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Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
Socially Responsible Investing Forum Donald A. Kirshbaum
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Socially Responsible Investing Forum Donald A. Kirshbaum

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  • 1. Socially Responsible Investing Forum Donald A. Kirshbaum Connecticut Office of the Treasurer Denise L. Nappier, Treasurer How Socially Responsible Investing has become Responsible Investing March 30, 2007
  • 2. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Connecticut Retirement Plans and Trust Funds (CRPTF) - $24 billion </li></ul><ul><li>State Treasurer Denise Nappier </li></ul><ul><ul><li>principal fiduciary </li></ul></ul><ul><li>Re-entered shareholder activism in 1999 </li></ul>
  • 3. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>OVERVIEW </li></ul><ul><ul><li>History </li></ul></ul><ul><ul><li>Issue Areas </li></ul></ul><ul><ul><li>Coalitions </li></ul></ul><ul><ul><li>Examples </li></ul></ul><ul><ul><ul><li>Climate Change </li></ul></ul></ul><ul><ul><ul><li>Transparency </li></ul></ul></ul><ul><ul><ul><li>Sudan </li></ul></ul></ul><ul><ul><li>Where are we now? </li></ul></ul><ul><ul><li>Where are we going? </li></ul></ul>
  • 4. HISTORY <ul><li>Screening Out </li></ul><ul><li>Value Judgments </li></ul><ul><li>Faith Based Investors </li></ul><ul><li>SRI Investors </li></ul><ul><li>Sustainability </li></ul><ul><li>Shareholder Activism </li></ul>Overview History Issue Areas Coalitions Examples Where are we now? Where are we going?
  • 5. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Corporate Governance </li></ul><ul><li>Energy Enrollment </li></ul><ul><li>Finance </li></ul><ul><li>Health Care </li></ul><ul><li>Human Rights and Labor Standards </li></ul><ul><li>Militarism </li></ul><ul><li>Inclusiveness </li></ul>ICCR ISSUES: 2006
  • 6. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Diversity </li></ul><ul><ul><li>Board </li></ul></ul><ul><ul><li>Glass Ceiling </li></ul></ul><ul><ul><li>Sexual Orientation </li></ul></ul><ul><ul><li>EEO Reporting </li></ul></ul><ul><li>Gambling </li></ul><ul><li>Tobacco </li></ul><ul><li>Health </li></ul><ul><li>Environment and Climate Change </li></ul><ul><li>Global Labor Standards </li></ul><ul><li>GMO </li></ul><ul><li>Nuclear Power </li></ul>Some other SRI Issues
  • 7. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Faith Based Investors </li></ul><ul><li>SRI Funds </li></ul><ul><li>Small Number of Public Pension Funds </li></ul>SHAREHOLDER ACTIVISM COALITIONS
  • 8. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Coalition Organizations </li></ul><ul><li>ICCR </li></ul><ul><li>Social Investment Forum </li></ul><ul><ul><li>SRI in the Rockies </li></ul></ul><ul><li>Council of Institutional Investors (CII) </li></ul><ul><li>CERES/Investor Network on Climate Risk </li></ul><ul><li>Principles for Responsible Investment (CPRI) </li></ul>
  • 9. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Faith Based Funds </li></ul><ul><li>SRI Funds </li></ul><ul><li>TIAA-CREF </li></ul><ul><li>Main Stream Mutual Funds and Investment Managers </li></ul><ul><li>Insurance Companies </li></ul><ul><li>Public Pension Funds </li></ul><ul><li>Labor Pension Funds </li></ul><ul><li>Foundations </li></ul><ul><li>University Endowments </li></ul><ul><li>International Pension Funds </li></ul>Today the Coalitions are Broadening
  • 10. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Examples </li></ul><ul><li>Climate Change </li></ul><ul><li>Sudan </li></ul><ul><li>Shareholder Rights </li></ul>
  • 11. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>CLIMATE CHANGE </li></ul><ul><li>Began as value based issue </li></ul><ul><li>Called for reduction of CO2 emissions as a public good: ICCR 1991 </li></ul><ul><li>Concept of Climate Risk </li></ul><ul><ul><li>Regulatory </li></ul></ul><ul><ul><li>Physical </li></ul></ul><ul><ul><li>Reputation </li></ul></ul><ul><ul><li>Litigation </li></ul></ul><ul><li>Shift from environmental “social” issue to fiscal issue </li></ul><ul><li>Transparency </li></ul><ul><li>Opportunities </li></ul>
  • 12. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>CLIMATE CHANGE </li></ul><ul><li>U.N. Summits </li></ul><ul><ul><li>November 2003, May 2005 </li></ul></ul><ul><li>Call to Action </li></ul><ul><li>Investor Network on Climate Risk (INCR) </li></ul><ul><li>Call for Public Policy to protect long term value of investments </li></ul>
  • 13. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>CLIMATE CHANGE </li></ul><ul><li>INCR – formed November 2003 </li></ul><ul><li>Call to Action 2003 (10 signers) </li></ul><ul><ul><li>Signed by Public Pension Fund Trustees and Managers </li></ul></ul><ul><ul><li>Labor Pension Funds </li></ul></ul><ul><li>Call to Action 2005 (28 signers) </li></ul><ul><ul><li>Also signed by Foundations, European Investors, Faith Based Investors </li></ul></ul><ul><li>Call to Action 2007 (65 signers) </li></ul><ul><ul><li>Corporate CEOs and Asset Managers (both mainstream and SRI) </li></ul></ul>
  • 14. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>TRANSPARENCY </li></ul><ul><li>SEC 10-K: Management Discussion and Analysis </li></ul><ul><li>Sarbanes Oxley </li></ul><ul><li>SEC </li></ul><ul><ul><li>Compensation Discussion and Analysis </li></ul></ul><ul><li>Global Reporting Initiative (GRI) </li></ul><ul><ul><li>Sustainability Reporting </li></ul></ul><ul><li>Carbon Disclosure Project </li></ul><ul><li>Global Framework for Climate Risk Disclosure </li></ul>
  • 15. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>SUDAN </li></ul><ul><li>Sudan is not S. Africa </li></ul><ul><li>Global Economy </li></ul><ul><li>China </li></ul>
  • 16. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>SUDAN </li></ul><ul><li>Divestment movement </li></ul><ul><ul><li>Divest Sudan </li></ul></ul><ul><ul><li>University Endowments and student movement </li></ul></ul><ul><li>State Legislation </li></ul><ul><ul><li>Global Portfolios </li></ul></ul><ul><ul><li>Legal Challenges </li></ul></ul><ul><ul><li>US Sanctions limit US company divestment </li></ul></ul><ul><li>Constructive Engagement </li></ul><ul><li>Lack of effective follow through </li></ul>
  • 17. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Where we are now – Mainstream Investors </li></ul><ul><li>What’s Out </li></ul><ul><ul><li>Screening sin stocks (Tobacco, porn, gambling) </li></ul></ul><ul><ul><li>GMO </li></ul></ul><ul><ul><li>Military </li></ul></ul><ul><ul><li>Nuclear </li></ul></ul><ul><ul><li>Drug Pricing – some but not mainstream </li></ul></ul>
  • 18. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>What’s IN </li></ul><ul><ul><li>Shareholder Rights </li></ul></ul><ul><ul><li>Executive Compensation </li></ul></ul><ul><ul><li>Climate Change </li></ul></ul><ul><ul><li>Reconcile long term investors with short investment managers </li></ul></ul><ul><ul><li>Sustainability/GRI </li></ul></ul><ul><ul><li>Global Labor Standards </li></ul></ul><ul><ul><li>Diversity </li></ul></ul><ul><ul><li>ESG </li></ul></ul><ul><ul><li>Principles for Responsible Investment (PRI) </li></ul></ul>Where we are now? – Mainstream Investors
  • 19. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>Where we are going on: </li></ul><ul><ul><li>Shareholder Rights </li></ul></ul><ul><ul><li>Executive Compensation </li></ul></ul><ul><ul><li>Climate Change </li></ul></ul>
  • 20. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>SHAREHOLDER RIGHTS </li></ul><ul><li>Transparency </li></ul><ul><ul><li>Sustainability Reports/GRI </li></ul></ul><ul><ul><li>SEC: MD&A, CD&A </li></ul></ul><ul><ul><li>Climate: CDP; Global Framework </li></ul></ul><ul><li>Access to the Proxy </li></ul><ul><ul><li>HP vote 43% </li></ul></ul><ul><ul><li>SEC </li></ul></ul><ul><li>Direct Communication with Board members on important issues </li></ul>
  • 21. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>EXECUTIVE COMPENSATION </li></ul><ul><li>Pay for Performance </li></ul><ul><li>Disclosure </li></ul><ul><li>Options back dating </li></ul><ul><li>Say on Pay </li></ul><ul><li>Internal and External Pay Equity </li></ul><ul><li>Appropriate Benchmarking </li></ul>
  • 22. Overview History Issue Areas Coalitions Examples Where are we now? Where are we going? <ul><li>CLIMATE CHANGE </li></ul><ul><li>Risk and Opportunity </li></ul><ul><li>Universal Investor </li></ul><ul><li>Public Policy – National and International </li></ul><ul><li>The Stern Report </li></ul><ul><ul><li>Pay me now or pay me later </li></ul></ul><ul><ul><li>Transfer of cost from now to the future and from rich to poor </li></ul></ul><ul><ul><li>How much and how fast </li></ul></ul>
  • 23. Questions and Discussion <ul><li>Donald Kirshbaum </li></ul><ul><li>CT Office of the State Treasurer </li></ul><ul><li>Tel: 860.702.3164 </li></ul><ul><li>Email: [email_address] </li></ul>

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