings on climate change-related grounds as part of a move to align its socially responsible investment (SRI) policy with the objectives of the Paris Agreement.
Financial Times: Sweden’s central bank has ditched bonds issued by Australian and Canadian regions on the grounds that their carbon emissions are too high, as part of its push to use monetary policy in the battle against climate change. [Full article available to Financial Times subscribers.]
Citywire: NN Investment Partners' emerging markets debt chief Marcelo Assalin has left the firm, along with several portfolio managers in his team. This follows a rift caused by diverging views within the team over the further integration of ESG criteria, which the group plans to step up for EMD strategies.
Eco Business: The investment firm, which aims to halve the greenhouse gas emissions of its portfolio by 2030, will also report its consumption of electricity, water, paper and air miles from this financial year.
GRESB: Combining Verisk Maplecroft’s global risk analytics with GRESB’s geo-coded asset-data and adaptation measures, the scorecard provides location-specific intelligence on climate change and ESG exposure to create a unique risk-adjusted and asset-level benchmark of global real estate investment.
IPE: Avoiding reputational risk drives pension funds to adopt environmental, social and corporate governance (ESG) “principles” more so than it does other types of institutional investors. More than one-third (35%) of pension fund respondents included reputational risk as a top three factor driving ESG investing at their institution, compared with 21% of endowment and foundation respondents, and 6% of sovereign wealth funds.
Nikkei Asian Review: U.S. private equity firm Neuberger Berman will create a fund that advocates for governance and sustainability reforms at small and midsized Japanese companies. Neuberger chiefly will seek enterprises valued at less than 500 billion yen ($4.57 billion). The fund will select 20 to 30 targets pending bottom-up due diligence. The new investment vehicle aims to draw capital from global pension funds.
GreenBiz: Last week, Apple issued $2.2 billion in green bonds, raising its total so far to $4.7 billion — and further cementing its status as the top corporate green bond issuer in the United States. But growth in green bonds actually has slowed after a blistering five years, seemingly ceding some ground to newer sustainability-linked loans with looser requirements.
Markets Media: As environmental, social, and corporate governance concerns continue to grow, institutional investors and asset managers have found obtaining the necessary financially material disclosures from companies a growing challenge and have started to push towards mandated disclosures.
Founded in 1990, PWRI is the Dutch public pension fund for disabled workers. It manages the pension for over 200,000 individuals and had US$ 9.6 billion of assets under management as at December 31, 2018.
Responsible investing has been part of the pension fund's investment policy since 2004. The external asset managers to whom PWRI allocates capital must implement their policy which includes screenings (land mines, cluster bombs and tobacco producers), ESG integration, impact investing, engagements and proxy voting. Impact investments seek to improve the climate, as well as increasing the accessibility of labor markets to individuals with disabilities. As part of its engagements, PWRI engages with portfolio companies on implementing policies and procedures to create work opportunities for disabled workers.
Business Wire: The Concordia University Foundation committed today to end investments in the coal, oil and gas sector within five years. The Foundation also announced it would go further than this divestment and will be the first university foundation in Quebec with a target of 100% sustainable investments by 2025, including by doubling its social or environmental impact investment.
The Asset: The debate on whether environmental, social, and governance (ESG) investing is part of the fiduciary duty of an asset manager remains unsettled. But major asset owners and leading asset managers are coming out strongly in favor of ESG being part of an asset manager’s fiduciary duty, a development that may decide the issue sooner rather than later.
Chief Investment Officer: Guy Opperman, the UK minister for pensions and financial inclusion, has chastised investment managers for their lack of action regarding climate change. Opperman even suggested that pension plan trustees should give their investment managers the sack if they don’t support climate resolutions.
Corporate Adviser: Regulators have been urged to launch a review of the ethical and sustainable fund sector, after a leading wealth manager accused the industry of misleading investors by marketing socially responsible funds that have significant exposures to defence, tobacco and gambling stocks.
GARP: From boutique money managers to French behemoth BNP Paribas SA, financial firms are setting up sustainability-focused mutual funds that mimic hedge-fund tactics. In an unusual move, they’re not only buying stakes in the companies favored by green investors, but also shorting firms that are failing to make the shift to sustainability.
ShareAction: Climate change is one of the highest priorities facing investors. In this report, we’ve examined how 57 of the world’s largest asset managers voted on 65 shareholder resolutions linked to climate change. While there is encouraging improvement when it comes to voting for climate change resolutions, many still shy away from holding companies account. Investors voting power is the most powerful tool they have, it is vital that all investors use it.
Live Mint: Every year, Harvard Business Review (HBR) publishes a list of the world’s 100 top-performing CEOs. Amazon’s Jeff Bezos topped the list in 2014 and has been on it every year—until now.
IPE: Institutional investors and asset managers are moving away from the shareholder value maximisation philosophy as famously espoused by Nobel economics laureate Milton Friedman in 1970. Instead, they are moving towards the recognition that corporations have duties and responsibilities towards all stakeholders affected by their businesses.
Bâtirente was founded in 1984 by the Confederation of National Syndicates in Québec, Canada to manage the pension of affiliated labor unions. The Non-corporate pension fund had US$ 499 million of assets under management as at December 31, 2018.
As a founding signatory of the United Nations' Principles for Responsible Investment, the Manager has been committed to investing sustainably. As such, 92% of its assets are managed by firms that integrate ESG criteria to their management process and that are PRI signatories. Furthermore, Bâtirente, in partnership with the "Regroupement pour la responsabilité sociale des entreprsies", founded Æquo in 2016 to manage its shareholder engagements and offer these services to other institutional investors in Québec. Finally, the asset owner collaborates with peers to influence company practices through collaborative engagements through PRI groups and Climate Action 100+, as well as through engagements with policymakers on issues like Supply Chain Modern Slavery.
The Asset: Environmental, social, and governance (ESG) investing is one of the most exciting emerging interfaces between hedge funds and machine learning. Hedge funds are finding new ways to use machine learning and ultimately artificial intelligence (AI) in the investment process to further capitalize on the ever-growing quantities of data.
Top 1000 Funds: In September 2015, the United Nations General Assembly adopted 17 Sustainable Development Goals with underlying targets to be met by 2030. Target 8.7 commits governments to taking immediate and effective measures to eradicate forced labour, modern slavery and human trafficking and prohibit and eliminate all forms of child labour. I was in New York for the most recent United Nations General Assembly and it was clear that accelerated action is urgently needed to meet our shared commitments.
Financial Times: The Arab Bankers Association of North America last week honoured Farouk Bastaki, the head of the Kuwait Investment Authority, at a glittering dinner in New York. The crowd included recipients — and no doubt some would-be recipients — of riches from his sovereign wealth fund, one of the largest in the world. [Full article available to Financial Times subscribers.]
IPE: The proportion of institutional investors who do not believe in sustainable investment has fallen by almost half since 2017, but performance concerns are still a challenge.
FT Adviser: The Association of Member-Nominated Trustees (AMNT) had complained to the FCA in May about fund managers failing to allow pension scheme trustees to operate a stewardship policy for the environmental, social and governance (ESG) aspects of the companies in which they invest via fund managers.
The World Bank: The World Bank launched the Sovereign ESG Data Portal: a free, open and easy to use online platform that provides users with sovereign-level environmental, social and governance (ESG) data. The portal is designed to help investors better align ESG analysis with key sustainable development policy indicators and analysis, as well as to increase data transparency and support private sector investments in emerging markets and developing countries.
IPE: Half of the large Dutch pension funds have not defined specific action points on climate change. Of the 50 pension funds examined by the VBDO, 12% lacked an explicit policy against climate change, while 38% had only addressed the issue in general terms, the organisation found.
Institutional Asset Manager: Assets managed in Environmental, Social, and Governance (ESG) mandates by the 500 largest asset managers in the world rose by 23.3 per cent in 2018, in contrast to their overall assets under management (AUM), which were down 3 per cent from the previous year.
Top 1000 Funds: As concerns about climate change reach fever pitch, Harvard Business School has published a report that shows investment strategies that “aggressively” reduce carbon emissions can significantly boost fund performance.