FGA and Commonfund Institute recently announced joint study on governance in higher education, the Commonfund-FGA Benchmarking Study of Governance (CFSG). In this second major phase of research, the group found results that validated and confirmed the findings of the initial five-year study of public pensions at Marquette University. Asset owner governance considerations remain critical for mission development, financial outcomes and addressing complex issues.
When Dr. Chris Merker began teaching ESG — Environmental, Social and Corporate Governance — at Marquette in 2009, his classroom was filled with blank stares.
“People didn’t really give it too much thought back then,” Merker says.
By this point, Merker, a director of Private Asset Management at Robert W. Baird & Co., had been thinking for years about ESG. The U.S. had recently been through two economic downturns, and Merker had been trying to understand why. When he first heard about ESG, around the time the United Nations founded its Principles for Responsible Investment initiative in 2005, he thought that between a growing list of corporate governance failures and rising stakeholder concerns, perhaps it could offer a window into why the world was struggling.
ESG is far different from traditional accounting. Accounting is typically viewed purely from financial statements — an organization’s value on paper was its true value. But, according to research by Ocean Tomo, over the past 50 years, the market value of companies has become increasingly disconnected from its book value. ESG has fostered new ways to understand factors that don’t show up on a financial statement — including reputation, relationships with employees, and how an organization may have exposures to growing environmental risks.
More than a decade later, Merker says everything has changed. He no longer receives blank stares when discussing ESG, which has morphed into a new language of accounting standards and metrics. This is a language that corporations, investors and students alike are all scrambling to learn.
We are delighted to announce our keynote speakers for the 2022 Marquette Sustainability 2.0 Conference scheduled for October 26-27. We look forward to a special keynote panel discussion on the energy transition and the potential future of nuclear power with leaders from two outstanding organizations.
Mr. Dan Pickering, Founder and CIO, Pickering Energy Partners
Dan Pickering is the Chief Investment Officer of Pickering Energy Partners (PEP). PEP manages client assets via energy strategies focused primarily on public markets and private equity. Prior to PEP, Mr. Pickering served as the President of Tudor, Pickering, Holt & Co. and Chief Investment Officer of TPH Investment Management. Dan has spent 26 years as an energy portfolio manager, researcher and analyst, first at Fidelity Investments (where he managed ~$1 billion of energy sector funds), then as Head of Research at Simmons & Company and as the founding partner of Tudor, Pickering, Holt & Co. Dan currently serves as the portfolio manager of the PEP Energy Equity Opportunities Fund and on the Investment Committee of PEP’s energy co-investment and private equity strategies. He also serves on the Advisory Board’s for Tudor, Pickering, Holt & Co, the Energy ESG Council, the Houston CFA Society, as well as the Board of Trustees for Texas Children’s Hospital and the Texas Children’s Hospital Foundation. Dan grew up in Missouri, has a BS in Petroleum Engineering from the Missouri School of Science and Technology and an MBA from the University of Chicago.
Mr. Brent Ridge, President and CEO, Dairyland Power Cooperative
Prior to Dairyland, Ridge served as Vice President, Corporate Services, and Chief Financial Officer and Treasurer at Energy Northwest (Richland, Wash.). His responsibilities included finance, treasury, enterprise risk management, asset management, human resources, supply chain, information services and energy services and development. He also served as Vice Chairman of the Corporate Nuclear Safety Review Board for Columbia Generating Station. Earlier in his career at Energy Northwest, Ridge served as Asset Manager, Controller and Chief Risk Officer. He was also the manager of Construction and Maintenance Services, responsible for power plant modifications, outage and online major maintenance, facilities and commercial engineering. Ridge earned a bachelor’s degree in Civil Engineering from the University of Idaho and an MBA from Regis University (Denver, Colo.). He also completed the Reactor Technology Course for Utility Executives at MIT, the Utility Executive Course at the University of Idaho and the Advanced Management Program at Harvard University.
The problem extends well beyond crude oil and its derivatives. The price of natural gas has soared, futures for coal delivered to Europe have risen 137% this year, and cash prices for Appalachian coal have more than doubled since last June.
Yet the long-term outlook is more hopeful. The policies we adopt in response to the current price surge can create a more stable energy sector a decade from now. We need something we haven’t had for a long time: a comprehensive energy strategy built on realistic premises about supply, technology and politics.
A visit to Arizona last year brought this home…When on a pink Jeep tour of the Cococino National Forest near Sedona, I asked our guide whether the area had seen a reversal of fortune on rainfall, and he said that the green we saw was only from a recent reprieve of some precipitation, otherwise the mostly brown vegetation was from the 20-year mega drought, with average annual rainfall 75% below average.
The Financial Economist Roundtable weighs in on the SEC’s proposed climate-related disclosure rules. Their advice: limit rules to ESG related-cash flows and avoid “proxy legislation” of social and environmental policy.
The Financial Economist Roundtable (FER) is a group of senior financial economists who have made significant contributions to the finance literature and seek to apply their knowledge to current policy debates. FER was founded in 1993 and meets annually. Members attending an FER meeting discuss specific policy issues on which the FER may adopt statements. When the FER issues a statement, it reflects a consensus among at least two-thirds of the attending members, and all the members who sign it support it. The list of signatories for the 2021 statement can be found at http://www.financialeconomistsroundtable.com/.
