It is a favorite pursuit of journalists and commentators at each year-end and the start of the new calendar year to look back and look forward to identify “top stories” and significant trends of the year past. And to look ahead at “what might be” in the new year. We present a few of these musing for you in this first newsletter of the year 2020.
The year 2019 began with an important challenge to corporate leaders from Larry Fink, chairman and CEO of the world’s largest asset manager, BlackRock (with more than US$6 trillion in AUM). He writes each year to the CEOs of companies that his firm invests in on behalf of the firm’s clients. There are literally hundreds of publicly-traded companies in the BlackRock portfolio.
by Benjamin Bailey, CFA, Praxis Mutual Funds & Everence Financial
Praxis Mutual Fund shareholders expect us to invest with their values in mind. The Praxis Impact Bond Fund turned 25 this year and through the first half of the fund’s tenure we diligently focused on screening out holdings contrary to those shared values. In 2006, our eyes were opened by a public bond offering that showed us what positive impact bonds (those bonds that make a positive impact on the climate and/or communities) could do.
There is no doubt now – the world’s largest asset managers are definitely focused on corporate sustainability and sustainable investing (the two go hand-in-hand) as survey after survey is telling us. In recent years we seen considerable momentum as asset owners and their managers adopt or further enhance their sustainable investing / ESG investing approaches. And to gauge the progress we’re seeing major, global asset managers busily take the pulse of the capital market players.
by Jon Hale, Ph.D, head of sustainable investing research for Morningstar. In 2018, Hale was named to Barron’s list of the 20 most influential people in ESG investing, and in 2019, he was included in the InvestmentNews’ 10 leaders of ESG & Impact investing
The terms of reference are familiar now to many more institutional owners and their managers (as well as to a growing number of retail investors who are their clients and beneficiaries). This movement began as “socially responsible investing” (“SRI”) which evolved over time to “sustainable & responsible investing” and on to “sustainable & responsible & impact investing” in the 21st Century.
In recent months we’re increasingly hearing and using the simplified term “sustainable investing” and “ESG investing”.
The big news of this week: The USA is now “officially” withdrawing from the Paris Accord on Climate Change. The one-year countdown to “USA out” is now underway.
In 2015 as the representatives of almost all of the nations of the world gathered in Paris, France for “COP 21” (or “the UN Climate Change Forum, the 21st yearly meeting of the Conference of Parties), an important agreement was reached: the 196 nations would work together to attempt to limit global warming to below 2-degrees Celsius (3.5-degrees Fahrenheit) – or at least to not above 1.5C (2.7F).
Climate Change and Corporate Reporting – the two terms are increasingly coupled now as many more investors and stakeholders are requesting information from publicly-traded companies about their awareness of, and strategies & actions for addressing the many risks posed to the enterprise by climate change.
Important sea change: many more investors are now asking companies for information about their preparation for climate change and some, demanding a report if none has been issued.
There are many voices raised now and joining in the public dialogues on corporate sustainability, citizenship, responsibility, ethics, governance…and more. These fit into the commentary stream on the future of capitalism -- and how to make it work for everyone.
There are rigorous companion dialogues – rapidly growing in number -- related to the role of sustainable investing as many more asset owners and their managers adopt new approaches, many focused on corporate ESG performance and outcomes. We see this as further reinventing of capitalism. Do you?