Tag: Energy & Climate

Faithful Finance-Strategies for Connecting Values and Capital-by Kate Walsh-Global Impact Investing Network

Faithful Finance: Strategies for Connecting Values and Capital to Generate Real-World Impact

By Kate Walsh, Global Impact Investing Network

Kate Walsh-Global Impact Investing NetworkFaith-based investors have been pioneers in the field of responsible investing for nearly fifty years. In 1971, the Episcopal Church penned the first shareholder resolution addressing a social concern: racial segregation. Empowered by their ownership stake, the church called for General Motors to divest from South Africa until apartheid was ended. Paul Neuhauser, author of the resolution, later reflected on the church’s underlying conviction: “Our view was that, because of the conditions there, they should not operate under such immoral conditions.” That demand ultimately prompted a number of major corporations operating in South Africa to adopt the Sullivan Principles, a set of operating guidelines focused on basic fairness and anti-segregation.

By wielding their power effectively, these early faith-based investors generated change – and sparked a movement. They knew their work was essential fifty years ago, and it is even more important now.

Today, we need an “all hands-on deck” approach as the urgent issues of climate change, racial and social injustice, and inequality reach their tipping points. We also need leadership through varied approaches to solve these crises. Allocating substantial capital to promising solutions is one of the most effective way to address these concerns. Impact investing – that is, investing with the intention to generate positive, measurable social and environmental impact alongside a financial return – offers precisely such an approach.

As the global champion of impact investing, the Global Impact Investing Network (GIIN) has long recognized the important role of faith-based investors and, in 2019, began a project to deepen our engagement with this community. We sought to understand what might prevent faith-based investors from allocating capital to impact investment and to identify ways that more faith-based assets could be invested in alignment with their missions.

Although the field of faith-consistent investing is wonderfully diverse, three key themes emerged from our research as strategies for faith-based investors to more effectively generate the positive change they seek: realize the opportunity, articulate your impact goals, and work in community.

Realize the opportunity: Impact investing is a natural extension of the values of faith-based investors. However, not all have realized this alignment and, thus, may be missing an important opportunity.  Many faith-based investors told us that they and their financial consultants may have limited knowledge or experience of impact investments. Without that understanding, these investors may overlook the powerful ways that impact investments can align with both the mission and financial goals of their organization. So, broader awareness of the opportunity presented by impact investing is critical.

Key decision-makers must also recognize that impact investments exist across asset classes and across the risk-return spectrum. This means that there is likely an investment product for any faith-based investor appetite. Even for investors who will consider only low-risk and market rate returns for their investment portfolio, there are still opportunities to find impact products that meet asset owners financial and moral goals.

Faith-based shareholders also have an opportunity to advocate in a more internal setting, encouraging their internal managers and decision-makers to learn about impact investing and insisting that these products be offered to the organization. The investors should always decide what purpose is attached to their capital.

Articulating impact goals: In order for faith-based investors to operate more effectively, they must clearly vocalize the end results they are seeking. This is the second strategy uncovered by our research. In the GIIN’s 2019 Annual Impact Investors Survey, some fund managers indicated that their fund simply did not offer a specific impact theme of interest to faith-based investors; the managers listed this as a top challenge. To meet this need, fund managers and advisors will have to reflect on the mission of the faith-based institution. When the institution has clearly articulated its end goals, it is easier for financial advisors and consultants to seek out the right financial opportunities. While there are many products in the market that may match with faith-aligned values, financial institutions may sometimes need to create a new product to meet a specific need of a faith-based organization. However, for such innovation to occur, the first step is a clearly articulated and measurable impact goal.

Come together: The final strategy for realizing a deeper alignment of impact investing in faith-based portfolios is through partnership. This approach is the most complex – and perhaps the most necessary, as it can amplify the effectiveness of the first two strategies.

As faith communities know from their decades of advocacy, there is deep benefit in coming together to share knowledge and grow commitments aimed at achieving meaningful real-world changes. Those same lessons can be applied to faith-based investing efforts. As investors, faith communities must learn from each other, coordinate across different groups, and make their collective capital count. By partnering, both inside and outside their faith, resources are shared, knowledge is spread, and capital can be placed in ways that directly address the pressing challenges we all face.

As 2020 draws to a close, more and more people are seeing the reality that the Episcopal Church shareholders realized back in 1971: that all investments have an impact and that, with intention and focus, those impacts can be positive. Indeed, for faith-based investors, there has never been more urgency to ensuring that your investment capital is impacting the world “for better” – and in accordance with your values.

That underlying vision of a more aligned world offers a host of powerful benefits. Perhaps its most important benefit is the potential to unify people across faiths, and beyond faith, for the betterment of our world. So, let us take action now – building on the lessons of the past and moving toward a brighter future, together.   


Article by Kate Walsh, who serves as the Manager of Faith-Based Investors for the Global Impact Investing Network (GIIN). In this role, Kate networks with faith-based investors to encourage the use of impact investing as a tool to further their missions.  

Previously, Kate served as the Associate Director of Investor Advocates for Social Justice (formerly the Tri-State Coalition for Responsible Investment) where she focused on advocacy regarding food sustainability, financial markets reform and forced labor concerns. In addition, she served as a board member for the Interfaith Center on Corporate Responsibility (ICCR). She is also experienced in impact measurement having previously been the Manager of Program Evaluation for the Actors Fund.

Kate holds a Masters of Public Administration from the Robert F. Wagner School at NYU and a BS in Management & Politics from Fairfield University.

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Shell International Solar array aerial

Grace vs. Greed: The Church of England Steps into the Climate Breach

By Peter McKillop and Kerrie Sinclair, Climate & Capital Media

A growing band of investment activists led by the Church of England is out to prove that where governments fail, faith (and money) can prevail.

For months the warning signals went ignored. Then at 1:00 pm on January 25, 2019, a vast dam holding iron ore sludge collapsed, swamping the small Brazilian town of Brumadinho with a 26-foot wall of mud, leaving 270 people dead or missing.

After a few token gestures of concern—a ministerial visit, a few arrests, and a $4.7 million fine against the dam owner, Brazilian metals and mining giant, Vale S.A. – Brazil and the $324 billion metals mining industry looked forward to moving on.

It was to be business as usual until a group of influential institutional investors stepped in.

Outraged at the corporate irresponsibility, they vowed to use their combined $14 trillion in financial clout to demand more corporate accountability and oversight of 1,700 mine tailing dams around the world.

The Church of England logoLeading the charge was one of the world’s most progressive institutional shareholders, the Church of England Pensions Board, led by its charismatic director of ethics and engagement, Adam Matthews. Along with the Swedish National Pension Funds, Matthews created a coalition of investors that successfully pressured the mining industry to impose new and far-reaching rules on how the industry monitors mine tailings dams around the world.

“It shouldn’t have happened, and we made a concerted effort, with others, to try to ensure it doesn’t happen again,” Matthews told Climate & Capital Media.

Adam Matthews-photo by Geoff Pugh
Adam Matthews, photo by Geoff Pugh

With $3.1 billion in assets, the Church of England Pensions Board is a relatively small player by institutional money standards. (BlackRock, by comparison, manages $7 trillion in assets.) But, what the Church lacks in assets is more than made up for by Matthews’ passion to mobilize the once-sleepy world of institutional asset managers.

His efforts are on the vanguard of a growing trend among activist institutional investors who are no longer waiting for governments to tackle the world’s most important environmental and social issues, particularly climate change.

Church and State

Most governments continue to ignore the most ambitious Paris Agreement goal to achieve 1.5 degrees Celsius warming limit, instead fast-tracking the Earth’s average temperature to rise by more than 3 degrees Celsius, which would make the planet all but uninhabitable for humans. Taking their cues from years of government lip service, the world’s largest energy companies have continued to not decrease but increase fossil fuel investments.

Activist institutional investors say that tide must turn and so now is the time for radical engagement. With governments dawdling on the sidelines, Matthews is determined to unleash what former Goldman Sachs economist Bob Litterman calls the “awesome power” of the finance industry. By demonstrating what can be done, investors hope it would encourage reluctant governments to step up and follow the lead of institutional money.

“If the government could see that there’s the commitment and intent,” says Matthews, then the role of finance “may be dominant in the equation,” referring to the role of business and finance in solving climate issues.

This is a far cry from the days when institutional fund managers were often part of the problem, not the solution, content to sit back and clip coupons for its pensioners. When they did engage, it was often on the wrong side, invoking their so-called fiduciary duty to push CEOs to maximize returns and reduce costs, regardless of the impact on the environment and the climate.

Now, Matthews and his growing band of activist institutional investors have a new climate agenda. They are demanding emission cuts, seeking changes in business models, supporting climate shareholder votes, and if necessary, threatening to starve companies of capital if they don’t commit to an acceptable future carbon path.

Net Zero Asset Owner Alliance

Their approach is working. Last year, when Royal Dutch Shell announced it would use investor funds to raise oil and gas production, investors rebelled. Asset manager Sarasin & Partners, in a very public letter, warned Shell’s actions threatened “planetary stability.” Matthews and the Church of England Pensions Board, a Shell shareholder, joined the most ambitious climate investor alliance yet, the Net Zero Asset Owner Alliance, which is working to limit warming in its portfolios to 1.5C—a stronger commitment than the Paris Agreement. Matthews also played a central role by engaging with Shell on behalf of Climate Action 100+, an alliance of over 450 investors.

The pressure worked. Within months, Shell dramatically reversed course. It announced it would strive to be a net zero carbon business by 2050. Where it had once pledged to deliver $125 billion in dividends over the next five years, it now announced its first dividend cut since World War II, reflecting what it described as a fundamental shift to become a net zero business. It now aspires to be the world’s largest electricity company.

A Climate Crusade

Investor pressure also forced the Minerals Council of Australia to adopt the “net zero” goal last month. And while the mining body notorious for killing off any meaningful climate action in Australia refused to issue emission-reduction targets, the investors that own its members, soon will. The Net Zero Asset Owner Alliance later this year will specify targets for net-zero-aligned cuts to be achieved by 2025 by all companies in their portfolios, including the miners.

Forces Resignation of Rio Tinto CEO over Aboriginal Rights

And it is not just in the climate fight that companies are feeling the heat. Last month, the chief executive of mining giant Rio Tinto resigned after an outcry from Matthews and others over the company’s destruction of an ancient Aboriginal archeological site.  The Pensions Board, which is an investor in Rio Tinto, demanded the resignation of Jean-Sebastien Jacques after the extent of the damage done to the sites became clear.

“We are in a completely different situation now that causes us to revisit some fundamental assumptions, and I think you’re beginning to see companies grapple with that,” says Matthews.

Matthews believes the energy industry is beginning to see a differentiation between those companies committed to diversifying themselves and taking on new roles as low-carbon energy providers and those “companies that will just be paying back to their shareholders,” says Matthews. “Some will just hold out and that’s where the investment community can be challenged to decide: walk away or try and replace chairs and directors at these companies.”

“We are in a completely different situation now that causes us to revisit some fundamental assumptions”

Not surprisingly, he has intensified his focus on the US oil and gas sector which he says is “hugely behind” its European peers. This spring, the Church of England joined with the New York State Retirement Fund and Legal & General Investment Management to support a shareholder suit opposing the re-election of Exxon CEO and chairman Darren Woods.

Another key element of his engagement strategy is to target the demand side as well as fossil fuel suppliers in order to reduce demand for these fuels and push key industrial sectors to net-zero pathways. This, he says, “means identifying and rapidly overcoming” any blockages in public policy, financing, and technology. The key, he believes, is to bring together industrial buyers and sellers and incentivize them through investments to work together to reduce their collective carbon footprints.

Post Covid-19 Economic Recovery

A critical milestone for climate progress will be accelerating efforts to pressure governments to integrate climate-related initiatives into any post Covid-19 economic recovery plan. Investors are particularly concerned that even the more progressive efforts, like those in the EU, still fail to include formal conditions ruling out member states’ spending on fossil fuels.

The pandemic transition “requires ambitious policy, combined with corporate leadership, combined with investors,” Matthews says.

Brian O’Callaghan, a researcher at the Smith School of Enterprise and Environment told Climate & Capital Media: “As always with policy design, the devil is in the details. It is vital that policymakers get this right. The stakes are high.”

One tactic the Church had avoided is divesting bond and equity holdings in fossil fuel companies. “Divestment is not the answer. As an asset owner, we always retain that right, but it won’t solve the climate crisis,” said Tom Joy, the Church of England Pensions Board chief investment officer, shortly after joining the 26-member Net Zero Asset Owner Alliance.

A Step Towards Divesting

This month, however, the Church of England took its first step towards divesting from ExxonMobil when the Pensions Board announced it had fully divested from the oil giant because the oil company has failed to set goals to reduce emissions produced by its customers. However, the Church of England through other investment entities does continue to own ExxonMobil equity, and according to a spokesperson, “continues to be actively engaged on climate change with ExxonMobil as a shareholder.”

Its reluctance to divest from fossil fuel companies puts the Church and other activist asset owners at odds with more aggressive climate activists like Greta Thunberg, who are pushing for an immediate divestment of all fossil fuel holdings. But climate-conscious investors say they have no choice: So long as governments run from their climate policy-making responsibilities, activist investors cannot divest.

“If everyone who has good ethics divests, only those with bad ethics control the companies,” says Garry Weaven, the former chair of fund manager IFM Investors which manages around $108 billion worth of assets for 27 Australian industry pension funds.

Investors with a Mission

Rather than divest, investors believe that the only way to rouse somnolent governments is by demonstrating that private coalitions of business leaders, prodded by private financial capital, can successfully push companies towards net zero. These actions would then act as a catalyst by setting an example of effective engagement. This, in turn, will make it easier for opportunistic politicians, particularly in the United States, to challenge the stranglehold the oil and gas industry has on governments. Finance, says Matthews, “has got to be absolutely at the table pushing the low-carbon agenda.”

Matthews is a third-generation fan of Liverpool Football Club. Last week his beloved Reds won their first Premier League title in 30 years. Liverpool’s theme song, “You’ll Never Walk Alone,” sums up Matthews’s and the Church‘s determination to never let the vulnerable walk alone in the darkest moments. To the mining industry’s surprise, they stepped up after Brazil’s mine tragedy. Now they are determined to do the same with climate change.

(Feature aerial solar array photo, courtesy of Shell International)


Article by Peter McKillop and Kerrie Sinclair

Peter McKillop is the Founder of Climate & Capital Media. Previously Mr. McKillop was a Managing Director at BlackRock, where he was responsible for leading the firm’s strategic communications and messaging for its iShares ETF and Indexing business. He has also held senior communication leadership positions at J.P. Morgan, KKR, UBS, and Bank of America. Before entering the financial communications field, Peter was a senior correspondent and bureau chief for Newsweek in New York, Tokyo, and Hong Kong

Kerrie Sinclair, a U.K.-based journalist who covered finance, renewable energy, and climate policy in Australia for News Ltd. She has also worked at Dow Jones Newswires and AFX News, covering European and U.S.-listed companies and financial markets. 

Climate & Capital Media-GreenMoney-Oct.20

Article originally published by Climate and Capital Media. Reprinted with Permission.

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Pursuing Justice Through Faith-based Impact Investing-by Amanda Joseph-Calvert

Pursuing Justice Through Faith-Based Impact Investing

By Amanda Joseph, Calvert Impact Capital

Amanda Joseph-Calvert Impact Capital(Above – Azure, a Calvert Impact Capital portfolio partner, is an initiative that mobilizes capital and technical expertise to upgrade and expand water services for the poor in rural and peri-urban communities of El Salvador. Azure was launched through a partnership between Catholic Relief Services (CRS) and the Inter-American Development Bank’s Multilateral Investment Fund (IDB/MIF)).


Justice, justice, justice shall you pursue.

For many of us who engage in impact investing, this verse from Deuteronomy 16:20 is a familiar one, our clarion call to pursue a path of justice and healing – which includes the responsible stewardship of our personal and communal assets. Many more Americans have become familiar with this verse, as the words hung in the chambers of esteemed Supreme Court Justice Ruth Bader Ginsburg, a touchstone for her as she pursued a life committed to justice.

Today, the call for justice is growing louder, with a global pandemic that has laid bare the deep fissures in our society and a legacy of systemic racism and economic inequality that we as a nation can no longer ignore. And in the midst of this crisis and churning, we are also experiencing a great awakening  to the possibility of transforming society, as we acknowledge our interdependence, and make real a world that is just, equitable, and sustainable.

For all investors, but particularly for communities of faith in these turbulent times, the prospect of impact investing offers an abundance of meaningful opportunities to realign and reaffirm how our values support our investment strategies. From a congregation that decides to make a deposit in a local credit union or Black-owned community development bank, or to a church-based pension fund that invests in climate resilience, there are multitude of options and approaches across asset classes and impact themes for investors to explore.

Like many of us working in this dynamic space, my own impact investing journey began well before the term was coined. In the late 90s, I had the good fortune to work alongside visionary leader Jeffrey Dekro to organize the first and only national initiative to encourage American Jewish individual and institutional investing in CDFIs and low-wealth communities. Our “why” was steeped in Jewish values, teachings, and our historical experience as immigrants. To undertake the “how,” we looked to leaders across faiths as our models and partners, as well as to secular funds like Calvert Impact Capital, as we supported congregations, foundations, and communal organizations to make their first impact investments over the course of a decade-plus. We also launched an interfaith disaster response fund, focusing on critical recovery programs post-Hurricanes Katrina, Rita, and Sandy, demonstrating the power of interfaith investor partnerships.

Maria Ines Galvis-sheep farmer in Columbia received a loan from ECLOF International-photo Amanda Joseph Calvert Impact Cap
Maria Ines Galvis, a sheep farmer in Colombia, received a loan from ECLOF International, a faith-based organization with a mission to promote social justice and human dignity through microfinance. ECLOF International is a Calvert Impact Capital portfolio partner.

In doing this work, we were part of a long and storied tradition. Faith institutions helped create the impact investing market as we know it today. Over the decades, faith communities have served as true pioneers and risk takers, demonstrating again and again that impact investing is a viable strategy in pursuit of justice, offering opportunity to our most vulnerable and disenfranchised communities, locally and globally.

At Calvert Impact Capital, one of the first impact funds in the US, faith investors have been our partners since we began our work 25 years ago. By that time, faith investing in US community development financial institutions (CDFIs) and international microfinance was an established practice, with Catholic orders and women religious at the vanguard. Today, faith investors currently represent more than 15 percent of our $500 million capital base. They include congregations, churches, health care systems, mutual funds, and foundations, and span denominations and affiliations – Catholic, Baptist, Mennonite, Jewish, Unitarian, Methodist, and many others. We also know that many of our 5,400 individual investors are inspired by their traditions; our most recent investor survey revealed that 26 percent of respondents “invest because of my faith.”

VisionFund-the world's largest Christian microfinance network provides courses on sustainable farming for Indrani clients
Calvert Impact Capital portfolio partner VisionFund, the world’s largest Christian microfinance network, provides comprehensive courses on sustainable farming and provides micro-loans for clients such as Indrani to grow their businesses.

As Director of Faith Based Initiatives, I serve as a resource and a connector for faith institutions and their financial professionals — chief investment officers, financial advisors, and asset managers — leveraging Calvert Impact Capital’s impact investment expertise. Since 1995, we have helped over 150 faith-based groups develop their first impact investing programs or enhance programs already underway; overcome barriers with internal finance committees, leadership, external financial advisors, and fund managers; explore creative ways to deploy their assets; and connect with other faith investors doing this work to share successes and lessons learned. We understand well that for many faith investors travelling from the faith-specific “why” to the “how” is a process of discernment, listening, and eventually, action. We also work very closely with financial advisors and professionals who are committed to supporting their faith clients on this journey.

Faith-based investors are natural leaders of the impact investing movement and we want to ensure they are fully equipped to reach their potential. This is why over the next year, we will offer a series of training opportunities and resources to educate faith investors and build a deeper impact investing practice among them.

In this effort we join a growing network of both secular and faith organizations, including the Global Impact Investing Network (GIIN), Interfaith Center on Corporate Responsibility (ICCR), FaithInvest, Catholic Impact Investing Collaborative (CIIC) and many others, who share a commitment to seeing faith institutions engage more fully in the impact investing ecosystem and with whom we actively collaborate. And we also want to hear from you: What challenges are you facing as a faith-based investor or as a financial professional working with faith communities? What resources do you need? How can we help or work together?

Two Calvert Impact Capital staff members visit Israel Manor Inc. Life Center in NE Washington DC
Two Calvert Impact Capital staff members visit Israel Manor Inc. Life Center, a Calvert Impact Capital portfolio partner, in Northeast Washington DC, as construction is underway. Now open, Unity Healthcare provides health services and community spaces, and is co-located with Israel Manor Baptist Church.

Answering the call to be part of the solution to our urgent local and global challenges has never been more urgent. Drawing from the examples set by many faith investors so far, we encourage congregations and institutions of all faiths and religious traditions—and the community of financial professionals who support them—to seek justice and put faith into action through impact investing.

We welcome opportunities for conversation, collaboration, and partnership. Please visit the Calvert Impact Capital website or email me directly – ajoseph@calvertimpactcapital.org


Article by Amanda Joseph, Director of Faith-Based Initiatives at Calvert Impact Capital, a leading impact investment firm that through its products and services has mobilized over $2 billion in investments to create a more equitable and sustainable world. She serves as a resource for faith-based investors on their impact investing journeys and partners with faith leaders and networks to build the capacity and community of practicing faith-based impact investors.

Previously, Amanda worked at Opportunity Finance Network, the nation’s leading association of community development financial institutions (CDFIs) committed to providing affordable, responsible capital and financial services to communities not served by mainstream finance. She has held senior management roles at a technology company assisting Americans to sustainably move out of poverty and for a decade-plus at Jewish Funds for Justice/The Shefa Fund where she managed the first and only national initiative to organize the American Jewish community to invest in low-wealth communities across the county.

Amanda has prior experience as a commercial loan officer for the Self-Help Credit Union, and has worked with a range of mission-driven organizations. She holds an MBA from the Yale School of Management, and an AB from Bryn Mawr College.

Energy & Climate, Featured Articles, Impact Investing, Sustainable Business

The VERGE20 Conference Goes Virtual-GreenMoney

The VERGE 20 Conference Goes Virtual October 26-30 to Accelerate the Clean Economy

Climate change is the most significant global threat we face today. It also represents an unprecedented opportunity to build a clean economy by electrifying and decarbonizing our world, equitably and profitably. Momentum is building as businesses and governments transform their organizations to be more efficient and resilient.

The VERGE 20 online event is the leading platform for accelerating the clean economy. Join more than 15,000 leaders (online this year) — from the private and public sectors, utilities, solution providers, investors, and startups — advancing systemic solutions to address the climate crisis through five key markets: clean energy, electrified transportation, the circular economy, carbon removal and sustainable food systems.

VERGE Energy
The VERGE Energy conference explores decarbonizing, decentralizing, digitizing and democratizing global energy systems, with professionals in energy management and procurement from corporations and governments, as well as allied service providers, innovators, developers, financiers and utilities.

VERGE Transport
The VERGE Transport conference explores how to create clean, electrified transportation systems that are accessible to all by bringing together fleet managers, utilities, vehicle manufacturers, policy makers, transportation planners, infrastructure developers and entrepreneurs.

VERGE Circular
The VERGE Circular conference focuses on the tools, tactics and systems leadership companies are using to shift their products and services from linear to circular. From product design and business strategy to closed-loop supply chains and enabling infrastructure, it brings together professionals in supply chain, logistics, sustainability, packaging design, marketing and other functions..

VERGE Carbon
The VERGE Carbon conference focuses on unlocking the value of carbon pollution by using it to create innovative products, materials and services. The conference brings together professionals from carbon markets, carbon capture and sequestration, product and materials innovation, building and construction, land management, energy production, forestry, food and agriculture, and supply chains.

The VERGE Food conference showcases the leaders, organizations and innovations that are creating more sustainable ways to produce, distribute and consume food. It focuses on the challenges and opportunities in providing healthy affordable food for all, and the strategies, technologies, products and packaging that will enable us to do so sustainably and profitably.

This year’s speakers include: Lisa Jackson of Apple; Bill McKibben
of 350.org; Varshini Prakash of Sunrise; Maria Pope of Portland General Electric; Philip Saunders of City of Seattle; Angela Hultberg of IKEA Group; Gina McCarthy of NRDC; Michael Tubbs of City of Stockton; Carla Peterman of Southern California Edison; Ashley White of Amazon.

Sign up here to attend the October 2020 online event.


Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

GreenMoney announces strategic partnership with Climate and Capital Media

GreenMoney Journal Announces Strategic Partnership with Climate & Capital Media

GreenMoney Journal is pleased announce our Strategic Partnership with Climate & Capital Media, a global media company that connects investors and entrepreneurs working on climate change solutions. Its news service develops engaging, well-reported profiles that deliver practice and meaningful investment and leadership insights about the fast-growing community of businesses addressing global warming and building a more sustainable climate economy.

Beginning in September 2020 the strategic partnership will include joint efforts in editorial content, distribution, and marketing.

“As climate change continues to have an increasing impact on the bottom line of companies all over the world, we look forward to working with Peter and Climate and Capital Media to help keep our readers well informed on issues affecting communities and commerce as well as our SRI and ESG investments,” said Cliff Feigenbaum, founder and publisher of the GreenMoney Journal.

“At Climate & Capital Media, our goal is to make the business and finance of climate action accessible and inviting. We value the great story-telling and vivid images that inspire and motivate everyone working to build a global climate economy. We are excited to partner with Cliff and GreenMoney Journal, ‘the voice of the community,’ as we jointly work to influence capital that supports solutions to climate change,” said Peter McKillop, founder of Climate & Capital Media.

GreenMoney Journal is a leading global sustainable business and impact investing media brand, with a biweekly eJournal that reaches an audience of 27,000 investors and a website focused on innovative solutions and responsible leadership. Now in its 28th year of publication, GreenMoney is an award-winning, trusted and independent journalism brand with a dedicated readership of financial and sustainability professionals.



Cliff Feigenbaum

Peter McKillop

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US SIF Foundation Releases Report-Investing to Advance UN Sustainable Development Goals

US SIF Foundation Releases Report on Investing to Advance the UN Sustainable Development Goals

The report examines why sustainable investors in the United States are interested in the Sustainable Development Goals (SDGs) and the challenges in furthering the SDGs. The report also assesses whether the SDGs have led to a change in investment strategies, new investment products or new investment flows.

The US SIF Foundation recently released “Investing to Achieve the UN Sustainable Development Goals: A Report for the US Investor Community.” The report examines why sustainable investors in the United States are interested in the Sustainable Development Goals (SDGs) and the challenges in furthering the SDGs. The report also assesses whether the SDGs have led to a change in investment strategies, new investment products or new investment flows.

The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015, calls on governments, civil society, business leaders and investors to take action to help realize 17 sustainability and social justice goals. The economic arguments for implementing the SDGs are compelling. Ending poverty, reducing income inequality and advancing the socioeconomic status of women — as the Goals emphasize — would spur economic growth and also provide opportunities for many business enterprises to expand their customer base.

To prepare the paper, the US SIF Foundation drew on information from UN public reports and data surrounding the issuance of and investment in SDG bonds, climate bonds and SDG-themed equity funds. Staff also interviewed representatives of a select group of investment management firms and institutional asset owners with a long-standing commitment to sustainable investment.

The report is divided into the following sections:

  • The history of the Sustainable Development Goals
  • The case for investing in the SDGs
  • Encouraging private sector investment
  • The rise of green, SDG, and sustainable bonds
  • The SDGs in the equity markets
  • The response of US sustainable investors

“Although no official database tracks private sector investments in the SDGs or the collective impact of these investments, numerous investment products have been launched or issued in recent years with sustainable development themes,” said Meg Voorhes, Director of Research at the US SIF Foundation and editor of the report. “We encourage managers or issuers of investment products that purport to support one or more of the SDGs to measure and report the impact of their products and strategies.”

Download the report here.


About US SIF and the US SIF Foundation

US SIF: The Forum for Sustainable and Responsible Investment is the leading voice advancing sustainable and impact investing across all asset classes. Its mission is to rapidly shift investment practices toward sustainability, focusing on long-term investment and the generation of positive social and environmental impacts. US SIF members include investment management and advisory firms, mutual fund companies, asset owners, research firms, financial planners and advisors, broker-dealers, community investing organizations and nonprofit associations.

US SIF is supported in its work by the US SIF Foundation, a 501(C)(3) organization that undertakes educational and research activities to advance the mission of US SIF. The US SIF Foundation will publish its biennial Report on US Sustainable and Impact Investing Trends in November. The Foundation also offers training on the Fundamentals of Sustainable and Impact Investment and in partnership with the College for Financial Planning, offers the only sustainable investment designation in the United States, the Chartered SRI Counselor™ (CSRIC™). This graduate-level program provides financial advisors and investment professionals with the history, definitions, trends, portfolio construction principles, fiduciary responsibilities and best practices of sustainable investment.

Additional Articles, Energy & Climate, Food & Farming, Impact Investing, Sustainable Business

ESG Global Equity Fund-Trillium Asset Management

Trillium Global Equity: Trailblazing ESG Fund Continues to Perform

By Matt Patsky, Jim Madden and Patrick Wollenberg, Trillium Asset Management

Matt Patsky-Jim Madden-Patrick Wollenberg authors-Trillium Asset Mgmt-Trailblazing ESG Fund continues to performIn the ever-evolving landscape of Environmental, Social, and Governance (ESG) investing, the core philosophy of Trillium has remained the same since it was founded in 1982: provide for the financial needs of our clients while leveraging their capital for positive social and environmental impact in alignment with their values.

Over the last 21 years, this approach of the $579 million Trillium ESG Global Equity fund has proven itself, time and again through a long track record of positive results, generating returns responsibly. The Fund has an 8.56% average annual return for the past five years, outperforming 75% of 895 peer Morningstar funds in the World Large Stock category as of August 31, 2020, based on total returns*, with a gross expense ratio of 1.33%.

The differentiation of the Trillium ESG Global Equity fund is in the details. Two decades ago, at the Fund’s inception, there was little in the way of ESG data, so Jim Madden, Co-Portfolio Manager, was part of the team that created the criteria from the ground up. Trillium has been evolving and refining those core metrics ever since.

“Discerning what is important in vetting these companies requires even greater discipline now that ESG and traditional data has grown, and continues to grow,” said Madden.

Why Global?

For over 20 years, the Fund has offered clients a core global equity exposure with what Trillium believes are quality growth companies and diversified assets across countries, sectors, and market caps. Led by a senior Portfolio Managers team, the Fund’s construction has historically delivered higher returns versus its benchmark, the MSCI ACWI over 1, 3, and 5-year periods.

Why Fossil Fuel Free?

The Fund’s mission has always considered Climate Change as a driver that makes fossil fuel exposure inherently risky and so, avoids exposure to the energy sector. By instead investing in companies that Trillium believes understand ESG principles, they conclude that this acknowledgement demonstrates the qualities of innovation and leadership that create a distinct competitive advantage and build long-term value.

Trillium’s commitment to the quality of the Fund speaks to their overall commitment to ESG and many of the principles that inform the firm’s investment strategy are on full display in some of today’s most profound issues, where Trillium’s Shareholder Advocacy continues to be an influential force for change. In addition to investing for positive environmental and social impact, Trillium has a long and proud history of active ownership. The firm leverages the capital of its clients by engaging in dialogue with companies it invests in to work toward improving their environmental, social and governance profiles.

ESG Analysis

In addition to the primary ESG analysis process conducted by Trillium’s equity research analysts, the strategy maintains a proprietary framework to assess each considered company on environmental merits. A comprehensive review of the ecological risk and opportunities analyze seven categories implemented across all sectors. Data is gathered and analyzed by the portfolio managers, equity research analysts and ESG specialists, utilizing a range of resources, including their 20+ years of proprietary ESG company datasets, governmental websites, and non-governmental organizations. Each company is scored accordingly and monitored to assess any material changes to this initial assessment.

Fundamental Research

Trillium’s ESG-integrated fundamental research process efforts include both industry and in-depth company analyses, which cover both quantitative and qualitative considerations. In terms of industry reviews, the team evaluates the respective secular & cyclical dynamics, along with relevant national & regional aspects of a company’s operating environment. In terms of company-specific analysis, the team considers strategic leadership (business model, competitive advantage, strategy, management quality, etc.) and financial fundamentals (economic translation of that leadership, along with analysis of key quality characteristics including margin profile, cash flow, ROIC, net leverage, etc.). Valuation is derived through a combination of a traditional P/E multiple approach and a discounted cash flow analysis (with a 3-stage model), depending on sector & industry and other considerations.

Glossary of Terms:

P/E, or price-earnings ratio, also known as P/E ratio, is the ratio of a company’s share (stock) price to the company’s earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or undervalued.

Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow.

ROIC stands for Return on Invested Capital and is a profitability or performance ratio that aims to measure the percentage return that a company earns on invested capital. It also represents the residual value of assets minus liabilities.

Trillium Global Equity ESG Fund Performance Chart-6.30.20

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800-853-1311.

The MSCI ACWI Index, MSCI’s flagship global equity index, is designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 26 emerging markets. One cannot invest directly in an index.


Article by Matt Patsky, Jim Madden, and Patrick Wollenberg

Matt Patsky is CEO of Trillium Asset Management and a Portfolio Manager on Trillium’s Sustainable Opportunities strategy and the Trillium ESG Global Equity Strategy. He joined Trillium in 2009, and has three decades of experience in investment research and investment management. Matt began his career at Lehman Brothers in 1984 as a technology analyst. In 1989, while covering emerging growth companies for Lehman, he began to incorporate environmental, social and governance factors into his research, becoming the first sell side analyst in the United States to publish on the topic of socially responsible investing in 1994. As Director of Equity Research for Adams, Harkness & Hill, he built that firm’s powerful research capabilities in socially and environmentally responsible areas such as renewable energy, resource optimization, and organic and natural products. Matt was most recently at Winslow Management Company in Boston, where he served as director of research, chairman of the investment committee and portfolio manager for the Green Solutions Strategy and the Winslow Green Solutions Fund.
Matt is currently on the Boards of Environmental League of Massachusetts, and Shared Interest. He has also served on the Boards of Pro Mujer, US SIF and Root Capital. Matt is a member of the Social Venture Circle (SVC). Matt is a member of the CFA Society Boston and is a Chartered Financial Analyst charterholder. He holds a Bachelor of Science in Economics from Rensselaer Polytechnic Institute.

Jim Madden is a Portfolio Manager on Trillium’s ESG Global Equity Strategy. Prior to joining Trillium in 2014, Jim was Chief Investment Officer and Senior Portfolio Manager at Portfolio 21. He worked with Portfolio 21 for over 20 years both on the investment team and as the developer of the company’s shareholder activism program. Jim earned a bachelor’s degree and M.B.A. from the University of Wisconsin and is a Chartered Financial Analyst (CFA) charterholder.

Patrick Wollenberg is a Portfolio Manager of the Trillium ESG Global Equity strategy and a Research Analyst covering the financial sector. Patrick joined as an Analyst in September 2018 with previous experience as a portfolio manager and equity research analyst for several Global and European equity funds at ING Investment Management and Robeco Asset Management, where he started his career in 1994. Immediately prior to joining Trillium, he was an Investment Director at John Hancock Investments (JHI), covering global, international, emerging markets and US equity funds for John Hancock. While at JHI, Patrick served as an ESG specialist at the firm, driving product development, content creation and client education. Patrick also served in due diligence roles at Merrill Lynch Global Wealth & Investment Management. Patrick completed his Masters of Science (Honors) in Business Administration in 1992 and Masters of Science Economics (Honors) in 1994 from Erasmus University Rotterdam, The Netherlands. Patrick is a Certified European Financial Analyst.

The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectuses contain this and other important information about the investment company, and it may be obtained by calling 800-853-1311, or visiting www.trilliummutualfunds.com. Read it carefully before investing.

Mutual fund investing involves risk. Principal loss is possible.

Trillium ESG Trillium ESG Global Equity Fund may invest in foreign securities, which are subject to the risks of currency fluctuations, political and economic instability and differences in accounting methods. These risks are greater for investments in emerging markets. Investing in foreign securities is riskier than investing in domestic securities. The fund invests in smaller companies, which involve additional risks such as limited liquidity and greater volatility. Trillium ESG Trillium ESG Global Equity Fund’s environmental policy could cause it to make or avoid investments that could result in the portfolio underperforming similar funds that do not have an environmental policy. There are no assurances that the fund will achieve its objective and/or strategy.

Trillium ESG Trillium ESG Global Equity Fund is distributed by Quasar Distributors, LLC. No other products mentioned are distributed by Quasar Distributors, LLC.

* Morningstar ranked PORTX in the top 32%, 28% and 24% out of 825, 725 and 610 World Large Stock funds for the one-, three- and five-year periods ending 8/31/2020, respectively.

The Morningstar percentile ranking is based on the fund’s total-return percentile rank relative to all managed products that have the same category for the same time period. The highest (or most favorable) percentile rank is 1%, and the lowest (or least favorable) percentile rank is based on the total number of funds ranked in the category. Morningstar total return includes both income and capital gains or losses and is not adjusted for sales charges. © 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Each Morningstar category average represents a universe of funds with similar objectives.

Energy & Climate, Featured Articles, Impact Investing, Sustainable Business

Going Global with ESG Investing-GDP Growth for 2020-Pekin Hardy Strauss

Going Global with ESG Investing

By Matthew Blume, CFA, Pekin Hardy Strauss Wealth Management

Matthew Blume-Pekin Hardy Strauss-GreenMoneyOur mantra has always been to go wherever we believe there is value. We will take our SRI mandate to the far reaches of the Earth if that is where we are able to find attractive investment opportunities that meet the needs of our sustainably-minded investors. Now, more than ever, our focus has turned global, as we look for strong ESG performers that trade at attractive valuations, a task that has become exceedingly difficult in the domestic market. Emerging markets, despite their unique challenges for ESG investors, demand special attention due to their deep undervaluation relative to the U.S. stock market.

Famed investor Warren Buffett generated fantastic returns over the course of his life by following a strategy of making investments in deeply undervalued companies when nobody else was interested in them. Mr. Buffett’s strategy is not complicated, but it seems that many investors, including (and maybe especially) those interested in sustainability, have forgotten this simple concept. Indeed, the S&P 500 Index currently trades near its all-time high, at multiples that will likely make it difficult for investors to generate attractive returns over the coming decade. At the same time, interest in emerging market stocks appears almost non-existent and is worsening as the coronavirus pandemic continues to put downward pressure on those economies where fiscal support has been less forthcoming than in G20 economies.1 This divergence is exactly the type of opportunity our “go anywhere” investing strategy is designed to capture.

There is no doubt that emerging markets have historically presented an added challenge for investors focused on sustainability factors. However, the encouraging growth in ESG disclosure by emerging market companies and the ever-widening coverage of emerging market companies by ESG data providers has dramatically lowered this hurdle, giving sustainability-focused investors far more opportunities to invest in deeply undervalued companies in the Buffett fashion. We would even suggest that sustainable investors may stand to benefit more than investors who simply allocate to traditional emerging markets equities.

Our approach to investing in emerging markets is the same as it is in any other market: look for companies with strong ESG performance trading at attractive valuations. Set forth below are some of the key considerations that inform our current interest in emerging markets.

• GDP Growth
Although the rest of the world continues to generate faster economic growth than the United States, investors seem convinced that the United States is in much better shape than the rest of the world. We believe this consensus view is incorrect, as there is little to suggest that the United States has fewer problems than the rest of the world. Between 2018 and 2050, the working age population in the emerging markets is expected to increase by 135%, even while the working age population in the developed world is expected to decline by 7%.2 Population growth in emerging economies, along with productivity improvements which correlate to many of the UN Sustainable Development Goals, should lead to far better growth in emerging markets over the next thirty years relative to the United States and other industrialized countries.

[ See Real GDP Growth Infographic at top. Source ]

• Evolution of Emerging Markets
The world has changed considerably as a result of the growth of emerging markets over the past 20 years. Emerging markets represent a greater share of the global economy today, while the United States’ share of the global economy has decreased. Emerging market countries have become richer, and their middle-classes have increased commensurately; China and India are home to two of the top three largest middle-class populations in the world. At the same time, emerging market economies are evolving away from low cost, labor- and resource-intensive industries and towards technology, services, and consumer-driven industries. This evolution not only helps to make emerging markets more attractive to investors generally, but it also provides greater opportunity for sustainability-focused investors.

• Valuation Discrepancy
The valuation discrepancy between U.S. stocks and emerging market stocks is currently larger than at almost any time in recent history. As of September 10, 2020, the U.S. stock market is trading at a cyclically-adjusted P/E (CAPE) multiple of 31.2x earnings.3 The only two times in history when the S&P 500 Index was more expensive by that measure were 1) the peak of the Dot-Com bubble in 2000 and 2) the stock market peak in 1929. Investors would be wise to remember how poor stock returns were subsequent to those valuation peaks. Emerging market stocks trade at a CAPE ratio of just 15.8x; put simply, emerging market stocks are currently trading at a 50% discount to their U.S. brethren.

Matthew Blume with Kurt Summers-former Chicago Treasurer
Matthew Blume with Kurt Summers, former Treasurer for the City of Chicago at the 2018 SRI Conference

• The U.S. Dollar is Overvalued
When the U.S. dollar appreciates relative to the currencies of other countries, the U.S. stock market tends to outperform the stock markets of other countries. Similarly, when the U.S. dollar depreciates versus the currencies of other countries, the U.S. stock market tends to underperform. We think several important fundamental factors should lead to a weaker dollar in the years ahead (e.g., fiscal and monetary stimulus, trade imbalances), and that dollar weakness should fuel earnings growth and share price appreciation in emerging markets.

• ESG Outperformance in Emerging Markets
Over the past 10 years, the MSCI EM ESG Leaders Index has outperformed the MSCI Emerging Markets Index by more than 3.5% per annum while also experiencing less volatility and smaller drawdowns.4 This outperformance dwarfs that of the MSCI EAFE ESG Leaders Index vis-à-vis the MSCI EAFE Index (0.87% per annum), and in the U.S., the MSCI USA ESG Select Index has actually underperformed the MSCI USA Index by a small margin.5,6 This strongly suggests that ESG-focused investors can earn a material premium investing in emerging markets – one that can be elusive in developed markets.

We believe the opportunity on offer for ESG investors in emerging markets is clear. We recognize the unique challenges that emerging markets investing poses for SRI investors, but we also recognize that SRI investors who are willing to go against the grain stand to benefit greatly from deep undervaluation and an ESG premium. While countless ESG investors crowd into the same flashy U.S. technology stocks, paying multiples that all but guarantee poor forward returns, value conscious investors who are willing to do the more difficult work of understanding the ESG risks and opportunities of emerging market companies should be rewarded with attractive long-term performance in our view.


Article by Matthew Blume, CFA, Portfolio Manager and Director of ESG Research with Pekin Hardy Strauss Wealth Management.

Matthew is a portfolio manager of private client accounts at Pekin Hardy Strauss Wealth Management and manages the firm’s ESG research and shareholder advocacy efforts. Matthew works closely with clients to help them articulate their financial goals and constructs comprehensive financial plans to help them achieve those goals, all while ensuring that each client’s portfolio is aligned with his or her personal values and risk tolerance. As the firm’s Director of ESG Research, Matthew is responsible for understanding the ESG-related risks and opportunities faced by each potential investment that the firm considers. This information is key in the firm’s efforts to tailor client portfolios to their unique values. Matthew also leads the firm’s shareholder advocacy efforts, engaging with management teams of portfolio companies to encourage responsible and sustainable management of those companies. Matthew has become a respected voice in the SRI community, speaking at conferences and serving on expert panels around the country. He is an outspoken advocate for using business as a force for good and is highly active in the Chicago B Corp community. Prior to joining Pekin Hardy, Matthew worked as an investment advisor for Cornerstone Asset Management, and prior to that, as a systems engineer for a large government contractor. Matthew is a CFA Charterholder and is a member of the CFA Institute and the CFA Society of Chicago. He is also a frequent contributor to Nasdaq.com, where he writes on matters of personal finance and investing.

Article Footnotes:
[1] https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020

[2] Source: Oppenheimer, World Bank

[3] The cyclically-adjusted P/E (CAPE) ratio is a valuation measure that takes into account 10 years of earnings adjusted for inflation. If P/E ratios, profit margins, and inflation rates are mean reverting, and we believe that they are, this measure is a useful indicator of forward-looking equity returns. The lower the CAPE ratio, the more likely it is that 10-year forward returns will be attractive. The higher the CAPE ratio, the more likely it is that 10-year forward returns will be lower than historical returns.

[4] https://www.msci.com/documents/10199/c341baf6-e515-4015-af5e-c1d864cae53e

[5] https://www.msci.com/documents/10199/c8a8efd5-0bfb-44ae-9d5c-89e29fa8b9c6

[6] https://www.msci.com/documents/10199/180b72ea-8d96-471c-88c6-0c01fb682b76

This commentary is prepared by Pekin Hardy Strauss, Inc. (“Pekin Hardy”) for informational purposes only. Pekin Hardy Strauss, Inc. does business as Pekin Hardy Strauss Wealth Management, encompassing financial planning and separate account management services for individuals and families, and as Appleseed Capital, the firm’s institutionally-focused arm. The information contained herein is neither investment advice nor a legal opinion. The views expressed are those of the authors as of the date of publication of this report, and are subject to change at any time due to changes in market or economic conditions. Although information has been obtained from and is based upon sources Pekin Hardy believes to be reliable, we do not guarantee its accuracy. There are no assurances that any predicted results will actually occur. Past performance is no guarantee of future results. The S&P 500 Index measures an index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The MSCI Emerging Markets Index is an index that consists of indices in 24 emerging economies: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Qatar, Taiwan, Thailand, Turkey and the United Arab Emirates.

Additional Articles, Energy & Climate, Impact Investing, Sustainable Business

Responsible-Investing-in-China-by-John Streur-Hellen Mbugua-and-Jade Huang-Calvert Research and Mgmt

Responsible Investing in China

By John Streur, Hellen Mbugua, and Jade Huang, Calvert Research and Management

It is undeniable that China’s influence on the global economy, global financial markets and geopolitical system is significant. From an economic standpoint it is the second-largest economy in terms of GDP and is slated to reach parity with the US in the next 10 years or so. In global financial markets, China represents 43% of the MSCI Emerging Markets Index and 5% of the MSCI All Country World Index as of August 31, which follows the United States and Japan. Moreover, 22% percent of the MSCI All Country World Index is non-Chinese companies dependent on the purchasing power of Chinese consumers to fuel their own companies’ sales and profit growth. On the geopolitical front, China continues to be an export machine supported by the country’s low-cost, skilled labor and efficient infrastructure.

However, the decision whether to invest in China is a complicated one, particularly to a responsible investor. The power and reach of China’s state-led model, its weak human rights record, lack of transparency, as well as heightened geopolitical tensions, can dissuade international investors from investing in Chinese companies or non-Chinese companies doing substantial business in China. Calvert’s viewpoint, however, is that it is preferable for a responsible investor to invest in China and engage as a shareowner, rather than divest. At Calvert, we believe as responsible investors we should fully understand the unique risks that investing in China may offer and weigh that against the return potential that a country with diverse people and a rich culture can offer in the form of both investment opportunities, in areas such as renewables, infrastructure, technology and consumer goods, as well as shareholder engagement. Engagement can create opportunity to be a part of positive change that advocates for business practices that can benefit the planet and the quality of life for billions of people.

Like many emerging-market economies, China is very much in development. While China’s GDP is second only to the US, its GDP per capita, according to 2019 World Bank data, is far lower, at $10,800 versus the US, at $65,118. This trails most Western countries and is more comparable to its emerging-market peers such as Mexico and Turkey. A strong civil society and legal system that provide effective checks and balances continue to be works in progress. At Calvert, we consider risks around data security, data access, legal protection, systemic corruption and political hazard to be key risks when investing in China, and ones we believe will grow in importance with China’s increasing economic influence.

Chinese internet security law, which took effect in 2017, requires that local firms allow the Chinese government access to individual privacy data in the interest of national security. Given China’s infamous record on protecting data of international firms and individuals, data security is a cause for real concern. This risk can lead to downstream reputational and liability hazard, as well as long-term national security concerns. The case of Yahoo reflects on ways this risk can materialize. Yahoo complies with Chinese authorities and openly acknowledges that the company cannot protect the privacy of China-based users. In 2005, when Yahoo provided data to the Chinese government, it led to the arrests and 10-year sentences of two Chinese activists. Yahoo was sued by the dissidents’ families, which eventually led to a settlement in 2007. As part of that settlement, Yahoo created a $17 million fund to support persecuted Chinese dissidents and their families.

Furthermore, data physically located in China is irretrievable by international regulators and firms. International auditing firms cannot retrieve data from their Chinese units. This can lead to problems for investors, affiliated auditors and international regulators. The case of China MediaExpress, an advertisement services provider, shows how problems surrounding data access can lead to losses for multiple parties. After being caught inflating revenues and stock prices, China MediaExpress was delisted by Nasdaq (2011), deregistered by the SEC (2012) and charged with fraud by the SEC (2013). In addition, Deloitte, KPMG, PricewaterhouseCoopers, BDO and E&Y were all charged by the SEC for refusing to hand over documents to aid the SEC’s investigations.

Another risk is China’s inconsistent application of legal protections, which may tend to veer on the rule by law, not the rule of law. The legal system is still developing, and is often influenced by powerful forces in politics and business. In previous decades, inconsistencies usually benefited international firms; more recently, inconsistencies have tended to benefit Chinese firms. We anticipate that this will continue as China protects domestic firms in certain sensitive industries. This risk is linked to unexpected legal action, particularly against people who are linked (even loosely) to sensitive issues. This risk materialized in December 2018, when Michael Kovrig and Michael Spavor were arrested by China and charged with criminal espionage days after Huawei’s CFO Meng Wanzhou was arrested by Canadian authorities and set to be extradited to the United States. Kovrig, a former diplomat, and Spavor, a high-level consultant, are both Canadians, and their arrests are almost universally seen as retaliation for Meng’s arrest in Canada. Kovrig and Spavor remain imprisoned in China.

Political tensions between Beijing and international actors can hurt Chinese and non-Chinese firms. This risk can cause serious financial damage to individual firms, potentially presenting material obstacles to established business models and growth strategies, and potentially impact the broader economy. The evolving saga around TikTok demonstrates the unstable environment that political hazard risks present for businesses and investors. President Trump’s executive order that threatened to ban TikTok was met with a recent update to Chinese law that could require ByteDance (the Chinese firm that owns TikTok) to obtain government permission for any sales of technology to a foreign company, potentially derailing any possible sales to Oracle, Microsoft and other non-Chinese suitors.

Finally, systemic corruption is another overarching risk. Similar to other emerging economies, vested interests at various levels of government operate in an opaque system. Networks of relationships often drive business and political decision-making processes. Many companies, such as GlaxoSmithKline (GSK), have faced reputational damage and steep financial losses due to their corrupt business practices in China. The case of GSK reflects how systemic corruption is relevant to both Chinese and China-exposed international institutions. GSK, the British health care giant with a history in China dating back to Imperial times, was involved in extensive corruption in its China operations. Company representatives bribed hospital officials and health care providers to push the company’s drugs for unlicensed uses. It also paid hush money to a patient who had health complications after using a drug that was not approved for the condition for which he was taking it, and GSK also attempted to bribe Chinese regulators. Moreover, GSK’s China operations were linked to a series of shell firms accused of money laundering. As a result, GSK had to pay a then-record $489 million fine to China in 2014, and several managers were deported and/or given suspended jail sentences. In the wake of the scandal, GSK’s sales and reputation plummeted in China.

Calvert believes that understanding these risks is essential when investing in China. We also believe that one can find attractive investment opportunities where the risk/return profile is favorable, given the growth potential in the country. As a responsible investor, engagement with management as a shareowner can also be a tool to drive positive change, whether improving working conditions for employees, pushing for stronger environmental practices or advocating for a move toward global norms of corporate governance. We are already seeing the Shanghai and Shenzhen exchanges move toward greater disclosure requirements around ESG issues. While overall disclosure requirements are not yet to the stringency of US and Hong Kong exchanges, the trajectory is positive. Responsible investors have a role in advancing these company disclosures so all investors can have a clearer understanding of material risks. By avoiding any Chinese exposure altogether, one loses that seat at the table.


Article by John Streur, President and CEO for Calvert Research and Management; Hellen Mbugua, Vice President and ESG senior research analyst for Calvert Research and Management; and Jade Huang, Vice President and Portfolio Manager for Calvert Research and Management.
See their biographies below.

References to individual companies are provided solely for informational purposes only and are intended only to illustrate certain relevant environmental, social and governance factors. This information does not constitute an offer to sell or the solicitation to buy securities. The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Calvert does not guarantee the accuracy, adequacy or completeness of such information. Opinions and other information reflected in this material are subject to change continually without notice of any kind and may no longer be true after the date indicated or hereof.

As of August 31, 2020, Calvert portfolios hold the following companies within its integrated telecommunication services subindustry:
AT&T Inc.
BT Group plc
Cellnex Telecom S.A.
Chunghwa Telecom Co, Ltd
Deutsche Telekom AG
Elisa Oyj Class A
HKT Trust and HKT Ltd
Infrastrutture Wireless Italiane S.p.A.
KT Corporation
Nippon Telegraph and Telephone Corporation
Orange SA
Proximus SA de droit public
Royal KPN NV
Singapore Telecommunications Limited
Swisscom AG
Telecom Italia S.p.A
Telefonica Deutschland Holding AG
Telefonica SA
Telekom Austria AG
Telenor ASA
Telia Company AB
Telstra Corporation Limited
TELUS Corporation
TPG Telecom Limited
Tuas Ltd.
United Internet AG
Verizon Communications Inc.

As of August 31, 2020, Calvert portfolios hold the following companies within its pharmaceuticals subindustry:
Astellas Pharma Inc.
Axsome Therapeutics, Inc.
Bristol-Myers Squibb Company
Catalent Inc
Chemical Works of Gedeon Richter Plc
Chugai Pharmaceutical Co., Ltd.
Dechra Pharmaceuticals PLC
Eisai Co., Ltd.
Elanco Animal Health, Inc.
Eli Lilly and Company
GlaxoSmithKline plc
H. Lundbeck A/S
Hikma Pharmaceuticals Plc
Horizon Therapeutics Public Limited Company
Ipsen SA
Jazz Pharmaceuticals Plc
Kyowa Kirin Co., Ltd.
Merck & Co., Inc.
Merck KGaA
MyoKardia, Inc.
Nektar Therapeutics
Novartis AG
Novo Nordisk A/S Class B
ONO Pharmaceutical Co., Ltd.
Orion Oyj Class B
Otsuka Holdings Co., Ltd. Daiichi Sankyo Company, Limited
Perrigo Co. Plc
Pfizer Inc.
Reata Pharmaceuticals, Inc. Class A
Recordati Industria Chimica e Farmaceutica S.p.A.
Roche Holding AG
Royalty Pharma Plc Class A
Santen Pharmaceutical Co., Ltd.
Shionogi & Co., Ltd.
Sumitomo Dainippon Pharma Co. Ltd.
Taisho Pharmaceutical Holdings Co., Ltd.
Takeda Pharmaceutical Co. Ltd.
Vifor Pharma AG
Zoetis, Inc. Class A

Article Writers Biographies:

John Streur is president and chief executive officer for Calvert Research and Management, a wholly owned subsidiary of Eaton Vance Management specializing in responsible and sustainable investing across global capital markets. John is also president and a trustee of the Calvert Funds as well as a director of Calvert Impact Capital and member of its Risk Management Committee. He guided the creation of the Calvert Principles for Responsible Investment, the Calvert Research System and the Calvert Indices, and has placed focus on investment research and emphasis on environmental, social and governance (ESG) factors integrated with investment decisions. He joined Calvert Research and Management in 2016.

John began his career in the investment management industry in 1987. Before joining Calvert Research and Management, he was president and chief executive officer with Calvert Investments. He has managed socially responsible investments at the request of institutional clients, including public funds, religious institutions, and college and university endowments since 1991. Previously, he was president, director and principal of Portfolio 21, a boutique firm specializing in global environmental investing, and spent 20 years at AMG Funds (and its predecessors), a firm he co-founded and where he served as president, CEO and chair of the Investment Committee.

John is a Founding Member of the Investor Advisory Group of the Sustainability Accounting Standards Board and serves on Merck’s External Sustainability Advisory Council. John earned a B.S. from the University of Wisconsin, College of Agriculture and Life Sciences.

Hellen Mbugua is a vice president and ESG senior research analyst for Calvert Research and Management, a wholly owned subsidiary of Eaton Vance Management specializing in responsible and sustainable investing across global capital markets. She is responsible for environmental, social and governance (ESG) research in the apparel and retail industries. She joined Calvert Research and Management in 2018.

Hellen began her career in the investment management industry in 2009. She has worked with pension funds and asset managers in both public and private markets. Before joining Calvert Research and Management, she held senior investment positions at IFG Development Group and Adaris Capital Partners, both private equity firms focused on alternative assets. Prior to her work in private equity, Hellen was an associate director at Pacific Alternative Asset Management Company (PAAMCO), where she was an associate director covering multiple asset classes and participating in hedge fund co-investments. Prior to PAAMCO, she worked at State Street Corporation and Segal Consulting’s actuarial practice.

Hellen earned a B.S. from the University of California Santa Barbara and an MBA from the Tuck School of Business at Dartmouth College, where she was a Robert Toigo Fellow. She was born and raised in Kenya and speaks three languages.

Jade Huang is a vice president and portfolio manager for Calvert Research and Management, a wholly owned subsidiary of Eaton Vance Management specializing in responsible and sustainable investing across global capital markets. She is responsible for managing the suite of Calvert Responsible Indices, including the index construction processes, as well as developing new investment products at Calvert. She joined Calvert Research and Management in 2016.

Jade began her career in the investment management industry in 2005. Before joining Calvert Research and Management, she was a portfolio manager with Calvert Investments. Previously, she was an investment analyst at Microvest, an asset management firm specializing in impact investing, and led the certification department at Fair Trade USA. Jade earned a B.A. from the University of California, Berkeley and an M.A. in international finance and economics from Johns Hopkins University, School of Advanced International Studies (SAIS).

Energy & Climate, Featured Articles, Food & Farming, Impact Investing, Sustainable Business


Socially Responsible Investing: A Global Perspective

By Amy Domini, Domini Impact Investments

Amy Domini-Domini Impact Investments-GreenMoneyGlobally, socially responsible investing is flourishing. Almost as importantly, it means the same thing around the world. I begin with some recent quotes, which I noted over the past few weeks:

  • Datuk Muhamad Umar Swift, CEO of Bursa Malaysia, “As a frontline regulator and market operator, we want to provide an environment that encourages sustainable practices among our market participants.”
  • Shenzhen-based Ping An has developed an ESG ratings framework it says is “suited to China” that “builds on the ESG compliance disclosure requirements of the Hong Kong Stock Exchange (HKEX) and the Shanghai Stock Exchange, as well as international guidelines.”
  • Saudi Arabia’s stock exchange, TADAWUL aims to launch an ESG index by the beginning of 2021.
  • “I perceive a sense of urgency on mainstreaming sustainable finance,” said Marcos Ayerra, chairman of the Securities and Exchange Commission of Argentina
  • The New Zealand Government has announced bold new plans to prevent default providers of its ‘opt-in’ retirement provision, KiwiSavers, from investing in fossil fuels.

During a fairly recent visit to the Serengeti, I would visit the gift shops at the safari camps we stayed at and marvel at the tags: “made by a women’s cooperative that supports education for Maasai girls,” “fair trade chocolate for dignity” were among them. Younger readers may not realize that this is new. Until at least the 1980s, such items were sold to tourists as much less expensive than American counterparts. Selling for cheap and not selling for purpose was the messaging. The world has shifted. Significant numbers of consumers make purchase decisions by a desire to support. Would this have come about without socially responsible investors? Perhaps, but probably not. Years of advocacy raised awareness.

Beyond a purchase decision, the acceptance and even mandating of responsible investment practices has begun to harness and use financial asset management systems for good. By influencing these financial systems to consider the need for a healthy planet with healthy citizens, the responsible investment field has done what no single government (nor the United Nations) has been able to accomplish. The old model of profit-at-any-cost, including the planet, has a counterweight.

It was not an accident nor a natural outcome of the past. Cultural anthropologist Margaret Mead’s famous observation “Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has” is proving true through this concept we alternate between calling responsible and impact investing. Forty years ago there were a relatively few of us working to help the public to connect the dots. We wanted investors involved in the efforts others had begun to ensure the twin goals of universal human dignity and ecological sustainability. Tim Smith was then the Executive Director of Interfaith Center on Corporate Responsibility, motivating a global investor focus on South Africa, through the use of shareholder resolutions. Chuck Matthai was a veritable Johnny Appleseed of community development lending. Joan Bavaria had just launched the Valdez principals, which grew into a global environmental accounting movement. Joshua Mailman advocated for financing businesses that through their practices would achieve these goals. Each of these people did more than what they did. They shared strategy, respect and efforts. They built networks. There was no discussion of the best way. All ways were needed.

Early on activists focused on three approaches: 1. Set both ecological and human standards for what one would buy, 2. Engage with companies as an investor, and 3. Find ways to incubate and build grassroots economies that could alleviate poverty and bring more people into the mainstream.

After my book, Socially Responsible Investing, was translated into Japanese, Korean and Chinese, I travelled to financial centers in each of those countries and spoke out for this way of investing. In each location I followed the commitments early members of the then-named Social Investment Forum had made to each other. These standards included some simple ideas. One was that we would not play a game of which of our three core strategies was “better” since only when all three were used did we see the results we needed to see. Another was to remember the Southern hemisphere and to use it in examples and to support it in our work. A resolve not to use the word “black” to mean bad was agreed to. Recognition that a focus on the role of government was important to our work was acknowledged.

By agreeing to discuss the same issues in much the same way, a small group of committed individuals was able to appeal to investors from around the world and to make a relatively new and somewhat wobbly idea into the powerhouse it is today. Now we see that global impact investors practicing in a manner which is culturally appropriate but utilizing the three approaches is widespread and approaching seamless.

This all matters because we have a purpose. We are not advocating for our field because we think it might help you make better investment decisions, though it might. We are advocating for this approach because we believe that only an engaged investor class can prevent complete collapse of the fragile ecology of our planet, and provide universal dignity to all people. We recognize that global stock markets alone are as large as global GDP. We know that when you consider bond markets, currency markets, derivatives markets, and so on, the world of finance dwarfs the real world’s financial resources. We recognize that finance is sophisticated, interconnected, immediately reactive and limitlessly resourced. It is a magnificent tool for good or for evil. Building a vast investor class that places responsibility for the future squarely into every value proposition is our purpose. The trends in global SRI give us hope.


Article by Amy Domini, Founder and Chair of Domini Impact Investments.

She is widely recognized as the leading voice for socially responsible investing. In 2005, Time magazine named her to the Time 100 list of the world’s most influential people. In 2006, she was awarded an honorary Doctor of Business Administration degree from Northeastern University College of Law. Yale University’s Berkeley Divinity School presented Ms. Domini with an honorary doctorate in 2007. In 2008, Ms. Domini was named to Directorship magazine’s Directorship 100, the magazine’s listing of the most influential people on corporate governance and in the boardroom.

Ms. Domini is a past board member of the Church Pension Fund of the Episcopal Church in America; the National Association of Community Development Loan Funds, an organization whose members work to create funds for grassroots economic development loans; and the Interfaith Center on Corporate Responsibility, the major sponsor of shareholder actions.

Ms. Domini holds a B.A. in international and comparative studies from Boston University, and holds the Chartered Financial Analyst designation.

Energy & Climate, Featured Articles, Impact Investing, Sustainable Business

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