By MIRIAM ACZEL
On June 14th, Leaders in Energy held a panel and networking event on the role investment choices have in promoting clean energy and a sustainable economy, entitled “Perspectives on Making an Impact Through Sustainable Investing“. The evening included discussions moderated by Leaders in Energy Founder and Clean Energy Ambassador Janine Finnell, panelists David Loehwing (Director of Sustainability Research at PAX World Management), Leila Mathur Peck (Vice President, Financial Advisor at Morgan Stanley), and Markus Walther (Sustainability Analyst at Calvert Investments). Information presented in this forum got us thinking about how we can use investment strategies to make positive change.
To encourage continued thinking about how to harness the power of personal investment to promote sustainability, some helpful resources are provided below.
Global resources and studies on socially responsible investing (SRI)
- The UN’s Environment Program Finance Initiative (UNEP FI) and Mercer’s Investment Consulting (a joint report). Demystifying Responsible Investment Performance: A review of key academic and broker research on ESG factors. This report provides an interesting perspective as it is a joint project of the UN Environment Program and a private investment company. The report gives an overview and analysis of both academic and broker findings on responsible investment and how considering environmental, social and governance factors doesn’t compromise, but can actually enhance the performance of investments.
- Arabella Advisors. Measuring the Growth of the Global Fossil Fuel Divestment and Clean Energy Investment Movement (September 2015). Arabella states their mission as working with foundations, philanthropists and investors to develop strategies to “create meaningful change.” Report analyses impact of fossil fuel divestment and clean energy investment.
- United Nations Global Compact. Implement the Value Driver Model (n.d.). Describes how to adapt and apply the value driver model, which uses business metrics to assess how sustainability activities contribute to financial performance.
U.S. Organizations and Associations that encourage SRI and Sustainable Investing
- US Social Investment Forum. US SIF and its members advance investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. https://www.ussif.org/
- Green America. Green America’s mission is “to harness economic power–the strength through consumers, investors, businesses and the marketplace-to create a socially just and environmentally sustainable society.” https://www.greenamerica.org/socialinvesting/
Academic Studies and Sources
- Tellus Institute and the Investor Responsibility Institute. Environmental, Social and Governance Investing by College and University Endowments in the United States: Social Responsibility, Sustainability, and Stakeholder Relations (2012). An analysis of aggregate data surrounding ESG investing in college and university endowments.
- MIT Sloan Management Review. Investing for a Sustainable Future: Investors Care More About Sustainability than Many Executives Believe (May 11, 2016). Analyzes investors ability “to connect sustainability performance with corporate performance” and provides strategies for corporate management to “stay relevant to sustainability-oriented investors.” This article includes a number of references worth reviewing:
- “Investors Don’t Care About Sustainability …” Bloomberg Businessweek November 9, 2010.
- Calvert Investments, G. Serafeim, et al. “The Role of the Corporation in Society: Implications for Investors,” September 2015.
- G. Eccles, et al. “The Impact of Corporate Sustainability on Organizational Process and Performance,” working paper 12-035, Harvard Business School, Boston, Massachusetts, November 2011.
- L. Clark, et al. “From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance,” March 2015.
- US SIF, “Report on U.S. Sustainable, Responsible, and Impact Investing Trends 2014.”
- Khan, G. Serafeim and A. Yoon. “Corporate Sustainability: First Evidence on Materiality,” Working Paper 15-073, Harvard Business School, Boston, Massachusetts, March 2015. Authors look at portfolio stock returns to examine performance of sustainability investments. They specifically look at investments categorized as “material”—meaning that asset managers have integrated sustainability factors in capital allocations.
- Students for Sustainable Investment Practices at Middlebury College. Studies on SRI investing benefits. A useful list of resources that include academic studies on socially responsible investing, E-books, videos, organizations and other sources of information. A student-developed and managed site, it provides perspective on socially responsible investment practices from university students’ points of view. https://sites.middlebury.edu/sric/resources/
SRI Investment Companies
- Domini Social Investments. An investment firm specializing “exclusively in socially responsible investing. We manage funds for individual and institutional investors who wish to integrate social and environmental standards into their investment decisions.”
- Calvert Investments. “As a leader in sustainable and responsible investing (SRI), Calvert offers a range of SRI strategies. Recognizing that investors want choice in how they meet their financial goals and impact corporate responsibility and sustainability practices, we offer three distinct approaches…”
- First Affirmative Financial Network, LLC. “First Affirmative creates and manages customized investment portfolios for individual and institutional clients that seek to align investment decision making with personal values and/or institutional mission. Working through a nationwide network of investment professionals, we help clients invest in companies that contribute to clean, healthy environment, treat people fairly, embrace equal opportunity, create safe and useful products, and support efforts to promote a more peaceful world.”
- Green Century Funds. “Founded by a partnership of non-profit advocacy organizations, Green Century provides investors who care about a clean, healthy planet to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. At Green Century, “green investmenting” means investing in a diverse array of companies that are helping to build a cleaner, greener future for us all- from small innovative wind power producers to large, established firms using cleaner technologies to run their business and bring their products to market.”
Media/In the News
- SRI in Plain English. A broad overview for those new to SRI.
- TED Talk on SRI. Tom Van Dyck: Socially-Responsible Investing for Long Term Safety and Returns.
- N. Robins. “2016, the Year of Green Finance: The View From London,”Huffington Post, January 15, 2016.
Other sources you’ve found particularly useful? Let us know.
Miriam Aczel is a Ph.D. candidate in Energy Science and Policy at Imperial College London. Her research interests include the environmental and health impacts of shale gas in the U.S., UK, and EU. She is based between between London, Paris, and Washington, DC.
Photographs courtesy of Elvin Yuzugullu.