I finally replayed the Sustainable Investing Landscape and Strategies event hosted recently by Church Pension Group (CPG) in the US, which invests on behalf of clergy and employees of The Episcopal Church. Many of you have met or heard Chris Rowe from CPG at FaithInvest and other forums, also included were Bhakti Mirchandani of Trinity Church Wall Street, and Anne Richardson of Episcopal Church Foundation, along with respected ESG manager Boston Common Asset Management.
The forum was an excellent cross section of faith investor types (pension, endowment, and foundation) covering their current work and observations.
Notable headlines I heard from these faith-based asset owners:
Active engagement to help their asset managers: for example, one selects a responsible investing theme each year and asks their asset managers to report in detail on how they approach the theme in their investments. They collate and anonymize the findings and share them with all their asset managers in order to help spread best practices and encourage managers – competitively - to improve their efforts.
“ESG is data, not a method” – one doesn’t do “ESG investing”, one uses ESG data to inform investment decisions and monitor investment holdings. Thought this important as in our own research we’ve seen investment policies and guidelines written with language like “the manager is expected to invest in line with ESG” – what does this mean?
“Net zero by 2040 will not happen” and assuming it will means you may be overinvesting in companies that would benefit from the rapid changes required to hit this target (think 'transition minerals,' covered in a prior post), and underinvest in companies that benefit from a longer transition (think energy production). Overall “be realistic about the pace of change in climate”.
All speakers emphasized the importance of shareholder advocacy and company engagement (where specific and narrower issues of interest can be targeted), using their asset managers and various stakeholder and coordinating groups (like ICCR).
For those newer to the topic, at about minute 7 they do a good review of the terminology, and throughout talk about the values-themes they are focused on today.