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Friday, November 4th, 2011 Tellus Institute brings stakeholders together to discuss problems in agriland investments
BOSTON — Following the release of three country-specific reports by the Oakland Institute on agricultural land investments in Africa, the Center for Social Philanthropy at Tellus Institute hosted Oakland Institute Executive Director Anuradha Mittal and Board Member Jeff Furman for an in-depth briefing and discussion with stakeholders representing a variety of NGOs, academics, investors, students, and labor groups.
Mittal and Furman presented and led the discussion along with C-SocPhil director Josh Humphreys. Dr. Humphreys provided insight into recent trends that have driven increased investment by college endowments and other institutional investors into alternative asset classes such as agricultural land.
Mittal and Furman explained the Oakland Institute’s findings that these investments are particularly enticing because their managers claim to yield high returns and tout them as “sustainable” ways to “feed Africa” and the world. In fact, however, any food, fuels, or other goods produced on these purchased lands are often exported out of Africa, and the development of these sites can force hundreds of thousands of people from the land on which they have lived their entire lives. No social or environmental impact assessments are conducted before these developments occur, Mittal said, and the human rights violations, conflicts, and resulting risks for investments are underplayed by investment managers.
The discussion that followed involved participants from Tellus Institute, Grassroots International, the Initiative for Responsible Investment at Harvard University’s Kennedy School, Oxfam America, the Responsible Endowments Coalition, Reynders McVeigh, the Service Employees International Union, the Sustainable Endowments Institute, and Trillium Asset Management.
Questions and conversations focused on power dynamics and the need for greater transparency and accountability in the agricultural land investment process. Mittal described situations in which investors have evaded community consultation by convincing tribal leaders that their investments will help the people living there. She also provided examples of local resistance sparked by land grabs and labor conditions in Ethiopia and South Sudan. Furman suggested that if any standards were to be put in place to enforce the actual social, environmental, and economic sustainability of these investments, such requirements would have to be rigid and accountable in order to prevent these dangerous cases. Participants highlighted the particularly weak transparency in college investments even though endowments benefit from tax exemption.
The group also discussed prospects for the development of new more responsible forms of investment in smaller scale, sustainable agriculture.
For more information about the event or about C-SocPhil’s work on alternative investments and other research related to endowments, contact Josh Humphreys at jh@socialphilanthropy.org or (617) 575-9660.
ABOUT THE CENTER FOR SOCIAL PHILANTHROPY
The Center for Social Philanthropy (C-SocPhil) is an innovative, nonprofit social enterprise working on the frontiers of philanthropy and finance. We provide data, research, resources and tools to help foundations, donors, and other mission-driven investors leverage their assets more fully for long-term, sustainable social and environmental impact. The Center is housed at Tellus Institute, a think tank in Boston pursuing a Great Transition to a more just, sustainable and equitable global civilization.
ABOUT THE OAKLAND INSTITUTE
The Oakland Institute is a policy think tank dedicated to advancing public participation and fair debate on critical social, economic, and environmental issues. For more information, please visit http://www.oaklandinstitute.org/.
Wednesday, October 26th, 2011 New C-SocPhil research documents 16% growth in sustainable alternative investments
WASHINGTON, DC – In late October, US SIF Foundation released Sustainability Trends in US Alternative Investments, an in-depth report on the market of US alternative investment funds that incorporate environmental, social or governance (ESG) criteria. The report measures the growth of the ESG alternative investment market from 2010 to 2011 and tracks emerging trends, including the most prevalent ESG themes and the role that investor networks and field-building organizations are playing in supporting the industry’s growth.
Based on data collected by a team of researchers at Tellus Institute’s Center for Social Philanthropy, led by principal investigator Joshua Humphreys and lead analyst Ann Solomon, $80.9 billion was identified in 375 ESG alternative funds at the outset of 2011. This represents a 15.9-percent growth in assets for the ESG alternative investment market since the beginning of 2010, when $69.8 billion was identified as invested through 346 funds.
The alternative investment funds tracked in Sustainability Trends span the asset classes of private equity and venture capital, property, and hedge funds. Private equity and venture capital funds led the field numerically with 233 distinct funds, while property funds dominated the field in asset-weighted terms, with a combined total of $44.3 billion under management. A list of individual fund names and fund managers are provided in appendices to the report.
“Sustainable and responsible investing – the incorporation of environmental, social and corporate governance (ESG) criteria into investment management activities – has become an increasingly important part of the capital markets,” said report lead author Joshua Humphreys, director of the Center for Social Philanthropy. “Within this growing investment field, now sized at more than $3 trillion in the United States alone, alternative investments are attracting unprecedented attention across asset classes, geographies and ESG themes.”
Investor demand was a major driver of the ESG alternative market’s recent growth. Lisa Woll, CEO of US SIF: The Forum for Sustainable and Responsible Investment (US SIF), commented: “Alternative investments in sustainable and responsible investing are attracting a wide range of investors – high-net-worth families and individual ‘angel’ investors, mission-driven institutional investors such as philanthropic foundations, hospitals and faith-based institutions, and some of the largest and most prominent pension funds and private equity firms.”
Funds’ approaches to ESG incorporation were highly varied, and included a wide diversity of ESG themes. US SIF Deputy Director and Research Director Meg Voorhes said: “The majority of the alternative fund managers we reviewed consider several ESG criteria simultaneously, but environmental factors predominate. In particular, we see interest in green building, climate change issues, clean technology, renewable energy and energy efficiency. These managers look to produce market rates of return for their clients while helping to foster businesses, generate jobs or introduce products that will yield social and environmental benefits.”
A free Executive Summary of the report is available here. Electronic and hard-copy versions of the full 35-page report is available here, free for US SIF members and fee-based to other accredited investors.
The report was made possible with the support of Lead Sponsor Azimuth Investment Management, LLC, and the following Supporting Sponsors: Arborview Capital, DBL Investors, Ecotrust Forest Management, Inc., The Lyme Timber Company, Mission Markets, SJF Ventures, TerraVerde Capital Partners, Trillium Asset Management, and Working Lands Investment Partners, LLC.
For more information, please contact lead author Joshua Humphreys, jh@socialphilanthropy.org or (617) 575-9660.
ABOUT THE CENTER FOR SOCIAL PHILANTHROPY
The Center for Social Philanthropy (C-SocPhil) is an innovative, nonprofit social enterprise working on the frontiers of philanthropy and finance. We provide data, research, resources and tools to help foundations, donors, and other mission-driven investors leverage their assets more fully for long-term, sustainable social and environmental impact. The Center is housed at Tellus Institute, a think tank in Boston pursuing a Great Transition to a more just, sustainable and equitable global civilization.
ABOUT US SIF AND US SIF FOUNDATION
US SIF Foundation, a nonprofit 501(c)(3) organization, supports the educational and research activities of US SIF: The Forum for Sustainable and Responsible Investment. US SIF (http://www.ussif.org) is the US membership association for professionals, firms, institutions and organizations engaged in sustainable and responsible investing. US SIF and its members advance investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. US SIF’s members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, banks, credit unions, community development organizations, non-profit associations, and pension funds, foundations and other asset owners.
Wednesday, September 28th, 2011 New report documents exorbitant executive salaries and radical wage inequalities at Massachusetts’ wealthiest colleges.
View the full report here: http://www.tellus.org/publications/files/issue-brief-exec-comp-201109.pdf
BOSTON — In a newly released special issue brief, the Center for Social Philanthropy at Tellus Institute documents the excessive compensation of top staff at Massachusetts private colleges and universities, including often undisclosed compensation from outside corporations. The report also highlights the dramatic income disparity between these “key employees” and lower level faculty and staff at the same schools.
The issue brief, Academic Excess: Executive Compensation at Leading Private Colleges and Universities in Massachusetts, focuses on Massachusetts’ 20 wealthiest private schools, whose collective endowments represent more than $50 billion in combined assets. The issue brief builds on the Center for Social Philanthropy’s 2010 report Educational Endowments and the Financial Crisis, which examined compensation trends and high-risk endowment investment practices and at six leading New England colleges.
Academic Excess reveals that despite the 2008-2009 financial crisis and subsequent layoffs at universities across the state, six- and seven-figure compensation packages remain commonplace for high-ranking college staff. In fact, 20 university employees earned over $1 million in 2008-09. Most of those top 20 are current or former staff at Harvard University. The average disclosed pay for these “key employees” across all 20 schools amounted to more than $464,000.
The excessiveness of these compensation packages is drawn in stark relief to the average salaries of professors and the lowest paid staff at these same colleges. The top paid employees earn between 3 and 33 times what the average professor makes and from 11 up to an astonishing 180 times what a unionized custodian earns. Such extreme income inequality at Massachusetts universities not only affects faculty and staff on-campus, but also has far-reaching impacts on the communities in which these schools are located.
Despite the widespread patterns of excessive pay, many forms of high compensation go unreported and remain largely obscured from public view. Colleges are only required to report the compensation of the 20 highest compensated “key employees” making over $150,000 and the five highest-paid employees making more than $100,000—leaving many other recipients of high pay undisclosed. Additionally, at present, colleges are not required to disclose compensation their employees receive from outside parties for corporate board service, consulting, speaking, or other business activities. Despite the lack of reporting requirements, Academic Excess identified $18.8 million in outside compensation to 26 “key employees.” Even when these outside pay packages present potential conflicts of interest, schools are under no obligation at present to disclose them.
“The view from Massachusetts is only the tip of the iceberg in excessive college pay in our country,” said Joshua Humphreys, director of the Center for Social Philanthropy at Tellus Institute and a co-author of the report. “While college leaders and their lobbyists complain about the burdens of added transparency, the fact is that there remain numerous loopholes in reporting requirements that make it difficult for the public to understand just how deeply entrenched excessive compensation has become on college campuses. Taxpayers and stakeholders are right to be concerned about these pay schemes when their tax dollars are effectively subsidizing them, given the numerous tax exemptions that private, nonprofit colleges receive. We need a new social contract for higher education, in which transparency becomes a benefit, not a burden.”
Million-dollar university salaries are also a major concern for college students and their families, who are paying ever-increasing tuitions. In the past 40 years, private college tuition and fees have increased twice as fast as the median US household income. Given the importance of access to higher education to career outcomes, this issue brief raises serious questions about the effects of executive compensation on college affordability.
The issue brief was co-authored by Humphreys, Catie Ferrara, and Bryant Mason, summer fellows at the Center for Social Philanthropy at Tellus Institute. Funding for this research was provided by the Center and by Service Employees International Union, Loc 615, which represents thousands of property-service staff at campuses across New England.
View the full report here: http://www.tellus.org/publications/files/issue-brief-exec-comp-201109.pdf
For more information, please contact Joshua Humphreys, jh@socialphilanthropy.org or (617) 575-9660.
ABOUT THE CENTER FOR SOCIAL PHILANTHROPY
The Center for Social Philanthropy (C-SocPhil) is an innovative, nonprofit social enterprise working on the frontiers of philanthropy and finance. We provide data, research, resources and tools to help foundations, donors, and other mission-driven investors leverage their assets more fully for long-term, sustainable social and environmental impact. The Center is housed at Tellus Institute, a think tank in Boston pursuing a Great Transition to a more just, sustainable and equitable global civilization.
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