easy things you can do to have an impact
DESCRIPTION
Presentation by Steve Heim, Boston Common Asset Management, at the Take Action! 2010 Impact Investing Conference in Boston.TRANSCRIPT
Take Action! Boston 2010Easy Things You Can Do To Have An Impact
September 16, 2010
BOSTON COMMONASSET MANAGEMENT, LLC
Steven Heim, Director of ESG Research & Shareholder EngagementBoston Common Asset Management, LLC
84 State Street, Suite 940, Boston, MA 02109702 Marshall Street, Suite 611, Redwood City, CA 94063
Tel: (617) 720-5557 Fax: (617) 720-5665Web: www.bostoncommonasset.com
Integrated InvestingFinancial Return & Social Change
Fundamentals
Valuation
End-Market Growth
Social
Governance
Environmental
Integrated Investment Portfolio
Financial FactorsSustainability
Factors
Sustainable Financial Returns
Results
Shareholder Engagement
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ESG Investment Matrix
Stock Selection ESG Research
Portfolio Construction
Quantitative Screening
Weak Strong
Strong SunPower Praxair
Average Cisco Systems
Weak
ESG Opinion
Investment Opinion
The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that the securities discussed herein will remain in the account’s portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed do not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
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Sustainable Guidelines Example: Climate Change
Favor investment in companies that:
– Develop and market renewable energy technology
– Provide products or services to increase energy efficiency
– Develop innovative programs to reduce direct and indirect GHG emissions
– Achieve significant progress in cutting greenhouse gas emissions
– Respond to Carbon Disclosure Project
Avoid investment in the following types of companies:
– Major coal producers
– Major producers of coal-to-liquids fuels without plans for carbon sequestration
– Electric utilities that primarily use coal fired generation
– Major opponents of federal climate change policies4
Investing in SustainabilityEnvironment
We invest in companies…
Whose products are part of the
solution
Whose technologies enable cleaner
manufacturing/products
Whose product profiles include
sustainable products
Whose practices promote
sustainability
Vestas Wind Systems
First Solar
PraxairCummins
Emerson ElectricHonda
StaplesCanon
The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that the securities discussed herein will remain in the account’s portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed do not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
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To improve the corporation’s long-term social and environmental performance and promote sustainable growth, we initiate:
– Constructive Dialogue with Corporate Management
– Targeted Data Gathering
– Shareholder Resolutions and Representation at Annual Shareholders Meetings
– Collaboration with US and International Organizations
– Public Policy Testimony
– Proxy Voting to Favor Best Practices
ESG Initiatives Beyond Screening
The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that the securities discussed herein will remain in the account’s portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed do not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
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CollaborationsWork with U.S. & International Organizations
Leverage via Institutional Investor NetworksASrIA – Association for Sustainable & Responsible Investment in Asia
Carbon Disclosure Project – Institutional investors asking companies for climate change data & disclosure
Conflict Risk Network – Initial focus on Sudan
Eurosif – European Sustainable Investment Forum
Investor Environmental Health Network – Focus on toxics and safer chemicals
Interfaith Center on Corporate Responsibility – For faith-based and other institutional investors
Investor Network on Climate Risk a project of Ceres - for institutional investors & financial institutions
Social Investment Forum – International Working Group, Sustainable Investment Research Analyst Network, Indigenous Peoples Working Group
UNPRI (Principles for Responsible Investment) – A leading global network for institutional investors
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Multiple Stakeholders
Government
Shareholders
Ecology Customers
Employees
Community
CorporationManagement
Environment Social
Governance
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Multi-Stakeholder Engagement
Types of Engagement
– Direct Engagement with Companies and
Industries
– Coalition Building
– Cross-Industry Collaboration
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Identify core issue to client mission and corporate operations– Coal-fired, electric power plants generate over a quarter of
total U.S. greenhouse gas emissions
– JPMorgan Chase & Co. has been lead lender for utilities developing new coal-fired power plants in the U.S.
– Regulation of greenhouse gas emissions is a risk to lenders
Engage company management – File shareholder proposal asking JPMorgan to publicly
disclose its due diligence process when extending loans to utilities with new fossil fuel plants under construction
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Direct EngagementCoal Financing
Outcomes – JPMorgan reports publicly on number of financial
transactions to utilities with coal-fired generation under development, and how it implemented enhanced due diligence for those transactions
– Subjects all future engagements with companies involved in mountaintop removal mining to “enhanced review”
Next Steps– Take engagement beyond reporting to reduce lending
to electric utilities developing new coal-fired generation
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Direct EngagementCoal Financing
Cross-Industry CollaborationMineral trade and conflict in the Democratic Republic of Congo
Identify core issue to client mission and corporate operations
– More than 5.4 million casualties have resulted from conflict in the DRC, fueled in part by a lucrative trade in minerals that supply the electronics, automotive, and aerospace industries, food producers, medical device companies and tool manufacturers (e.g. cobalt and tantalum)
– Procurement of key materials from unstable regions presents business risks
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Cross-Industry CollaborationMineral trade and conflict in the Democratic Republic of Congo
Engage company management– Investors organize to publicly condemn use of minerals
sourced in the DRC
– Investors contact over 100 companies in various industries, asking them to identify where their raw materials originate
Outcomes– Industries used different approaches, which investors
shared broadly to establish new tools
– Identified “leaders” and “laggards” and encouraged companies to meet and exceed steps taken by peers
Next Steps– Continue to facilitate multi-stakeholder process
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