Tag: Impact Investing

Envisioning Transformational Change in Who Builds Wealth and How by Kelly ODonnell Homewise

Envisioning Transformational Change in Who Builds Wealth and How

By Kelly O’Donnell, Homewise

Kelly ODonnell Homewise(Above: Interior of the live/work units in El Camino Crossing, a mixed-use development in Santa Fe, New Mexico; Courtesy of Homewise)

What could the next 30 years bring? At Homewise we are working towards a future in which a growing and increasingly diverse spectrum of Americans have the opportunity to build intergenerational wealth and foster strong communities through homeownership. We believe that this work, if taken to scale and adequately resourced, could transform the distribution of wealth and opportunity in America within 30 years.

Homeownership is widely recognized as the primary mechanism by which Americans build wealth. It is also a powerful tool of neighborhood stabilization and community development; but homeownership is a tool to which only some Americans have access and from which some Americans benefit far more than others. Homeowners have higher net worth than renters, regardless of race; but White Americans are 50 percent more likely than Black or Hispanic Americans to own their homes.

White households also generate higher average returns from their housing investments than do African American and Hispanic households. This is due to differences in income and education as well as more insidious but equally pervasive factors such as racial segregation, predatory mortgage lending practices, devaluation of property in minority communities, and the heightened likelihood that families with few liquid assets have of experiencing foreclosure or other forms of distressed sale. White households are significantly less likely than households of color to be preyed upon by subprime lenders and/or lose their homes to foreclosure.

During the housing crisis of the previous decade, almost 8 percent of African American and Hispanic families lost their homes to foreclosure, compared to under 5 percent of White families, and while the ‘typical’ White family lost 16 percent of its assets during this time, the typical African American family lost over half its assets and the typical Hispanic family saw its wealth decline by two-thirds.

The uneven access and disproportionate risk non-White Americans confront in their efforts to become homeowners must be remedied if we are to fully harness the power of homeownership to reduce disparities and drive beneficial social change. Critical to these efforts are policies and programs that prepare people for homeownership and, once ready, provide them with resources, like down payment assistance, that enable them to purchase homes they can afford in neighborhoods of their choice. Cultivating successful homeowners also requires standing with them through financial setbacks and helping them to avoid foreclosure. Homewise does this work every day on behalf of ordinary New Mexicans, but delivering these comprehensive services at the scale needed to chart measurable progress at the national level requires a strong and well-resourced commitment in every state and at every level of government.

Peering 30 years down the road at a future in which the potential benefits of homeownership are fully realized for all Americans, we at Homewise see a country in which:

  • Americans embrace affordable homeownership as a commodity beneficial to all and, rather than organizing to prevent affordable housing from going up in their neighborhoods, coalesce around more inclusive community goals that preserve everyone’s property values such as walkable streets and safe schools.
  • Competition from responsible lenders for market share in communities of color deprives subprime mortgage lenders of access to their target demographic thereby decreasing the disproportionate financial risk many non-White households take on when becoming homeowners.
Live-Work El Camino Crossing-Homewise
Live/work building in El Camino Crossing, a mixed-use development in Santa Fe, New Mexico.
  • Sufficient capital to support the growth of homeownership, especially among low-income households and households of color, flows from diverse funding sources. Recognizing the sweeping economic and social benefits of affordable homeownership, new individual and institutional investors and funders join longstanding supporters in making long-term, low-cost capital available to community lenders and developers of affordable homes. This vision stands in stark contrast to the current reality in which raising adequate capital remains an ongoing struggle for developers of affordable housing. Homewise obtains capital from numerous sources, some traditional and others, like the Homewise Community Investment Fund, both innovative and homegrown. The Community Investment Fund provides a diversified source of capital to support mortgage lending and successful homeownership in New Mexico as well as an opportunity for individual investors to generate quantifiable community benefits with their investment portfolio. Investments in the fund are pooled and used to finance fixed-rate mortgages for low- and moderate-income households, energy and water conserving home improvement loans and the development of affordable homes.
  • Systematic under-investment in communities of color is displaced by well-resourced community development efforts that are driven by the needs and priorities of community members and increase the community’s capacity for sustainable economic growth. Here again, Homewise has undertaken, on a modest scale, the sort of efforts needed nationwide. The Community Development team at Homewise learns all it can about the communities in which Homewise works through surveys and direct outreach to residents and local businesses. This information drives the development of strategies that strengthen neighborhoods in ways that are responsive to specific community priorities, strengths and challenges. For example in Santa Fe, an extremely tight housing market with a dearth of workforce housing, Homewise builds new mixed-use developments to increase homeownership while simultaneously fostering proximity, walkability and neighborhood vibrancy. In Albuquerque, where the need for starter homes is less acute, but decades of sprawl development has decimated portions of the urban core, Homewise buys and restores empty residential and commercial buildings and then helps community members and local businesses back into them, so that locals are not displaced by rising property values. These redevelopment efforts preserve neighborhoods while also catalyzing new investment in communities that have experienced decades of disinvestment.
  • The role of affordable homeownership in addressing broader social issues such as climate change, community health, and education is recognized and leveraged. Homeownership practitioners play a central role in the development of housing policy, but also in crafting policy solutions to broader issues that intersect with affordable housing, such as urban sprawl, chronic disease, and equitable access to high-quality public education. Through these intersections, strong partnerships and collaborations are forged between homeownership advocates and environmental advocates, neighborhood associations, community groups, employers, educators, economic developers, and numerous other traditional and non-traditional allies.
Residential Home in El Camino Crossing-Homewise
Residence in El Camino Crossing, a mixed-use development in Santa Fe, New Mexico.
  • Homeownership initiatives are adequately resourced and regarded as viable alternatives to subsidized rental housing rather than overly complex niche programs from which relatively few are permitted to benefit. Homeownership with a conventional 30-year fixed mortgage is more stable and often costs less than renting and is the only truly sustainable form of affordable housing. One-time down payment assistance paired with financial education and coaching can provide a permanent solution to a family’s housing problems without any additional costs to the public sector. As an investment, this compares quite favorably to the cost of paying the same family’s rent every month for years. It is our hope that 30 years from now, US housing policy reflects this fact.
  • US anti-poverty policy recognizes and rewards the willingness and ability of low-income households to invest wisely in their financial futures and, in so doing, embraces truly sustainable, affordable homeownership solutions.

The next 30 years could see the emergence of a more equitable and prosperous America – one in which our housing and lending systems are purged of systemic inequities and the cycle of poverty is broken. Making this vision a reality will require hard work, thoughtful policy, and sustained public investments in the programs and processes that make homeownership more accessible and beneficial to the broadest possible spectrum of Americans.

 

Article by Kelly O’Donnell, who joined Homewise in 2021 as the Director of Homewisdom. Prior to Homewise, O’Donnell was a research faculty member at the University of New Mexico and a private economic and public finance consultant for governments and nonprofits in New Mexico and nationwide. Prior to that, she held a series of senior leadership roles in New Mexico state government including Director of Tax Policy, Deputy Cabinet Secretary for Economic Development and Superintendent of the New Mexico Regulation and Licensing Department and served as research director for New Mexico Voices for Children. She holds a PhD in Economics from the University of New Mexico.

Featured Articles, Impact Investing, Sustainable Business

Market Infrastructure Built Over the Past Three Decades Will Help Fuel the Next 30 Years by John Streur Calvert

Market Infrastructure Built Over the Past Three Decades Will Help Fuel the Next 30 Years

By John Streur, Calvert Research and Management

John Streur Calvert(Above: Getty Images, Courtesy of Calvert)

As we look forward to the next 30 years, we believe that capital markets are on the precipice of an increase in the impact of corporate environmental, social and governance (ESG) performance on security prices. We expect a corresponding acceleration of capital deployed to solve the environmental challenges we face today, such as excessive greenhouse gas (GHG) emissions and plastic pollution. We also expect substantial improvement in corporate diversity, equity and inclusion performance. At this moment, with war in Ukraine, the pandemic still raging globally and inflation hurting the poor the hardest, it may seem hard to accept an optimistic outlook for the future. However, with independent innovators like GreenMoney and Calvert laying the groundwork for the past few decades, we are now seeing the infrastructure that responsible investors like us have built having a real impact on transparency and capital flows.

GreenMoney has been and is a critical part of that market infrastructure, providing information about responsible investing, advocating for positive change, connecting investors and working to drive real-world improvement for all people. Over the entire 30 years of innovation and leadership by GreenMoney, Calvert has been there too, proudly.

Congratulations on the impact GreenMoney has had, and thank you for letting Calvert be part of it as we acknowledge our own anniversary of Calvert’s first socially responsible strategy 40 years ago this year.

Let’s take a look at the market infrastructure that has been built during this period to better understand our view of the future. As long-term responsible investors, we are interested in understanding the externalities a company creates in the course of its business. However, because externalities are generally negative impacts that a company has on the environment or on people directly, and that the company often hopes to avoid having to pay for or be penalized for, they are not eager to disclose information about the specific details of these externalities. Carbon emissions, human rights violations, pollution, weak performance on diversity and unsafe products are among the innumerable other adverse impacts companies have and for which they would prefer not to be held responsible. The market infrastructure necessary to create transparency into these issues, with sufficient detail to be able to use the information in investment decisions by every single investor, is what has been built or is in the final stages of development.

Markets are in the final stage of development of a regulatory framework across markets in the U.S., EU and U.K. that will increase the amount and quality of information about externalities related to carbon and methane emissions. This is on top of various requirements already in force in many major Asian nations, including China, mandating listed company disclosure of GHG emissions. In many markets, new or proposed regulations will require companies to provide additional human capital management and diversity information. Government regulations that require companies to disclose their performance on material environmental factors related to climate change will allow investors to better quantify and price these externalities, which is the market mechanism that sends signals to innovators and entrepreneurs about opportunities to develop new products and strategies that solve the problems caused by the corporate externality.

It is the transparency that these regulations call for that will help to accelerate the changes we need to solve the environmental and social challenges of today. Governments are also attempting to create market signals to speed capital deployment to solve climate and environmental problems. For instance, the United States is in the process of passing its very first climate legislation, which uses incentives to spur investment into renewable energy. California recently passed legislation that requires plastics to be recyclable and that also charges companies that use large amounts of plastic packaging a fee, which will be used to offset costs the state incurs in cleaning up plastic waste.

After decades of work, we now see a coordinated effort to strengthen market function through greater transparency, investors are increasingly using this information in the security price discovery process and government action to incentivize investment into solutions. We have already seen the development of new industries (renewable energy, electric vehicles) and companies, prior to this infrastructure and government action. We now expect to see an increase in capital formation and a real acceleration in real-world solutions.

Calvert Research & Mgmt
Image courtesy of Calvert Research and Management

For different reasons, but through similar mechanisms of information flow and transparency, we also expect acceleration in the improvements in diversity, equity and inclusion at corporations. The percentage of the highly skilled labor force made up of women and minorities is increasing worldwide. Companies are lagging in their ability to attract and retain women and minorities in their own employee ranks, and this is a material missed opportunity that companies are attempting to address. As we gain greater transparency into the demographics of individual companies, we find that virtually all companies know and want to improve, but struggle to do so. As more investors understand the opportunities that come along with better performance for all employees, shareholders are taking action to encourage companies to improve board and C-suite diversity. Companies are responding, and positive change is happening.

One question we often get about the future of ESG investing is, “If everyone uses ESG information, will there be any difference between mainstream and socially responsible investing?’’ The differences are very likely to be the same differences we see between mainstream investors and responsible investors today. There have always been independent thinkers and actors, innovators and change agents, and there has always been a mainstream herd following. Yes, almost all investors will consider ESG information in investment decisions, and this will make a difference to real-world outcomes. However, clients have always understood intentionality. There are those driving for positive change versus those clinging to status quo and protecting entrenched interests and power. That won’t change, and that is why we need another 30 years from GreenMoney and Calvert!

We also believe that there will be a wave of new, independent, innovative investment firms and financial technology firms focused on ESG investing and positive change that will compete successfully with the mainstream investment industry. The changes we discuss above regarding transparency, information flow and government action and significant forces will signal innovators to start companies to solve climate and social challenges in the “real’’ world, and also spur new company formation in our own industry.

We are already seeing this happen, and many new entrants are doing excellent work and pushing the mainstream in the process. Institutional investors and retail investors indicate that they plan to invest more heavily into responsible and ESG strategies. There are new firms being created today that are doing what GreenMoney and Calvert set about to do 30 or 40 years ago. As this market expands, we are seeing waves of product innovation in our industry already, and we are really just getting started.

Along with new firms, new products, much greater transparency and positive government initiative will come increasing competition and professionalization of the responsible investing approach. One area we are confident will become central to the approach is the identification, quantification, analysis and, ultimately, market pricing of externalities. Expertise in this specific area is likely to be a critical differentiator between the firms that come to be the leaders of the next 30 years and the pack.

We have a very positive view of the future because the groundwork and infrastructure built will cause existing positive trends to accelerate. Yes, this is an uncertain time due to war, inflation, and a pandemic on top of climate change and inequality. However, for long-term, multi-decade players, the trends emerging today in responsible investing and better real-world outcomes are impossible to ignore. It seems like it took far too long to get to this point. But we are there, and the next 30 years will be very different.

 

Article by John Streur, president and chief executive officer for Calvert Research and Management. John is also president and a trustee of the Calvert Funds as well as a board director of Calvert Impact Capital and chair of its Audit and Finance 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 for the Sustainable Accounting Standards Board (SASB), a group of leading asset owners and asset managers committed to improving the quality and comparability of sustainability-related disclosure by corporations for use by investors.

Disclosures

Risk Considerations Investing involves risk including the risk of loss. There is no guarantee that any investment strategy, including those with an ESG focus, will work under all market conditions. Investors should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

The views and opinions are those of the author as of the date of publication and are subject to change at any time due to market or economic conditions and may not necessarily come to pass. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) and its subsidiaries and affiliates (collectively the Firm”), and may not be reflected in all the strategies and products that the Firm offers.

This material is a general communication, which is not impartial, is for informational and educational purposes only, not a recommendation to purchase or sell specific securities, or to adopt any particular investment strategy. Information does not address financial objectives, situation or specific needs of individual investors.

Calvert Research and Management is part of Morgan Stanley Investment Management, the asset management division of Morgan Stanley.

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

GMs vision for a more sustainable and equitable future by Kristen Siemen

The Next 30 Years: GM’s Vision for a More Sustainable and Equitable Future

By Kristen Siemen, General Motors

 

 

Kristen Siemen GM - GreenMoneyOver two years ago, businesses were forced to adapt to the extraordinary circumstances caused by the COVID-19 pandemic. The world experienced disruptions on a massive scale, which pushed companies like General Motors to find new and more tactical ways of doing business.

For GM, the pandemic became an opportunity for even more company-wide innovation. With the development and launch of electric vehicles like the Bolt EUV, the Cadillac LYRIQ and the GMC Hummer EV Pickup, we showed ourselves and the world just how agile and creative we could be, even during a difficult and challenging time for everyone across the globe.

Today, we’re using what we’ve learned during these unprecedented times to propel forward our vision of an all-electric, more sustainable and more inclusive future.

Here’s what we see happening in the next 30 years.

Putting Everyone in an EV

We know climate change is an urgent priority, and we know EVs can be a critical part of the solution. It will take millions of new EVs hitting the road every year to reach the zero-emissions future we’re striving for.

Understanding that our customers want and need options, GM is addressing multiple aspects of what it takes to help put everyone in an EV, and we envision a future in which EVs fit a wide range of lifestyles and price points. We are rapidly building out our own batteries, software, manufacturing, and customer experience to make that a reality while also laying the critical foundations for customer education and charging infrastructure.

GM’s versatile Ultium platform provides the building blocks for everything, from mass market to high performance vehicles – all from a single, common cell in most markets and a set of interchangeable propulsion components. © 2020 Steve Fecht and General Motors

A key part of GM’s strategy is our Ultium EV Platform, a combined EV architecture and propulsion system, from which GM will quickly be able to scale a full lineup of ground-up EVs. Instead of designing a new battery system for each new EV, GM is using its Ultium Platform for many of its future EVs — from high-volume crossovers like the recently revealed 2024 Chevy Equinox EV at an estimated MSRP around $30,0001, to the 2024 Chevy Silverado EV pickup truck, Cadillac LYRIQ and the GMC Hummer EV Pickup. Ultium affords GM’s EVs competitive range and performance, sporty driving and will help expedite the company’s transition to an all-electric future.

GM has announced significant battery capacity expansion at four battery cell manufacturing plants and already has binding agreements securing many battery raw materials and precursors to support our goal of one million units of EV capacity in North America annually by 2025. We plan to invest $35 billion in electric and autonomous vehicles through 2025 and convert 50 percent of our manufacturing footprint to EV production by 2030.

GM 2024 Equinox Interior
General Motors Chair and CEO Mary Barra confirmed during her 2022 CES keynote address that Chevrolet will launch the Chevrolet Equinox EV in the 2024 model year. © 2020 Steve Fecht and General Motors

Because we can’t help everybody have access to an EV if we don’t ensure everybody has access to EV chargers, we’re building out charging infrastructure and creating a convenient charging experience with Ultium Charge 360. Ultium Charge 360, which gives customers access to more than 100,000 charging stalls in the U.S. and Canada through agreements with 11 different operators, GM vehicle mobile apps and other products and services, will make charging your EV at least as easy as filling up a tank of gas, if not even simpler.

Autonomizing Transportation

Imagine a world with no car crashes and no traffic, where you’re free to get around no matter your age, your stage of life or your physical capabilities. Self-driving vehicles offer promising potential to contribute to this future and support all three pillars of GM’s zero crashes, zero emissions and zero congestion vision.

GM is investing in Cruise, which became the first company to offer a fully driverless commercial ride-hailing service to the public in a major U.S. city. This first-of-its-kind service in San Francisco is provided in the fully autonomous Cruise AV, which is a zero-emission vehicle based on the Chevy Bolt EV. The Cruise AV has already logged over a quarter of a million driverless miles and thousands of driverless rides in San Francisco an effort to make the dream of self-driving a reality. The next step in GM and Cruise’s self-driving journey is the Cruise Origin, a purpose-built, zero-emission, shared autonomous vehicle designed to operate without a human driver. The Cruise Origin represents the pinnacle of GM’s leadership in automation, electrification and mobility.

Cruise AV, ©Bax+Towner

Cruise’s AVs represent a significant step in the journey towards achieving a zero-emissions future, in addition to offering accessible mobility options for seniors, people who are blind or have low vision and other communities that have traditionally faced barriers to accessing reliable transportation. Self-driving vehicles like these that remove the human driver aim to significantly reduce or eliminate the risks associated with human driver error, with the goal of reducing the number of injuries and fatalities on our roadways. GM and Cruise are working hard to deploy autonomous vehicles at scale to help create a safe, less-congested future for all.

HD Cruise Origin, ©Vasyl, stock.adobe.com

Electrifying Everything

Our vision of an all-electric future encompasses so much more than just personal electric vehicles; it even extends beyond the transportation industry. One of the things we are most excited about for the future is that we want to broaden the application of our technology to electrify everything: planes, trains, semi-trucks, boats, and more.

Through our hydrogen fuel cell technology, which is a great compliment to our Ultium batteries, we want to help other industries meet their clean energy targets.

We’ll aim to get there by leveraging both our Ultium Platform and our HYDROTEC fuel cell power cube.

Ultium’s capacity to power many types of vehicles is already being proven with BrightDrop, a connected ecosystem of electrified delivery products and fleet management services helping make last-mile deliveries smarter, safer and more efficient. HYDROTEC fuel cell generators could ultimately replace diesel-burning generators with fewer emissions at worksites, buildings, movie sets, data centers, outdoor concerts and festivals. They could also back up or temporarily replace grid-sourced electricity for residential and small commercial enterprises at times of power disruption.

Innovation in how we use these platforms will help extend the zero-emissions mission across land, air and sea.

Cadillac LYRIQ pairs next-generation battery technology with a bold design statement which introduces a new face, proportion and presence for the brand’s new generation of EVs. © 2020 Steve Fecht and General Motors

Prioritizing an Equitable, All-Electric Future

We recognize that no two communities experience climate change in the same way and that some are more vulnerable to climate impacts or lack the resources to fully participate in and benefit from the transition to a more sustainable future. As the effects of climate change take hold across the globe, it has never been more urgent to ensure our sustainability solutions are guided by inclusion and equity.

We envision an all-electric transition that includes our current and future workforce, customers and communities that may be more likely to experience the impact of climate change disproportionately. At GM, that means prioritizing Equitable Climate Action.

GM’s Equitable Climate Action initiative is rooted in four key areas:

  • The Future of Work – This includes our current workforce and the pipeline of future talent. We will help our current workforce transition to an all-electric future, and we will help support the future workforce as the market shifts to more clean energy jobs through education, training and investments in STEM.
  • EV Access – We want to put everyone into EVs, so we’ll offer a wide selection of EVs across a range of price points. GM was the first company to introduce an affordable, high mileage EV with the Chevrolet Bolt EV in 2017, and that vehicle is now more affordable than ever. We believe this will increase EV accessibility and adoption so more consumers can enjoy the benefits of affordable EV ownership.
  • Infrastructure Equity – We want to see ubiquitous charging solutions that can help meet customer needs wherever they are. We must address concerns about charging deserts and other scenarios that can hinder EV ownership and are working with our dealers and 3rd parties to accomplish this.
  • Climate Equity – We are committed to helping fund organizations that are closing the climate equity gap at the community level and across these four key areas. Through our $50 million Climate Equity Fund, to date we’re working with a total of 39 grantees to accelerate the transition to an inclusive zero-emissions mobility future.
Cadillac Lyriq-GM
Cadillac LYRIQ pairs next-generation battery technology with a bold design statement which introduces a new face, proportion and presence for the brand’s new generation of EVs. © 2020 Steve Fecht and General Motors

It’s no secret — GM is driving towards an all-electric, more sustainable future and moving faster than ever. We’re committed to driving the industry forward with a range of EVs in several sizes and styles that meet customers where they are on price, while prioritizing sustainable solutions, diversity, equity and inclusion as we transition.

Our sights are set on continuing to excite and inspire everyone about the road ahead and we know that our culture, strong values, robust strategies and proven execution will allow us to accelerate towards the promise of a more equitable, all-electric future, together.

 

Article by Kristen Siemen  Appointed to Chief Sustainability Officer in February 2021, Kristen Siemen helps to lead General Motors to a future with zero emissions as the company continues to take bold actions against climate change, including GM’s commitment to become carbon neutral in its products and operations by 2040. Under Siemen’s leadership, GM has received numerous recognitions including JUST Capital’s MOST JUST Companies, the Dow Jones Sustainability Indices Gold Class for corporate sustainability leadership, and Ethisphere’s World’s Most Ethical Companies for demonstrating exceptional leadership and commitment to business integrity.

Siemen is also passionate about promoting inclusion and gender equality. She was instrumental in creating GM’s career reentry program, “Take 2,” serves as GM’s key executive for the Society of Women Engineers and is the co-lead for the GM Women Ally Program. Since transitioning into her role as CSO, Siemen has garnered several individual recognitions for exemplary leadership, most notably including Crain’s Notable Leaders in Sustainability, Future 50 Tech, and Sustainability Mag’s Top 100 Women in Sustainability. Siemen serves on the Oakland University School of Engineering & Computer Science Advisory Board, where she received both her bachelor’s and master’s degrees in Electrical Engineering.

Footnote:
[1] MSRP excludes DFC, tax, title, license, dealer fees and optional equipment and is subject to change.

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

Jesse Jackson Tim Smith Donna Katzin demonstrating against Citibank's apartheid govt lending-GreenMoney

Reflecting on the ESG Industry’s Strong Foundation and Bright Future

By Tim Smith, Boston Trust Walden

Tim Smith Boston Trust Walden--Reflecting on the ESG Industrys Strong Foundation(Above:  Jesse Jackson, Tim Smith and Donna Katzin at a demonstration in the 1980’s calling on Citibank to end lending to the apartheid government in front of the bank’s headquarters in NYC.)

In light of my forthcoming retirement in December 2022, I am especially pleased to be included in this 30th anniversary issue of GreenMoney. It has been a tremendous privilege to be embedded in the evolution of ESG Investing for 50 years, first at ICCR and then at Boston Trust Walden.

This is an occasion to look ahead at the ESG industry’s future. But that is best done by reflecting on the foundation laid by investors over the last plus 50 years. In 1971, the Episcopal Church filed the first shareholder resolution calling on General Motors to leave South Africa because of its racist system of apartheid, a historic moment. That resolution ushered in a new era of shareowner engagement, including two decades of work on South Africa. Global economic pressure from investors and governments played an important catalytic role in making the apartheid regime negotiate, leading to a peaceful transition to power sharing and the election of Nelson Mandela as President.

Also, the ESG industry’s history is marked by major long-term campaigns, like the infant formula campaign leading to a global code of conduct, saving the lives of hundreds of thousands of infants. And early work on issues of diversity, human rights, climate, and the environment – both in direct operations and throughout global supply chains – were essential stepping stones for future work.

Building on that past, let’s look at some encouraging signs that promise a bright future for the industry’s ESG work. At the same time, let’s also look pragmatically at the challenges for the next quarter century. Obviously, this is a best guess on my part, but that is the nature of crystal ball gazing, isn’t it?

Clearly there has been an explosion of interest and involvement in ESG or Sustainable and Responsible Impact Investing (SRI), especially in the last two decades. For example, US SIF’s 2020 Report on US Sustainable and Impact Investing Trends points to a total of over $17 Trillion in US AUM in ESG, an increase of 42% since 2018. And the Principles for Responsible Investing has 3750 global investor members with over $110 Trillion of AUM (depending on market swings, of course). These asset managers and asset owners pledge to integrate ESG into their investment practices believing these issues have a distinct impact on the bottom line. Many also commit to active ownership, urging transparency from the companies in which they invest. Of course, we could all debate the actual figures and how legitimate these ESG practices are, but it is undeniable that ESG investing is expanding in the marketplace. This “genie is not going back in the bottle.”

Simultaneously, the growth of sustainability within the business community has increasingly been accompanied by specific measurable goals and objectives. Certainly, many companies embrace the belief that sustainability protects and advances shareholder value. Such statements are a concrete and welcome validation of the ESG work of investors. A considerable majority of large global corporations now produce sustainability reports to publicize their commitments and progress. I could go on for pages regarding specific decisions and changes by corporations in response to shareholder engagement on issues spanning climate change, board and workforce diversity, governance reforms, consumer protection, etc. (www.iccr.org and www.ceres.org have extensive catalogs of shareowner impact over the years). I believe such reporting and transparency is going to expand in depth and breadth going forward.

Another significant change is the influence and power of proxy voting on ESG issues by asset owners and managers. There has been a huge shift in recent years on votes in support of shareholder proposals (35 resolutions received majority votes in both 2021 and 2022, as well as scores of votes in the 35%-49% range) demonstrating broad investor support on specific issues like racial justice, climate change, plastic pollution, and board diversity. These voting changes are described in updated proxy voting policies, or Stewardship Reports, and of course in NPX reports displaying every vote. And this voting power is held by some of the largest asset managers in the world, such as State Street Global Advisors, BlackRock, T. Rowe Price, and Vanguard. While it is hard to imagine these firms filing resolutions, their engagements with companies in support of ESG issues sends a powerful message that is hard for a business to ignore.

In addition, even though the final vote has not yet occurred, the dramatic Securities and Exchange Commission’s (SEC) proposed rule calling for specific corporate climate disclosures signals federal government support for a new and necessary level of ESG disclosure by companies, further affirming the importance of investors’ work seeking improved disclosure.

Larry Fink, BlackRock’s CEO, has said, “the tectonic shift towards sustainable investing is still accelerating.” I agree the future is bright for ESG investing. And we are likely to see more investment managers be prodded and held accountable by their clients to embrace continuous improvement in ESG practices. Many large asset owners now hold their investment managers accountable on ESG. This accountability is also likely to grow because when the “markets speak,” managers listen.

But despite such promise, I fear the next quarter century is not likely to be smooth sailing. What I refer to as “the old opposition” is attempting to rebrand and attack ESG to reverse the tides. Former Vice President Mike Pence has described ESG as a “new trend of woke capitalism” and the enemy of the free enterprise system.

Such attacks have grown in 2022 as ideological opponents argue that ESG is a violation of fiduciary duty and will result in poorer portfolio performance. For example, the state of Texas recently passed legislation threatening to end business relations with investment firms that “boycott fossil fuel companies.” Such threats can certainly impede ESG expansion and sadly may well become part of the political polarization growing in the U.S.

Finally, I expect the future, as in the past, will include investors with a range of ESG motives and mandates. Pension funds may emphasize that ESG incorporation is a prudent move that protects long-term shareowner value. Foundations may stress alignment with their missions. Some individuals may strive to ensure their investments are consistent with their values, while others may seek tangible environmental and social impact from their investments. The Sustainable Investing umbrella can certainly comfortably include investors led by different North Stars, especially when they so often have similar messages on vital issues like climate, diversity, and governance, to name but a few.

In summary, while investor motives and constraints may differ, the larger umbrella of SRI/ESG Investing is likely to expand in size and grow in its real-world impact. While there is inevitably more work to be done, I am deeply proud to have contributed to this enormous economic shift in partnership with so many of you.

Passing the climate torch to the next generation

 

Article by Tim Smith, who has been part of the ESG industry since 1971. After earning a BA from the University of Toronto and Master of Divinity degree from Union Theological Seminary in New York, he joined the Interfaith Center on Corporate Responsibility (ICCR). He spent thirty years at ICCR, including 24 years as its Executive Director. He joined Boston Trust Walden Company in 2000, where he advanced the firm’s shareholder engagement efforts related to a variety of issues including climate lobbying and governance. He also frequently represented Boston Trust Walden at public events and helped to foster long-term client relationships.

In 2007, 2012, and 2013, Tim was named as one of the “Top 100 Most Influential People in Business Ethics” by Ethisphere Institute. In 2010, he received the Bavaria Award for Impact at the third annual Joan Bavaria Awards for Building Sustainability into the Capital Markets. In 2011 and 2012, he was named one of the most influential people in corporate governance by the National Association of Corporate Directors.

Tim has served on multiple boards and chaired advisory councils for several different institutions. He was the former Chair of US SIF and currently serves as chair of Shared Interest, which mobilizes economic resources for communities in Southern Africa. He also serves on the Principles Committee of Wespath, the United Methodist Pension Board, which leads the Board’s ESG and shareholder advocacy work. Finally, he served as Chair of the Sustainability Advisory Board of Kimberly-Clark.

Tim currently serves as Senior ESG Advisor at Boston Trust Walden. His retirement commences at the end of 2022. As for the next chapter, he looks forward to continuing to work on many key sustainability issues and continue to cause “good trouble,” in the words of Congressman John Lewis.

 

This commentary solely reflects the views of the author, Timothy Smith, and is subject to change without notice. This commentary is provided for informational or educational purposes only and is not an endorsement of any security and should not be relied upon for any investment decision. These views do not necessarily reflect the opinions or views of Boston Trust Walden Company or its affiliates.

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

UNFI Climate Goals validated by SBTI-GreenMoney

UNFI’s Climate Goals Validated by SBTi

Company commits to significantly reduce emissions across its operations and value chain

 

United Natural Foods, Inc. (NYSE: UNFI) (“UNFI”) announced in late May its science-based emissions reduction targets covering the organization’s operations and value chain have been validated and approved by the Science-Based Targets initiative (SBTi), making the Company among the first North American wholesale grocery distributors to adopt these targets. A core element of UNFI’s 2030 Environmental, Social and Governance (ESG) agenda, Better for All, is a commitment to reduce greenhouse gas (GHG) emissions, waste, and make progress on other key ESG priorities.

“Climate change continues to pose a serious threat to our planet and UNFI is committed to taking bold action on environmental issues and investing in opportunities to reduce our emissions,” said UNFI Chief Executive Officer, Sandy Douglas. “Through adoption and pursuit of these science-based targets, UNFI is proud to help lead the North American wholesale and grocery distribution industry, and humbly recognizes the critical importance of coordinated and rapid decarbonization.”

UNFI’s emissions reduction targets1 approved by the SBTi are consistent with levels required to meet the goals of the Paris Agreement. The three validated targets below are based on a fiscal 2020 emissions base year and fiscal 2030 emissions target year.

Operations Targets

  1. Reduce scope 1 and 3 heavy freight well-to-wheel GHG emissions from transportation by 38 percent on an intensity basis.
  2. Reduce absolute scope 1 and 2 GHG emissions from all other emission sources by 50 percent.

UNFI’s fleet of over 2,000 owned and leased trucks makes 1.37 million deliveries to over 30,000 customer locations each year. These deliveries are facilitated through UNFI’s 56 distribution centers which represent approximately 30 million square feet of warehouse space. Together, distribution centers, retail, fleet and all refrigerant emissions account for less than 5 percent of the Company’s total scope 1, 2 and 3 emissions.

Value Chain Target

  1. Reduce absolute scope 3 GHG emissions from purchased goods and services by 25 percent.

UNFI purchases nearly 300,000 products from over 12,000 suppliers and growers, which account for around 90 percent of total scope 1, 2, and 3 emissions. To promote reductions, UNFI created the Climate Action Hub to provide tools and resources, including opportunities for suppliers and vendors to learn from experts and each other, to innovate and scale climate solutions across the food system. Hub visitors will find resources such as a Climate Action Guide which provides tips on how to advance their own emissions reduction work.

“We are excited to take the next step in our emissions reduction journey by having our targets validated by SBTi, but we know we can’t accomplish these goals alone,” said Alisha Real, UNFI Director of Sustainability and Social Impact. “We take the need for business accountability in solving this global challenge seriously and look forward to engaging our value chain in these important efforts.”

“UNFI’s commitment to reducing their emissions, including their scope 3 emissions, sets a strong precedent in the food industry. By working in collaboration throughout their network of suppliers, UNFI is helping to activate and support much needed climate action,” said Courtney Pineau, Executive Director at The Climate Collaborative. 

To see a short video with UNFI Chief Executive Officer, Sandy Douglas, please visit – https://vimeopro.com/user48556009/sbti

  

About United Natural Foods

UNFI is North America’s premier food wholesaler delivering the widest variety of products to customer locations throughout North America including natural product superstores, independent retailers, conventional supermarket chains, ecommerce retailers, and food service customers. By providing this deeper ‘full-store’ selection and compelling brands for every aisle, UNFI is uniquely positioned to deliver great food, more choices, and fresh thinking to customers everywhere. Today, UNFI is the largest publicly traded grocery distributor in America. To learn more about how UNFI is Fueling the Future of Food, visit www.unfi.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. Examples of these statements include, but are not limited to, statements regarding our emissions reductions targets and related plans to achieve those goals. The risks and uncertainties which could impact these statements include those described in the Company’s filings under the Securities Exchange Act of 1934, as amended, including its annual report on Form 10-K for the year ended July 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on September 28, 2021 and other filings the Company makes with the SEC. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company may from time to time update these statements, but it is not obligated to do so.

Footnote:
[1] UNFI commits to reduce scope 1 and 3 heavy freight well-to-wheel (WTW) GHG emissions from transportation 38% per tonne kilometer by FY2030 from a FY2020 base year. UNFI also commits to reduce absolute scope 1 and 2 GHG emissions from all other emission sources 50% by FY2030 from a FY2020 base year. UNFI further commits to reduce absolute scope 3 GHG emissions from purchased goods and services 25% within the same timeframe.

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

Bloomberg Launches Indices in Climate Index Family

Bloomberg Launches Indices in Climate Index Family

New indices include EU Paris-Aligned Benchmarks, as well as broad equity, corporate and sovereign fixed income offerings

 

Bloomberg announced in early June the launch of new indices within the Bloomberg Climate Index Family, expanding the firm’s fixed-income and equity index offerings.

Newly launched indices in the family include those labelled as EU Paris-Aligned Benchmarks (PAB), which deliver investors the tools and insight they need to measure and align their investment strategy with the Paris Climate Agreement’s decarbonization targets. The Climate Family also includes indices providing comprehensive exposure to broad equity, as well as corporate and sovereign fixed income universes, that incorporate various climate and low-carbon themes, including a new Government Climate Risk score developed by Bloomberg Sustainable Finance Solutions.

“Investor demand for tools that help them build trustworthy ESG investment products and lower their carbon footprint has never been higher and Bloomberg’s new Climate Index Family provides industry-standard climate benchmarks investors can use with confidence,” said Chris Hackel, Head of ESG Indices, Bloomberg. “To be at the forefront of the net zero transition, investors can also rely on Bloomberg’s Paris-Aligned Indices, built using Bloomberg emissions data. We will continue to build upon this family to support customer demand of solutions backed by Bloomberg’s sustainable finance expertise and look forward to working with investors to leverage our ESG data sets to create additional custom climate strategies to meet their specific needs.”

Bloomberg’s PAB offering is underpinned by the Company’s comprehensive greenhouse gas (GHG) emissions data on over 50,000 companies, which includes company-reported data and estimates for companies that do not report their emissions. Bloomberg’s GHG emissions estimate model provides a distribution of estimates and confidence score showing the quality and availability of data for each estimate. This approach allows for the use of more conservative estimates, which follows the United Nation’s precautionary principle to ensure corporate GHG data is not underestimated to incentivize companies to report their GHG emissions.

As with all Bloomberg Indices, the Bloomberg Climate Index Family is available for benchmarking, asset allocation and product creation purposes. The indices can be further customized to meet specific individual investor needs with respect to liquidity requirements, decarbonization trajectory, additional ESG exclusions, portfolio construction and the inclusion of additional ESG data sets.

The equity indices launched include:

  • PAB Canada Large-Mid NR Index (CAD), ticker: CAPABNL Index
  • PAB Canada Large-Mid NR Index (EUR), ticker: CAPABNE Index
  • US Large-Mid NR Index, ticker: USPABN Index
  • Japan Large-Mid NR Index, ticker: JPPABN Index
  • Eurozone Developed Large-Mid NR Index, ticker: EURPABN Index
  • Europe ex Eurozone Developed Large-Mid NR Index, ticker: EUXPABN Index
  • APAC ex Japan Developed Large-Mid NR Index, ticker: APXPABN Index

Bloomberg EU Paris-Aligned Benchmarks Indices

The fixed income indices launched include:

  • Bloomberg US Corporate Paris-Aligned Index, ticker: I37119US
  • Bloomberg Euro Corporate Paris-Aligned Index, ticker: I37117EU
  • Bloomberg Global Corporate Paris-Aligned Index, ticker: I37120US
  • Bloomberg Global Treasury Carbon-Scored Index, ticker: I37033US
  • Bloomberg Pan-Euro Treasury Carbon-Scored Bond Index, ticker: I37034EU
  • Bloomberg Euro Treasury Carbon-Scored Bond Index, ticker: I37035EU
  • Bloomberg EM Local Currency Government Universal Carbon-Scored Bond Index, ticker: I37036US
  • Bloomberg EM Local Currency Government Carbon-Scored Bond Index, ticker: I37037US
  • Bloomberg Global Treasury Universal Carbon-Scored Bond Index, ticker: I37038US
  • Bloomberg Global Inflation-Linked Carbon-Scored Bond Index, ticker: I37039US
  • Bloomberg Pan-Euro Inflation-Linked Carbon-Scored Bond Index, ticker: I37040EU
  • Bloomberg Euro Inflation-Linked Carbon-Scored Bond Index, ticker: I37041EU

Bloomberg clients can access the available indices on the Bloomberg Terminal and all research and methodology for the indices is available at Bloombergindices.com.

Bloomberg provides an independent, transparent approach to indexing for customers across the globe. To learn more about Bloomberg’s Sustainable Finance Solutions, visit Bloomberg ESG.

 

 

About Bloomberg Index Services Limited
Bloomberg’s index team has a proven track record in creating industry leading and bespoke indices across asset classes, including best in class fixed income and commodity indices. Bloomberg Index Services Limited (BISL) takes an innovative approach to delivering strategic benchmarks that help market participants address their evolving needs. As an integral part of Bloomberg, BISL has access to a comprehensive range of trusted data and reliable technology for calculations, analytics and workflow automation, along with distribution capabilities that can help amplify the visibility of our customers’ products.

About Bloomberg
Bloomberg is a global leader in business and financial information, delivering trusted data, news, and insights that bring transparency, efficiency, and fairness to markets. The company helps connect influential communities across the global financial ecosystem via reliable technology solutions that enable our customers to make more informed decisions and foster better collaboration. For more information, visit https://Bloomberg.com/company or request a demo.

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

Newday Impact Launches Ocean Health ETF

Newday Impact Launches Ocean Health ETF

Pledges 5% Donation to Non-Profit Working in Ocean Health. The ETF has over 80% of Portfolio Actively Involved in Protecting Ocean Resources

 

Newday Impact, a San Francisco-based asset management and financial technology company that brings authentic responsible investing to those seeking investments that reflect their values, recently launches the Newday Ocean Health ETF (NYSE: AHOY). The fund – Newday Impact’s first exchange traded fund and one of the few ETFs dedicated to protecting and restoring healthy marine ecosystems – builds on the company’s five years of impact investing and strong relationships with grassroots nonprofit organizations working to mitigate environmental damage to the world’s oceans.

The Newday Ocean Health ETF seeks long-term capital appreciation through investments in companies that are diverting ocean-bound plastic waste, supporting sustainable fisheries, controlling ocean acidification caused by CO2 emissions, and actively using other strategies to combat ocean pollution and other threats to marine health. The entire portfolio is also aligned with UN Sustainable Development Goals including zero hunger, clean water and sanitation, decent work and economic growth, responsible consumption and production, climate action, and life below water.

Through its ESG screening methodology and proprietary fundamental research models, the Newday Ocean Health ETF currently has over 80% of the companies that either has a direct or indirect connection to protecting and restoring healthy marine ecosystems and climate change.

Newday Impact has a policy to contribute a portion of revenues from its thematic portfolios to its nonprofit partners. The company will donate 5% of its net revenue of Ocean Health ETF to EarthEcho International, an environmental nonprofit organization established by Philippe and Alexandra Cousteau in honor of their father, Philippe Cousteau Sr., and their grandfather, legendary explorer Jacques-Yves Cousteau. Newday Impact has partnered with Philippe Cousteau and EarthEcho International since 2021 to provide sustainability education to thousands of students and teachers who are part of the SIFMA Foundation’s National Stock Market Game. The EarthEcho team has also provided Newday Impact with important insights into ocean health and sustainability that the company uses in building its investment portfolios.

“Several sustainable investing ETFs are created by financial services companies that see marketing opportunities in the ESG space but include environmentally irresponsible companies to improve the fund’s performance,” said Doug Heske, CEO of Newday Impact. “Our Ocean Health ETF portfolio is 100% focused on companies with effective, legitimate green agendas, based on the knowledge and relationships we’ve built in our five years of impact investing. We believe that affecting positive change can also drive positive financial returns, and this fund is an opportunity for socially conscious investors to make a difference in both areas.”

“Ocean health is critical to the survival of the planet for reasons ranging from its role in absorbing CO2 and supplying oxygen to providing food for billions of people around the world, creating millions of jobs, and even supplying ingredients for life-saving medications,” said Philippe Cousteau of EarthEcho International*. “Newday Impact’s new ETF is an important step in helping fund companies that are investing in protecting the ocean ecosystem for future generations.”

The Newday Ocean Health ETF was developed in partnership with Toroso Investments and Tidal ETF Services.  For more information, visit newdayimpactetfs.com.

* Phillipe Cousteau may be indirectly compensated for this endorsement through Newday Impact’s donation to EarthEcho.

 

About Newday Impact

Newday Impact is a financial services company that provides authentic portfolios for socially responsible investors. Backed by insightful research and recognized community leaders, Newday Impact offers portfolios addressing the major ESG issues in the world. The company also supports its partners by donating 5% of net revenue to nonprofits focused on this transformational change. Newday Impact works with family offices, institutions, investment advisors, financial services platforms, and individual investors, who want both a return on investment and community impact. For more information about Newday Impact’s work and investment opportunities, email info@newdayinvesting.com or visit https://newdayimpact.com.

About Tidal ETF Services

Formed by ETF industry pioneers and thought leaders, Tidal ETF Services, LLC sets out to thoughtfully disrupt the way ETFs have historically been developed, launched, marketed, and sold. With a focus on helping ETF issuers, Tidal offers a comprehensive suite of services, proprietary tools, and methodologies designed to bring lasting ideas to market. We are advocates for ETF innovation on a mission to help issuers efficiently and effectively launch their ETFs and optimize their growth potential in a highly competitive space. Learn more at tidaletfservices.com.

IMPORTANT INFORMATION

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information are in the prospectus. A prospectus may be obtained by calling 833-4UN-SDGS or 833-486-7347 or by visiting newdayimpactetfs.com.

Please read the prospectus carefully before you invest. 

Investing in ETFs involves risk including possible loss of principal.  The Fund is a recently organized management investment company with no operating history or track record to evaluate. The Fund’s portfolio composition is dependent on proprietary quantitative models and is subject to data risk. Any decisions made in reliance on the data could have a direct impact on the fund’s performance.

The Fund is non-diversified, which means that it may invest a greater percentage of its assets in the securities of a smaller number of issuers or sector than if it were a diversified fund.  This may increase the Fund’s volatility and cause the performance of a relatively smaller number of issuers to have a greater impact on the Fund’s performance.  The Fund’s investment strategy or emphasis on the Ocean Health sector and utilizing Environmental, Social and Governance criteria may limit the types and number of investment opportunities available to the Fund and it could underperform other funds that do not use this screening methodology.

The Fund may invest in American Depositary Receipts (ADRs) which has the risk that it may not provide a return that corresponds with an underlying foreign share.  Investments in foreign securities are subject to risks associated with adverse political and economic developments including economic sanctions.  Also, there may be less rigorous disclosure or accounting standards and regulatory practices which may cause more fund volatility.  Investing in small or mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. The securities of smaller companies generally trade in lower volumes and may be subject to greater and more unpredictable price changes.

The Fund is distributed by Foreside Fund Services, LLC.

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

The Challenge of Decarbonizing Cities and Real Estate by Cynthia Curtis-JLL

The Challenge of Decarbonizing Cities and Real Estate

By Cynthia Curtis, JLL

Cynthia Curtis-JLL-GreenMoneyBased on government estimates, buildings account for 60% of carbon emissions in cities. And with more than 2.5 billion people moving into cities in the next 30 years, there is a responsibility to ensure that the real estate sector, and the permanency of buildings and our communities, are evolving and adapting in a sustainable way. This isn’t only good for the planet – it also benefits job creation, health, and equality.

As the world emerges from the pandemic and seeks to tackle multiple other pressing challenges ranging from war in Ukraine, food shortages, inflation, and cost-of-living pressures, it is vitally important we do not lose collective focus on the catastrophic risks posed by climate change.

Global urbanization offers a time-limited opportunity to work towards widespread climate-resilient development and transformational adaptation. There needs to be an all-in approach in the built environment sector to deliver the critical 1.5oC pathway. A significant majority of the world’s major cities have committed for all new buildings to be net zero by 2030 and all buildings to be net zero by 2050. But with approximately 80% of existing building stock set to still be standing in 2050, meeting this net zero goal is a huge challenge for the real estate sector.

The real estate industry must play a central role in enabling companies, communities, and cities to deliver their net zero goals. It is encouraging to see that our industry’s collective response is spearheaded by the growing number of net zero carbon commitments, as governments and companies act to limit global warming to 1.5oC. The urgency of which was reinforced by the IPCC’s latest report that calls for immediate, ambitious and sustained efforts to slash emissions. At the same time, the pandemic and continuing advances in technology have changed how and where we work, with long term implications for health, wellbeing, and inclusivity.

Taken together, these trends are likely to lead to substantial change, challenges, and opportunities for the real estate industry. For JLL, understanding and responding to these trends is fundamental to our purpose of shaping the future of real estate for a better world.

Responding to the Climate Emergency

To help inform real estate decarbonization strategy – looking beyond current regulation to create competitive advantage and future-proof real assets – JLL has released a new research study examining efforts taking place across 32 world cities.

Our findings point to five key issues:

  • The urgent need to decarbonize real estate: city governments are now recognizing that it’s time for action. They are introducing a raft of measures covering new and existing commercial real estate. Some cities are ahead of their peers in tackling real estate decarbonization – New York, Paris, Singapore, Toronto, and Sydney.
  • You can’t improve what you can’t measure: real estate owners/investors and occupiers are increasingly being asked to comply with mandatory regulations and to benchmark and report emissions, energy, water, and waste. U.S. cities like Boston, New York and Washington DC are leading the way.
  • There is an urgent imperative to address the retrofitting challenge of existing buildings. Around 50% of the world’s raw material is consumed in the development of buildings. And of the 40% of emissions stemming from the built environment, 11% is from embodied carbon from the construction process.1
  • Retrofitting a city’s existing building stock to net zero carbon is going to be central to decarbonizing a city’s economy. To meet the commitment for all buildings to be net zero by 2050, retrofitting rates will have to accelerate from the current level of 1%-to-2% per annum2 to 3%+.
  • Without decarbonizing the energy grid there are limits to what building owners can achieve in reducing their emissions. Most major global cities now have ambitious targets to move to clean energy generation. Leading the way is Munich, which aims to be powered 100% from renewable sources by 2025.3

The research points to a tapestry of responses: some cities are trailblazers, others just starting out. However, the direction of travel points towards harmonization over time and spotlights best practice, which can also be scaled along the way.

Focusing our Sustainability Efforts Where We Can Deliver the Greatest Impacts

JLL believes in leading by example. Being a responsible business is central to our values. Our global sustainability program is focused on three issue areas where we can achieve the greatest impacts: climate action for sustainable real estate, healthy spaces for all people, and inclusive places for thriving communities. These are informed by JLL’s purpose and aligned to the firm’s Beyond Business strategy.

JLL Climate Action Healthy Spaces Inclusive Places REPORT

In June 2022, we released our latest Global Sustainability Report. Key highlights included:

Climate action for sustainable real estate:

  • JLL’s net zero target aims for the full abatement of 95% of its carbon footprint by 2040. By the end of 2021, JLL had reduced Scope 1 and 2 emissions by 17% from our 2018 baseline and the firm is on track to meet its net-zero 2030 target for occupied office space and vehicle fleet.
  • The first real estate company – and one of just seven companies globally – with a net-zero target validated by the Science Based Target initiative (SBTi) – in 2021, the SBTi launched the world’s first corporate Net-Zero Standard, enabling businesses to set emissions reductions target in line with science.
  • 65,301 metric tons CO2e averted by advising clients on renewable energy projects, a three-fold increase on 2020.

JLL--Healthy spacesHealthy Spaces for All People:

As well as the focus on climate change, the program recognizes the importance of promoting health, safety, and wellbeing among our workforce through the buildings which JLL occupies and manages for clients.

  • 390 sustainable building certificates achieved for clients, over 30% more than in 2020.
  • 45% of JLL offices with a sustainable building certificate4, on track for 100% by 2030.

 

 

Inclusive places for thriving communities:

JLL’s sustainability program also puts diversity, equity, and inclusion (DEI) front and center. The firm is determined to create a culture that fosters DEI in all areas of its business.

  • 36% of our top two senior management levels are female, with a target to achieve 40% by 2025.
  • Supported 33 Women’s Business Network Business Resource Groups around the world and launched a global Women Transforming Tech resource group.
  • Continued to grow Business Resource Groups – nine in the Americas, eight in EMEA, and seven in Asia Pacific (along with 11 country and regional DEI groups) – which help drive the business by providing professional development, training and networking opportunities for employees with shared backgrounds, experiences, aspirations and goals.
  • Strengthened our global training to empower every individual to reach their full potential by launching a new learning platform providing access to 25,000 tailored courses and increased our investment per employee by four-fold in 2020, to $316 per employee.
  • $1.97 billion spent with diverse suppliers, doubling spend on the previous year – and set a target to reach $2.5 billion by 2025.
  • $8.9 million contributed to charitable causes – a 15% increase over 2020, with 919 organizations supported – an increase of 40% over 2020.

In the real estate industry, we’ve always been used to collaboration, whether that’s between the owner of a building, the occupier of a building, local governments to get permits in place to retrofit or to build buildings. To drive the change necessary to meet the challenge of decarbonizing our cities and sector, it’s going to take an ‘all-in’ approach. At JLL, we are committed to playing our part and supporting our clients on their journey. To discover how, read our latest JLL 2021 Global Sustainability Report or download the summary report here.

 

Article by Cynthia Curtis, SVP and Corporate Sustainability Officer, Americas for JLL. She is responsible for elevating JLL’s sustainability program across the region and embedding it broadly throughout the business. Included in her scope is delivering against JLL’s net-zero carbon target of reducing scope 3 emissions from the properties that it manages on behalf of clients. She serves as the company’s representative on the World Green Building Council’s Corporate Advisory Board. Cynthia also collaborates with the Investor Relations team to ensure its investors have a more complete understanding of JLL’s competencies, goals and impacts through outreach and disclosure.

Cynthia serves on the Board of Directors for Greenback Renewable Energy Company, LLC, which is dedicated to investing in projects and managing capital for its public shareholders as well as institutional investors in the sustainable infrastructure sector. Previously, Curtis has worked in the public, private and non-profit sectors, including Ceres and CA Technologies, where she served as vice president and chief sustainability officer. 

She lives in the Boston area, is a member of the New England Women in Energy and the Environment, chairs the Wellesley Village Church Energy Committee, and built one of the region’s first gold LEED-certified residences.

Footnotes:
[1] Source: WorldGBC, Bringing Embodied Carbon Upfront, Sept 2019
[2] World Economic Forum, A Framework for the Future of Real Estate, April 2021
[3] Stadtwerke München’s (SWM) target, https://renewablesnow.com/news/munich-on-track-to-reach-100-renewables-in-2025-770469/
[4] For JLL offices over 10,000 sq. ft.

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

The Climate Crisis is a Health Emergency-by Ebony Perkins

It’s Official: The Climate Crisis is a Health Emergency

By Ebony Perkins, Impact Finance Center

Above – A Self-Help financed solar project in Kinston, North Carolina. Self-Help has invested over $175 million in solar development companies that are providing a clean energy alternative to fossil fuels and opportunities for economic advancement in rural communities. These installations have created 2,250 jobs in the clean-energy sector and have provided over 280 megawatts of clean energy to the grid–enough to power 53,000 homes.

 

Ebony Perkins Impact Finance Center

GreenMoney Journal is turning 30!

The guests have arrived, the music is playing, and the celebration is about to begin.

But wait…don’t pop the champagne just yet. We still have work to do.

It’s natural to want to celebrate our progress in the fight against climate change. Since GreenMoney Journal’s founding in 1992, we’ve had a few wins—we’ve bent the emissions curve, national leaders have committed to cutting emissions even further, electric vehicle sales have skyrocketed, and clean energy costs have declined.

Investors are also strategically using their investments to support communities that are currently experiencing the direct effects of climate change in their everyday lives. Community development financial institutions have received a surge of investments in the last decade. According to the US SIF 2020 trends report, “community investing assets nearly doubled between 2014 and 2016, then increased by just over 50 percent between 2016 and 2018, and most recently grew by 44 percent between 2018 and 2020.”  Money managers have invested $266.3 billion into community investing institutions.

Yet, investments in community investing institutions are still only 1.6% of the $16.6 trillion in ESG incorporated assets. Many communities are in crisis mode as they face mounting health issues and even death because of climate change.

Though we’ve made progress in the fight against climate change, we must remain persistent and continue to protect our most vulnerable populations.

The Climate Crisis is a Health Emergency

Our most vulnerable groups — low-income and minority communities — feel the effects of our declining planet before the general population because they often lack the resources to shield them from the inevitable chain of events that occur resulting from environmental decline and failing infrastructure. They experience the effects of climate change at higher rates, are plagued by water contamination, and are more often located near landfills and hazardous waste sites than other groups. These groups are robbed of the chance to live and raise their families in safe communities where they can enjoy healthy food, drink safe water, and breathe clean air.

The World Health Organization estimates that in 2012 environmental factors contributed to 12.6 million deaths globally, nearly 23% of all deaths. In the United States, physicians are speaking out about the health risks that pregnant women, children, the elderly, and others with chronic health conditions are experiencing because of climate. They are seeing more patients with increased allergies, respiratory complications, heat-related difficulties, or mosquito-borne illnesses, among other issues.

Many individuals are now taking their health into their own hands after realizing the damaging effects of gas. Clean Energy Credit Union member John from Texas turned to the credit union after experiencing a storm that affected him and his family. He said, “I [decided] to go solar after the huge storm in Texas in February of 2021. After losing power for almost 48 hours and having to huddle around the gas fireplace just to survive, we had enough and decided to take control of our own energy production. We purchased a system large enough to produce 100% of our energy needs, with a battery backup that is generator ready. We feel much safer in our own home now that we have this system.”

Many green financial institutions recognize that no one should continue to jeopardize their health because of expensive financing options from traditional lenders. Nicole Buford, Marketing Director at Clean Energy, doubled down on their efforts to build healthier communities: “We recognize that there is a strong connection between health and the environment, and we are committed to leveraging clean energy to reduce pollution for the public’s health.”

In the future, investors will tailor their strategy in the fight against climate change to address the growing health problems vulnerable communities face. Some institutional investors are already investing in affordable housing that provides safe, environmentally-friendly living conditions. Others are increasing diversity in healthcare so patients experiencing environmentally-caused health conditions can work with a doctor or other healthcare professionals that can both identify with their plight and meet their needs.

West Oakland Community Foods Market
Community Foods Market is a full-service grocery store, health resource center and community hub that engages residents to lead healthier and more socially-connected lives. Self-Help’s $1,985,000 loan helped fund construction of the 14,000 square-foot grocery store to support the vibrant community of West Oakland.

How You Can Build Healthier Communities & Fight Climate Change

You don’t have to decide between either fighting climate change or building healthier communities. Below are a few ways you can achieve both:

  • Invest your cash with green financial institutions providing healthy alternative products: Some credit unions specialize in affordable clean energy loans. Consider placing your savings at Self-Help Credit Union in a CD, IRA, or money market account so they can help others lead healthier, environmentally-friendly lives.
  • Give to nonprofits addressing the public health effects of climate change: Many organizations are serving communities experiencing these health issues. Consider donating to organizations like The Medical Society Consortium on Climate & Health or PUSH Buffalo to help them continue to raise awareness and address health inequities.
  • Speak up for populations experiencing the brunt of this health crisis: As you continue to advocate for climate change, verbally acknowledge the people currently suffering from these health issues. Although we can continue to address carbon emissions and rising sea levels, we must not forget the growing number of human lives lost each day because of this current health crisis.

 

Article by Ebony Perkins, Senior Advisor, Impact Finance Center

Ebony Perkins is a dedicated, solution-oriented social entrepreneur whose heartbeat is community. She has a demonstrated ability of working with investors and philanthropists to help them make smart and strategic decisions. As the Director of Impact Investments for a Fortune 5 company, Ebony advances their social impact and tax credit investment strategy across the country. Before that role, she served as the Vice-President & Director of Investor Relations at Self-Help Credit Union. Ebony managed a national team that helps groups and individuals invest funds in a socially responsible financial institution that supports communities of all kinds, especially those underserved by conventional lenders.

Ebony co-hosts the Renegade Capital Podcast: The Activist’s podcast for finance and investments. She interviews thought leaders who go into the ring every day to fight against the racist, sexist, and exclusive norms established by traditional financial and capital systems. Ebony is also a Senior Advisor with Impact Finance Center and is supporting the creation of a membership organization that provides shared due diligence for a diverse asset manager database. 

Ebony’s commitment to community investing is evident by her service and contributions to Clean Energy Credit Union, Conservation Trust of North Carolina, US SIF, and Women In Philanthropy. She was also recognized on the SRI Conference’s inaugural 30 Under 30 List.

Ebony holds a Master of Public Administration from the University of North Carolina at Chapel Hill and a Bachelor of Science in Marketing from Claflin University as a summa cum laude graduate. She also has an Executive Certificate in Financial Planning from Duke University.

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

What would Nature do - What would Nature have ME do - by Katherine Collins

What Would Nature Do? What Would Nature Have Me Do? The Next Thirty Years

By Katherine Collins, Putnam Investments

Katherine Collins - Putnam InvestmentsWhen I was pensive as a child, I’d hop on my bike and ride to a little creek down the lane, where I could watch the caddisflies assemble their crazy pebbly houses.

When I was yearning to consolidate my thoughts after divinity school, I walked 500 miles through the fields of wheat and sunflowers in northern Spain.

When I was returning to practice in a large financial institution, I endlessly studied the interactions my honey bee hives.

In the early days of the pandemic, I began to stop on my daily walk to lean against a 200 year old oak, though it was weeks until I was aware of this habit.

And once, at a conference in Las Vegas, I hid amidst the branches of a big potted ficus tree, the only thing around that was not flashing lights or bleeping at me.

 

It is perhaps no surprise, then, that I see a great reconnection in business and investing taking root – a joining-up of finance and the wisdom of our natural world. I don’t mean a focus on investing in nature, though in many ways that is vital. I mean a focus on investing as nature, a shift in how our decisions are considered and made and monitored. This shift goes beyond the changing jargon and labels and frameworks of our profession, important though they can be. It reflects a deeper level of reunion, a reconnection of investing with the world it is meant to serve.

I acknowledge that this trend is not so visible some days.

Here in our “now,” things are pretty complicated.

Over the past two years, we have witnessed the tragic and disruptive impacts of the pandemic; continued evidence of racial injustice in the United States; record-breaking fire, hurricane, drought, and flood conditions across many parts of the world; and the ongoing polarization of civil discourse. Recent months have brought news of the horrific invasion of Ukraine, inflationary pressures, and tumult in economies and financial markets. The opportunities to improve the systems that support our well-being, livelihoods, and societies are enormous, sometimes overwhelming.

And yet.

When times are difficult, both shortcomings and strengths are revealed. Individuals, communities, companies, and societies have the chance to rediscover our most valuable assets. Amid the challenges noted above, we have also experienced the joy of reunion, the power of effective collaboration, and the glory of our natural environment. We are reminded daily of the power of social connection, positive technological advances, and effective systems of care and governance.

What are the common characteristics of these newly vivid assets?

Effectiveness over efficiency.
Connection over isolation.
Adaptation over rigidity.
Partnership over predation.

These are also the design principles at work in healthy natural systems, the ideas that sit at the heart of the practice of biomimicry.

What Would Nature Do?

Biomimicry asks us to look to nature as our most magnificent library of wisdom, not just a warehouse full of stuff. It asks us to stop before we design a process, or invent a taxonomy, or create a product, and to ask, What Would Nature Do? How is this function I’m considering present in natural systems, and what can I learn from the billions of years of cumulative experience all around me?

Fittingly, my introduction to biomimicry was itself a re-rooting. I was visiting with the incomparable Hazel Henderson at her home in Florida, where visionary scientists and teachers Janine Benyus and Dayna Baumeister introduced us to the core principles of biomimicry and natural systems design. At one point, Janine summarized by saying, “so this is how the world functions,” and I felt a huge whoosh of my own exhaled breath. This is how the world – our home – already functions. It is not so hard to imagine realigning our puny, brand-new financial systems once this reality is clear.

In some ways an investment practice or business operation aligned with natural systems might still seem a faraway dream. But I see the green shoots sprouting up everywhere I look. When a CEO reports on the benefits of their products to customers before talking about operating margins, that’s a sprout. When a CFO tells me with eyebrows raised that increasing wages is an investment and not just a cost, that’s a sprout. When my own team shares stories of the best things in our weeks before diving into our spreadsheets, that’s a sprout. When analyst and CIO commentary recognizes that all of these activities contribute to financial returns, that it’s not a zero sum, fixed pie world, that is more than a sprout; it is a sapling!

What Would Nature Have Me Do?

A more recent reframing of this core question has recently come to me through reunion with the Harvard Divinity School community, and particularly with the legacy of Reverend Peter J. Gomes. I’m sorry to report that one of my main lessons from Divinity School is, unless you are Reverend Gomes, no one really wants to hear your sermon! Thankfully we still have the records of his orations to draw upon for inspiration and guidance.

Rev. Gomes famously upped the ante on the popular Christian phrase, “What would Jesus do?” by asking instead, “What would Jesus have me do?” This has me wondering, what if we extend our inquiry to ask, What would Nature have me do?

These two tiny words make all the difference. They move us from a place of judgment to a place of responsibility, from analysis to action. Whatever we honor, this edit tilts the question inward, and forward.

In this demand we find love.
In this demand we find hope.

Like the green shoots of biomimicry design principles, I see sparks of this hope everywhere. The buttoned-up CFO who tells us about sharing personal struggles with his team during the pandemic is a spark. The analyst whose enthusiasm for the circular economy earns the attention of a cranky old colleague is a spark. The manager who insists on a higher standard of substance over a check-the-box approach to reporting is a spark.

As I compose this curious combination of reflection and prediction, dear Hazel has just “gone virtual” (in her words). She leaves us with great bushels of seeds from her far-ranging wisdom, and great arcs of illumination from the sparks of her spirit. As we go forward with the planting, as we try to light a path ahead, how fitting it would be for us to also take up her mantra, “the wealth is in the network!” This work is joyful, and also sometimes lonely. But we are not alone.

These seeds and these sparks are my hope for the next thirty years. They are the source of my faith in what could lie ahead. Here is the work of our time, to reconnect all that has been held falsely separate.

What rewards it could bring!

Study Nature. Love Nature. Stay close to nature.
It will never fail you. – Frank Lloyd Wright

 

Putnam Investments 2022 Sustainability ReportArticle by Katherine Collins, Head of Sustainable Investing at Putnam Investments and portfolio manager for Putnam’s Sustainable Leaders and Sustainable Future strategies, with approximately $8 billion in assets under management. 

Ms. Collins has over thirty years’ experience as an active fundamental investor and was named to the inaugural Forbes “50 Over 50” list of leaders who are shaping the future of finance in 2021. She is the author of Month of Sundays and The Nature of Investing, and founder of Honeybee Capital, an independent investment research firm focused on sustainable investment themes. Earlier in her career, she served as Head of Equity Research, Portfolio Manager, and Equity Research Analyst at Fidelity Investments.

Katherine serves on several nonprofit boards, including the Santa Fe Institute, Omega Institute, and Harvard Divinity School Dean’s Council. She earned a Master of Theological Studies from Harvard Divinity School and a B.A. from Wellesley College, and is a CFA charter holder

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

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