Category: November 2016 – Faith & Investing

Exxon - SisterPat - Green Money Journal

The Power of Faith-Based Investors in the Face of a Changing Climate

By Sister Patricia Daly, executive director, Tri-State Coalition for Responsible Investment

TRI-State Logo

The Paris Agreement takes effect on November 4, 2016 and nations around the planet look to implement their commitments and meet their targets on greenhouse gas (GHG) emission mitigation, adaptation and financing a low carbon future. One of the greatest challenges of our day is to transition the global economy to a greenhouse gas emissions-free world while incentivizing development. Some might say we need a miracle. We certainly need creative, committed professionals to deliver the financial products and renewable energy technologies, adaptations and efficiencies to meet these goals.

Top photo: Investor groups and NGOs launched CAMPAIGN EXXON to highlight the greatest laggard and the most generous supporter of climate deniers in the early 2000’s.

The role of faith-based investors in climate finance and socially responsible investing

Faith Based Investors Tackle Climate Change

In the late 1980s, the faith-based investors at the Interfaith Center on Corporate Responsibility (ICCR) were working to eliminate Apartheid while advocating for corporate practices that respect human rights and protect the planet. The insurance industry in the U.S. had just released the numbers: one-third of their loss reserves had disappeared in the 1980s due to severe climatic events. More expensive homes built along coastlands could account for some of the additional losses, but the storms were more frequent and more severe. A growing number of scientific studies concerned about warming temperatures in the atmosphere were catching the attention of citizens, business leaders, and government officials. ICCR members held additional concerns about the impacts of climate change on poor people around the world who have little or no carbon footprint and had no notion of insurance. By the early 1990s ICCR members started to raise concerns with companies in the utility sector about efficiencies and demand-side management (DSM). Later in the decade, companies in the oil and gas, utility, and auto sectors received shareholder resolutions asking companies to calculate and report on their GHG emissions. Shareholder dialogues with these companies also addressed the science of global warming in light of corporate funding of the Global Climate Coalition (GCC), which published disinformation and created the basis for the climate deniers of today.

Within a few years companies started to disclose their carbon emissions. By 2000 the Carbon Disclosure Project was founded. Now known as CDP, this organization compiles data from companies allowing investors to evaluate the efforts of a company to reduce their carbon footprint, assess risk and set reduction goals. As a bonus, corporations realized newfound savings as costs were reduced when emissions were cut. Individual companies have reported billions in savings since they started tracking their emissions. Investments in efficiencies have offered some of the best returns.

By the new millennium, concerns about climate change were growing. Hundreds of companies were reporting their carbon emissions. Investor groups and NGOs founded Campaign Exxon to highlight the greatest laggard and the most generous supporter of climate deniers. Companies received a resolution asking them to disclose their lobbying fees, including to industry groups that might have used the support to finance the GCC and other initiatives. Shareholder resolutions asking for companies to report on their “climate risk” were filed with corporations and financial institutions. The largest reinsurers, SwissRe and MunichRe, had climate risk executives and were soon asking how CEOs and directors of companies were addressing climate risk. Economists at the time realized that climate change presented a material risk to companies and needed to be disclosed as such. ICCR investors were joined by city and state institutional investors and other shareholders in the filing of shareholder resolutions and the support of such resolutions on the proxy ballots.

CEOs had begun to announce the termination of GCC membership by the year 2000, realizing that the disinformation campaign was counter-productive to the work of companies and sector groups as they were well underway in the task of addressing climate change and the opportunities and risks it posed.

While the world was still far from an international climate treaty, by 2005 thousands of companies internationally were disclosing GHG emissions, and sometimes the associated climate risk.

In 2006, with so many investors attentive to the disclosure of GHG emissions, financing of disinformation and lobbying, disclosure of investments in renewables and new technologies, ICCR members discerned what more was needed. While disclosure itself was important, it was not going to stop climate change. In the 2007 shareholder season we saw a new wave of shareholder resolutions asking companies to set reduction targets and asking companies for the business plans to thrive in a climate constrained economy.

Admittedly, this last request has been a steeper climb for investors and companies. Yet additional corporations continue to report new targets in their sustainability reports year over year. Corporations such as Walmart have committed to being carbon-neutral by 2050, with new commitments announced during Climate Week at the United Nations in September 2016 by Bank of America, General Motors and Apple to source 100% of their energy needs from renewables.

It’s Not Just Climate

Since 2007 faith-based institutional investors and their partners have worked together on dozens of strategies to help companies become leaders in a climate-constrained world.

As the climate in the USA and around the world has drastically shifted over the years, we see the impacts on water, agriculture, and various species. Companies now are asked to report on their water footprint and set reduction goals. With pesticide use on crops and antibiotic use in animals and their feed, we see growing health impacts. Related climate concerns increase as precious waterways are contaminated from run-off, and soils are depleted.

The Energy of the Divestment Campaign – And the Pitfalls

In 2012, the fossil fuel divestment campaign began to energize students, citizens, and faith communities to build the political will to move us to an international treaty and US climate policy. Divestment appealed to some faith communities who wanted to take an absolute position, rather than delving into the complexities of grey areas. Most faith traditions, if not all, engage with others for the purpose of right understanding and right relationship. People of faith should be hesitant to judge someone beyond the possibility of redemption or to demonize others. Faced with the need to transition multinational corporations to a carbon neutral economy, many understand that divestment strategies without corporate engagement and focused investment will not get us close. Investors working with companies understand that divestment initiatives have a minimal effect on multinational corporations. Voices within the faith-based investor community continue to move corporate leaders rather than demonize them (while sounding the alarm for faster and more serious shifts).

If investors neglect their responsibility as part owners of a corporation by not even voting their stock in support of the climate resolutions, nor participating in the life of the corporation except for checking the stock price, yes, go ahead and sell the stock. But most will continue to provide a solid market for fossil fuels. Imagine instead if the momentum encouraged investors to engage with companies demanding significant investments in alternatives to fossil fuels and the technologies that substitute products that rely on fossil fuels. Even if it was as simple as voting in support of a shareholder resolution to create a clear majority, the action would make companies take notice. Imagine investors demanding that Fidelity, Vanguard, Black Rock and other large financial managers actually consider climate risk in their products and vote in support of greater disclosure and action on climate change. Imagine.

Climate Finance Commitments

With the leadership of Ceres and the Investor Summit on Climate Risk, we see international investors, large financial institutions and public pension funds committing hundreds of billions of investment dollars to the transition to a low-carbon economy worldwide.

Clean Energy Invest Gap

Billions of dollars are now invested in new technologies, the development of renewable energy, adaptation plans, and climate-resistant infrastructures with new investments growing each month. In the midst of creative, new investment products, faith communities are challenging financial managers and investors to integrate impact investing to assure that poor people, people at greatest risk to the impacts of climate change, and people who live in energy poverty with little responsibility for climate change, are also served by these investments.

The United Nations Sustainable Development Goals (SDGs) suggests a framework for these investments.

17 Goals

The SDGs are part of a comprehensive document called “Transforming Our World: The 2030 Agenda for Sustainable Development,”[1] agreed to by all countries at the United Nations.

The “2030 Agenda” lays out a vision for the future of all humanity, and it describes a process of international collaboration for achieving it. The 17 goals, known as the SDGs, and the 169 targets that accompany them, are the most specific expression of that vision:

1. End global poverty in all its forms everywhere.
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture.
3. Ensure healthy lives and promote well-being for all at all ages.
4. Ensure inclusive and equitable quality education. Promote lifelong learning opportunities for all.
5. Achieve gender equality and empower all women and girls.
6. Ensure availability and sustainable management of water and sanitation.
7. Ensure access to affordable, reliable, sustainable and modern energy for all.
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.
10. Reduce inequality within and among countries.
11. Make cities and human settlements inclusive, safe, resilient and sustainable.
12. Ensure sustainable consumption and production.
13. Take urgent action to combat climate change and its impacts.
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development.
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.
17. Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development Finance.

While Goals 7, 13 and 17 hold obvious links to climate change, others addressing water and agriculture deal with some of the known impacts.

As of this writing, Hurricane Matthew has plowed through Haiti and Cuba and into the U.S. wielding death and destruction: another “Thousand Year Storm”. As the planet and her people grapple with the implementation of the Paris Agreement, investors are at the forefront of its success as companies continue to make progress, and as new investment products come on line to enable the transition to a low-carbon economy. Creative collaboration in the transition will be needed as we address the added challenge of enabling communities around the planet to foster sustainable development.

 

Article by Sister Patricia Daly, OP who is a Dominican Sister of Caldwell, NJ and has worked in Corporate Responsibility and Socially Responsible Investing for over 35 years. She directs the Tri-State Coalition for Responsible Investment (http://tricri.org), an organization of 40 Roman Catholic Dioceses and Congregations of Women and Men primarily in the NY metropolitan area. Pat represents these and other institutional investors to the Interfaith Center on Corporate Responsibility. Pat has invited companies to address issues of human rights, labor, ecological concerns, equality, and international debt and capital flows and played a role in positioning the agenda of global warming into the priorities of Corporate America. Pat serves on the Advisory Board of Lamont Doherty Earth Observatory, the climate science arm of Columbia University’s Earth Institute, and the Board of Mustard Seed Communities. She is the proud recipient of the 2014 Joan Bavaria Award, presented by Ceres and Trillium Asset Management and holds and honorary doctorates from William Paterson University and Duquesne University.

Article Note: [1] https://sustainabledevelopment.un.org/post2015/transformingourworld

Featured Articles

An Approach to Incorporating Sustainable Investing Within Your Bond Portfolio

A New Report from Community Capital Management

 

The Report’s Introduction

Community Capital Management (CCM) is a pioneer in managing fixed income impact investing and fossil fuel free portfolios. We incorporate the “environmental” and “social” aspects of ESG investing in our investment philosophy by proactively screening market-rate bonds that positively contribute to economic and sustainable impact.

One of the main developments seen so far in the sustainable bond space has been driven by green bonds. We are seeing growing progression towards sustainable bonds with a wider focus on environmental and/or social positive impact. In fact, as noted below, the Green Bond Principles (GBP) released an update to its use of bond proceeds earlier this summer to include themes with social objectives.

CCM continues to focus upon the ultimate use of proceeds for all impact investments, green bonds included. For us, a threshold declaration of green intent by an issuer is a starting point. We need to be able to identify, record, and track the underlying environmental and social activity that the transaction supports. In this regard, we use a combination of proprietary research augmented by the use of third-party standards to screen our portfolios ensuring bonds purchased support one or more environmental initiatives.

Our analysis follows the guidelines of the GBP which focuses on four core components: Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds, and Reporting. In June 2016, an update to the GBP was released which included an update to the bond concept “use of proceeds” to themes beyond the environment, such as bonds financing projects with social objectives, or with a combination of social and environmental objectives. The GBP are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the green bond market by clarifying the approach for issuance of a green bond.

Why Fixed Income

Fixed income is an ideal place to start making sustainable investments for two primary reasons:

First, it is typically a lower-risk asset class with lower volatility and greater liquidity than other sustainable asset classes.

Second, there are tangible positive environmental outcomes that can be measured quantitatively and monitored qualitatively. The additional research associated with sustainable fixed income investments provides an added layer of transparency by detailing the use of bond proceeds to analyze the investment’s sustainable benefit.

By incorporating positive social and sustainable outcomes into fixed income investment decisions, investors can align these assets with their beliefs or missions.

 

Find the Full Report on CCM website at- http://www.ccminvests.com/

 

Calvert Investments Launches Global Energy Research Index

Calvert Investments has launched the Calvert Energy Research Index (CALNRG), which marks the seventh addition to the firm’s growing suite of responsible indexes and its second research index. The new index focuses on investing in companies that manage either energy use in a sustainable manner or that are actively engaged in facilitating the transition to a more sustainable economy through the reduction of greenhouse gas emissions and the expanded use of renewable energy sources. These companies must also satisfy minimum market capitalization and liquidity thresholds while operating in a manner that meets the Calvert Principles for Responsible Investment.

Calvert Investments believes that society has signaled to the public and private sectors that it is time for a global energy transformation. In the wake of the Paris Agreement and broad alignment on capping worldwide emissions, corporations are becoming more aware of their environmental footprints and the importance of striving for sustainable business practices.

“The global capital markets are poised to play a significant role in future efforts to address climate change and bolster lagging sustainability standards,” said CEO, John Streur.

“Calvert is striving to accelerate this shift through innovative, lower-cost funds that balance investors’ financial and ESG objectives,” Streur added. “The Calvert Global Energy Research Index is our latest step forward.”

Similar to the Calvert Global Water Research Index, Calvert’s new Global Energy Research Index takes a comprehensive approach to investing in the renewables sector as well as innovators in established industries.

“We are seeing companies beyond the renewable energy sector taking exciting steps to improve their environmental and sustainability practices,” said portfolio manager, Jade Huang. “This is a key reason why our new index encompasses positive disrupters that are differentiating themselves and driving impact across the utilities, industrials and technology sectors.”

Calvert Investments also announced that the Calvert Global Energy Solutions Fund (CGAEX) is moving from an actively managed approach to a passive strategy that seeks to track the performance of the Calvert Global Energy Research Index. This change is expected to take effect on or about October 3, 2016 and will reduce the Fund’s Class A net expense ratio from 1.85% to 1.65%.

 

About Calvert

Calvert Investments is a global leader in responsible investing. Our mission is to deliver superior long-term performance to our clients and enable them to achieve positive impact. Calvert Investments had more than $12.2 billion in assets under management as of December 31, 2015. Learn more about Calvert at- www.Calvert.com

Calvert Investments is a registered trade name representing Calvert Investments, Inc. and its subsidiaries, including Calvert Investment Management, Inc., an SEC-registered investment advisor, and Calvert Investments Distributors, Inc., a FINRA member broker/dealer and distributor of the Calvert mutual funds.

Investment in mutual funds involves risk, including possible loss of principal invested.

The global energy solutions sector is subject to the risk that stocks that comprise the sustainable energy solutions sector may fall in value, and the risk that prices of energy (including traditional sources such as oil, gas or electricity) or alternative energy may fall. The sustainable energy solutions sector can be significantly affected by a number of factors, including fluctuations in energy prices, supply and demand of alternative energy fuels, energy conservation, and government regulations and policies. The Calvert Global Energy Solutions Fund is non-diversified and may invest more of its assets in a smaller number of issuers than a diversified fund; therefore, gains or losses on a single stock may have greater impact on the Fund. A downturn in the sustainable energy solutions industry would impact the Fund more than a fund that does not concentrate in this industry, and the Fund therefore may be more volatile than a typical mutual fund.

Large-cap companies may be unable to respond quickly to new competitive challenges such as changes in technology, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Prices of small- and mid-cap stocks can be more volatile than those of larger, more established companies. Small- and mid-cap companies are more likely to have more limited product lines, fewer capital resources and less depth of management than larger companies. Prices of micro-cap securities are generally even more volatile and their markets are even less liquid relative to small-cap, mid-cap and large-cap securities. Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuations. The risks of investing in emerging market securities are greater than those of investing in securities of developed foreign countries.

An index strategy has operating expenses; a market index does not. Although expected to track its target index as closely as possible while satisfying its investment criteria, an index strategy will not be able to match the performance of the index exactly.

Class A shares of the Calvert Global Energy Solutions Fund have a gross expense ratio of 1.98% and a net expense ratio of 1.85%. The net expense ratio reflects a contractual fee and/or expense reimbursement that currently extends through January 31, 2017. In connection with the reduction of the net expense ratio to 1.65% the contractual term will be extended through January 31, 2018.

For more information on any Calvert fund, please contact your financial advisor, call Calvert at 800.368.2748, or download a free summary prospectus and/or prospectus at www.Calvert.com . An institutional investor should call Calvert at 800.327.2109. An investor should consider the investment objectives, risks, charges and expenses of an investment carefully before investing. The summary prospectus and prospectus contain this and other information. Read them carefully before you invest or send money.

Calvert mutual funds are underwritten and distributed by Calvert Investment Distributors, Inc., member FINRA and subsidiary of Calvert Investments, Inc.

Additional Articles

ImpactAssets Introduces “100 Percent for Impact” Alternative to Traditional Money Market Funds

ImpactAssets Liquid Impact Portfolio provides donor advised funds with liquidity and yield while making a social impact.

 

ImpactAssets announced recently the launch of the ImpactAssets Liquid Impact Portfolio, a new 100% impact money market alternative that enables investors to “park cash” while benefiting low-income communities.

For more information here: http://impactassets.org/our_products/giving_fund/investment-options

As an innovative solution, the ImpactAssets Liquid Impact Portfolio seeks to provide the ease and utility of a money market fund with the goal of safety of principal, liquidity and yield, and is available only within the ImpactAssets Giving Fund, a donor advised fund (DAF)*.

“With the introduction of the ImpactAssets Liquid Impact Portfolio, we now offer our clients liquidity and yield with significant impact,” said Tim Freundlich, President of ImpactAssets. “We’ve partnered with community development banks and other high impact financial institutions to generate ‘liquidity for impact’ while helping to finance affordable housing, small business and community facilities.

“With this product, we are tapping into a groundswell of investor interest in local community investing, while providing liquidity to our donors as they wait to make grants or allocate to longer term impact investment options.”

Reinvention of What It Means for Investors to “Park Cash”

The Liquid Impact Portfolio is constructed of short-term deposits and investments through Community Development Financial Institutions, and features laddered maturities across a relatively short duration with a targeted weighted average maturity of less than 180 days. No minimum balance is required.

The financial institutions receiving capital from the Portfolio are dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream. By financing community businesses – including, small business, microenterprise, nonprofit organizations commercial real estate, and affordable housing – the Portfolio sparks job growth and retention in hard-to-serve markets across the nation.

“Historically, money market funds and money market alternatives have been overlooked as a viable impact investment opportunity. We’ve changed that thinking with the Liquid Impact Portfolio,” said Gabe DiClerico, Director, Operations. “Now donors can tap additional sources of low-volatility liquid return while making a positive impact to targeted localities and communities.

A Full Suite of Impact Portfolios

Building upon ImpactAssets’ pioneering legacy of developing groundbreaking impact investment solutions, this new portfolio continues to fill out the organization’s wide spectrum of impact investment offerings, which also include a new suite of four 100% Impact Portfolios that uniquely blend public and private equity and debt impact funds and are targeted to investor time horizons.

The new 100% Impact Portfolio lineup includes Conservative, Moderate and Aggressive portfolios and provides donors easy access to world class impact fund managers spanning traditional asset classes while addressing the world’s most significant social and environmental issues. Many of these investments provide gap-filling financing to social enterprises that are too small or too “unconventional” to raise capital from traditional sources.

 

About ImpactAssets:
ImpactAssets is a nonprofit financial services firm that increases the flow of capital into investments delivering financial, social and environmental returns. ImpactAssets’ donor advised fund (“The Giving Fund”), impact investment notes, and field-building initiatives enable philanthropists, other asset owners and their wealth advisors to advance social or environmental change through investment

About The Giving Fund:
The Giving Fund is an innovative donor advised fund that empowers donors to increase the impact of their giving by combining it with strategic sustainable and responsible investing to build a sophisticated philanthropic endowment. Donors recommend how The Giving Fund’s assets are invested across a range of leading impact investment options including community investment, turnkey portfolios, private debt and equity funds, seed venture and custom investments. The Giving Fund currently has $300M in total Assets.

For more information contact:
Amy Bennett, Director of Marketing

ABennett@impactassets.org or visit www.impactassets.org

* A donor advised fund is a philanthropic vehicle that allows organizations, families or individuals to make a charitable contribution, receive an immediate tax benefit and then recommend grants from the fund over time.

 

Additional Articles

Green Century Launches New Fossil Fuel Free International Index Fund

The First Diversified and Responsible Fossil Fuel Free International Index Fund Available to U.S. Investors

On September 30, 2016 Green Century Capital Management (Green Century) announced the launch of the Green Century MSCI International Index Fund. The Fund, which is the first diversified and responsible fossil fuel free international index fund available to U.S. investors, will seek to achieve long-term total return through investment in large and mid-cap stocks from approximately 22 Developed Market (DM) countries in Europe, parts of Asia, Australia and Canada that have outstanding Environmental, Social, and Governance (ESG) factors. More on the Fund at- http://greencentury.com/the-green-century-funds/international-index-fund/

The Fund will invest in stocks included in the MSCI World ex USA SRI ex Fossil Fuels Index; a custom index calculated by MSCI, Inc., a leading global index provider. Northern Trust Investments will serve as the subadvisor for the Fund. The MSCI World ex USA SRI ex Fossil Fuels Index is comprised of the common stocks of approximately 239 companies in the Index, minus the stocks of fossil fuel companies.

“With the launch of the new Fund, we are expanding the ways in which we help our investors make a tangible impact through the power of their investments,” Leslie Samuelrich, President of Green Century Capital Management said. “In addition to providing our investors the opportunity to make a difference on issues such as climate change, sustainable agriculture, and forest protection outside the U.S., the new Fund can help investors diversify their portfolios,” Samuelrich added.

The Green Century MSCI International Index Fund, like Green Century’s Equity and Balanced Funds (http://greencentury.com/the-green-century-funds), invests in the stocks of companies selected based on a thorough review of ESG factors and includes those companies believed to have the best overall sustainability records. The Fund will also not invest in companies that produce genetically modified organisms (GMOs), civilian firearms, military weapons, nuclear power or tobacco.

For more than 25 years, Green Century has been providing individuals and institutions the opportunity to invest responsibly for themselves, their families and the future. By investing in companies that protect the environment and promote fair and equal rights, Green Century delivers investment opportunities that align with its investors’ values, and seeks to avoid the potential financial risks of investing in companies that employ dangerous, unethical, and environmentally harmful practices.

To learn more about Green Century’s sustainable investment strategy, advocacy efforts, and how you can make an impact with the power of your investments, please visit the Why Choose Green Century webpage (http://greencentury.com/why-choose-green-century) or call 1-800-934-7336.

 

About Green Century Capital Management
Green Century Capital Management is the investment advisor to the Green Century Funds and offers three environmentally and socially responsible funds, the Green Century MSCI International Index Fund, the Green Century Equity Fund, and the Green Century Balanced Fund. Green Century works to curb climate change through fossil fuel free investing, reinvestment in sustainable companies, and advocating with companies to improve their environmental policies and supply chains.

You should carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please visit www.greencentury.com , email info@greencentury.com , or call 1-800-934-7336. Please read the Prospectus carefully before investing.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region, or market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. The Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria.

The World ex USA SRI ex Fossil Fuels Index is a custom index calculated by MSCI Inc. The World ex USA SRI ex Fossil Fuels Index is comprised of the common stocks of the companies in the MSCI World ex USA SRI Index (the World ex USA SRI Index), minus the stocks of the companies that explore for, extract, produce, manufacture or refine coal, oil or gas or produce or transmit electricity derived from fossil fuels or transmit natural gas or have carbon reserves included in the World ex USA SRI (Socially Responsible Investment) Index. The World ex USA SRI Index includes large and mid-cap stocks from approximately 22 developed markets countries (excluding the U.S.). The World ex USA SRI Index is a capitalization weighted index that provides exposure to companies with what MSCI calculates to have outstanding Environmental, Social and Governance (ESG) ratings and excludes companies whose products have negative social or environmental impacts. It is not possible to invest directly in an index.

The Green Century MSCI International Index Fund (the “Fund”) is not sponsored, endorsed, or promoted by MSCI, its affiliates, information providers or any other third party involved in, or related to, compiling, computing or creating the MSCI indices (the “MSCI Parties”), and the MSCI Parties bear no liability with respect to the Fund or any index on which the Fund is based. The MSCI Parties are not sponsors of the Fund and are not affiliated with the Fund in any way. The Statement of Additional Information contains a more detailed description of the limited relationship the MSCI Parties have with Green Century Capital Management and the Fund.

This information has been prepared from sources believed reliable. The views expressed are as the date of publication and are those of the Advisor to the Funds.

The Green Century Funds are distributed by UMB Distribution Services, LLC. 9/16

Contact:
Green Century Capital Management
Leslie Samuelrich lsamuelrich@greencentury.com or 617-482-0800

Additional Articles

Etho Capital and Future Super to Launch Australia’s First Global Sustainability Index

Establish Partnership To Develop Additional Sustainable Investment Strategies

Etho Capital, the investment company committed to creating world-class, data-driven investment solutions that advance sustainable priorities and provide superior risk-adjusted returns, and Future Super, Australia’s first fossil fuel-free superannuation fund, recently announced an agreement to launch a global sustainability index. Etho Capital will create the Global Sustainability Leadership Index composed of 100 of the world’s most sustainable and efficient companies that are leaders in their sectors. The Global Sustainability Leadership Index will exclude companies closely linked to the extraction, processing and distribution of fossil fuels.

Since its launch in September 2014, Future Super has helped shift over AU $185 millions away from fossil fuel exposed super funds. Future Super investors will initially commit AU $35 million to the Global Sustainability Leadership Index, which is expected to begin trading at the end of October 2016.

The announcement coincides with an increased demand among institutional investors in Australia and around the world for investment products that have the potential to produce higher returns by investing in companies with the most efficient supply chains and reducing exposure to companies with poor sustainability track records. The Global Sustainability Leadership Index is designed to achieve superior risk-adjusted returns while meeting the sustainability needs of the Australian marketplace. The Index will utilize Etho Capital’s proprietary Smart Sustainability Process™ analytics, which applies the most rigorous sustainability screening standards focusing on supply chain efficiency, governance and business practices of a broadly diversified universe of nearly 6000 companies.

“We are proud to partner with Future Super and form what we believe is a groundbreaking relationship to create a suite of actively and passively managed investment products, starting with the Global Sustainability Leadership Index,” said Conor Platt, Co-Founder, Chief Executive Officer and Chief Investment Officer of Etho Capital. “Future Super and Etho Capital are acting on what many investors are beginning to realize: sustainability can substantially impact investment performance, and is therefore a core component of fiduciary duty. There’s a price on climate pollution, poor governance and poor business practices, generally, and the more a business is connected to this supply chain, the more it is going to hurt their performance.”

Etho Capital’s research shows that companies with a more efficient supply chain and better governance drive alpha, and are a proxy for better performance in the markets over time.

“Our objective is to provide our investors with Australia’s first highly customized fossil fuel free index composed of some of the world’s top performing and sustainable global companies to meet the performance and sustainability criteria of the Australian marketplace,” said Simon Sheikh, Managing Director, Future Super. “Etho Capital is really the only investment company today that brings the proven track record and the depth of analysis we need. We are excited to partner with Etho Capital on this Global Sustainability Leadership Index and look forward to working together to create other sustainable investment solutions for our fund.”

Last November, Etho Capital launched the ETHO ETF (NYSEArca: ETHO), the first index ETF to exclude all fossil fuel companies and the first public investment product to select equities based on climate efficiency while rigorously screening for overall sustainability and social responsibility. This marked the first U.S. equity product to employ Etho Capital’s Smart Sustainability Process™, and the new collaboration with Future Super is an important step in the company’s plans to bring sustainable investing to global scale.

“Global investors are realizing that sustainability and supply chain efficiency metrics can be very material for financial risks and returns, particularly when connected to economy-wide shifts towards climate pollution regulations and disruptive technology trends, like the potentially rapid transition from oil to electrified transportation,” said Ian Monroe, Co-Founder, President and Chief Sustainability Officer of Etho Capital, who also teaches at Stanford University. “Our approach has shown that investors of all sizes can align their portfolios with their values without sacrificing returns. Our Global Sustainability Leadership Index relies on our proven Smart Sustainability Process and it’s designed to provide Australian investors with an innovative solution that achieves top-tier returns while meeting all common sustainability requirements.”

Longer-term partnership
The parties also agreed to develop additional actively managed products that demand high performing sustainability investment products. Etho Capital intends to expand its suite of actively and passively managed investment products with additional strategic partners as it expands its offering in global markets. Etho Capital expects to launch its first actively managed long/short hedge fund this fall.

Future Super
Future Super is Australia’s first fossil fuel free superannuation fund. Future Super’s investment strategy is to select companies that provide competitive financial returns and have a positive impact on the environment and society. This includes avoiding all companies directly involved in coal, oil and gas, as well as companies that provide support to the fossil fuel industry. Future Super believes that we can’t prevent climate change if we continue to invest in it. Since its launch in September 2014, Future Super has helped shift over $185 million away from fossil fuel exposed super funds. To find out more visit- www.myfuturesuper.com.au

Etho Capital
Etho Capital is a mission-driven investment company committed to creating world-class, data-driven investment solutions that advance sustainable priorities while providing superior risk-adjusted returns. Etho Capital’s proven Smart Sustainability Process™ utilizes both quantitative pollution and efficiency data and qualitative expertise methods to generate broadly diversified portfolios of only the most carbon-efficient and sustainable companies. Etho Capital launched its first index ETF in November 2015 (NYSEArca: ETHO), which is also the first index ETF to exclude all fossil fuel companies, and the first public investment product to select equities based on climate efficiency while rigorously screening for overall sustainability and social responsibility. For more information visit- http://ethocapital.com/#smart-sustainability-intro

Additional Articles

Catholic Institutions Make Their Largest Faith-Based Fossil Fuel Divestment Announcement

“All Bishops Conferences of the world called for ‘an end to the fossil fuel era’ in a powerful statement last year. The divestment announcement of these Catholic institutions simply is an update to their investment policies following the Bishops’ appeal.”

– Tomás Insua, Global Catholic Climate Movement Global Coordinato

On October 4, 2017, on the Feast of St. Francis of Assisi, Catholic institutions and communities from all over the world celebrated the culmination of the month-long Season of Creation (http://seasonofcreation.org) with the largest joint announcement of their decision to divest from fossil fuels.

The Catholic communities committing to switch the management of their finances away from fossil fuel extraction include: The Jesuits in English Canada; the Federation of Christian Organisations for the International Voluntary Service (FOCSIV) in Italy; the Presentation Society of Australia and Papua New Guinea; SSM Health in the United States; the Diocese of the Holy Spirit of Umuarama in the Brazilian state of Paraná; the Missionary Society of St. Columban, based in Hong Kong and with a global presence in 14 countries; and the Salesian Sisters of Don Bosco – Daughters of Mary Help of Christians in Milan and Naples (Italy).

Commitments range from divesting from coal, as is the case of the US healthcare institution SSM, to redirecting the divested funds into clean, renewable energy investments, as FOCSIV has announced. As for the Brazilian Diocese of Umuarama, it is both the first diocese and the first Latin American institution to commit to divest from fossil fuels; the Diocese is taking steps to become low-carbon and is part of COESUS, a coalition fighting fracking in Latin America.

The fossil fuel divestment movement was acknowledged during the presentation[1] of Pope Francis’s message on the World Day of Prayer for Creation by Cardinal Peter Turkson, president of the Pontifical Council for Justice and Peace, when he pointed out that Pope Francis suggests that “social pressure—including from boycotting certain products—can force businesses to consider their environmental footprint and patterns of production. The same logic animates the fossil fuel divestment movement.”

Major Orthodox, Catholic, Protestant, and Anglican organizations came together between September 1st (World Day of Prayer for Creation) and October 4th to observe the Season of Creation, calling on the 2.2 billion Christians worldwide to pray and take action to care for the Earth.

The urgent need to stop all new fossil fuel infrastructure was highlighted by a recent report[2] which found that the potential carbon emissions from the oil, gas and coal in the world’s currently operating fields and mines would increase our planet’s temperature beyond 2°C by the end of this century, and even with no coal, the reserves in oil and gas fields alone would cause warming beyond 1.5ºC.

The campaign to divest from fossil fuels is the fastest growing divestment campaign in history, according to a report[3] by the University of Oxford. Up to date, nearly 600 institutions worth over $3.4 trillion globally have announced divestment commitments (http://gofossilfree.org/commitments).

This is the latest in a row of recent announcements involving faith communities and climate change. Earlier this month, it was announced[4] that over 3,000 UK churches had switched or planned to move to green energy in 2016; Morocco, where COP22 will gather this December, will give 600 mosques a green makeover[5] by March 2019: in September, the Indian government asked[6] ashrams to invest in solar power; and just last week the Anglican Church of Southern Africa[7] passed a motion during its provincial Synod to divest from fossil fuels.

Quotes:

“Climate change is already affecting poor and marginalized communities globally, through drought, rising sea levels, famine and extreme weather. We are called to take a stand.”
– Peter Bisson sj, Provincial of the Jesuits in English Canada.

“This announcement is for FOCSIV an important commitment on climate justice: we strongly believe that in order to fight climate change we need to act at the root causes removing financial support at fossil fuel industry and reinvest it in renewable. VIDES, a catholic NGO member of FOCSIV, has positively welcomed the message of Laudato Si’ and Divestment, obtaining the important announcement of the Italian Salesian Sisters of Don Bosco. We will continue in addressing religious institutes: together, as Catholics, we have the moral duty of being the proofs of a concrete commitment to stop the climate crisis and promote environmental justice.”
– Gianfranco Cattai, President of FOCSIV.

“The Presentation Society of Australia and Papua New Guinea has made the commitment to work towards divestment of investments that are at the expense of the environment, human rights, the public safety and local communities. Presentation Sisters in Australia and Papua New Guinea believe that the healing of the planet will only come about with care for Earth and the whole community of life. We are one planet and one Earth community and we have a common destiny.”
– Sr Marlette Black, pbvm, President of the Presentation Society of Australia and Papua New Guinea

“As a Mission-based Catholic organization, SSM Health has always been deeply aware of the importance of caring for our natural resources. Our renewed commitment to the environment keeps us consistent in word and deed with the Franciscan Sisters of Mary, our founding congregation, and with the climate change encyclical released by Pope Francis in June 2015.”
– William P. Thompson, SSM Health President/Chief Executive Officer.

“As Bishop of Umuarama Diocese, in communion with the Catholic Church and attentive to the calls of the Gospel, I clearly understand the message of Pope Francis in Laudato Si’, which calls us to care Common House through initiatives that protect all forms of life. We can not accommodate and continue allowing economic interests that seek exorbitant profits before the well being of people, to destroy biodiversity and ecosystems, nor continue dictating our energy model based on fossil fuels. We know that Brazil has abundant sources of clean and renewable energy that do not harm our common home. Therefore, I believe that the proposal to turn the Diocese of Umuarama into low-carbon is a practical way to achieve what Laudato Si’ calls for.”
– Dom Frei João Mamede Filho, Bishop of the Diocese of Umuarama, Brazil.

“Columbans have a long history of commitment to caring for the Earth as part of our missionary identity. We see our Socially and Environmentally Responsible Investment policy as an important expression of that commitment and therefore are exploring ways to direct our investments towards funds which respond positively to our issue priorities such as renewable energy, community-based microenterprise, and peace initiatives.”
– Fr. Kevin O’Neill, Columban Superior General.

“The diversity and global distribution of the organizations taking part in this joint announcement show the leadership of the Catholic communities in going beyond prayers and taking concrete action in response to the repeated calls of Pope Francis to preserve our common home. We celebrate this announcement and hope that the message it conveys reaches people of all faiths and inspires more Catholic institutions, including the Vatican itself, to take away the harmful influence of the fossil fuel industry’s ambition over our economies and societies, and push for clean and just energy sources for all humanity.”
– Yossi Cadan, 350.org Senior Divestment Campaigner.

“For religious people, the aim of divestment is to bankrupt the fossil fuel industry morally, not financially. Hopefully, because of their duty to manage their resources, these companies will invest in renewable forms of energy.”
– Columban Fr. Sean McDonagh, leading international eco-theologian.

“As Catholic Christians we know that our participation matters. It matters morally; it matters to God. Divestment from companies that continue to mine fossil fuels is a necessary and significant step toward building a world which is powered by the gifts God gave—like the sun and the wind. We can turn the course of our momentum away from greenhouse gasses and death and toward creativity, clean energy sources, and hope.”
– Nancy M Rourke, PhD, Associate Professor and Director of Catholic Studies Program at Canisius College.

 

Article Notes:

[1] http://en.radiovaticana.va/news/2016/09/01/presentation_pope_francis_message_day_of_prayer_for_creation/1255096

[2] http://priceofoil.org/2016/09/22/the-skys-limit-report/

[3] https://www.theguardian.com/environment/2013/oct/08/campaign-against-fossil-fuel-growing

[4] http://www.climatechangenews.com/2016/09/01/over-3000-uk-churches-on-way-to-ditching-fossil-fuels/

[5] https://www.theguardian.com/environment/2016/sep/05/morocco-to-give-600-mosques-a-green-makeover

[6] http://www.businessgreen.com/bg/news/2471575/indian-ashrams-urged-to-embrace-solar-mission

[7] http://www.greenanglicans.org/the-anglican-church-of-southern-africa-votes-to-divest-from-fossil-fuels/

Additional information on the Catholic Divest-Reinvest online hub – http://catholicclimatemovement.global/Divest-and-Reinvest/

Contacts:

Christina Leaño, Global Catholic Climate Movement
christina@catholicclimatemovement.global or +1 786 459 5667

Jenny Zapata López, 350.org Global Communications Coordinator
jenny.zapata@350.org or +521 614 4277692

Contacts of Divesting Institutions:

Jesuit Fathers of Upper Canada
Anne-Marie Jackson mjackson@jesuitforum.ca

FOCSIV
Giulia Pigliucci ufficio.stampa@focsiv.it or 3356157253

The Presentation Society of Australia and Papua New Guinea
Thea Ormerod
President, Australian Religious Response to Climate Change
chair@arrcc.org.au or (02) 9150 9713

Missionary Society of St. Columban
Amy Echeverria amywe@columban.org or +1-301-503-9222

SSM Health
Brian Westrich Brian.Westrich@ssmhealth.com
+1-314-989-2878 (office) or +1-314-591-1552 (mobile)

Diocese of the Holy Spirit of Umuarama – Paraná, Brazil
Reginaldo Urbano Argentino: +55 44 98586431

Salesian Sisters of Don Bosco (Italy)
Giovanna Montagnoli, Direzione Generale VIDES – ITALIA
videsitalia@videsitalia.it ot 06 876569011

For more information including Statements from each of the Divesting Institutions go to- https://catholicclimatemovement.global/release-catholic-institutions-announce-they-are-divesting-from-fossil-fuel-extraction/

[The next joint divestment announcement is scheduled for March 1st, 2017 (Ash Wednesday).]

Article Source:
Global Catholic Climate Movement website

Additional Articles

BrownFlynn and Sustainserv Form Strategic Partnership to Strengthen Sustainability Expertise and Geographic Reach

BrownFlynn, a Cleveland-based corporate sustainability and governance consulting firm, and Sustainserv, a Zurich- and Boston-based corporate sustainability, analytics and communications firm, have entered into a strategic partnership. The partnership will leverage complementary capabilities to give corporations access to a comprehensive and expanded library of sustainability services in North America, Europe, and Asia.

BrownFlynn and Sustainserv are two of the pioneering firms in corporate sustainability consulting and, together, bring more than 35 years’ experience delivering sustainability services and training to global companies across many sectors. The firms, which for the past 12 months have been collaborating on key projects, will work together with public and private organizations—and their key stakeholders—to effectively quantify, measure, manage, govern, report, and develop strategies to address their most material environmental, social, and governance (ESG) impacts. In addition, they will collaborate on the development of next generation corporate sustainability products and services, including approaches to integrated reporting, investor relations services, new data collection and analytics tools, stakeholder engagement, training, and techniques to address supply chain sustainability.

“BrownFlynn aspires to create a world where all companies operate in a manner that enables current and future generations to thrive,” said Margie Flynn, principal and co-founder of BrownFlynn. “We believe our partnership with Sustainserv brings us closer to achieving that vision. By coming together, we can serve clients around the globe and offer them world-class sustainability services. The timing is particularly beneficial to companies that will be required to fulfill the EU Directive on corporate social responsibility reporting.”

Matthew Gardner, a managing partner and co-founder of Sustainserv said, “We are very excited about this collaboration. Our firms share a strong sense of purpose and vision, and we are delighted to bring BrownFlynn’s tools and expertise—such as what they have developed for ESG investors—to our clients. This partnership will bring great energy to our innovation and product development processes, allowing us to more quickly develop and rollout exciting new products and methodologies for companies seeking to integrate sustainability into their business processes.”

 

About BrownFlynn

Founded in January 1996, BrownFlynn is a leading corporate sustainability and governance consulting firm. The Firm advises Fortune 500 and privately held companies to drive value creation by focusing on and managing their greatest sustainability impacts, setting their direction, engaging stakeholders, and communicating their stories internally and externally.

BrownFlynn is the first U.S.-certified training partner of the Global Reporting Initiative (GRI) and the only U.S. consulting partner for EcoVadis, a leader in sustainability supply chain assessments. The Firm shares its expertise through speaking engagements, whitepapers, webinars, collaborative partnerships, and regular columns in leading publications. To learn more, visit www.brownflynn.com

About Sustainserv

Sustainserv was founded in 2001 in Zurich, Switzerland, and Boston, Massachusetts. Its team of consultants works with companies in a large variety of sectors to help them develop well-matched sustainability strategies, quantitatively understand their impacts and effectively communicate their efforts and aspirations to internal and external stakeholders. Sustainserv’s team brings a wide range of skills and experience, enabling them to deliver tailored solutions to companies wherever they are in the sustainability journey. Sustainserv has helped in the preparation of more than 200 sustainability and annual reports and is a GRI certified training partner in Switzerland. Sustainserv regularly offers workshops, training courses, and seminars in its Boston and Zurich locations. To learn more, visit www.sustainserv.com

Sustainserv Contact:
Matt Gardner matthew.gardner@sustainserv.com or 617-330-5001
BrownFlynn Contact:
Margie Flynn margief@brownflynn.com or 216-303-6003

Additional Articles

Impact Investing: New Wine in Old Wineskins for Faith-Based Investors

By by Jeffrey Dekro, Director of Faith-Based Initiatives for Calvert Foundation

More than thirty years ago, I began work in the community investment field as a Jewish activist working with people of other faiths, races and national origins. Working now at the Calvert Foundation, I have found an eagerness among other faith-based investors to continue growing the impact investing field which has become much larger and more financially sophisticated than it was a generation ago.

Faith-based social investing in low-income communities was a much narrower field then, but it was unquestionably a leading edge of what has become the highly visible and rapidly growing impact investment sector. Led by orders of nuns who bravely risked their own retirement funds and institutional assets, the movement grew to include mainline Protestant churches and one small but innovative player that initiated a program to stimulate Jewish American participation in low-income community investing. As the field grew, so did participants’ skill sets. Today faith-based impact investors are no longer simply prophetic advocates and committed organizers; rather they have learned to be skilled financial experts, innovative dealmakers and risk evaluators, efficient administrators, experienced salespeople and marketing mavens, and technology wizards.

But although faith-based social investment has grown to include hundreds of actors, the predominant mode of activity has been overwhelmingly defined by silo-defined involvement. Only rarely have social investors from faith-based communities joined together to increase the volume of their investments and leverage their complimentary skills and capacities to increase their impact. An important exception to this denominationally limited social investment model was the establishment of the Isaiah Fund after Hurricanes Katrina and Rita. Then, approximately a dozen-and-a-half faith communities combined to establish an advisory body that supervised a small organizing and technical staff to invest some $7 million in a pooled fund which was dedicated to rebuilding New Orleans and to creating a structure that could be used to respond with financing for low-income communities affected by other major disasters such as Hurricane Sandy.

Over the past decade-plus since Hurricanes Katrina and Rita devastated New Orleans and the Gulf Coast region, a new spirit has arisen within the faith-based social investment movement. This ethos has been wonderfully exemplified in part by the activities of the Isaiah Fund and the Interfaith Center on Corporate Responsibility (ICCR). Alongside the dramatic expansion of both domestic and international social investing, faith-based communities have been expanding their vision to include classic religious values of celebration and outright community building in their embrace of the generally secular model of impact investing. Through their evolving efforts, faith communities may actually be adding a deeply humanizing feature to impact investing which already exhibits consistently increasing degrees of cooperation and collaboration, if only to increase leverage and outcomes.

Recently, in numbers of meetings and conferences as well as in individual conversations, I have heard faith-based investors repeatedly express great re-dedication to the principles that originally motivated them to direct their religious activism through the use of personal and institutional financial assets to develop their neighborhoods, regions and nations and to sustain our planet. In their framing of it, the preeminent of those values is Justice which stands as the keystone that strongly binds all the others. Beyond their efforts to stimulate commitment to impact investing within their own religious and ethnic communities, faith-based impact investors now seek to meet the current historical moment by transcending the borders of their respective traditions to stand together as stakeholders of all that we hold in common: our families, communities and the planet itself. Happily, representatives from the great scriptural traditions, both West and East, have stood up to be counted as advocates for the worldwide impact investment movement. They have identified the web of planetary interdependence in which we all reside and the prophetic responsibility to act that we share as individuals and as members of the range of institutions with which we are affiliated. Leadership for this effort has notably been offered by some of the world’s great religious leaders including the Dalai Lama and Pope Francis.

Now, that sensibility is being activated and brought to scale. Recognizing the trends and tendencies among faith-based investors, Calvert Foundation has chosen to take advantage of its own financial strength and staff capacities to establish the Jubilee Assembly an umbrella forum dedicated to impact investing for self-identified faith-based individuals and institutions. “Jubilee” refers to the overall process described in the Hebrew Bible, of restoring capital to the most economically deprived sectors of society. It is a term with deep social justice resonance for all three of the great Western religious traditions, Judaism, Christianity and Islam.

The Jubilee Assembly will bind together and brand the dozens of religiously-based impact investors who already hold Calvert Foundation’s Community Investment Notes® and it will attract others at both the national and congregational levels across faith traditions. Besides providing a public forum for faith-based investors to promote Impact and low-income community investing, the Jubilee Assembly will provide access for them to make customized selections within the existing context of Calvert Foundation’s Community Investment Note®. (Even so, precisely in order to help build the field, Jubilee Assembly members will not have to purchase CF’s Community Investment Note® to enroll: www.calvertfoundation.org/faith )

Besides reaching out to various faith communities, one innovative aspect of the Jubilee Assembly is the Tzedek (Justice) Alliance which provides Jewish Americans with a unique venue for impact investing that coincides with the Jewish ethical tradition of reaching out to those in need with empowering investments which are preferred even to grants and charity. In addition to that, the Jubilee Assembly will include representation from both Christian and Muslim communities. Some of the initial partners in the Jubilee Assembly are Azzad Asset Management, Faith and Money Network, Praxis Mutual Funds, Reconstructionist Rabbinical College, Trinity Health and United Church of Christ.

Calvert Foundation (CF) is both a logical and excellent home for the Jubilee Assembly. For over 20 years, Calvert Foundation (www.calvertfoundation.org) has offered a convenient and risk-mitigated way to invest for social good. As the only deep impact, fixed-income investment opportunity that is available with a CUSIP through brokerage firms, the Community Investment Note has allowed investors to receive consistent financial returns and measurable social returns[1]. The capital CF raises through the Note is used to make loans to non-profits and social enterprises throughout the U.S. and around the world. CF has helped over 15,000 investors channel over $1.2 billion into organizations creating social impact with a 100% repayment rate. In all that time, CF has built strong and continuing working relationships with dozens of faith-based leaders and institutions that have bought CF’s Notes and created remarkable impact investment projects throughout the U.S. and worldwide. Not surprisingly, some of their most remarkable deals have involved the nexus between key concerns of faith communities: environment, energy and poverty as reflected in Calvert Foundation’s environmental portfolio and women’s investment initiative WIN-WIN.

This and other similar impact investment work is being adopted increasingly by religiously-oriented (and also committed secular) investors to realize one purpose: to create greater financial equity for people and communities at the margins in order to bring greater financial opportunity and sustainability for communities and the environment, to do Justice! Equally significant, these impact investors are being joined directly on an ever increasing basis, by people at the margins both in the U.S. and throughout our ever more globalized world. Partly as a result of the impact investing and fair trade movements, those folks have not only benefited from financial investments, they have also been educated (and educated themselves!) to become more financially knowledgeable planetary citizens. In that way, the beneficiaries become partners and benefactors so the aspiration becomes material reality through effective impact investing that transcends mere good intentions.

If “community” is a value of American civic religion, it is certainly an aspiration of traditional religious teachings. For that reason, faith-based investors have readily identified with impact investing based on their historical participation in community investment initiatives ever since the Community Development Financial Institutions (CDFI) movement began. In the religiously alive consciousness of those investors, there is no distinction between lenders and borrowers; they are all stakeholders in a commonweal of connection and mutuality. Of course this attitude is not exclusive to faith-based investors but it is their hallmark. For them “community” is an inclusive honorific and not an objectifying euphemism for the needy and disempowered. Similarly, “impact” describes the social and economic benefits to be realized by everyone in the process.

Faith-based investors recognize that low-income community investing and impact investing are effectively the same. Both have the capacity to help bond together and even heal disparate segments of our fragmented nation and world. Calvert Foundation’s Jubilee Assembly and various other denominational and religiously inspired community and impact investment projects aim to link unexpected partners from within our society and across the globe. These faith-based investor activists engage in impact investing that is premised on initiatives which model a transcendence of borders, going beyond the boundaries of our conventional and predictable expectations to accomplish material ends with spiritual dividends for all parties concerned.

 

Article by Jeffrey Dekro, who has been a community and money organizer for almost 40 years. In 1980, he founded the Non-Profit Energy Management Corporation along with a subsidiary loan fund that helped finance energy conservation measures by Philadelphia faith-based congregations and nonprofits. Jeffrey founded The Shefa Fund in 1988, which he led for 18 years before initiating a merger with Jewish Fund for Justice that created the Jewish Funds for Justice, now Bend the Arc. At Shefa, Jeffrey established the TZEDEC Economic Development Campaign, which stimulated more than $50 million in American Jewish and faith-based investment for low-income community development to promote affordable housing, small business loans and vital social services. In 2008, after Hurricanes Katrina and Rita, he conceived and founded the Isaiah Fund with other faith-based activists and institutional partners.

Jeffrey is now the Director of Faith-Based Initiatives for Calvert Foundation (CF), a new position designed specifically for him. CF is a non-profit that enables people and institutions to invest in its Community Investment Note to provide community development financing and services to under-served communities in the US and worldwide. Through the Community Investment Note, CF connects individual investors with organizations around the globe that develop affordable housing, create jobs, protect the environment, and working in numerous other ways for the social good. Since 1995, more than 15,000 Calvert Foundation investors have invested more than $1 billion.

Article Note

[1] www.calvertfoundation.org/storage/documents/CI-Note-Fact-Sheet.pdf

Featured Articles

Frank Coleman, executive vice president, Christian Brothers Investment Services

Faith & Investing: Morals Matter…Ethics Matter

By by Frank Coleman, executive vice president, Christian Brothers Investment Services

1980’s- 1990’s:  ExxonMobil Denies Climate Change Through Academic/Industry Studies (Internal Research Ran Counter to Public Stand)

Sept 2008:  Financial Crisis (Lehman Brothers Bankruptcy)

Jan 2012:  Apple Supplier Foxconn Accused of Massive Abuses in Production

Nov 2013:  JP Morgan Chase Fined $13 billion for Failures During Financial Crisis

Feb 2014:  GM Recalls 1.6 Million Cars for Faulty Ignition Switches, A Problem Known for 11 Years

Sept 2015:  The EPA Discovers Volkswagen Manipulated Emissions Data

July 2015:  Toshiba Found to Have Overstated Earnings by over $1.2 billion

Sept 2015:  Turing Pharmaceuticals Raises Price of Daraphim 5,000%

Sept 2016:  Wells Fargo Accused Of Opening Fake Bank Accounts to Boost Profits

 

Faith and “Values” investors hold the keys to the kingdom.

More on that in a moment…

There is no doubt that the above list of transgressions is only a sampling of the instances of corporate malfeasance that have hit the headlines. A quick search yields many, many more every year. 2015 seemed to be an especially noteworthy year, so much so, that The Wall Street Journal began identifying the headline with a “Crisis of the Week…” appellation.

As the ESG/SRI industry has developed and progressed over the years…as we expand the lexicon that describes our work, as we enhance and expand the toolbox of strategies at our disposal and turn our attention to the role of corporate governance in our work and the need to think about the impact of our ESG activities and engagements, there is one lesson that should not be lost in the conversation.

In the rush to create a “new SRI”, we must not forget the one thing that truly matters: moral compass!

Moral compass is broadly defined as: “Anything which serves to guide a person’s decisions based on morals or virtues”.

There can be no social progress unless the leaders and managers of our enterprises have a moral compass.

As the field of ESG expands into the mainstream, we must be careful that we not lose sight that no matter the number of sustainability reports that are published; no matter the number of CSR (corporate social responsibility) positions that open up; no matter if 100 percent of corporations publish and adopt ethical codes of conduct…all of this is meaningless if the leaders and managers responsible for implementing and translating them from the page into action lack a moral compass.

Remember the statement that “Faith and ‘values’ investors hold the keys to the kingdom?” Well if you cringed at the metaphor, let me explain why I say this.

From the start, our analytical framework starts at a different place. In my work, I assiduously avoid using the terms “good” or “bad” company.

I do so for three reasons:

First, faith investors start with an assumption that just as there are no perfect individuals, there are no perfect companies. Companies will never be perfect and in fact, will engage in a mix of activities or behaviors, some of which will be beneficial and some of which will not be.

Second, companies are not human. They are inanimate entities that in and of themselves have no capacities for human emotions. So, while a company may behave badly at moments, from a faith framework, it doesn’t have the capacity to “be” good or bad. And we must remember that the actions of a company represent the decisions made by individuals within that company.

Third, if we accept the above two premises, then we have to accept the fact that our role as faith and “values” investors is not to determine the “goodness” or “badness” of the company, but to move the company along a continuum where those behaviors that are perceived not to be beneficial are transformed into more beneficial behaviors.

This framework is foundational to our view that corporate engagement has tremendous transformational potential. Faith and “values” investors fundamentally see our role transforming a company’s behavior so that it becomes a better citizen of the world. It is why faith investors generally do not run for the doors when a company misbehaves. We expect that it will happen, because nothing in life is perfect. What is as important though, in our view, is how the company responds to the transgression. Does it address the problem in an ethically and morally responsible way? Can we help the company see its responsibility to respond in this way? Those are the questions that are key to us.

Unfortunately, morals and values, are not easily calculated or assessed. We tend to operate under a standard that follows the “I know it when I see it” method of assessment made famous by Justice Potter Stewart.

For example, we can measure environmental failures via a range of data points: EPA fines, effluence outputs into the environment, workplace safety violations, etc. All of those can be measured and once measured; we can create metrics that help to develop formulas, scenarios and processes that tell how large or small these metrics are in relation to others.

As I review the methodology of a number of ESG research providers and vendors, I see a lot of very good approaches to sustainability that are all metrics driven. “Measure what’s important” is an important underlying assumption.

I have not yet seen a measure of “moral compass.”

So, let me come back to the bold statement made at the outset: Faith and “Values” investors hold the keys to the kingdom. The keys are the ability to unlock that moral compass, because once that is done, then it opens the people in the company to embrace a new possibility.

Here’s why I make such a statement: First, we operate from an analytical framework that differs from a “materiality” standard. We believe in the transformational power of engagement and seek, in our work with companies, to “unlock” the moral compass or the values compass within individuals. By engaging, we can “mano a mano” try to move the company along the continuum it needs to be on. And, in addition to being armed with our data, charts and analysis, we also go into with a moral compass which seeks to assess whatever is at play.

Don’t get me wrong; analysis and data are good things and morals and values are good things. Faith and “values” investors are trying to bring both to our conversations with companies.

Second, faith and “values” investors operate from a set of core principles that are amazingly consistent across the different faiths and values that drive each individual firm.

We do what we do because we want the world to provide a standard of living for all its citizens that comes from a place of justice and sustainability….

We do what we do because we believe that a just and sustainable society is desirable and achievable.

We do what we do because we believe that all of the world’s citizens need equal access to economic success

We do what we do because our natural resources need to be preserved for future generations…

We do this because we are committed to a larger view of the world that focuses on responsible citizenship as the road to sustained profits and share price.

Now don’t get me wrong; I am a quant person at heart. Data is important. But, as a faith investor, I also believe that the core components of our success rely on us unlocking that “moral compass,” which in many cases gets shelved in the heat of the need to generate quarterly returns or the need to deal with a catastrophic emergency.

Faith and “values” investors believe that our values framework is the key that will unlock that “moral compass.”

“We need authentic leaders, people of the highest integrity, committed to building enduring organizations. We need leaders who have a deep sense of purpose and are true to their core values. We need leaders with the courage to build their companies to meet the needs of all their stakeholders, and who recognize the importance of their service to society.”

Bill George, former Medtronic CEO

 

Article by Francis G. Coleman, executive vice president at CBIS (http://cbisonline.com), an investment advisory firm that provides investment services to the Catholic institutional market

Francis G. Coleman is responsible for corporate strategy and planning, strategic planning and board member and trustee relations and development, as well as overseeing the Socially Responsible Investing (SRI) and Information Technology departments at Christian Brothers Investment Services (CBIS). During his tenure, he has held the following positions: Director of Socially Responsible Investing (1994-1999), Director of Marketing and Participant Services (1989-1994), Director of Participant Services, and Operations (1987-1989). As Vice President and Director of SRI (1999-2002), he was responsible for incorporating ethical standards into investments and developing a policy and approach for CBIS that reflects the Church’s broad concerns in an effort to impact corporations. He is on the boards of the IRRC Institute, a research center for social, environmental, and corporate governance issues; Georgian Court University, a Catholic university in New Jersey sponsored by the Sisters of Mercy; and the Park Foundation, which supports environmental and educational causes.

He is also a member of the SRI Committee for the SRI Fund, an alternative hedge fund serving primarily Catholic investors, and of the Independent Committee of the STOXX Christian Values Index, a screened faith-based index of European stocks. In addition, he serves on the Investment Committee of the Interfaith Center on Corporate Responsibility (ICCR). He formerly served as Chair of the Board of Partners for the Common Good, a community investing program sponsored by CBI; as well as Vice-Chair (1997-1998) and Chair (1998-2001) of the Board of ICCR (1997-2001). He served on the Investment Committee of the American Friends Service Committee (AFSC) from 2009 to 2015. He is a member of the Social Venture Network, is on the Board of the Montessori School of Syracuse, and served a nine-year term on the Board of the Leviticus Fund. Mr. Coleman holds a B.A. from Columbia University.

Featured Articles

Signup to receive GreenMoney's monthly eJournal

Privacy Policy
Copyright © GreenMoney Journal 2021

Global Events Calendar

View All Events

march

01marAll Day05World Ocean Summit Accelerating a Sustainable Ocean Economy - virtual

02marAll Day03Women & Worth Summit: Actions Speak Louder Than Words – virtual

15marAll Day18Climate Risk Summit: North America 2021 - virtual

X