Foundation & Endowment Money Management - Sustainable Investments Gain Traction

Sustainable Investments Gain Traction

Nonprofits are increasingly turning to sustainable investments that consider environmental, social, and governance factors with an aim to identify better managed, lower risk companies. FEMM Contributing Reporter Joseph D'Allegro recently spoke with Matthew Kiernan, co-head of the Sustainability Solutions Group at RiskMetrics Group; Paul Hilton, director of advanced equity research for Calvert; and Hugo Steensma, managing director of Sustainable Asset Management.

FEMM: Why should an endowment or foundation make a sustainable investment?

Kiernan: Foundations and endowments typically spend 5% of their corpus each year in grants targeted towards the particular objectives and priorities of the particular institution. It has long struck me as both perverse and frustrating that, for the most part, the other 95% of the institutions' assets are invested with virtually no regard whatsoever for their overriding purpose or mandate! The vast majority of them have no idea what the environmental impacts of their investment activities might be. For all they know, their money managers are investing in the most egregious environmental polluters on the planet, and helping to undo all of the institution's good work on the program side.

Hugo Steensma Steensma: There are many different approaches to investing in sustainability. Program Related Investing (PRI), Mission Related Investing (MRI) and Socially Responsible Investing (SRI) all have a different focus on one or more aspects of a foundation's or endowment's mission. A foundation or endowment should only consider a sustainable investment if the primary goal of the asset manager is to generate at least and preferably exceed market based returns. Fortunately there are now an increasing number of investment ...

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Exclusive news on nonprofits'investment management

Sustainable Investments Gain Traction

Exclusive news on nonprofits'
investment management