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Rather than just celebrate the tenth anniversary of the United Nations Principles for Responsible Investment, it seemed more appropriate to focus instead on the work not yet done. The last decade has been critical in terms of socializing the Principles and gaining signatories. The uptake has been dramatic. From a cold start the PRI is now at roughly 1,500 signatories representing more than US$60 Trillion.

Now the question is what are those signatories doing with the Principles. The mission states: “The PRI will work to achieve this sustainable global financial system by encouraging adoption of the Principles and collaboration on their implementation; by fostering good governance, integrity and accountability; and by addressing obstacles to a sustainable financial system that lie within market practices, structures and regulation.”

The numbers do not yet add. Continue reading “UN PRI turns ten”

Credit where credit is due — the art and editorial departments at CityWire USA took a few fun liberties when I referred to carrot cake in my latest article unpacking when a fund is and is not good for your ESG portfolio. Jean-Jacques Rousseau is believed to have originated the quote “Qu’ils mangent de la brioche” which was then ascribed to Mme. Antoinette. The allusion as it turns out is quite apt and timely for a discussion of ESG issues, though. With the hollowing out of the middle class and the near polar separation of the very wealthy and the poor, matters of economic justice become matters of peace and stability even in developed economies. An ESG portfolio should not be disconnected from these realities, and addressing vertical slices of environmental, social and governance factors without looking across the totality presents its own risks to portfolio and purpose.

In the previous article, which is also now posted to the library, I take up a discussion of the mechanisms and merits of divestiture in public market portfolios. Is it possible to divorce a portfolio from activities that contravene the purpose and principles of the asset owners, and to do so without accepting out-of-bounds risk or sub-market returns? And while we are on the subject of literary and artistic allusion, no, the artwork does not suggest an Ayn Randian bent.  If anything, we need Atlas to cherish the responsibility for the world on his shoulders, not shrug. Divestiture should be part of a program to address the world’s problems, not retreat from them.

Head on over to the Library, pull up a chair (not too posh — remember poor dear Marie) and peruse both articles.

Happy International Women’s Day. Today is an opportunity to speak with a more personal than corporate voice.

Those who know me or read what I publish know that I am a champion of engagement over detachment on issues of consequence in business, society and the environment. I understand and embrace the motivations behind a day without women, but I worry that the lasting positive impact will not be sufficient to offset the lost wages and other difficulties women will face making it happen. How do we help sustain the positive impact of a day of direct action beyond tomorrow morning’s headlines?

I am asking my fellow Y-chromosomes to be advocates for gender equality and inclusiveness, and women to take the opportunities that a day like today creates to engage with men, or frankly anyone in a position of privilege and power. Catalyst puts out an excellent resource guide that can help foster this type of engagement that I recommend reading and sharing. We should not need a day or a month on the calendar to be aware and engaged on matters of gender equality and diversity but we have it so we should use it for maximum impact. Give people the tools and language to start effecting durable change:

First Step – Engaging Men

At the risk of parody of the SCOTUS, at least for the time being it appears that money is speech. That is a frightening prospect when we are talking about free and fair elections and the orderly and ethical functioning of government. In commerce and the capital markets though, nothing speaks as loudly as the almighty dollar, and that is a good thing. Customers speak to companies through their spending patterns. Behaviors are shut down or reinforced based on how customer dollars flow. This has been a particularly active period, with customers manifesting their support for or displeasure with a wide range of companies. Curiously, it has been apparel companies most prominently in the headlines the last few months, from L.L. Bean to Under Armour, and now REI. It may be the extent to which customers are more engaged, or brand ambassadors are more passionate spokespeople, or simply how fickle and fleeting customer loyalty is in the world of fashion and apparel.

Continue reading “In or out? Action through (dis)engagement”

Our latest article, entitled “Navigating the Moral Maze of Impact Investing” has appeared in CityWire USA’s January 30, 2017 issue. Click here to read it. You can also always find our articles and other mentions on our Libraries and Links page.

The original title of the article was “Trompe l’oeil”. For the non-Francophones in our readership, it is a French expression that loosely translates to a “trick of the eye”. It is frequently used to describe a work of art in which the artist has used a variety of techniques to create the illusion of three-dimensionality. In the context of impact investing, we used it to refer to what we might also more casually call window-dressing. We challenge our readers to discern between the illusion created by feel-good talking points about portfolio holdings and measurable and material positive change created through investment and engagement.

RIS was in the news again, this time on January 17th in FundFire, part of the Financial Times mediascape. The article is under Danielle Verbrigghe’s byline. Of note:

With his consulting venture, which will offer strategic and investment consulting, Sloss hopes to use his experience on the wealth management and asset management sides of the business to connect the dots between financial advisors, clients and asset managers, he says.

“I think I can be a good intermediary and translator between the different stakeholders and constituents, to bring people together in the ESG space,” Sloss says.

Thank you to Danielle for her insightful piece. The full article can be read on FundFire’s subscription-based site here.

I was extremely fortunate to be able to interview the esteemed Steve Lydenberg and his colleague and co-founder of The Investment Integration Project (TIIP), Bill Burckart, for my latest article in CityWire USA magazine. TIIP recently released a new industry analysis report entitled “Tipping Points 2016” which, as Steve and Bill describe it, gets down to systems-level thinking in sustainable investing. My article (link) focused on Section 2 of the report, which is an incredibly thoughtful and useful piece on how to deconstruct the processes of intentionality. I highly recommend reading the entire TIIP report (link).

Special thanks to TIIP, and particularly Steve and Bill, for taking the time to be interviewed, but also for permission to utilize their graphical framework for intentionality in the article. You can see that graphic in its full glory and context in the Tipping Points 2016 report.

“…businesses are coming to the conclusion that reducing emissions is not just good for the environment—it can also boost bottom lines, cut costs for consumers, and deliver returns for shareholders.”

I could not have said that any better. So who did say it?

Barack Obama. Yesterday, 44 published a policy forum article in Science entitled “The irreversible momentum of clean energy“. There is a certain amount of the expected global top-down policy argument, but what caught my eye was the attention drawn to the fundamental bottom-up case — unlocking value for business stakeholders.

Where are the exhaustive peer-reviewed scientific journal articles that evaluate the data and present different conclusions, or event present different independently verifiable data?

After a dust-up over a NOAA analysis of sea surface temperatures that bolsters the case that climate change is a measurable, material and increasing phenomenon, a multi-institution team led by Zeke Hausfather at Berkeley evaluated data from three largely independent sources —  National Oceanic and Atmospheric Administration’s Extended Reconstruction Sea Surface Temperature (ERSST), the Hadley Centre SST data set (HadSST3), and the Japanese Meteorological Agency’s Centennial Observation-Based Estimates of SSTs (COBE-SST) from 2003 to the present. I include the link to the study below for those of you who do not have enough charts and Greek letters in your daily diet. As I understand it, they consulted different data sets from different gathering mechanisms – buoys, ships and floats – to account for biases that could emerge in the devices or methodologies.

The science continues to hold up. There are too many conscientious scientists of all political stripes from too many governments and institutions for there to be a credible conspiracy to manipulate either the data or the conclusions or both for very long. Continue reading “If climate change is a hoax…”