Role of Asset Owners in Addressing Climate Change

Climate Change

United Kingdom Carbon Emissions Rose 4 Percent in 2012  8/5/2013 The Guardian

On July 25, the United Kingdom’s Department of Energy and Climate Change released data documenting a four percent rise in carbon dioxide (CO2) emissions, reversing a downward trend. Coal produced 39 percent of the UK’s electricity in 2012, compared to 29 percent in 2011.  The four percent rise in CO2 emissions earned the UK the last spot in the European Union (EU) on the list of yearly emission totals, behind Lithuania (an increase of 1.7 percent) and Germany (an increase of less than one percent). The rise in emissions will make it difficult for the UK to achieve its climate change targets.For additional information see: The Guardian

Asset Owner Partnerships 

TBLI Conference and Nexus Europe have agreed to become partners. As part of this partnership, TBLI will include a special session for a ‘Next Generation Dialogue’ in the program of the upcoming TBLI CONFERENCE EUROPE 2013 in Zurich. Nexus Europe will invite their Next Gen HNW members (1000) to attend TBLI CONFERENCE EUROPE as guest asset owners.

Who is Nexus?

Nexus is an international network of young investors, philanthropists, social entrepreneurs, influencers, and allies who work to grow and improve philanthropy and social impact investing. The network collaborates to advance the potential of next generation leadership across nations and sectors as well as to bridge communities of wealth and social entrepreneurship for dialogue, group problem solving and education. The membership includes people from more than 60 countries and hundreds of the world’s most influential families.

I recently got some questions from relations in financial sector regarding our summit the TBLI CONFERENCE™, as to why they  should come. Apart from meeting the thought leaders in the industry and experiencing very effective peer to peer learning, I thought it would be good idea for those who never experienced our annual summit to address those points.

Why should you attend TBLI CONFERENCE™?

This conference is hands on and will help you answer some important questions, such as:

  • How will climate change impact investments?
  • What does ESG mean anyway? And what is Impact Investment?
  • What is the sense of urgency to include ESG in an investment strategy?
  • Which strategies should I consider in the current market environment, and how do I implement?
  • How should I optimize my portfolio in ESG and Impact Investment?
  • What can I expect in terms of risk, return and cost?
  • Can I see  Case Studies on return and risk using ESG strategies?

Register now and save 400 CHF

How to convince Asset Owners (HNW, Family Offices, Pension Funds) about ESG and Impact Investing.

Did you ever notice that all the studies and anecdotal evidence shows that HNW are actually interested in ESG and Impact Investing? I get constant requests from asset owners  for interesting investment opportunities that provide a financial, social and environmental added value. However, when you go through the so called “gate keepers” (private banks, wealth advisors, wealth managers), nothing happens.
You will hear that “risk management can’t approve”. “We need to invest in established, long term track record, blah, blah”. So, I say, “Oh. You mean European Sovereign Debt, or Stocks which haven’t performed in 10 years, or better yet asset managers, like Madoff ”

How can you get through to asset owners?

I have found, that after 13 years of trying,  the most effective is to reach out directly and indirectly, and by letting them experience the ESG and Impact Investment community, at TBLI CONFERENCE EUROPE or ASIA. By allowing them to come, learn and interact with all these financial professionals through educational outreach and actually meet investors, who are putting large sums to work in ESG and Impact Investing, the rest falls into place.

That is why we allow 50 asset owners to come for free. If you are an asset owner and want to learn about ESG and Impact Investing, contact

Pension Funds-All talk and little to no action

The PRI has been in existence for nearly 3 years.What has been achieved, fundamentally. Extremely little. Constant chatter, letters sent to Obama, more declarations of better governance, blah, blah.

If you take the one fundamental issue of the PRI:
We will be active owners and incorporate ESG issues into our ownership policies and practices.

This has been a total failure. Recently, the Dutch minister of finance was chastising the institutional investors for not being active owners, with respect to the financial sector. He claimed that the asset owners were partly to blame for the financial disaster.  They owned a great deal of financial stocks, but weren’t vocal or critical while the financial sector created the gasoline fire. It burned really bright but it went out very fast, and created a toxic mess.

Case in point.

APG was a major shareholder of Fortis, after being asked to buy shares to show a sign of confidence. After the price dropped nearly 95% in a few months, and the Dutch government stripped the assets and left the junk on the stock market. What was the response of APG at the shareholder meeting in Brussels, about selling to BNP. They don’t vote for. They didn’t vote against. They abstained. Not really the signs of an active shareholder.

Most of the asset owners say they are committed to integrating ESG in their whole portfolio or in a significant part. After many years of chit chat, they are proud if they reach 2 or 5%, or they claim the whole fund is ESG because they are chatting to management, or have eliminated cluster bombs. That is pathetic and ridiculous.

Most of the asset owners have signed the PRI as a sign of membership to the fitness club os ESG investment. The only problem is they forget to exercise and get on the scale to see how much weight they have lost.
As long as Asset Owners use PRI as aspirational and not a clear commitment in the short term, very little will fundamentally change. I can live with that, but at least we need to be honest. At present, the PRI and its asset owners who have signed have created a massive bulls eye on their backs, just waiting for civil society to pounce.

As Yoda said in Star Wars:

Do or do not.
There is no try.