Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.



Published on

Published in: Economy & Finance, Business
  • Be the first to comment

  • Be the first to like this


  1. 1. Social Investment How Responsible Investing Can Strengthen the Fiduciary Oversight of Foundation Endowments and Enhance Philanthropic Missions 2009
  2. 2. A Brief Introduction <ul><li>This PowerPoint is based on a booklet produced by the Social Investment Forum Foundation entitled, “The Mission in the Marketplace: How Responsible Investing Can Strengthen the Fiduciary Oversight of Foundation Endowments & Enhance Philanthropic Missions.” </li></ul><ul><li>This booklet can be found online at http:// </li></ul><ul><li>Marketplace.pdf . </li></ul><ul><li>Acknowledgements: </li></ul><ul><li>J.A. & H.G. Woodruff, Jr. Charitable Trust </li></ul><ul><li>Foundation Partnership on Corporate Responsibility ( ) </li></ul><ul><li>The Rose Foundation ( ) </li></ul><ul><li>Triple EEE Foundation </li></ul>
  3. 3. An Invitation to Foundations & Endowments <ul><li>Responsible Investing Strategies </li></ul><ul><li>Social and Environmental Screening </li></ul><ul><li>Shareowner Advocacy </li></ul><ul><li>Community Investing </li></ul><ul><li>Social Venture Capital </li></ul>
  4. 4. Creating Value <ul><li>“ [F]oundations are not simply vehicles for distribution of charitable gifts, but rather investors in value creation.” </li></ul><ul><li>— Jed Emerson </li></ul><ul><li>Generation Foundation </li></ul>
  5. 5. What is Responsible Investing? <ul><li>Responsible investing is an investment process that considers the social and environmental consequences of investments , both positive and negative, within the context of rigorous financial analysis. </li></ul>
  6. 6. Terminology <ul><li>The incorporation of environmental, social, & governance (ESG) factors into investment management has been described in a variety of ways: social investing, mission-related investing, values-based investing, socially responsible investing (SRI), ethical investing, double- or triple-bottom-line investing, and responsible investing. This report will use a number of these terms. </li></ul>
  7. 7. Socially Responsible Investing (SRI) <ul><li>SRI incorporates issues of </li></ul><ul><li>Corporate Social Responsibility (CSR) , ranging from environmental concerns to human rights and supply-chain management, from workplace health and safety to equal employment opportunity and human resources policies. </li></ul>
  8. 8. Responsible Investing’s Scope and Scale <ul><li>Over $2.7 trillion : U.S. SRI Assets under professional management </li></ul><ul><li>Over $15 trillion : Assets of institutional investors backing UN Principles for Responsible Investment </li></ul><ul><li>Over $6 trillion : Assets of UN Global Compact endorsers </li></ul><ul><li>Over 27% Annual Growth in US SRI Assets 1995-2007 </li></ul>
  9. 9. Fiduciary Prudence, Performance & Mission-Based Investing <ul><li>Consideration of sustainability as an element of prudent trusteeship </li></ul><ul><li>Recognition of “extra-financial” benefits </li></ul><ul><li>Added economic value of environmental performance </li></ul><ul><li>Competitive long-term performance </li></ul><ul><li>Variety of options across investment styles, instruments, and asset classes </li></ul>
  10. 10. Social and Environmental Screening <ul><li>The Incorporation of Environmental, </li></ul><ul><li>Social and Governance (ESG) Criteria </li></ul><ul><li>into Investment Analysis </li></ul><ul><li>Negative Screening Avoids Poor CSR Performers </li></ul><ul><li>Positive Screening Identifies Strong CSR Performers </li></ul><ul><li>“ Best-of-Class” Screening Identifies Sector Leaders </li></ul>
  11. 11. Largest Foundations Employing Social or Environmental Screening* <ul><li>Bill & Melinda Gates Foundation </li></ul><ul><li>Ford Foundation </li></ul><ul><li>David and Lucile Packard Foundation </li></ul><ul><li>California Endowment </li></ul><ul><li>Annie E. Casey Foundation </li></ul><ul><li>Rockefeller Foundation </li></ul><ul><li>Carnegie Corporation of New York </li></ul><ul><li>California Wellness Foundation </li></ul><ul><li>Robert Wood Johnson Foundation </li></ul><ul><li>Charles Stewart Mott Foundation </li></ul><ul><li>Carnegie Corporation of New York </li></ul><ul><li>Heinz Endowments </li></ul><ul><li>William Penn Foundation </li></ul><ul><li>Among 50 Largest Private Foundations </li></ul><ul><li>Source: Chronicle of Philanthropy, 2006 </li></ul>*May include a single screen, such as tobacco
  12. 12. Shareowner Advocacy <ul><li>Active Proxy Voting </li></ul><ul><li>Filing and Co-filing Resolutions </li></ul><ul><li>Direct Dialogue with Management </li></ul><ul><li>Participation in Shareowner Coalitions and Networks </li></ul>
  13. 13. Recent Shareowner Successes <ul><li>Climate Change and Carbon Disclosure </li></ul><ul><li>HIV/AIDS Policies at Coca-Cola and PepsiCo in Africa </li></ul><ul><li>Labor Conditions at Taco Bell and Yum! Brands </li></ul><ul><li>Fair Trade at Procter & Gamble </li></ul>
  14. 14. Shareowner Engagement Networks <ul><li>Council of Institutional Investors </li></ul><ul><li>Foundation Partnership for Corporate Responsibility </li></ul><ul><li>Interfaith Center on Corporate Responsibility (ICCR) </li></ul><ul><li>International Corporate Governance Network </li></ul><ul><li>Investor Network on Climate Risk (INCR) </li></ul><ul><li>Jewish Shareholder Engagement Network </li></ul><ul><li>Social Investment Forum </li></ul>
  15. 15. Recent Social Shareholder Resolution Proponents Among Foundations <ul><li>As You Sow Foundation </li></ul><ul><li>Camilla Madden Charitable Trust </li></ul><ul><li>Conservation Land Trust </li></ul><ul><li>Edward W. Hazen Foundation </li></ul><ul><li>Funding Exchange </li></ul><ul><li>Haymarket People’s Fund </li></ul><ul><li>Jessie Smith Noyes Foundation </li></ul><ul><li>Lemmon Foundation </li></ul><ul><li>Max and Anna Levinson Foundation </li></ul><ul><li>Nathan Cummings Foundation </li></ul><ul><li>Needmor Fund </li></ul><ul><li>Pride Foundation </li></ul><ul><li>Tides Foundation </li></ul><ul><li>United Church Foundation </li></ul><ul><li>Wisdom Charitable Trust </li></ul>
  16. 16. Community Investing (CI) <ul><li>Provides capital to traditionally underserved communities </li></ul><ul><li>Generates high-impact social returns </li></ul><ul><li>Supports affordable housing, child care, and sustainable economic development </li></ul><ul><li>Provides diverse investment opportunities, from below-market deposits to risk-adjusted, market-rate returns through debt, equity and venture capital </li></ul>
  17. 17. Community Investing Institutions <ul><li>Community Development Banks </li></ul><ul><li>Credit Unions </li></ul><ul><li>Loan Funds </li></ul><ul><li>Venture Capital </li></ul><ul><li>International Microfinance Funds </li></ul><ul><li>Grown from $4 billion in 1995 to over $25 billion in 2007 </li></ul>
  18. 18. Sample Foundation Leaders in CI <ul><li>F. B. Heron Foundation </li></ul><ul><li>Jewish FundS for Justice (JFSJ) </li></ul><ul><li>A. J. Muste Memorial Institute </li></ul><ul><li>Rose Foundation for Communities and the Environment </li></ul>
  19. 19. Social Venture Capital <ul><li>“ Double-bottom-line:” both financial and social returns </li></ul><ul><li>Alternative Investment opportunities in early-stage private equity </li></ul><ul><li>Debt financing to support non-profit social enterprises </li></ul><ul><li>Over $600 million in capital from “Angel Investors” and Institutions alike </li></ul>
  20. 20. Getting Started <ul><li>Conduct Research and Gather Resources </li></ul><ul><li>Ask Whether Your Existing Managers and Consultants Have the Necessary Expertise </li></ul><ul><li>Consult a Financial Advisor with Expertise in Mission-Related Investing </li></ul><ul><li>Have a Strategic Conversation within Your Organization on Your Investment Policies </li></ul><ul><li>Present Findings to Your Foundation Board or Investment Committee </li></ul>continued
  21. 21. Getting Started <ul><li>Develop Active Proxy Voting Guidelines </li></ul><ul><li>Draft a New Responsible Investing Policy </li></ul><ul><li>Explore Community Investing Opportunities </li></ul><ul><li>Lead by Example: Share Knowledge & Best Practices </li></ul><ul><li>Join Responsible Investor Networks </li></ul>
  22. 22. The Social Investment Forum <ul><li>Dedicated to advancing the concept, practice, and growth of socially and environmentally responsible investing </li></ul><ul><li> </li></ul><ul><li>The Social Investment Forum 910 17 th Street NW, Suite 1000 Washington, DC 20006 phone (202) 872-5361 fax (202) 775-8686 </li></ul><ul><li>Join online today! </li></ul>