Robert Goellner

Record 515 institutional investors managing $35 trillion in assets urge governments to step up ambition to tackle climate change

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Ahead of next week’s United Nations Climate Action Summit, a record 515 institutional investors managing $35 trillion in assets urged governments worldwide to step up action to tackle climate change and achieve the Paris Agreement’s goals.

The Global Investor Statement to Governments on Climate Change, developed by the seven Founding Partners of The Investor Agenda, calls on governments to phase out thermal coal power worldwide, put a meaningful price on carbon pollution, end government subsidies for fossil fuels, and update and strengthen nationally-determined contributions to meet the emissions reduction
goal of the Paris Agreement no later than 2020.

“The global shift to clean energy is underway, but much more needs to be done by governments to accelerate the low carbon transition and to improve the resilience of our economy, society and
the financial system to climate risks,” the investors wrote. They warned the current government commitments leave an “ambition gap” that will not prevent global average temperature from rising
beyond the 1.5 degree threshold that scientists warn could trigger catastrophic and irreversible effects of climate change.

The investors’ call to action published today comes as UN Secretary-General António Guterres is asking all leaders, from governments and the private sector, to present plans – at the UN Climate Action Summit on September 23 or at the latest by December 2020 – to cut greenhouse gas emissions 45% by 2030 and reach carbon neutrality by 2050. “I am also asking all investors to scale up green ventures, to increase lending for low-carbon solutions and to stop, in effect, financing pollution,” Secretary-General António Guterres said at a preparatory meeting for the
Summit.

Signing the Global Investor Statement to Governments on Climate Change is an action item in the Policy Advocacy focus area of the The Investor Agenda. Launched in September 2018 by seven Founding Partners — Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative — The Investor Agenda is a collaborative initiative that aims to accelerate and scale up the investor actions worldwide that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping global average temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions
that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy.

The Founding Partners also announced today the release of The Investor Agenda Annual Progress Report, which found that nearly 1,200 investors have taken action in one or more of the focus areas of The Investor Agenda. More than 750 investors have engaged with or directly influenced portfolio companies to act on climate change, more than 400 investors have stepped up their own disclosure on climate change, and more than 260 have set a climate target.

“Investors are stepping up their response to climate change and increasingly aligning their investment with the goals of the Paris Agreement,” said Rebecca Mikula-Wright, Director, Asia Investor Group on Climate Change (AIGCC). “The Investor Agenda has a pivotal role to play as a platform for supporting investors to lead ambition and catalyse sustainable investment, whilepromoting engagement across all regions and jurisdictions.”

“The Investor Agenda provides an unprecedented global forum for investors to accelerate action on climate change and drive transformation of capital markets to deliver a 1.5-degrees Celsius economy. To do that investors need to take further action themselves, but also require stronger incentives from governments” said Paul Simpson, CDP CEO.

“The global reach and potential impact of The Investor Agenda and the global collaboration of the seven organizations are quite extraordinary,” noted Mindy Lubber, Ceres CEO and President. “With the immense power and influence that investors hold in our global economy, they have a tremendous opportunity and responsibility to act at the urgent pace and scale required to keep average global temperature rise to no more than 1.5-degrees Celsius.”

“By working with our peers globally and across the regions, we can scale up ambition and action to tackle climate change and deliver on the promise of the Paris Agreement,” said Emma Herd, Chief Executive Officer, Investor Group on Climate Change (IGCC). “Collaboration is the key to success, and investors must play our part. The Investor Agenda is the platform we need to drive real investor action at this crucial point in time.”
Climate change poses an unprecedented threat to the global economy,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC). “Investors representing nearly half the world’s invested capital are sending a clear message that they need to see far greater ambition from governments in addressing the climate crisis. A considerable number of countries have already committed to delivering net zero emission economies by 2050. Investors are asking that others now follow their lead.”

“The Investor Agenda has a critical role to play in compelling investors to act and bring about lasting change around climate,” said Fiona Reynolds, CEO of Principles for Responsible Investment (PRI). “Ambition and meaningful action from governments, business and the financial sector is imperative to curb the current trajectory of global warming. These groups must act now to curb the climate emergency the world is facing by reaching the goals of the Paris Agreement to realise 1.5-degrees Celsius.”

“There is a growing urgency for investors and corporations to act on climate change goals. As of today, temperatures have risen 1-degree Celsius above pre-industrial levels,” said Eric Usher, Head of UNEP Finance Initiative. “To keep the rise to within 1.5-degrees Celsius globally, leadership from within the investor community will be key. The Investor Agenda is one critical platform in supporting investors in their individual actions.”

About The Investor Agenda
The Investor Agenda is a collaborative initiative to accelerate and scale up the investor actions that are critical to tackling climate change and achieving the goals of the Paris Agreement with the aim of keeping average global temperature rise to no more than 1.5-degrees Celsius. It provides investors with a set of actions that they can take in four key focus areas: Investment, Corporate Engagement, Investor Disclosure and Policy Advocacy. It has been developed by seven Founding Partners: Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment and UNEP Finance Initiative. Visit www.TheInvestorAgenda.org for more information.

Max Mintz

Climate Risk in Passive Investing

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We’ve been seeing a lot of articles recently about a “bubble” in passive (index) investing. We haven’t commented much on this trend, as we’re big fans of low cost index funds in our portfolios. However, an article came out yesterday in Forbes that makes a point connected with this debate that we agree with wholeheartedly. Jeff McMahon writes in his article “Index Funds Face Heightened Risk From Climate Change” that Index funds are uniquely exposed to the systematic risks faced by climate change, and specifically to the inevitable policy response to climate change.

The Principles For Responsible Investing (PRI) (of which we are a signatory) has been doing a lot of research on this (see here for more information, or click here to view the slides from a recent event we attended with the PRI). We have incorporated this viewpoint into our portfolios, and the way we’ve done it speaks directly to McMahon’s article from yesterday.

McMahon points to the recent testimony before Congress from Alicia Seiger, the Managing Director of Stanford’s Sustainable Finance Initiative, who argues that investors are less able to manage climate risk because they are less able to monitor it (you can read her entire testimony here). We completely agree with this for the vast majority of index funds on the market today, but in our practice we have discovered that there are a number of ESG approaches that can be used to manage this risk (see this blog post from earlier this year for more information). Further, by looking at the PRI’s research, we believe we can identify the most likely policy responses and manage these risks within our portfolios.

The most likely policy levers to secure an accelerated and just transition Source: UNPRI (https://www.unpri.org/climate-change/what-is-the-inevitable-policy-response/4787.article)

By mindfully choosing investments that incorporate Environmental, Social and Governance data in their investment process, we believe we can manage these risks. However, there are a number of different approaches emerging within the investment community, and they do not all have the same results! If you are interested in what we’re doing to manage these risks in our portfolios, or if you would like us to analyze your investments to see how exposed you are to these risks, click here to schedule an appointment!

Max Mintz

President Macron of France addresses PRI In Person 2019

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This week marked PRI In Person, the United Nations-Supported Principles for Responsible Investing’s (PRI) annual meeting. We weren’t able to attend since it’s hard to justify a Paris trip, but we wanted to share the remarks that President Macron made to open the meeting. We’re proud to be a signatory of the PRI, and to help our clients align their investments with the issues they want to work on.

If his remarks speak to you, and you want to get involved to add your voice and investments to the global effort to combat climate change, we’re here to help.

Max Mintz

Common Interests recognized as a “Best For The World” B Corp for exceptional impact on our customers

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Common Interests, a Certified B Corporation, has been named a Best For The World honoree for the fourth year in a row in recognition of our work to improve the lives of our customers through the use of our services. Ranking in the top 10 percent of all 3,000 B Corps for our positive impact on our customers, Common Interests earned this honor because our investments promote public benefits, and are designed to solve social and environmental issues. Through our recent Impact Report, we have shown the real impact our clients’ investments have made on the world. We are leading by example in the financial services industry to inspire other firms to enable their clients to align their investments with their values. Through our impact targeting project, we have focused our investments on improving health, preserving the environment, creating economic opportunity for individuals and communities, and increasing the flow of capital to purpose-driven enterprises. Our firm was also recognized for our innovative fee structure which enables us to serve underserved populations. Through this award, B Lab shows how companies like Common Interests set a gold standard for how business can be a force for good for people around the world.

Best For The World recognition is administered by B Lab, the global nonprofit that certifies and supports Certified B Corporations, which are for-profit companies dedicated to using business as a force for good. Today there are 3,000 Certified B Corporations across 64 countries and 150 industries, unified by one common goal: to redefine success in business.

“We are proud to be honored as Best For The World for the Fourth year in a row” said Bob Goellner, managing partner of Common Interests, “This award is evidence of our efforts to mindfully design the impact of our investments and not turn people away. I founded this firm to empower the financial wellness of our community, and this recognition is confirmation that we are serving this purpose.”

B Corps meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corp Certification doesn’t just evaluate a product or service, it assesses the overall positive impact of the company that stands behind it—like Common Interests. Using the B Impact Assessment, B Lab evaluates how a company’s operations and business model impact its workers, community, environment, and customers. To achieve the B Corp Certification, a company must achieve a score of at least 80 points on the assessment.

“We’re incredibly proud of this year’s Best For The World honorees,” says Anthea Kelsick, Chief Marketing Officer of B Lab. “These inspiring companies represent the kinds of business models and impact-driven business strategies that are building a new economy—one that is inclusive, regenerative, and delivers value to all stakeholders, not just shareholders. To that end, B Corps like Common Interests are redefining capitalism and showing that it actually can work for everyone.”

1,000 B Corps from 44 countries were named to the 2019 Best For The World lists, including Patagonia, Beautycounter, Dr. Bronner’s, TOMS, Seventh Generation, and Greyston Bakery. The 2019 Best For The World honorees are determined based on the verified B Impact Assessments of Certified B Corporations. The full lists are available on https://bcorporation.net/.