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Global Warming: A Clarion Call For Urgency
Posted by Janelle Metzger

This article is part of a series that explains the differences between foundations and endowments, their power to advance the sustainable investing agenda, and investigates a variety of investment approaches. 

Our planet has been pushed past its limits: floods, fires and extreme weather this past summer indicate that climate change is accelerating. A recent United Nations report found that the world risks soon hitting 1.5°C of global warming in the 2030s, a threshold that would ignite "extreme events unprecedented in the observational record."  

The goal of the Paris Climate Agreement is to maintain that 1.5 threshold, however the U.N’s report explains that without "deep reductions in carbon dioxide and other greenhouse gas emissions," the world will surpass it within 80 years. As the 2030 deadline for the Paris Agreement and the Sustainable Development Goals agenda draws near, urgent action is required by consumers, regulators, governments, businesses and nonprofit organizations alike.  

Foundations and endowments can support the shift towards a more sustainable future by integrating ESG factors into their portfolio, while also increasing an emphasis on impact investing and shareholder engagement. According to our latest whitepaper, in 2020, foundations and educational institutions together held 8% of the $6.2 trillion institutional investments in ESG assets. Besides employing negative and best-in-class positive screening strategies, many foundations and endowments are leveraging shares to engage in active ownership. 

Negative screening refers to the exclusion of companies and certain sectors based on ethical, social, environment or religious factors. Most commonly, exclusionary strategies avoid investments in companies that are fully or partially involved in gambling, alcohol, child labor, human rights violations, tobacco and other related factors. Positive screening involves the inclusion of companies due to the social or environmental benefits of their products, brand value, leadership team or processes. Investors place a ‘premium’ on these ‘best in class’ businesses which ultimately increases their value. 

Foundations and endowments have the unique opportunity to advance the norm of conscious investing and mitigate the effects of climate change. With our planet pushed past its limits, the urgency for sustainable investing has never been more important.   

Aneuvia is an investment management firm that provides foundations and endowments with sustainable investing, integration of ESG and corporate strategies and impact investing consultation. View our latest whitepaper, Foundations & Endowments: Trends in Sustainable Investing, to learn more

Why Divest Harvard Signals the New Activist Investor Agenda
Posted by Janelle Metzger

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This article is part of a series that explains the differences between foundations and endowments, their power to advance the sustainable investing agenda, and investigates a variety of investment approaches.

We’ve entered a new age of activism. Consumers expect businesses, organizations and nonprofits to stand up for the social and political issues of our day. They also expect for them to drive real change - not just words, but also actions. 

According to a recent Deloitte study, 64% of consumers say they care more about extreme weather patterns than they did the prior year. Meanwhile, 74% of consumers say extreme weather will become even more important in the future.

deloitte

As consumers become more conscious, they expect the same of businesses. In fact, a majority (65%) of respondents expect CEOs to do more to make progress on societal issues, including reducing carbon emissions, tackling air pollution, and making business supply chains more sustainable.

This activism isn’t just limited to CEOs, but all leaders who hold the power and responsibility to create progress. Just last month, Divest Harvard - a coalition of students, alumni, and faculty - had a momentous victory after Harvard agreed to divest all direct and indirect investments in the fossil fuel industry. For nearly a decade, the activist group was rallying for the disclosure, divestment and reinvestment of Harvard University’s endowment towards environmentally sustainable, socially responsible, and community-based investment. In addition to sparking a historic on-campus protest that caught the nation’s eye, risking and incurring arrests, students also filed a legal complaint against Harvard with the Massachusetts Attorney General’s Office. Harvard’s decision to divest follows the footsteps of several other academic institutions including American University, Brown University, Columbia University, Georgetown University, Middlebury College, the University of Southern California and the University of Cambridge.

This display of student activism signals a gradual yet definitive “tipping of the needle.” Deloitte’s survey also signals that 58% of respondents want organizations to change their practices, and 55% want brands to create awareness around problems such as climate change. Another 41% would like companies to take a stand by donating to a nonprofit.

Foundations and endowments are strongly positioned to advance the activist investor’s and conscious consumer’s agenda. As the 2030 deadline for the Paris Agreement and the Sustainable Development Goals agenda draws near, transitioning from piecemeal to holistic approaches will open a myriad of possibilities for F&Es to tackle global challenges and build the world back better. 

Aneuvia is an investment management firm that provides foundations and endowments, individuals and families with sustainable investing, integration of ESG and corporate strategies and impact investing consultation. View our latest whitepaper, Foundations & Endowments: Trends in Sustainable Investing, to learn more.

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