Tag: Food & Farming

Moving Beyond Child Labor-Faith Investors Must Pay Greater Attention to Market Decisions-by Julie Tanner-Christian Bros Investment Serv

Moving Beyond Child Labor: Faith Investors Must Pay Greater Attention to Impacts on Children from Our Market Decisions

By Julie Tanner, Christian Brothers Investment Services

Julie Tanner-CBIS(Above – Julie Tanner at the Vatican attending the Address of his Holiness Pope Francis during The Congress on Child Dignity in the Digital World that was held in November 2019.)

Faith investors have long engaged companies and governments on exploitative practices involving child labor. They have also weighed in on negative infant formula marketing, violent video games, and obesity impacts from junk food over the past four decades. In fact, faith investors are typically the first shareowners to flag negative business impacts on children.

However, children are increasingly affected by corporate practices extending far beyond labor and other traditional focus issues. It is critical for faith investors to take the lead in highlighting the full range of harms facing young people, and build broad coalitions to work with companies and governments to advance children’s rights.

At Christian Brothers Investment Services (CBIS), we have focused on protecting children from sexual exploitation online since 2016. Our work on this issue has revealed a larger problem: Too often, children are not considered in corporate dialogues on human rights, or the due diligence companies conduct before launching a product or service. We hope that by working together, investors can help change that dynamic.

When CBIS became the first investor to engage tech, social media, and telecom companies on child sexual exploitation four years ago, few businesses were discussing this growing threat. We drew inspiration from Pope Francis’ sense of urgency on the issue, and Catholic social doctrine that implores us “to engage in a battle… against the violations of the dignity of [children] caused by sexual exploitation.”

At the time, there wasn’t much research to make an investment case for change. We were driven by a moral conviction that Information and Communication Technology (ICT) companies needed to tackle the escalating spread of child sex abuse material online. When we surveyed our Catholic investors on 40 issues related to human dignity, economic justice and environmental stewardship, child sexual exploitation online emerged as a top concern.

In 2017, CBIS conducted interviews and learning sessions to a broad range of experts on preventing child exploitation. We also began working with child welfare advocates to refine our requests of ICT companies. In addition, CBIS performed due diligence on U.S. and international legal frameworks that compel or prevent companies from taking appropriate action. We discovered that U.S. law compels several types of ICT companies to report child sex abuse content when found, but not to actively seek it out. With that revelation, we knew we needed to raise awareness among fellow investors and build alliances to amass enough influence to convince companies to rethink their core strategies.

Today, CBIS is part of a growing coalition of investors pressuring them to do more to protect children online from sexual harm and broader exploitation. In collaboration with issue experts, we seek to convince ICT companies to improve their practices to more effectively identify, disrupt, and prevent child sexual grooming and abuse on the internet.

Our work focuses not only on eliminating certain activity, but addressing the fact that the entire ecosystem around internet technology is not “fit for purpose” to keep children safe. We now ask companies to assess child rights and risks across their enterprises to truly evaluate their impacts on their most vulnerable stakeholders. We have also raised the issue of “safety by design,” asking ICT companies to consider user and child safety at the start of the process of designing a new device, service, or app.

Beyond moral arguments, we now know there is a strong investment case for these engagements. ICT companies are now widely held components of many investor portfolios. However, without effective practices to protect children from sexual exploitation online, they face brand, reputational, and legal risks. Companies may also feel direct financial consequences in the form of advertiser boycotts. In fact, in addition to engaging the ICT sector, CBIS seeks to exert indirect influence by educating online advertisers to push for higher child safety standards when deciding where to spend their marketing dollars. CBIS has also encouraged data plan and device sellers to ask device makers to consider child protection during the design process.

Since beginning our work with ICT companies, CBIS has seen progress on multiple fronts:

  • Apple Corporation implemented a policy in 2017 of removing apps from its App Store, and reporting the companies to authorities, if they are found facilitating human trafficking or child sex abuse. In 2019, Apple revised its user policies to indicate it was pre-scanning user materials in the iCloud to identify child sex abuse imagery.
  • Facebook has launched a child sexual exploitation video detection tool. After plans for more widespread encryption drew concern from observers, Facebook launched a multi-year plan to detect grooming and child sex abuse through metadata analysis of user information and other tools.
  • Alphabet platform YouTube announced new restrictions on users’ abilities to post comments after family videos received unwanted attention from pedophiles. YouTube also removed hundreds of accounts over these incidents in 2019.
  • Verizon and AT&T agreed to conduct a child rights and risk impact assessment across their businesses in 2020. Both also recently launched internal Online Safety Committees, and now report to their boards on online safety and child exploitation issues.
  • Six of the companies CBIS has engaged have committed to reporting metrics around preventing child sexual exploitation online. All companies we have engaged thus far increased their involvement in initiatives such as child protection groups, abuse reporting hotlines, improved detection tools, and awareness-building campaigns.

In 2019, Pope Francis proclaimed that investors and asset managers must hold ICT companies accountable for eradicating child sex abuse activity from their platforms and products. Now more than ever, investors must galvanize to heed this call to action—and fulfill the the U.N. Sustainable Development Goals to drive down violence and exploitation facing children worldwide.

Together, we must demand better performance and disclosure from companies, identify leading practices, and help spur industrywide cooperation on child protection. With 800,000 children going online for the very first time every day, we are called upon to take responsibility for our investments in the ICT sector by calling for an internet that works for children.

 

Article by Julie B. Tanner, Managing Director – Catholic Responsible Investments SM, Christian Bros Investment Services

Ms. Tanner leads the development and implementation of CBIS’ Catholic Responsible Investments SM Program and oversees a team responsible for Catholic investment screening, engagement and proxy voting activities. In addition, she crafts substantive agreements and strategic initiatives with boards and senior management in order to positively influence corporations and their impact on society. She is a member of the governing board of the Interfaith Center on Corporate Responsibility (ICCR) and is a member representative of Partners For The Common Good, which provides critical financial products and services to low-income people and communities.

Prior to joining CBIS in 2002, Ms. Tanner spent ten years in the financial services industry, most recently with JPMorgan Chase, before moving to lead the Finance and Environment Program at National Wildlife Federation. Ms. Tanner holds a B.A. from Rutgers University, an M.B.A. from Pace University, and an M.S. from North Carolina State University.

 

The securities identified and described do not represent all of the securities purchased, sold or recommended for CUIT Funds, CBIS Global Funds and separate managed accounts. For a complete list of securities please contact CBIS. The reader should not assume that an investment in the securities identified was or will be profitable.

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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.

VERGE Food
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.

 

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World Tree USA Becomes Most Successful Female-Founded Company on Wefunder

World Tree USA Becomes the Most Successful Female Founded Company Ever on Wefunder

Started by Wendy Burton in 2015, World Tree USA, LLC recently surpassed $2M on the Equity Crowdfunding Platform. This marks the third most successful capital raise in Wefunder’s history and the highest amount raised by any female founder.

Above photo: World Tree founder Wendy Burton (on the left) inspecting a farm in Costa Rica with World Tree’s Program Manager in Costa Rica, Mariana Alfaro Stivalet.

 

Wefunder is a giant in the industry. It is the largest equity crowdfunding platform in the US, with nearly 42% of the current market according to Crowdfund Capital Advisors. In the 9 years since it was founded in 2011, Wefunder has helped hundreds of companies raise almost $170 million.

The majority of that money has gone to male-founded companies. Of the 330 most-funded companies on Wefunder, only 18% were female founded.

And then there is World Tree.

World Tree is an agroforestry company that is breaking all the norms. It offers accredited and non-accredited investors the opportunity to participate in a timber investment through its Eco-Tree Program; a investment that creates direct environmental benefits relating to forest conservation, carbon sequestration, and promoting healthy ecosystems. The Eco-Tree Program leverages the fast-growth rate of the non-invasive Empress (Paulownia) tree to maximize the economic and environmental benefits of agroforestry.

World Tree’s objective is to meet the growing global demand for timber in a sustainable way. The Empress (Paulownia) tree has been rated the fastest growing hardwood tree in the world, maturing in only 10 years to produce a timber that has the highest strength-to-weight ratio of any hardwood commercially grown. While growing, the tree sequesters unparalleled amounts of carbon, the main cause of climate change. One acre of Empress (Paulownia) trees can absorb up to 90 metric tons of carbon per year. That is four times as much carbon as the average American family of 4 produces in one year.

World Tree with Empress wood samples at Social Finance Forum
World Tree’s Chief Investment Officer, Angela Nauta (left) with samples of Empress (Paulownia) wood at The Social Finance Forum in Toronto with Rita Fromholt, Marketing and SDG Special Projects Coordinator (center), and Dr. Cathy Key, World Tree’s President and Chief Operations Officer (right).

“Our investors love to back companies that are tackling an important cause,” says Nick Tommarello, Founder & CEO of Wefunder. “There are not many issues more important to our generation than climate change, so I’m not surprised World Tree raised over $2 million on Wefunder. It’s a win-win where investors hope to earn a return while helping the planet.”

Dr. Cathy Key, President & Chief Operations Officer of World Tree had this to say about working with Wefunder, “We had previously worked with two crowdfunding platforms in Canada where 95% of our investors came from our own database. By tapping into Wefunder’s database of over 400,000 investors, we were able to expand our reach significantly. Now, 80% of our investors are new to us. On top of this, the passionate team at Wefunder introduced us to financial advisors who helped spread the word even further.”

“Wefunder has taken a stand for equality by supporting female and minority founded companies and has been instrumental in our phenomenal growth,” adds Dr. Cathy Key. “We look forward to being back on the platform in the New Year with our next offering.

Currently, World Tree is conducting a $10.5 million Regulation A+ securities offering; the “2020 Eco-Tree Program” in the United States with Sustainable Wealth Management Firm Vanderbilt Financial Group (Vanderbilt Securities) named as the placement agent. This gives accredited and non-accredited investors access to invest in the Eco-Tree Program.

 

WorldTree logoWorld Tree USA, LLC (“World Tree”) is an agroforestry company focused on promoting the environmental and economic benefits of the Empress (Paulownia) tree. Founded in 2015 by Wendy Burton, the World Tree management team includes foresters, agronomists and scientists with extensive experience with agroforestry and, over 30 years of experience working with the Empress (Paulownia) tree. World Tree grows 18 exclusive non-invasive varieties. World Tree is the largest grower of Empress (Paulownia) trees in North America, with 2,000 acres under management across Canada, Costa Rica, Guatemala, USA and Mexico. For more information: World Tree

Wefunder logoWefunder is the nation’s leading investment crowdfunding platform, with a mission to keep the American dream alive. Founded in 2011, Wefunder has helped hundreds of companies raise almost $170 million. Wefunder companies have gone on to raise over $2 billion in venture capital. Wefunder is a Public Benefit Corporation and B Corp, with a goal to help 20,000 founders get off the ground by 2029. For more information: Wefunder

VFG-Vanderbilt Financial Group logoVanderbilt Securities is part of Vanderbilt Financial Group, an investment firm disrupting traditional finance by focusing on socially and environmentally responsible, ethical, and impactful investments. Vanderbilt is known as “The Sustainable Wealth Management Firm” for their commitment to providing financial advisors and their clients with access to values-aligned investments. Headquartered in a LEED-certified Platinum building, Vanderbilt’s commitment to changing the world begins at home in our office and within our culture. Under the leadership of the impactful husband and wife team, Steve and Heidi Distante, Vanderbilt’s culture has garnered awards such as being named one of the Best Places to Work on Long Island for 2018 and 2019, the Future50 and Corporate Culture Awards from SmartCEO, as well as being recognized as one of the finest run companies by the Management Action Plan (M.A.P.) organization.

As a thought leader in the impact space, Vanderbilt Financial Group is dedicated to increasing the reach and impact of the financial services industry using the United Nations’ Sustainable Development Goals as a framework. Their education platform, Impact U, provides students, advisors and investors with unique opportunities to increase their impact investing knowledge through videos, podcasts and fun interactive exercises. Vanderbilt Founder & Chairman Steve Distante released the award-winning documentary film “Igniting Impact” that sheds light on how purposeful entrepreneurship and impactful investments can help improve the world’s greatest challenges. Interact with Impact U 

This is neither an offer to sell, nor a solicitation to buy, a security, which can be made only by the prospective investors if it is preceded or accompanied by the Offering Circular, which contains various and important risk disclosures. This material does not purport to be complete and should be read in conjunction with the Offering Circular.

https://www.sec.gov/Archives/edgar/data/1687316/000147793220005164/wtcu_253g2.htm

Vanderbilt Financial Group is the marketing name for Vanderbilt Securities, LLC and its affiliates. Securities offered through Vanderbilt Securities, LLC • Member: FINRA, SIPC • Registered with MSRB Advisory Services offered through Vanderbilt Advisory Services Vanderbilt’s Form CRS among other important information and disclosures: http://www.vanderbiltfg.com/disclosures

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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.

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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
NOS SGPS SA
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
Sanofi
Santen Pharmaceutical Co., Ltd.
Shionogi & Co., Ltd.
Sumitomo Dainippon Pharma Co. Ltd.
Taisho Pharmaceutical Holdings Co., Ltd.
Takeda Pharmaceutical Co. Ltd.
UCB S.A.
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).

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Sustainable Investing Firm Blue Marble Celebrates 20th Anniversary-GreenMoney

Sustainable Investing Firm Blue Marble Celebrates its 20th Anniversary

Industry-leading sustainable investment firm Blue Marble Investments celebrates its 20th anniversary with the launch of a new website and video highlighting the role of socially responsible investors in a time of pandemic and global social justice movements.

Interest in ESG (environmental, social, governance) investing has been growing worldwide and accelerated in 2020 in response to current social movements, economic uncertainties, and technology shifts driven by the pandemic. According to Morningstar, sustainable funds in the U.S. saw a record inflow of $21 billion in the first half of 2020, matching all of 2019 and four times the previous record for a calendar year. Worldwide, the assets in sustainable funds topped an astonishing $1 trillion as pandemic and social movements swept across the globe.

“For twenty years we’ve been on the leading edge of ESG focused investment advice. From clean energy to gender empowerment to self-driving cars, we’ve helped investors not only build diversified ESG portfolios, but also participate in some of the world’s fastest growing trends,” said Arturo Tabuenca, founder of Blue Marble Investments.

In 2006, Blue Marble Investments democratized sustainable investing with the launch of EarthFolio, the first online “robo” advisor to focus exclusively on ESG. In an industry where ESG investing expertise is rare, and fees and minimums often make advice inaccessible, EarthFolio became the first advisor to bridge the gap between affordable expert advice and a rapidly growing marketplace of ESG-focused funds and ETFs.

Drawing on its deep sustainable roots, Blue Marble Investment’s new website invites a new generation of investors ready to put their mark on today’s world. Unlike firms that offer ESG as an aside, Blue Marble’s new website offers a comprehensive look at the various elements of socially responsible investing and how investors can quickly and easily participate in this space. Examples include:

  • Fossil-free portfolios that replace oil, coal, and gas with clean energy alternatives.
  • Personalized impact themes in water, gender empowerment, clean energy, and transportation,
  • Turnkey portfolios highlighting the relationship between ESG and financial criteria.
  • A wide selection of retirement and non-retirement accounts available to investors.

The COVID-19 pandemic has put a spotlight on how social and environmental factors can positively impact investor returns, especially during periods of market and economic turmoil. This is increasingly evident as, according to Morningstar, all 26 sustainable index funds have outperformed their conventional peers in the first half of 2020.

 

About Blue Marble Investments

Blue Marble Investment’s is a Registered Investment Advisor in the state of California. Accounts are held by TD Ameritrade Institutional, a member of Securities Investor Protection Corporation. The name Blue Marble is inspired by the image of Earth as captured by Apollo 8 on NASA’s first manned mission to the moon. The iconic image is credited with launching the environmental movement, Earth Day, and the Environmental Protection Agency.

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

Water and Pandemics-Alina Donets-Allianz Global Investors

Water and Pandemics

By Alina Donets, Allianz Global Investors

The COVID-19 pandemic has brought much uncertainty to human lives and the global economy, questioning a wide range of established beliefs and predicaments. In this turmoil, the water theme has not remained immune, facing many ambiguities and difficulties but also potential opportunities to be explored.

Allianz Global Investors-logoWe first assessed whether COVID-19 can spread through the water and sewage systems. Thankfully, it cannot, due to the virus’ characteristics.

Once this key safety question was answered, other important considerations followed, including whether water utilities could ensure consistent water supply and sewage operations while the world remained closed for business. This had to be carried out despite the distancing measures and the health risks for the employees, as well as restricted supply chains.

Looking forward, the water industry now needs to consider the resilience of this essential service in the light of future risks, be it against pandemics or other unexpected but highly impactful emergencies. In addition, investors now must assess the short-, medium- and long-term implications of the pandemic on businesses. Understanding these impacts will help to identify attractive opportunities and future winners.

The ability of water investments to navigate these headwinds will determine their ability to recover from the recent market pullback, as well as their competitive positioning in the future. More importantly, this pandemic further empathizes the importance of water for the wellbeing of our societies.

COVID-19 and Water-borne Pathogens

While SARS-CoV-2, the virus that causes COVID-19, spreads through air-droplets, the WHO has confirmed that it has not been detected in water sources.1 Furthermore, the virus has been characterized as unstable, making it susceptible to traditional disinfectant chemicals such as chlorine, which is often used in the water treatment process. This strand is different from SARS-CoV, the virus that causes severe acute respiratory syndrome (SARS), which had a large outbreak in 2003. Back then, a sewage leak in Hong Kong caused human infection through the release of droplets containing the virus into the air. The WHO concluded that poor plumbing in Hong Kong led to the spread of the virus.2 Fast forward to 2020, it is fortunate that the COVID-19 virus cannot be spread through water.

Water Quality: Treatment Focus

Today, water treatment systems are generally effective in killing a wide range of known and unknown bacteria and viruses, including coronaviruses. The pathogens that fall under this umbrella encompass those of specific significance and proved risk of spread through water.

Most viruses and bacteria can be killed with a handful of common water treatment methods, such as several chemicals and/or UV light treatment. Usually, utilities would opt for a combination of both, as different bacteria can survive different sanitation measures. Despite the resilience of some virus families to common disinfection methods, these measures are generally deemed adequate to provide safe drinking water, creating no significant health hazards.

Ultimately, countries with better developed water infrastructure have better success preventing these types of outbreaks, as they have technology that kills most known water- and sewer-borne pathogens.

The developed world has worked to establish effective standards and treatment when it comes to water quality. For example, US regulation requires 99.99% of viruses to be removed from the water, utilizing several treatment technologies.

In emerging markets, which often have poor infrastructure, the situation can be quite different. This is not necessarily due to weaker standards of pathogen regulation, but due to lower sewage infrastructure penetration or poorly enforced standards. For example, only 50% of Brazil’s population is connected to a wastewater system.3 Globally, 25% of the population is exposed to contaminated or poorly treated water. Of that 25%, half is located in emerging markets.4 This insufficiently treated water is, in turn, responsible for 90% of worldwide deaths from diarrhea.5

Unsurprisingly, water quality and treatment solutions are among the top spending priorities for both water utilities and governments worldwide.

Water Supply: Resilience of Infrastructure

Water treatment is not the sole solution to create a safe supply of potable water. As the world remains isolated at home waiting for the virus to be contained, utilities are working around the clock to ensure seamless continuation of water supply while simultaneously ensuring the safety of their employees.

Now, more than ever, this is a testament to the global importance of water utilities. To be prepared for future pandemics, we must reassess our emergency preparedness plans as well as the resilience of our current infrastructure. This pandemic has prompted additional sanitation measures to ensure that unlike with the SARS epidemic, this virus will not be transmitted through water. Utilities have already started working on new water technology to ensure the adequate treatment and detection of any contaminant and the resiliency of this finite resource.

Greater Sanitation

There has been much innovation of late to reduce the spread of viruses. Recently, there was a proposal for pre-treating wastewater in highly susceptible and dense areas such as hospitals before it reenters the sewage system.6 This would eliminate a significant portion of contamination risk resulting from wastewater. It should also include increased sanitation services at highly contaminated sites with effective disinfection agents. Sanitation service companies have seen an increased demand for their services during the pandemic. They have helped numerous clients such as hospitals and other institutions ensure the safety of their staff and continuity of essential services.

Quality Monitoring

Another important aspect of water safety is quality monitoring. We have seen a growth in this field as water utilities and governments seek to identify contaminants before they significantly harm the source. It is clear that water testing needs to be scaled for greater precision and detection of microbial contents. Firms that specialize in water quality monitoring help this goal by ensuring comprehensive water testing while also helping to impose additional sanitation measures.

Automation

Lastly, water services and workers within the water infrastructure industry are essential. It is estimated that half of US water utility firms prepared adequately for the pandemic. Many of these companies worked to create on-site living quarters to ensure continuity of water to citizens without increasing the risk of workers infection.7 One leader within the industry is a water utility in the Midwest that kept several workers across three water treatment facilities living on-premise to ensure water supply to over half a million people.8

While most of the utilities worldwide managed to sustain their operations, relying on their dedicated workforce and some level of automation sufficient to run the infrastructure with minimal human contact, these systems are not yet fully optimized. Utilities have already started to plan for increased automation, including better distance management, invoicing and meter readings. A large European-based utility firm has discussed increased digitalization to target better wastewater management and water optimization. As a result, water technology firms have seen a growing demand for their IT solutions.

Outlook

COVID-19 has and will continue to cause significant hardship for the global economy. Water-related investments are not fully immune, as the financing of many essential infrastructure investments is now under increased scrutiny. What remains clear, however, is the number of incremental measures required at the water infrastructure level that will support continued targeted spending. Resilience of water infrastructure has never been more important, and the social value of water has never been this high. As a result of this pandemic, many utilities have gained firsthand experience testing their emergency preparedness and business continuity plans. There remain numerous opportunities for improvement and automation within this field, and a result, there will be an acceleration of spending on water-related technologies.

As the world starts to reopen and we evaluate the “new normal,” water technology and smart water solutions will become even more essential to ensure adequate clean water for all. The societal need for these investments remains, which will result in continued demand despite the uncertain economic future we face.

 

Article by Alina Donets, co-lead portfolio manager, and a vice president with Allianz Global Investors, which she joined in 2017. She co-manages the Water strategy; and is a member of the Global Thematic team where she researches and develops investment themes globally, with a specific focus on themes aligned to SDGs and other societal goals. Ms. Donets previously worked as a portfolio manager at Bank Audi. Before that, she worked as an investment manager on thematic funds at Pictet Asset Management. Ms. Donets has a B.Sc. with honors in business studies from Cass Business School (London), and an M.Sc. with honors in International business from HEC (France). She is a CFA charterholder.

Footnotes:

  1. https://www.aquatechtrade.com/news/article/coronavirus-and-water-wastewater-global-advice/
  2. https://www.who.int/mediacentre/news/releases/2003/pr70/en/
  3. https://static.btgpactual.com/media/brut170308-water-privatization.pdf
  4. https://www.who.int/topics/water/en/
  5. https://journals.plos.org/plospathogens/article?id=10.1371/journal.ppat.1004867
  6. https://www.sciencedaily.com/releases/2020/04/200403132347.htm
  7. https://www.epa.gov/newsreleases/epa-urges-states-support-drinking-water-and-wastewater-operations-during-covid-19
  8. https://www.iowapublicradio.org/post/utilities-aim-keep-specially-trained-employees-healthy-and-working#stream/0

Disclosures

Investing involves risk. Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.

The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.

This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations. This communication’s sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of his document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional/professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP (Australian Registered Body Number 160 464 200) is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws.

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

The Future of Water-Jill Jedlicka-Waterkeeper Alliance Warrior-GreenMoney

The Future of Water

By Mary Beth Postman, Waterkeeper Alliance

The Future of Water-Mary Beth Postman-Waterkeeper Alliance-GreenMoneyWater is the lifeblood of our economy and our communities as well as playing a pivotal role in our health and well-being. This has become more apparent than ever during the public health crisis brought about by the global COVID-19 pandemic. Access to clean and affordable water services is vital to ensuring public health and thriving communities. Modern treatment processes are intended to ensure all viruses, including COVID-19, stay out of the water supply. The challenges facing water systems during a time of crisis will affect communities differently — those already in the midst of ongoing economic, environmental, and public health challenges may be the hardest hit.

There is responsibility at every level of government—local, state, and federal—to ensure everyone has access to clean water. It is critical that the systems delivering this essential resource are strong enough to endure economic challenges in the short and long term, and meet the needs of all communities along the way. This is a crucial moment for the United States to invest in a future where everyone can count on reliable and safe water service — now and for generations to come.

COVID-19 has made it clear that there is no public health without clean water for all. If one person or community does not have clean water, the health and well-being of everyone else is at risk. Curbing COVID-19’s spread requires people to increase handwashing, personal hygiene, and cleaning standards. But for the more than two million Americans who lack running water, indoor plumbing, or wastewater services in their homes and communities, these seemingly simple measures are out of reach. Many of those without access to water infrastructure are members of BIPOC (Black, Indigenous, People of Color) communities, live in rural or tribal areas, or are part of high-risk groups for COVID-19, including the elderly, disabled, homebound, people with preexisting conditions, and the unhoused.

To weather this global pandemic, we need immediate and sustained intervention to protect the health and well-being of all communities. But we must also begin planning for an economic recovery that leaves our communities and economy stronger and more resilient. If water infrastructure fails, it creates a domino effect across the economy and threatens our environment and public health. One-fifth of the US economy — including the agriculture, healthcare, manufacturing, and electricity sectors — would grind to a halt without a reliable and clean supply of water. Yet, we have chronically underinvested in water for too long. As a result, a water main breaks every two minutes in the United States. The American Water Works Association estimates the country must spend at least $1.2 trillion over the next two decades on our drinking water and wastewater systems.

One of the smartest ways to jumpstart economic recovery is investing in our nation’s water and wastewater infrastructure. As noted by Jane Kenny and Mark Mauriello in their NJ Spotlight op-ed, “Closing the water infrastructure investment gap would create more than 1.5 million American jobs, more than the entire employed workforce in 20 states. It would generate over $260 billion in economic activity annually, which exceeds the gross domestic product generated by 28 states.” Major investment in water systems is a smart and sustainable way to bring our economy back and build up communities so they can all thrive.

Despite the importance of keeping our water resources clean during this time, the Environmental Protection Agency (EPA) has announced it is temporarily suspending enforcement action through the summer for many types of permit violations in light of the COVID-19 pandemic. This policy allows oil and gas companies, along with other polluting industries, total discretion to determine whether they will comply with monitoring and reporting requirements. EPA has not even required regulated entities to “catch up” with missed monitoring or reporting, so it will have no way of knowing whether its policy resulted in adverse impacts to imperiled species and their habitat or communities. EPA is essentially signaling that polluters shouldn’t worry too much about violations. This is dangerous to all communities — we should not be suspending the monitoring and reporting requirements for major pollution during the COVID-19 pandemic.

Hudson River, New York; Waterkeeper Alliance

The good news is that this new policy doesn’t change how or when citizens can act. If, for example, a polluter reads the policy and decides not to comply with its permit, citizens could still enforce the permit requirements through a citizen suit. The memo also does not affect states’ ability to enforce violations of their permits, even under EPA-delegated programs. New York and North Carolina, for instance, have each said they are not suspending enforcement but will take all facts and circumstances into account when making enforcement decisions, which is in keeping with usual practice. Waterkeepers and their partners across the United States are reaching out to state environmental agencies to ensure that states maintain current enforcement levels. Under the Clean Water Act, Waterkeepers have been working with states to ensure critical protections for clean water remain in place.

Access to clean water is essential at all times, but its importance is heightened during public health crises! The effects of EPA’s temporary measure may be felt for decades: Once polluted, our water, air, and land can take generations to heal. Now is the time to take action—please write to EPA Administrator Andrew Wheeler and say now is not the time for EPA to suspend enforcement. Our clean water resources depend on it.

 

Waterkeeper-Alliance-2019-Annual-ReportNote to Reader: This is GreenMoney’s second article from Waterkeeper Alliance – the first was by Robert F. Kennedy, Jr., A Bill of Rights for Clean Water

 

Article by Mary Beth Postman, who has fought and advocated for local communities around the globe to protect and preserve their quality of life. Mary Beth played a pivotal role in the formation of Waterkeeper Alliance and serves as Deputy Director and Secretary to the Board of Directors. Mary Beth provides organizational leadership and directs its development efforts and is responsible for carrying out overall growth and implementation of various strategic projects and programs.

Previously, Mary Beth was Chief of Staff to Robert F. Kennedy, Jr. where she oversaw and facilitated all operations for Mr. Kennedy’s environmental work to hold polluters accountable for Hudson Riverkeeper, Natural Resources Defense Council and Waterkeeper Alliance. In addition, she managed all of Mr. Kennedy’s speeches, media appearances and publications as well as his weekly radio show Ring of Fire. Mary Beth also served as Administrator of the Pace Environmental Litigation Clinic at Pace Law School where she worked with America’s brightest environmental law students year after year as they completed course work in an exceptional educational model. Mary Beth co-authored WATERSHED FOR $ALE: Explosive Development Threatens New York City’s Drinking Water Supply.

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

The Rise of Water Investing-by Justin Winter-Impax-GreenMoney

The Rise of Water Investing

By Justin Winter, Impax Asset Management

Justin Winter-Impax Asset Mgmt-The Rise of Water InvestingClean water and sanitation for all is the subject of the United Nations’ sixth sustainable development goal, and an increasingly relevant topic to both emerging markets and the developed world. The need for water infrastructure is great in the developing world, and in the developed world, ensuring access to clean water is an ever-present issue, as recent crises have illustrated. This brings opportunities for investors.

In recent years, the universe of investable water-related companies has increased, and many of these companies have seen accelerated growth. Climate change, pollution and a growing, increasingly urban population all drive demand that innovation and technology can help fulfill.

Governments, public bodies and private industry are all investing in new and upgraded infrastructure, and the investment momentum keeps gaining pace.

Access and Changing Preferences

Emerging market regions such as China, India and Sub-Sahara require the development of water infrastructure where it previously did not exist. This development has been driven in no small part by urbanization, growing populations and changing consumption patterns that demand higher standards of living.

Aging Infrastructure

A great deal of the infrastructure in the developed world is outdated, inefficient or struggling to meet modern water demands. This was exemplified by the crisis in Flint, Michigan, where cost cutting led to insufficient water treatment and lead leached into the water supply. The project to replace the lead pipes, which commenced in 2016, continues1 with costs running into hundreds of millions of dollars.

The Curse of Cotton

The falling cost of textiles and the explosion of fast fashion in recent years have created a ballooning — but largely overlooked — environmental impact. Producing textiles, especially cotton-heavy textiles, is water intensive. The European Union plans to focus on the textiles sector in 2020, and we expect the issue to rise in public consciousness.2

Water Usage Graph-by fibre type and production phase-Impax
Source: Ellen MacArthur Foundation, “A New Textiles Economy: Redesigning Fashion’s Future,” 2017

Climate Change

Climate change is impacting water security. In recent years, several severe droughts and water shortages have impacted farming yields and industrial productivity and have brought revenue losses for workers, such as the 2011–17 California and the 2014-2017 Brazil droughts. South Africa’s second largest city, Cape Town, with a population of circa four million people, suffered its own water crisis recently. Rainfall well below historical levels meant the city’s main reservoir was close to zero in March 2018. Cape Town residential water use was cut from around 120 litres (31 gallons) per person per day in 2015 to 50 litres (13 gallons) at the start of 2018. More recently, prolonged drought in Australia contributed to one of the deadliest bush fire seasons on record and unprecedented water shortages.3

For officials and residents in these regions, the long-term impact of climate change on water supply requires investment in a range of measures, including conservation and leak detection.

An Ocean of Opportunities

The investment opportunities in water are surprisingly diverse and resilient. Risk characteristics are comparable to equity markets and water runs through the global economy, across markets, sectors and regions. Water also provides attractive opportunities through the economic cycle, encompassing both defensive and cyclical businesses.

In our view, water-related investment opportunities fall into three major areas of focus: water infrastructure, water treatment and water utilities. We expect companies offering water efficiency solutions such as smart meters to increasingly penetrate not only the residential and municipal areas but also business and agriculture. We also anticipate that a whole range of industries, such as pharmaceuticals and semiconductors, will increasingly seek products to help them reduce the amount of water used in their operations. Thus, we expect the companies that provide such solutions to benefit.

Leakage is a problem in many existing and outdated water infrastructures, and as these systems are repaired and replaced, we expect companies that provide solutions in this area to gain traction, including those in metering, leak detection and software solutions.

Technology and innovation play key roles in reducing water consumption. Smart meters, for example, can help utilities manage the supporting infrastructure more efficiently, and provide an early warning sign of and location of leaks. Public entities and private industry globally are investing in upgrading their infrastructure and this investment momentum looks set to continue.

 

Article by Justin Winter, Portfolio Manager, Director, at Impax Asset Management, where he analyzes investment opportunities for the firm’s investment strategies. He is a member of the portfolio construction team for the Impax specialists and water strategies, and he is co-manager of a product that combines these strategies. Justin has specialist research experience in both renewable energy and water, having worked at New Energy Finance and as a consulting engineer specializing in water issues and environmental impact statements.

Footnotes:

[1] Nicole Trian, “Australia Prepares for ‘Day Zero’ – the Day the Water Runs Out,” France24, Sept. 19, 2019.

[2] Impax Asset Management, “Impax’s 2020 Vision: An Outlook for Investors in the Sustainable Economy,” Jan. 2020.

[3] City of Flint, Michigan, https://www.cityofflint.com/gettheleadout/

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

LA Cleantech Incubator 2019 event on Fed Carbon Pricing Policy with Kirsten James-CERES-GreenMoney

Investors Use Climate Playbook to Scale Action on Water

By Kirsten James, Ceres

Above: Los Angeles Cleantech Incubator (LACI) 2019 event on Federal Carbon Pricing Policy. Kirsten James of CERES, Professor Antonio Bento, Ph.D, Director of USC Center for Sustainability Solutions, and Fran Pavely, Former California State Senator.

Kirsten James-Ceres

Roughly half the industries in our economy face significant water risks.

That’s the startling insight we uncovered when we analyzed the sectors represented in the four main U.S. stock indices. These risks, including dwindling water sources, pollution, climate change and increasing competition, affect industries across the board, from agriculture to utilities, apparel to oil and gas.

And yet, most companies still consider their water risk a concern that is siloed in their strategic long-term planning or an anomaly that will right itself.

So, how do we break through this disconnect? How do we convince capital markets that today’s headlines like this one – ‘Megadrought’ emerging in the western US might be worse than any in 1,200 years – isn’t an exceptional event but a preview of widespread water scarcity and uncertainty if we don’t change the status quo?

At Ceres, we are aggressively applying to the water crisis a similar model that is helping capital markets recognize the urgent and material risk businesses face from climate change — mobilizing pivotal institutional investors to shift perceptions.

In March, in partnership with the Government of the Netherlands, we launched a new initiative to catalyze investor leadership around valuing water as a systemic material and financial risk. The ultimate goal: drive companies to act on water-related risks by coalescing the financial sector around a simple yet powerful “ask” of companies to protect water resources across their value chains. At the helm of our work, the Valuing Water Finance Task Force, made up of some of the world’s largest and most influential pension funds and banks, will help us to develop a set of expectations for companies to value water in their business practices.

Many of the founding members of the Task Force have been active in the Ceres Investor Network and Ceres Investor Water Hub, where they have helped to move companies to act on climate and water risks. The members include: California State Controller Betty T. Yee, California State Teachers Retirement System (CalSTRS), Illinois State Treasurer Michael W. Frerichs, New York City Comptroller Scott M. Stringer, New York State Comptroller Thomas P. DiNapoli and New York State Common Retirement Fund, Sweden’s Skandinaviska Enskilda Banken (SEB), Sweden’s Sjunde AP-fonden AP7, Australia’s Hesta Super Fund, AustralianSuper, Cathay Financial Holdings, Cathay Life Insurance, the Government Employees Pension Fund of South Africa, Local Authority Pension Fund Forum (LAPFF) and PGGM.

And this is just the beginning for us. We hope to broaden the “tent” of institutional investors, commercial banks, leading scientists and nonprofit organizations collaborating with us to advance this critical work on water.

We have already seen how powerful coordinated action from influential investors can be on addressing water risk. In May, 71 percent of independent shareholders of Pilgrim’s Pride Corporation – the second largest poultry processor in the U.S. – voted in favor of a shareholder proposal requesting that the company report to investors how it plans to reduce water pollution within its supply chain. In its fourth year of coming to a vote, this is the highest level of support this proposal has received, a clear signal that independent investors (Pilgrim’s is majority-owned by Brazilian meatpacking giant JBS SA) are dissatisfied with the company’s approach to managing water risks.

And since launching last year, a coalition of 90 investors targeting the climate and water risks at the six largest fast food companies has notched key advances. McDonald’s, Yum! Brands, and Chipotle Mexican Grill have publicly committed to setting science-based emissions reduction targets. McDonald’s has also undertaken a water risk assessment and committed to assess the resilience of its animal protein supply chain to various warming scenarios.

But even this coalition, which is organized by Ceres and the global investor network FAIRR, has grown 75 percent over the past year to represent $11.4 trillion in assets under management, recognizes that the fast food giants still have much more to do. In January, the coalition called on the fast food companies to step up their efforts.

The sheer scope of the water crisis means that the entire financial system has to get onboard—and act boldly to significantly reduce water impacts. Creating this shift will depend on bringing together a broad group of investors and companies that recognize the market, financial and reputational risks of water use and management and act to mitigate these risks.

But before we can develop sound corporate expectations on water, we need to conduct foundational research and analysis and build the tent.

First, we plan to drive home the scientific and financial case for corporate water leadership. Despite a vast amount of research and real world examples, most investors are simply unaware of how dramatically our current way of doing business is threatening the availability and viability of the water resources companies depend on.

Why? The research hasn’t been brought together in a way that summarizes — for a financial audience — the extent of these impacts, the industries involved and the business practices that are having the most severe impact on freshwater resources. To address this gap, we will tightly focus on building the case for investors by compiling both scientific and financial evidence. And we will communicate it in ways that enable capital market actors to justify why addressing water issues needs to be a priority.

Second, building on these scientific and financial insights, we’re going to harness the influential voices of financial sector leaders to put the spotlight on water risks and create momentum for others within the financial community to get involved. With our Task Force serving as the vanguard, we will build momentum around this growing initiative to value water. And to help investors and bankers understand the key systemic risks within portfolio companies and sectors, we’re creating a set of actionable steps that is a blueprint for engaging in ways that will help both companies and financial markets.

Business has the innovative ingenuity to redefine water use and management. But to get there, we need to redefine how our societies and economies think about water. We can no longer afford to think of it as an infinitely available commodity. Instead, we need to realize just how valuable it is.

 

Article by Kirsten James, director of Water at Ceres. Ceres is a sustainability nonprofit organization working with the most influential investors and companies to build leadership and drive solutions throughout the economy. Kirsten James directs Ceres’ strategy for mobilizing leading investors and companies to address the sustainability risks facing our freshwater and agriculture systems. Previously, Kirsten served for five years as the director of California policy and partnerships at Ceres, where she led strategy development for our California-focused policy work, engaging companies and investors in support of public policies that call for sustainable water management, clean energy and greenhouse gas emissions reductions in California. Kirsten has been a regular blogger in publications such as Water Deeply, providing commentary on water policy and corporate water stewardship. In her personal capacity, she serves as an executive board member on the Los Angeles League of Conservation Voters and a committee appointee for the Los Angeles County Safe, Clean Water Program. Prior to Ceres, Kirsten worked for nine years at the Santa Monica-based environmental group, Heal the Bay, as their Science and Policy Director. She graduated with a bachelor’s degree from Northwestern University and a master’s degree in environmental science and management from the Bren School at University of California Santa Barbara.

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