1: FUND MANAGERS FEEL HEAT IN SEC CRACKDOWN OF OVERBLOWN ESG LABELS
With the explosive growth in ESG products in response to consumer demand for sustainable and ethical investments, the Securities & Exchange Commission reviews the criteria companies are using. It is an effort to curtail greenwashing, especially with firms that repackage traditional funds with a green label. Bloomberg
2: HOW ACTIVIST HEDGE FUNDS WENT FROM CORPORATE RAIDERS TO CLIMATE HEROES
A new wave of ESG investors, primarily hedge funds, uses their assets to push for an overhaul of directorships of corporations with a weak focus on long-term social and environmental sustainability. It comes with obstacles, primarily from traditional hedge funds seeking quick and profitable short-term quarterly earnings. Fast Company
3: EXECUTIVE STOCK SALES ARE UNDER SCRUTINY. HERE’S WHAT REGULATORS ARE INTERESTED IN
Securities regulators are rethinking rules on popular plans that let corporate executives sell stock without violating insider-trading provisions. For example, 10b5-1 plans allow executives to create schedules for buying and selling shares in the future, but they can modify without disclosure. Wall Street Journal
4: ENGINE NO. 1 TAKES CLIMATE FIGHT TO OTHER BIG OIL COMPANIES AFTER UNDERDOG WIN AT EXXON
After battling Exxon Mobil for board seats (and winning three) in a historic proxy battle earlier this year, the hedge fund launched an ETF this summer focusing on shareholder engagement. CNBC
1: The Securities and Exchange Commission will look at climate, as well as other ESG-related issues, in determining misconduct or mislabeling of information at fund companies. The federal agency’s move is meant to address possible greenwashing. Investment News: SEC establishes task force on ESG issues
2: The oil giant Exxon lost a historic proxy battle after a small hedge fund won three board seats, with the goal of pushing the company to address climate change. Shareholder support for environmental and social resolutions is on the rise, with significant implications for companies around the world. Barron’s: Exxon’s Shareholder Revolt is a Warning for Boards Everywhere
Despite the massive economic and social disruption wrought by the Covid-19 pandemic in 2020, governments and investors continued to buoy the capital markets. Conscientious investors saw the opportunity to channel their money into funds supporting families and small businesses in crisis. Last year, Natural Investments and our clients held $785M in responsibly managed assets, representing a 21% increase from the prior year.
We directed a significant proportion of our client investments (approximately $541M) toward responsibly managed mutual funds and separately managed accounts that use ESG integration strategies. Applying environmental, social, and governance (ESG) criteria helps us screen out firms with the worst corporate behavior, an approach that minimizes poor performance risk, as shown by numerous studies.
Natural Investments has regenerative investments with forty-nine companies and funds that create social and environmental benefits in response to some of our society’s most pressing challenges. Regenerative, in this context, refers to private equity and debt investment opportunities with an explicit mission for positive societal and environmental impact. As of 2020, Natural Investment clients devoted $110M to regenerative investing, a 19 percent increase from the prior year.
Natural Investments has joined with other investors representing $6.7 Trillion in assets under management to request that Amazon, Inc. respect workers’ rights to freedom of association and collective bargaining. We believe that worker representation plays an important role in companies.
In light of the reported anti-union practices at Amazon’s Bessemer facility in Alabama, we have joined this engagement to call upon the company to take concrete steps to implement its commitments to well-established human rights standards. We call on Amazon to immediately take steps to ensure the workers in Bessemer, Alabama are free to exercise their rights without interference. We also seek to kickstart dialogue on the company’s policies and approach to respecting labor rights in Amazon’s global operations and supply chain.
Jack Brill, a pioneer of the socially responsible investment (SRI) industry and co-founder of Natural Investments, passed away on January 21, 2021 at age 89. As one of the earliest SRI advisors in the ‘80s, Jack was a passionate advocate and known for his heartfulness and thought leadership. No one can attest to this better than his son and co-founder Hal Brill, who described their eventual realization of the power of socially responsible investing in Bringing Consciousness to Capitalism.
1: SUSTAINABLE INVESTING ASSETS REACH $17. 1 TRILLION (US SIF Foundation)
Total US-domiciled assets under management using sustainable investing strategies grew
from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020––an increase of 42 percent––according to a biennial “Trends Report” by the Forum for Sustainable and Responsible Investment (US SIF). The top three issues for money managers and their institutional investor clients: climate
change/carbon emissions, sustainable natural resources/agriculture, and board governance.
2: THE BIDEN ERA COULD BE A BOON TO SUSTAINABLE INVESTING (Barron’s)
Biden has promised ambitious plans for combating climate change and other environmental prerogatives. Experts outline their top seven priorities to strengthen the industry’s ability to move capital into sustainable and socially responsible investments.
