J.P. Morgan Asset Management is joining a chorus of global financiers saying that protecting the environment will be a key consideration for extending shipping loans.
“There is not an institutional investor today in the Western world that is not thinking about the impact of environmental, social and governance factors,” Andy Dacy, the chief executive of the finance firm’s global transportation group, told a meeting at the International Shipping Week here.
“Anyone looking for [shipping] capital, if you’re not employing such a strategy, it’s going to be increasingly very difficult to get capital.” Mr. Dacy said.
Proponents of ESG data believe it can help investors better understand the risks and opportunities companies face and may even offer alpha generation potential. On the other hand, skeptics think ESG criteria limit the universe of available stocks and that such restrictions are bound to negatively impact returns.
To return to our metaphor, having the ESG cake means generating strong investment performance, while eating it too implies doing good from an ESG perspective.
I get to learn about lots of different plans for dealing with climate change. It’s part of my job—climate change is the focus of my work with the investment fund Breakthrough Energy Ventures—but it’s just as likely to come up over dinner with friends or at a backyard barbecue. (In Seattle, we get outside as often as we can during the summer, since we know how often it’ll be raining once fall comes.)
Whenever I hear an idea for what we can do to keep global warming in check—whether it’s over a conference table or a cheeseburger—I always ask this question: “What’s your plan for steel?”
I know it sounds like an odd thing to say, but it opens the door to an important subject that deserves a lot more attention in any conversation about climate change. Making steel and other materials—such as cement, plastic, glass, aluminum, and paper—is the third biggest contributor of greenhouse gases, behind agriculture and making electricity. It’s responsible for a fifth of all emissions. And these emissions will be some of the hardest to get rid of: these materials are everywhere in our lives, and we don’t yet have any proven breakthroughs that will give us affordable zero-carbon versions of them. If we’re going to get to zero carbon emissions overall, we have a lot of inventing to do.
People can curb climate change and mitigate environmental pollution by voting with their money and investing in companies that have policies in place to limit such negative activities.
Although it has long been debated as to what extent humans are contributing to climate change and our ability to adapt, what is undeniable is the fact that the earth is getting warmer. The current warming cycle is occurring twice as fast in the Arctic than anywhere else on earth, and it is causing significant changes in the extent, duration, and conditions of sea ice. The loss of sea ice around the Svalbard, an archipelago in the Norwegian Sea, is predicted by scientists to be particularly profound in the coming decades.
Recent posting from the Commonfund Investment Stewardship Academy…
There are five imperatives for trustees of nonprofit organizations. Although governance has been my area of research for the last decade, I write this not only as an academic but also as a practitioner having hands-on experience with many of the issues that trustees confront today.
The impacts of climate change, including rising seas and extreme weather events, are quickly emerging as formidable challenges for the real estate industry and our cities.
Moody’s recently warned cities to take steps to prepare for climate change or face downgrades in their bond ratings. Last year, the International Association of Insurance Supervisors and the U.N.-backed Sustainable Insurance Forum outlineduniversal standards for how insurers should account for climate risks.
Neither of these actions should be surprising, because the consequences of climate change are only growing costlier. Natural disasters caused a record $300 billion in damage in the U.S. in 2017, most of it to real estate.
Impact investing took a direct hit with a speech by Securities and Exchange Commissioner Hester Peirce delivered recently to the American Enterprise Institute, just before the July 10 Financial Services House Committee hearing on Building a Sustainable and Competitive Economy: An Examination of Proposals to Improve Environmental, Social and Governance Disclosures.
The speech, which took on environmental, social and governance ratings and proxy voting especially, was seen by some in the impact investing business as anything from surprisingly uninformed to a call to action for the ESG industry to do better.
Focuses on both structural and process factors of governance
Covers related investment topics in each chapter, including fiduciary duty, financial literacy, asset allocation, and socially responsible and impact investing
Draws from the annual U.S. Public Pension Governance Survey and other leading industry and academic research
Includes special “practitioner sections” in each chapter geared to the more technical reader
More than 80% of the financial assets in the United States fall under the purview of a trustee. That’s a big responsibility for an estimated 1% (around 1.5 million people) of the U.S. working population charged with overseeing investments for millions and millions of beneficiaries, public sector, and non-profit organizations. In a world proliferated by investment products, increasingly dominated by indexes, faced—particularly in the pension world—with increasing liabilities, more regulation, and a growing number of social and sustainability objectives, what’s a trustee to do?
The Trustee Governance Guide is here to help guide today’s board trustee through the brave new world of 21st century investing. The book focuses on the critical aspects of the Five Imperatives: Governance, Knowledge, Diversification, Discipline, and Impact. Based on more than a decade of research, practice, and discussions with many key decision makers and influencers across the industry, this book addresses the many topics related to better governance, greater mission-driven financial performance, and impact. The questions the book addresses include:
What is good governance, how do we know it when we see it, and why does it matter?·
How much knowledge is necessary to be a competent board member?
How big should my endowment be?
What are the key elements of a diversified portfolio?
How much does cost matter?
What’s the difference between socially responsible and ESG investing?
Can I focus on sustainability and still be a good fiduciary?
This book provides a way for boards to improve and benchmark their own governance performance alongside their peers, and uniquely covers related investment topics in each chapter.
Sustainable investing will become the rule and no longer the exception. But this transition comes amid a disquieting change in how we must view capital, production, and their attendant effects.
