Mapping the Future of Responsible Investing

Two presentations from the Sustainable, Responsible, Impact Investing Conference.

There are very few Sustainable, Responsible, Impact 401ks

Getting Environmental, Social, Governance (ESG) in 401ks is difficult

Need to get in front of CEOs

Almost no SRI options in 401ks

Worried about performance – over 2200 academic studies – 90% say no underperformance, 50% say over performance

Mapping the Future of Responsible Investing

How do the Sustainable Accounting Board Standards (SASB) and the global Sustainable Development Goals (SDGs) interact? How do environmental, social, governance (ESG) factors analysis influence the evaluation of all companies and their impacts on our world.

Speakers: Katie Schmitz Eulitt, Anna Snider, John Streur

NOTES

• John Streur
• Sustainable development goals
• Atmospheric CO2 have reached new highs
• Most deaths globally today than ever before – shifted away from developed countries
• Income inequality increasing
• Income growth much greater for rich people. 30 years ago, lower income increased faster than rich
• When inequality rises economic growth stalls
• PRI – principles of responsible increasing
• Global Compact – ten principles
• SASB rules of procedure – sustainability accounting standards board
• UN sustainable development goals

Katie Schmitz – SASB

• Socio-economic trends up – earth/sustainability trends poor
• Over $8 trillion – 1 in 5 investment dollars – use ESG
• Signatories to PRI up
• Investors want more ESG information from companies
• SASB formed to independently set industry-specific standards – chair Michael Bloomberg
• Public annual report information about ESG data
• ESG factors affect financial condition or operating performance of companies
• GRI – address several of SDG targets
• SASB – address some 3-4 of the 17 SDG targets
• SASB voluntary disclosure – companies don’t want to disclose – need to have rules about disclosure

Anna Snider – measuring impact

How should investor/advisor use SDG – many consider factors but not directly yet

Know What You Own: Truth Beyond the Facade

Critically assessing companies for clients’ portfolios is an important part of financial advising. This includes portfolio management that reflects clients’ values and financial requirements. In this session, industry experts will discuss important tools to evaluate ESG and impact performance.

Speakers: Andy Behar, Paige Chapel, Cynthia Figge, Bob Helmuth

NOTES

• CSRhub – Cynthia Figge – has SRI info on many companies
• Not great correlation in evaluators – based on what doing, disclosure, or investigation
• Challenging to accurately evaluate a portfolio – a lot of reporting is voluntary
• How to communicate impact for clients:

Andy Behar As You Sow – non-profit, shareholder resolutions, has a tool to look at carbon footprint of mutual funds – palm oil (avoid) – weapon free fund, mass incarsaration free fund,

• Performace lagging is a myth
• Non SRI investments Risks – if you invest in ESG – would have avoided 90% of forclosures in 2009.
• Can get a high ESG score with best in class – and still be coal
• Went after mcdonalds to get antibiotics out of poltry – success: Wendy’s, Bking, followed – still need to get Beef and Pork
• Slavery in supply chain – Monster beverage target – got a 0 on supply chain because didn’t disclose
• Fossil Fuel Free – SPYX – pull out carbon underground companies – but still have pipeline companies, Haliburton, – now called Fossil Fuel Reserve Free – but still have Marathon, … smaller reserves – EFAX – FFF with lots of reserve companies (only mining coal for steal companies)

Paige – Aeris – alternative investments – lots of data on ESG, not much data on Impact

Fund managers can provide impact goals

Barrons had an article about the 100 top ESG funds

Put burden on fund manager to show what they are trying to change – what impact do they want