Advisors on ESG Investing: We Need Better Data (ThinkAdvisor)

https://www.thinkadvisor.com/2019/05/20/why-advisors-shy-away-from-esg-investing/

Link to Natixis Survey: https://www.im.natixis.com/us/resources/esg-investing-survey-2019

Investors are more interested than ever in how publicly traded companies handle environmental, social and governance issues, but many say they lack the information to make ESG investment decisions and their advisors often offer little help.

Those are some of the major findings of a new Natixis survey on ESG investment issues, which essentially combines the results of four previous global surveys of close to 12,500 individual investors, financial professionals, institutional investors and professional fund buyers. About 12.5% of those surveyed are from North America, primarily the U.S.

New UN Report – Humans ‘threaten 1m species with extinction’ (BBC)

https://www.bbc.com/news/science-environment-48169783

Interesting to note it’s not climate change that is top of the list this time: 1) Changes in land / sea use; 2) direct exploitation of resources.

Other highlights:

Species extinction risk: Approximately 25% of species are already threatened with extinction in most animal and plant groups studied.

Natural ecosystems: Natural ecosystems have declined by 47% on average, relative to their earliest estimated states.

Biomass and species abundance: The global biomass of wild mammals has fallen by 82%. Indicators of vertebrate abundance have declined rapidly since 1970.

Nature for indigenous people: 72% of indicators developed by local communities show ongoing deterioration of elements of nature important to them.

Live coral cover on reefs has nearly halved over the past 150 years.

Link to the Global Assessment website: https://www.ipbes.net/news/Media-Release-Global-Assessment

As Retiree Health-Care Bills Mount, Some States Have a Solution: Stop Paying (WSJ)

https://www.wsj.com/articles/as-retiree-health-care-bills-mount-some-states-have-a-solution-stop-paying-11556703001?mod=hp_lead_pos3

States across the U.S. are testing how far they can reduce health benefits for their retirees as a way of coping with mounting liabilities and balancing budgets. State and city governments increasingly began looking to cut these costs as they struggled following the 2008 financial crisis. In Detroit and Stockton, Calif., officials agreed to reduce their support for retiree health care as a way of negotiating their exits from municipal bankruptcy protection in 2014 and 2015, respectively.


Global sustainable investments hit over $30 trillion in 2018 (GSIA Report)

http://www.gsi-alliance.org/wp-content/uploads/2019/03/GSIR_Review2018.3.28.pdf

Globally, sustainable investing assets in the five major markets stood at $30.7 trillion at the start of 2018, a 34percent increase in two years. In all the regions except Europe, sustainable investing’s market share has also grown. Responsible investment now commands a sizable share of professionally managed assets in each region, ranging from 18 percent in Japan to 63 percent in Australia and New Zealand. Clearly, sustainable investing constitutes amajor force across global financial markets.

From 2016 to 2018, the fastest growing region has been Japan, followed by Australia/New Zealand and Canada. These were also the three fastest growing regions in the previous two-year period. The largest three regions— based on the value of their sustainable investing assets—were Europe, the United States and Japan.

Happy Earth Week! Sustainable Investing Goes Mainstream (Oppenheimer)

https://www.oppenheimerfunds.com/advisors/article/sustainable-investing-goes-mainstream?CMPID=EAMZZ1900101971&SID=100&AN=OPPNEW_20190422&HB=00000000000021884526&om_rid=AAAAAA&om_mid=2285961&heartbeat_id=00000000000021884526&itx[email]=fcc60a77dcf692cfed07ed5f940f9f8532ce8b71f28ce5b1db27bbb8653f1263@idio&BID=26344032&CID=ofiDM14451&OPT1=Rep&OPT2=IDIO%20TEST&OPT3=Y

In a few short decades, sustainable investing has grown from a niche corner of the financial world to a phenomenon large enough that the primary challenge for investors may come in understanding its true scope, the changes it represents for businesses and financial markets, and how to position their personal finances for the future.

By early 2018, funds guided by environmental, social and governance (ESG) issues totaled $98 billion in the United States, a 58% increase over the previous year, according to a 2018 Morningstar report.

IRS Releases New Round of Regs for Opportunity Zone Funds (ThinkAdvisor)

https://www.thinkadvisor.com/2019/04/17/irs-releases-new-round-of-regs-for-opportunity-zone-funds/

The Treasury Department has released a new round of proposed regulations governing opportunity zone funds that answers several key questions that have kept potential investors and fund operators on the sidelines.

The zones in which the funds invest are either in or adjacent to depressed communities, and there are over 8,700 spread throughout the U.S. To date, most of the early opportunity zone funds are focused on real estate developments, but the tax benefit is also available for other types of businesses opportunity in the zone.

Why the Longest U.S. Bull Market Has Failed to Fix the Nation’s Public Pensions (WSJ)

https://www.wsj.com/articles/why-the-longest-u-s-bull-market-has-failed-to-fix-the-nations-public-pensions-11554888600?mod=hp_lead_pos5

Maine’s public pension fund earned double-digit returns in six of the past nine years. Yet the Maine Public Employees Retirement System is still $2.9 billion short of what it needs to afford all future benefits to all retirees.

There is a simple reason why pensions are in such rough shape: The amount owed to retirees is accelerating faster than assets on hand to pay those future obligations. Liabilities of major U.S. public pensions are up 64% since 2007 while assets are up 30%, according to the most recent data from Boston College’s Center for Retirement Research.

It’s National Financial Literacy Month, Take the Financial Literacy Test (FINRA)

http://www.usfinancialcapability.org/quiz.php

See how you compare to the national and state averages.

The Bad

-49% of Americans don’t know what an index fund is

-44% can’t cover $400 out-of-pocket expense

-52% have no retirement savings

-Median household retirement acct bal is $2,500

-66% thought market was flat or down over past 10yrs

The Better

Those with greater financial literacy are more likely to save and plan for retirement, according to TIAA and the Global Financial Literacy Excellence Center at the George Washington University School of Business.

88% of those who answered between 76% and 100% of the questions on the Personal Finance Index (P-Fin Index) correctly save for retirement on a regular basis. By comparison, only 37% of those who answered less than 26% of the questions correctly regularly save for retirement.

86% of those in the first group have additional savings outside of their retirement plan, compared to 34% of the second group, and 63% of the first group usually track their spending, compared to 54% of the second group.

Furthermore, those with greater financial literacy are less likely to be financially fragile; 85% of the first group could come up with $2,000 if an unexpected need arose in the next month, compared to 25% of the second group.

Borrowing and debt management are the areas where knowledge is the highest, but comprehending risk is where it is the lowest.


“The P-Fin Index is the preeminent annual barometer of Americans’ personal finance knowledge,” says Stephanie Bell-Rose, head of the TIAA Institute. “Understanding the connection between financial literacy and financial wellness was a particular focus this year, to help us create a better roadmap for improving the financial well-being of Americans.”

On average, U.S. adults answered only 51% of the P-Fin Index questions correctly. The survey asked a total of 28 questions on the following topics: earnings, consuming, saving, investing, borrowing and managing debt, insuring, risk and where to find financial advice.

https://www.tiaainstitute.org/about/news/2019-personal-finance-index

Six Trends in College and University Endowments (CFA Enterprising Investor)

https://blogs.cfainstitute.org/investor/2019/04/03/six-trends-in-college-and-university-endowments/

What trends are influencing endowment investing in today’s market?

Among larger institutions, college endowments have been at the forefront of SRI and ESG investing…more than one in four colleges engages in some form of SRI. This could take the form of traditional negative screens or restrictions among faith-based organizations, ESG, shareholder activism, or impact investing. Parsing the data by assets, we find nearly 60% of these institutions apply some form of ESG criteria.