Green Investing: Opportunities to effect change through active shareholder engagement CFA Society of...
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Transcript of Green Investing: Opportunities to effect change through active shareholder engagement CFA Society of...
Green Investing:Opportunities to effect change through active shareholder engagement
CFA Society of Seattle
May 24, 2010
Erin Gray, Strategic AnalysisGreen Century Funds
Shareholder Advocacy or Engagement
• Shareholder advocacy basics• Why investors engage with companies• Strategy overview and current trends• Engagement examples
Advocacy Definition and Issues
• Definition:– Using power of stock ownership to promote change in
corporate practices
• Issues (ESG):– Environment
• Toxics chemicals, BPA, pesticide use, water
– Social• Diversity, labor safety, animals rights, community relations
– Corporate Governance• Say on Pay/Exec. Comp., political accountability, sustainability
reporting, housing foreclosures
Rationale for Engagement
• Make a change vs. divestment• Increasing fiduciary pressure
– Freshfields report• “…integrating ESG considerations… is arguably required”• “…a responsible investment option should be the default position.”
– UN PRI (Principles for Responsible Investment)– INCR (Investor Network on Climate Risk)
Green Century
• Mission alignment• Risk mitigation• Competitive advantages of green investing• Risk assessment:
– Litigation– Regulatory– Physical– Reputational
Advocacy Tools
• Direct negotiations• Shareholder resolutions
• Voting proxies
Shareholder Advocacy Trends
• Social Investment Forum 2010 Trends Report:– > $3 trillion in assets use at least 1 of 3 responsible
investment strategies
Shareholder Advocacy Trends cont’d.
Social and Environmental Shareholder Proposals Filed in 2011Other – 2%
Banking – 2%
Animals – 4%
Health – 5%
Labor/ Human Rights – 13%
Diversity – 13%
Environment – 26%
SustainabilityReporting – 10%
Political Spending – 23%
Source: As You Sow’s 2011 Proxy Preview
SRI Group
Pension Fund
Religious
Union
Individual
Special Interest
Foundation
Shareholder Advocacy Trends cont’d.
2011 Shareholder Resolutions by Filer
24%
8%
19%
15%
13%
8%
13%
Source: As You Sow’s 2011 Proxy Preview
Thank You!
Contact Information:Erin Gray, Strategic AnalysisGreen Century [email protected]
Hydraulic Fracturing
Source: ProPublica
GC Balanced Fund Performance
3 Month 1 Yr 3 YrSince
Incept.
GC Balanced Fund 4.99% 10.42% 3.66% 6.58%
Lipper Balanced Fund Index 3.90% 11.96% 3.78% 7.37%
The Balanced Fund uses the Lipper Balanced Fund Index as a benchmark. The Lipper Balanced Fund Index tracks funds whose primary objective is to conserve principal by maintaining, at all times, a balanced portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%.
The performance data quoted represents past performance, and past performance is not aguarantee of future results. Investment return and principal value of an investment willfluctuate so that an investor's shares, when redeemed, may be worth more or less than theiroriginal cost. Current performance may be lower or higher than the performance informationquoted. To obtain performance information current to the most recent month-end, please call1-800-93-GREEN. Performance is calculated after fees and includes the reinvestment ofIncome dividends and capital gain distributions, if any. The performance shown does notreflect the deduction of taxes that a shareholder might pay on any Fund distributions or theredemption of Fund shares.
As of 3/31/11:
GC Equity Fund Performance
6 Month 1 Yr 3 YrSince
Incept.
GC Equity Fund 13.53% 9.52% 2.22% 7.29%
S&P 500® Index 17.31% 15.65% 2.35% 8.57%The performance data quoted represents past performance, and past performance is not aguarantee of future results. Investment return and principal value of an investment willfluctuate so that an investor's shares, when redeemed, may be worth more or less than theiroriginal cost. Current performance may be lower or higher than the performance informationquoted. To obtain performance information current to the most recent month-end, please call1-800-93-GREEN. Performance is calculated after fees and includes the reinvestment ofIncome dividends and capital gain distributions, if any. The performance shown does notreflect the deduction of taxes that a shareholder might pay on any Fund distributions or theredemption of Fund shares.
As of 3/31/11:
The S&P 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The S&P 500® Index is heavily weighted toward stocks with large market capitalization and represents approximately two-thirds of the total market value of all domestic stocks. It is not possible to invest directly in the S&P 500® Index.
MSCI KLD 400 Social Index Performance