Author: Christopher K. Merker, Ph.D., CFA

Christopher K. Merker, PhD, CFA, is a director with Private Asset Management at Robert W. Baird & Co. He holds a PhD in investment governance and fiduciary effectiveness from Marquette University, where he has taught the course “Sustainable Finance” since 2009. Executive director of Fund Governance Analytics (FGA), an ESG research partnership with Marquette University, he is a member of the CFA Institute ESG Working Group, an international committee currently exploring ESG standards, publishes the blog, Sustainable Finance, which covers current topics around governance and sustainability in investing, and is co-author of the book, The Trustee Governance Guide: The Five Imperatives of 21st Century Investing.
Posted on

Johan Rockström: ‘We need bankers as well as activists… we have 10 years to cut emissions by half’ (The Guardian)

The eminent Earth scientist argues that we cannot just wait for the world order to change when it comes to tackling the climate crisis – we all have a duty to act now.

What makes a person like me most enthusiastic is that we are finally understanding that landing the Paris agreement is not just about eradicating fossil fuels, but about remaining within planetary boundaries. We need to keep carbon sinks in nature intact. We need to take care of the nitrogen, water and phosphorus cycles. Cop26 in Glasgow should be the first major climate conference where the climate agenda and the nature agenda come together. Let’s see if that succeeds but many forces are trying to push it to that point.

https://amp-theguardian-com.cdn.ampproject.org/c/s/amp.theguardian.com/environment/2021/may/29/johan-rockstrom-interview-breaking-boundaries-attenborough-biden

Posted on

Interesting developments this week around Climate Change (NYT and BBC)

Global Warming vs. Climate Change | Resources – Climate Change: Vital Signs of the Planet

First, an activist hedge fund has successfully waged a proxy contest to elect climate activists to Exxon’s board. We have long said that despite hedge funds’ typically “short-termist” orientation, that skills in investor activism could be applied in a constructive way to sustainability.

https://www-nytimes-com.cdn.ampproject.org/c/s/www.nytimes.com/2021/05/26/business/exxon-mobil-climate-change.amp.html

For the first time a court of justice has ordered emissions reductions; a Dutch court ordered Royal Dutch Shell to reduce emissions by 2030, 45% below 2019 levels.

https://www.bbc.com/news/world-europe-57257982

Posted on

Does Good Governance Lead to Better Investment Performance? (Commonfund)

The governance framework of an institution plays a significant role in its overall success. Based on our work with hundreds of higher education institutions over the past 50 years, we believe that good governance is critical to the health of the institution and the positive performance of the endowment. Most people intuitively agree that “good” governance is imperative but currently there is a dearth of quantitative research available that defines and measures the difference that it can make. To rectify this and help to move the industry forward, Commonfund Institute is embarking on a new research project titled, The Commonfund-FGA Benchmarking Study of Governance in Higher Education. 

The Study is the first of its kind and is being done in conjunction with Chris Merker and Fund Governance Analytics (FGA). FGA is a pioneer in the field of empirical governance research and evaluation of asset owners and operates in partnership with Marquette University. Their governance diagnostics are derived from decades of research and evaluation and have been used extensively to analyze the governance practices of public pension funds. This is the first time that these tools will be applied to higher education endowments.

https://www.commonfund.org/blog/does-good-governance-lead-to-better-investment-performance-in-higher-education-institutions

Posted on

Happy Earth Day!

No 2030 or 2040 pledges today, just a poem for reflection on this 52nd Earth Day.

Life is the simple thing we neglect every day. A day contains the time as we travel on our way. Time is the thing we lack in our lives. As we yearn to find our way through this phenomenon called life. We grow old in wisdom, yet are fragile in youth. We cannot escape the perils that seeks us with each move. We can embrace the seconds that the clock has, Or be the pawn forced by the master’s perilous hand.

– walkinverse (1/3)

Posted on

Carbon Capture is Key to Companies’ Net Zero Pledges (WSJ)

https://www.wsj.com/articles/carbon-capture-is-key-to-companies-net-zero-pledges-11615975780

Many companies’ plans to reduce their greenhouse-gas emissions to “net zero” rely heavily on technologies to capture carbon. Some are more speculative than others.

Nearly 1,400 companies have promised to cut their net carbon dioxide emissions to zero over the coming decades. So-called carbon offsets, where the gas is removed from the atmosphere, are central to many of these plans. The latest of the almost daily announcements: French oil giant Total said on Tuesday that it will plant a 40,000-hectare forest in the Democratic Republic of Congo to sequester 10 million tons of CO2 over 20 years.

Posted on

The climate clock is ticking and now, with Sky’s new coverage, it will make prime-time headlines (iNews)

https://inews-co-uk.cdn.ampproject.org/c/s/inews.co.uk/opinion/columnists/the-climate-clock-is-ticking-and-now-with-skys-new-coverage-it-will-make-prime-time-headlines-933810/amp

Starting this week, Sky News will get deadly serious in its coverage of climate change by highlighting every night the time we have left until the planet overheats.

The figure is already less than 12 years, and the on-screen ticker will be counting down, second by second, as we head towards the ominous limit of 1.5°C hotter than when the Earth’s temperature was first comprehensively measured in 1880.

The figure is already less than 12 years, and the on-screen ticker will be counting down, second by second, as we head towards the ominous limit of 1.5°C hotter than when the Earth’s temperature was first comprehensively measured in 1880. That ceiling was set in Paris at COP21, the 2015 UN Climate Change Conference, and Sky News has made its bold statement as we approach COP26 in Glasgow in November.