So here we are, standing on the threshold of a new decade. It will be, to paraphrase Winston Churchill, a decade of consequences. Play it right, and we have a chance of avoiding the worst impacts of climate change. Waste it, and we are in uncharted territory.
I am confident that we will end the next decade in a far better place than we are today, just as we are ending this decade in a far better place than we ended the previous one (as described by Angus McCrone in his October article Clean Energy’s Decade Nearly Gone, And Its Decade Ahead).
U.S. state and local pension funds manage over $4 trillion in retirement assets for 20 million active and retired plan members. Given the significance of these funds, proper oversight is vitally important to government officials, plan participants, and taxpayers alike. The challenges to effective pension fund governance have been well documented, and significant research has demonstrated that the characteristics of pension boards matter. This brief summarizes public pension fund governance, discusses key aspects of public pension boards, and presents additional evidence that a well-designed board relates to better plan outcomes.
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.
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.
To the dismay of many energy experts, the World Bank recently rather capriciously decided to stop funding virtually all new fossil-fuel plants. But phasing out readily available coal is a move that most major developing countries simply cannot afford without adequate incentives.
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.
BlackRock, the world’s largest asset manager, is doubling down on its view that investors in the US don’t yet fully appreciate the just how disastrous an economic impact climate change could have at a time when environmental, social, and corporate governance investing is garnering mainstream attention.
“Climate-related risks already threaten portfolios today, and are set to grow, we find,” strategists at the BlackRock Investment Institute wrote in a report this week, homing in on threats the massive US municipal bond market could face as the planet warms.
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.
