PAE 15: Sustainable Investment

Transcription

1 PAE 15: Sustainable Investment 12 pints available A. Credit Ratinale This credit recgnizes institutins that use their investment pwer t prmte crprate sustainability. This culd take the frm f making psitive investments that prmte sustainability r engaging with cmpanies in which they already hld investments. Psitive investing supprts scially and envirnmentally respnsible practices and the develpment f sustainable prducts and services. Active investr engagement can help align an institutin s investments with its values, prtect the institutin frm the financial cnsequences f fines, lawsuits, custmer byctts and damages t a cmpany s reputatin that may result frm unsustainable crprate behavir, and imprve the sustainability perfrmance f the businesses it invests in. Bth types f activities cntribute tward a mre just and sustainable financial system B. Criteria There are tw pssible appraches t earning pints fr this credit. Institutins may pursue ne r bth. Institutins fr which investments are handled by the university system and/r a separate fundatin f the institutin shuld reprt n the activities f thse entities. Optin 1. Institutin invests in ne r mre f the fllwing: Sustainable industries, such as renewable energy r sustainable frestry Businesses selected fr exemplary sustainability perfrmance (e.g. certified B Crpratins) Sustainability investment funds, such as a renewable energy r impact investment fund Cmmunity develpment financial institutins (CDFI) Scially respnsible mutual funds with psitive screens. Investment in a scially respnsible mutual fund with nly negative screens (i.e. ne that excludes egregius ffenders r certain industries, such as tbacc r weapns manufacturing) des nt cunt. Green revlving lan funds that are funded frm the endwment and/r Optin 2. Institutin has plicies and/r practices that meet ne r mre f the fllwing criteria: Has a publicly available sustainable investment plicy, fr example t cnsider the scial and/r envirnmental impacts f investment decisins, in additin t financial cnsideratins Uses its sustainable investment plicy t select and guide investment managers STARS 2.0 Technical Manual 282 PAE Investment

2 Has engaged in prxy vting t prmte sustainability, either by its CIR r ther cmmittee r thrugh the use f guidelines, during the previus three years Has filed r c-filed ne r mre sharehlder reslutins that address sustainability r submitted ne r mre letters abut scial r envirnmental respnsibility t a cmpany in which it hlds investments, during the previus three years Has a publicly available investment screening plicy, fr example t prhibit investment in an industry (e.g. tbacc r weapns manufacturing) r participate in a divestment effrt Engages in plicy advcacy by participating in investr netwrks (e.g. Principles fr Respnsible Investment, Investr Netwrk n Climate Risk, Interfaith Center n Crprate Respnsibility) and/r engages in inter-rganizatinal cllabratins t share best practices C. Applicability This credit applies t institutins with endwments f US $1 millin r larger. Institutins with endwments less than US $1 millin may chse t mit this credit. D. Scring An institutin earns the maximum f 12 pints available fr this credit by investing 100 percent f its investment pl in ne r mre f ways listed in Optin 1 (abve) r by investing 50 percent f its investment pl sustainably and meeting all f the investr engagement criteria listed in Optin 2 (abve). Incremental pints are available fr Optin1 and partial pints are available fr Optin 2. Each ptin is scred as fllws: Optin 1: Psitive Sustainability Investment Institutins earn the maximum f 12 pints available in Optin 1 by investing 100 percent f its investment pl in ne r mre f the ways listed abve. Incremental pints are awarded based n the percentage f the institutin s investment pl that is invested sustainably. Fr example, an institutin that invested 50 percent f its investment pl sustainably wuld earn 6 pints (half f the pints available in Optin 1). Enter values as indicated belw t calculate pints earned using Optin 1 Pints will be calculated autmatically when data are entered in the STARS nline Reprting Tl Factr Multiply Value f Psitive Sustainability Investments Divide Ttal Value f the Investment Pl Equals Ttal Pints Earned fr Optin 1 12 = STARS 2.0 Technical Manual 283 PAE Investment

3 Optin 2: Investr Engagement 1 pint is awarded fr each f the plicies r practices listed. An institutin with all f the plicies and practices listed wuld earn the maximum f 6 pints available fr Part 2. Ttal pints earned fr this credit are calculated accrding t the fllwing table: Enter values as indicated belw t calculate pints earned fr this credit Pints will be calculated autmatically when data are entered in the STARS nline Reprting Tl Pints Earned in Optin 1: Psitive Sustainability Investments Add Pints Earned in Optin 2: Investr Engagement Equals Ttal Pints (up t 12 available) + (up t 6 available) = (up t 12 available) STARS 2.0 Technical Manual 284 PAE Investment

4 Scring Example: Sustainable Investment Mdel Cllege s investment pl ttals $100 millin. The cllege invests $20 millin in sustainable industries and cmmunity develpment financial institutins. The cllege als engages as an investr in 3 ways, by: (1) having a sustainable investment plicy; (2) using its plicy t select and engage its investment managers; and (3) participating in the Investr Netwrk n Climate Risk. Optin 1: Psitive Sustainability Investment Factr Multiply Value f Psitive Sustainability Investments Divide Ttal Value f the Investment Pl Equals Ttal Pints Earned fr Optin millin 100 millin = 2.4 Optin 2: Investr Engagement 1 pint is awarded fr each f the plicies r practices listed fr a ttal f 3 pints. Ttal pints earned fr this credit are calculated accrding t the fllwing table: Pints Earned in Optin 1: Psitive Sustainability Investments Add Pints Earned in Optin 2: Investr Engagement Equals Ttal Pints = 5.4 E. Reprting Fields Required Ttal value f the investment pl (US/Canadian dllars) Value f hldings in each f the fllwing categries: Sustainable industries, such as renewable energy r sustainable frestry (US/Canadian dllars) Businesses selected fr exemplary sustainability perfrmances (US/Canadian dllars) STARS 2.0 Technical Manual 285 PAE Investment

5 Sustainability investment funds, such as a renewable energy investment fund (US/Canadian dllars) Cmmunity develpment financial institutins (CDFI) (US/Canadian dllars) Scially respnsible mutual funds with psitive screens (US/Canadian dllars) Green revlving funds funded frm the endwment (US/Canadian dllars) An indicatin f whether the institutin has a publicly available sustainable investment plicy An indicatin f whether the institutin uses its sustainable investment plicy t select and guide investment managers An indicatin f whether the institutin has engaged in prxy vting, either by its CIR r ther cmmittee r thrugh the use f guidelines, t prmte sustainability during the previus three years An indicatin f whether the institutin has filed r c-filed ne r mre sharehlder reslutins that address sustainability r submitted ne r mre letters abut scial r envirnmental respnsibility t a cmpany in which it hlds investments during the previus three years An indicatin f whether the institutin has a publicly available investment screening plicy An indicatin f whether the institutin engages in plicy advcacy by participating in investr netwrks and/r engages in inter-rganizatinal cllabratins t share best practices An affirmatin that the submitted infrmatin is accurate t the best f a respnsible party s knwledge and cntact infrmatin fr the respnsible party. The respnsible party shuld be a staff member, faculty member, r administratr wh can respnd t questins regarding the data nce submitted and available t the public. Cnditinal Required if the institutin is claiming pints fr psitive sustainability investments (Optin 1): A brief descriptin f the cmpanies, funds, and/r institutins referenced abve. Specific disclsure f hldings (e.g. fund r cmpany names) is nt required; general infrmatin abut the industries r fund types represented by the hldings is sufficient. Required if the institutin is claiming pints fr having a publicly available sustainability investment plicy: Uplad plicy r prvide a website URL where plicy is available Required if the institutin is claiming pints fr using its sustainable investment plicy t select and guide investment managers: A brief descriptin f hw the plicy is applied, including recent examples Required if the institutin is claiming pints fr engaging in prxy vting: STARS 2.0 Technical Manual 286 PAE Investment

6 Uplad prxy vting guidelines r prxy recrd, prvide a website URL where guidelines r recrd is available, r prvide an indicatin that managers are adhering t plicy Required if the institutin is claiming pints fr engaging with crpratins in its prtfli abut sustainability issues during the previus three years: Examples f hw the institutin has engaged with crpratins abut sustainability issues during the previus three years Required if the institutin is claiming pints fr having an investment screening plicy: A brief descriptin f the plicy and hw it has been implemented Apprximate percentage f endwment that the plicy applies t Required if the institutin is claiming pints fr engaging in plicy advcacy by participating in investr netwrks and/r inter-rganizatinal cllabratins: A brief descriptin f the netwrks and/r cllabratins Optinal The website URL where infrmatin abut the institutin's sustainable investment effrts is available Ntes abut the submissin F. Measurement Timeframe Reprt n current plicies and actins taken within the past three years. Sampling and Data Standards Reprt n a snapsht f the entire investment prtfli in Optin 1. Reprting n a sample f the endwment r a special fund f the endwment is nt allwed fr this credit. Institutins shuld strive t reprt n a representative snapsht. G. Standards and Terms B Crpratins Certified B Crpratins are a type f crpratin that meets cmprehensive and transparent scial and envirnmental perfrmance standards, meets higher legal accuntability standards, and builds business cnstituency fr public plicies that supprt sustainable business. B Lab, a nnprfit rganizatin, certifies B Crpratins. Cmmunity Develpment Financial Institutin Cnsistent with the Respnsible Endwments Calitin, a CDFI is defined as: STARS 2.0 Technical Manual 287 PAE Investment

7 A financial institutin established t prvide credit, financial services, and ther services t underserved markets r ppulatins. Investing in CDFIs prmtes sustainability by helping prvide credit t individuals and cmmunities wh are underserved by cnventinal lending institutins. In additin, CDFIs prvide an pprtunity fr institutins t invest in their lcal cmmunities. Investment Pl Cnsistent with the Natinal Assciatin f Cllege and University Business Officers (NACUBO), investment pl is defined as: The predminant asset pl r gruping f assets that is rganized primarily t supprt the institutin and reflect its investment plicies. Psitively Screened Fund A fund in which managers practively select businesses based n exemplary scial and/r envirnmental perfrmance. Negative Screen Cnsistent with the Respnsible Endwments Calitin negative screens are defined as fllws: Negative screens exclude certain industries r prducts frm investment prtflis. Schls r ther investrs can apply a negative screen t their investment prtfli t exclude cmpanies frm their investments. Screens are ften applied by individual investrs t ne r mre f the fllwing sectrs: tbacc, liqur, weapns, prngraphy, nuclear technlgies, resurce extractin (mining and drilling) and family planning prducts. Dzens f schls have screened ut tbacc frm their prtflis, and a handful f ther schlsmstly religiusly affiliatedhave applied stricter screens. Sharehlder Reslutin Cnsistent with the Respnsible Endwments Calitin, sharehlder reslutins are defined as: Frmal statements that are sent annually t every single sharehlder f a publicly traded cmpany n a prxy ballt. Sharehlder reslutins are als knwn as sharehlder prpsals r prxy reslutins. These reslutins usually wrk like a nnbinding referendum n a specific issue within a firm. [ ] Any sharehlder wh wns mre than $2,000 f a cmpany s stck fr ne year prir t the vte can write and file a reslutin and every sharehlder has the right (and duty) t vte n the reslutins f all cmpanies in which they wn stck. The reslutin prcess is gverned by the Securities and Exchange Cmmissin (SEC), a federal agency STARS 2.0 Technical Manual 288 PAE Investment

8 respnsible fr verseeing the market and crprate gvernance systems that prtect sharehlders frm each ther, frm managers and frm themselves. STARS 2.0 Technical Manual 289 PAE Investment