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Table of Contents
Front Cover
Environmental, Social, and Governance (ESG) Investing
Copyright Page
Contents
1 Introduction
Principles for responsible investing
Sustainable development goals
The scope of this book
Chapter 2: ESG, SRI, and impact investing
Chapter 3: Theories of the firm
Chapter 4: Fiduciary duty in investment management
Chapter 5: Overview of financial institutions
Chapter 6: Financial markets: equities
Chapter 7: Financial markets: bonds
Chapter 8: Shareholder engagement
Chapter 9: Defining and measuring ESG performance
Chapter 10: ESG in managing institutional investor funds
Chapter 11: ESG in managing college and university endowments
Chapter 12: ESG in managing sovereign wealth and government sponsored funds
Chapter 13: ESG in managing family foundations and family offices
Chapter 14: Faith-based investing
Chapter 15: ESG investing-organizations having direct impact
Chapter 16: What's next for ESG investing
2 ESG, SRI, and impact investing
Environmental, social, and governance investing
Socially responsible investment
Divestment: South Africa
Divestment: sin stocks
Impact investing
The Rise Fund
Mission investing
United Nations principles for responsible investing
United Nations sustainable development goals
Financial returns versus social and environmental returns
Global sustainable investment
3 Theory of the firm
The social responsibility of business is to increase its profits
Maximize shareholder welfare, not market value
Maximizing welfare
Shareholder rights
Summary
Appendix
4 Fiduciary duty in investment management
Addressing the Agency Problem
Fiduciary duty
Fiduciary obligations
"Prudent Man" rule
Uniform Prudent Investor Act
Uniform Prudent Management of Institutional Funds Act.
Freshfields Report
Fiduciary II
United Nations Principles for Responsible Investing
Organization for Economic Cooperation and Development
Summary
5 Overview of financial institutions
Information asymmetries, moral hazard, and adverse selection
Commercial banks
Credit unions
Investment banks
Trading and research
Asset securitization
Mergers and acquisitions
Prime brokerage
Central banks
Conventional monetary tools
Unconventional monetary policy
Other central banks
Shadow banking: other financial intermediaries
Insurance companies
Categories of insurance
Prudential Financial Inc
MetLife Inc
Zurich Insurance Group
Pension funds
Largest pension funds
CalPERS
Florida State Board of Administration
Asset managers
Hedge funds
Private equity
6 Financial markets: equities
Risk, return, and diversification
Capital asset pricing model
Efficient market hypothesis
Random walk
Types of orders
Equity trading venues
Regulation
Investing in equities
Collective investment vehicles: mutual funds and exchange-traded funds
Equity indexes
ESG indexes
MSCI
FTSE Russell
Morningstar
Robo-advisors
7 Financial markets: bonds
Future value and present value
Internal rate of return
Credit instruments
Fisher's law
Term structure and yield curve
Types of debt instruments: money market instruments
Types of debt instruments: US Treasury securities
Types of debt instruments: agency securities
Types of debt instruments: corporate bonds
Types of debt instruments: municipal securities
Types of debt instruments: sovereign debt
Fixed income trading
Fixed income indexes and funds
ESG bond funds
ESG bond fund managers
PIMCO
Fidelity
Green bonds
Green bond indexes and ETFs.
8 Shareholder engagement
Using engagement to create value for both investors and companies
Shareholder activism
Shareholder voting by proxy
Key corporate governance and shareholder voting trends
Recent shareholder proposals
Examples of shareholder engagement policies
Blackrock
CalPERS
T. Rowe Price
The New York City Comptroller's Office
Vanguard
Institutional investors acting together
The Investor Stewardship Group
The 30% Club
Sustainability Accounting Standards Board
9 Defining and measuring ESG performance
ESG factors in portfolio construction
Standards for companies to report their ESG impacts
Global Reporting Initiative
Sustainability Accounting Standards Board
United Nations Global Compact
The United Nations Guiding Principles
Quality issues in ESG reporting
Corporate ESG reporting: findings
Services providing an assessment of corporate ESG
Sustainalytics
MSCI
RepRisk ESG Business Intelligence
Ceres
JUST Capital
How do mutual funds and ETFs rate ESG performance of portfolio companies?
Morningstar
Does ESG investing require lower returns?
Conceptual critiques of ESG investing
Empirical studies
10 ESG in managing institutional investor funds
BlackRock
Sustainable investment choices
Fidelity
PIMCO
Goldman Sachs
J.P. Morgan
Betterment
JUST Capital
11 ESG in managing college and university endowments
Hampshire College
Yale University
University of California
Brown University
Harvard
Columbia University
ESG investing in other schools
Organizations providing analysis, support, consulting, and investing services for endowment management
Commonfund
The Intentional Endowments Network
National Association of College and University Business Officers.
The Forum for Sustainable and Responsible Investment
12 ESG in managing sovereign wealth and government sponsored funds
Transparency issues and concerns
Linaburg-Maduell Transparency Index
ESG investing by SWFs
ESG investing policy in selected sovereign wealth funds
Norway's Government Pension Fund-Global
The French Pension Reserve Fund
Temasek Holdings Private Limited
China Investment Corporation
New Zealand Superannuation Fund
Future Fund, Australia's Sovereign Wealth Fund
Middle East Sovereign Wealth Funds
Mubadala Investment Company (Abu Dhabi)
Public Investment Fund of Saudi Arabia
Other sovereign wealth fund activities
13 ESG in managing family foundations and family offices
The family office
Chan Zuckerberg Initiative
The Giving Pledge
Bill &
Melinda Gates Foundation
Lilly Endowment Inc
Day One Fund
Open Society Foundations
The Robert Wood Johnson Foundation
The Rockefeller Foundation
Bloomberg Family Foundation (Bloomberg Philanthropies)
The Ford Foundation
Carnegie Corporation of New York
Providing Services to the Foundation Community
Council on Foundations
The Foundation Center
14 Faith-based investing
Common features
Christian values investing
GuideStone
New Covenant Funds
The Interfaith Center on Corporate Responsibility
Christian Super
Timothy Plan Funds
Eventide Funds
Catholic values investing: socially responsible investment guidelines
USCCB investment policies
Catholic values mutual funds
Ave Maria Mutual Funds
LKCM Aquinas Catholic Equity Fund
Catholic values ETF
Islamic values investing
Green sukuk bonds
Islamic values indexes, mutual funds, and ETFs
MSCI Islamic index series
FTSE Shariah indexes
Amana Mutual Funds
The Iman Fund
Shariah compliant ETFs.
Jewish values investing
Jewish values indexes, mutual funds, and ETFs
15 ESG investing-organizations having direct impact
Women's Sports Foundation
USA for UNHCR
Michael J. Fox Foundation for Parkinson's Research
Elton John AIDS Foundation
Water.org
Ocean Conservancy
Project AWARE
Sea Shepherd Conservation Society
UNICEF and UNESCO
UNICEF
UNESCO
Red Cross and Red Crescent Societies
The Salvation Army
Meals on Wheels
Habitat for Humanity
16 What's next for ESG investing?
Empirical studies of environmental, social, and governance investment performance
The future of environmental, social, and governance investing
Environmental, social, and governance investment concerns to be addressed
References
Index
Back Cover.
Environmental, Social, and Governance (ESG) Investing
Copyright Page
Contents
1 Introduction
Principles for responsible investing
Sustainable development goals
The scope of this book
Chapter 2: ESG, SRI, and impact investing
Chapter 3: Theories of the firm
Chapter 4: Fiduciary duty in investment management
Chapter 5: Overview of financial institutions
Chapter 6: Financial markets: equities
Chapter 7: Financial markets: bonds
Chapter 8: Shareholder engagement
Chapter 9: Defining and measuring ESG performance
Chapter 10: ESG in managing institutional investor funds
Chapter 11: ESG in managing college and university endowments
Chapter 12: ESG in managing sovereign wealth and government sponsored funds
Chapter 13: ESG in managing family foundations and family offices
Chapter 14: Faith-based investing
Chapter 15: ESG investing-organizations having direct impact
Chapter 16: What's next for ESG investing
2 ESG, SRI, and impact investing
Environmental, social, and governance investing
Socially responsible investment
Divestment: South Africa
Divestment: sin stocks
Impact investing
The Rise Fund
Mission investing
United Nations principles for responsible investing
United Nations sustainable development goals
Financial returns versus social and environmental returns
Global sustainable investment
3 Theory of the firm
The social responsibility of business is to increase its profits
Maximize shareholder welfare, not market value
Maximizing welfare
Shareholder rights
Summary
Appendix
4 Fiduciary duty in investment management
Addressing the Agency Problem
Fiduciary duty
Fiduciary obligations
"Prudent Man" rule
Uniform Prudent Investor Act
Uniform Prudent Management of Institutional Funds Act.
Freshfields Report
Fiduciary II
United Nations Principles for Responsible Investing
Organization for Economic Cooperation and Development
Summary
5 Overview of financial institutions
Information asymmetries, moral hazard, and adverse selection
Commercial banks
Credit unions
Investment banks
Trading and research
Asset securitization
Mergers and acquisitions
Prime brokerage
Central banks
Conventional monetary tools
Unconventional monetary policy
Other central banks
Shadow banking: other financial intermediaries
Insurance companies
Categories of insurance
Prudential Financial Inc
MetLife Inc
Zurich Insurance Group
Pension funds
Largest pension funds
CalPERS
Florida State Board of Administration
Asset managers
Hedge funds
Private equity
6 Financial markets: equities
Risk, return, and diversification
Capital asset pricing model
Efficient market hypothesis
Random walk
Types of orders
Equity trading venues
Regulation
Investing in equities
Collective investment vehicles: mutual funds and exchange-traded funds
Equity indexes
ESG indexes
MSCI
FTSE Russell
Morningstar
Robo-advisors
7 Financial markets: bonds
Future value and present value
Internal rate of return
Credit instruments
Fisher's law
Term structure and yield curve
Types of debt instruments: money market instruments
Types of debt instruments: US Treasury securities
Types of debt instruments: agency securities
Types of debt instruments: corporate bonds
Types of debt instruments: municipal securities
Types of debt instruments: sovereign debt
Fixed income trading
Fixed income indexes and funds
ESG bond funds
ESG bond fund managers
PIMCO
Fidelity
Green bonds
Green bond indexes and ETFs.
8 Shareholder engagement
Using engagement to create value for both investors and companies
Shareholder activism
Shareholder voting by proxy
Key corporate governance and shareholder voting trends
Recent shareholder proposals
Examples of shareholder engagement policies
Blackrock
CalPERS
T. Rowe Price
The New York City Comptroller's Office
Vanguard
Institutional investors acting together
The Investor Stewardship Group
The 30% Club
Sustainability Accounting Standards Board
9 Defining and measuring ESG performance
ESG factors in portfolio construction
Standards for companies to report their ESG impacts
Global Reporting Initiative
Sustainability Accounting Standards Board
United Nations Global Compact
The United Nations Guiding Principles
Quality issues in ESG reporting
Corporate ESG reporting: findings
Services providing an assessment of corporate ESG
Sustainalytics
MSCI
RepRisk ESG Business Intelligence
Ceres
JUST Capital
How do mutual funds and ETFs rate ESG performance of portfolio companies?
Morningstar
Does ESG investing require lower returns?
Conceptual critiques of ESG investing
Empirical studies
10 ESG in managing institutional investor funds
BlackRock
Sustainable investment choices
Fidelity
PIMCO
Goldman Sachs
J.P. Morgan
Betterment
JUST Capital
11 ESG in managing college and university endowments
Hampshire College
Yale University
University of California
Brown University
Harvard
Columbia University
ESG investing in other schools
Organizations providing analysis, support, consulting, and investing services for endowment management
Commonfund
The Intentional Endowments Network
National Association of College and University Business Officers.
The Forum for Sustainable and Responsible Investment
12 ESG in managing sovereign wealth and government sponsored funds
Transparency issues and concerns
Linaburg-Maduell Transparency Index
ESG investing by SWFs
ESG investing policy in selected sovereign wealth funds
Norway's Government Pension Fund-Global
The French Pension Reserve Fund
Temasek Holdings Private Limited
China Investment Corporation
New Zealand Superannuation Fund
Future Fund, Australia's Sovereign Wealth Fund
Middle East Sovereign Wealth Funds
Mubadala Investment Company (Abu Dhabi)
Public Investment Fund of Saudi Arabia
Other sovereign wealth fund activities
13 ESG in managing family foundations and family offices
The family office
Chan Zuckerberg Initiative
The Giving Pledge
Bill &
Melinda Gates Foundation
Lilly Endowment Inc
Day One Fund
Open Society Foundations
The Robert Wood Johnson Foundation
The Rockefeller Foundation
Bloomberg Family Foundation (Bloomberg Philanthropies)
The Ford Foundation
Carnegie Corporation of New York
Providing Services to the Foundation Community
Council on Foundations
The Foundation Center
14 Faith-based investing
Common features
Christian values investing
GuideStone
New Covenant Funds
The Interfaith Center on Corporate Responsibility
Christian Super
Timothy Plan Funds
Eventide Funds
Catholic values investing: socially responsible investment guidelines
USCCB investment policies
Catholic values mutual funds
Ave Maria Mutual Funds
LKCM Aquinas Catholic Equity Fund
Catholic values ETF
Islamic values investing
Green sukuk bonds
Islamic values indexes, mutual funds, and ETFs
MSCI Islamic index series
FTSE Shariah indexes
Amana Mutual Funds
The Iman Fund
Shariah compliant ETFs.
Jewish values investing
Jewish values indexes, mutual funds, and ETFs
15 ESG investing-organizations having direct impact
Women's Sports Foundation
USA for UNHCR
Michael J. Fox Foundation for Parkinson's Research
Elton John AIDS Foundation
Water.org
Ocean Conservancy
Project AWARE
Sea Shepherd Conservation Society
UNICEF and UNESCO
UNICEF
UNESCO
Red Cross and Red Crescent Societies
The Salvation Army
Meals on Wheels
Habitat for Humanity
16 What's next for ESG investing?
Empirical studies of environmental, social, and governance investment performance
The future of environmental, social, and governance investing
Environmental, social, and governance investment concerns to be addressed
References
Index
Back Cover.