Report on US Sustainable and Impact Investing Trends 2020 Are You Investing for Principles? Or Performance?

Report on US Sustainable and Impact Investing Trends 2020 Are you investing for principles? Or performance?

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Report on US Sustainable and Impact Investing Trends 2020 iii At Calvert, Responsible Investing is all we do

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In the United States, 2020 has been framed by the interwoven health and economic crises of COVID-19, the renewed and urgent calls to address racial injustice after the murder of George Floyd and the 2020 elections.

These events have highlighted the need to confront social, economic and racial inequality. For practitioners of sustainable and impact investment, this has meant assessing how investment products and strategies, such as shareholder engagement, can make an impact on these issues. Investors are assessing how to better incorporate diversity and inclusive practices in their own firms and throughout their business relationships. And investors are speaking out and making commitments through such initiatives as the Investor Statement on Coronavirus Response and the Investor Statement of Solidarity to Address Systemic Racism and Call to Action.

We asked survey recipients this year to share their opinion on how sustainable investing will evolve by 2025, and particularly in the wake of COVID-19. Respondents highlighted the importance of transitioning to a low carbon economy, as well as human capital management, diversity, and health and wellness as priority issues. Further data is available in a sidebar later in the report.

The 2020 Trends Report, which tracked data as of year-end 2019, found that investors are considering environmental, social and governance (ESG) factors across $17 trillion of professionally managed assets, a 42 percent increase since 2018. This is a continuation of the significant growth in money managers and institutional investors that consider ESG factors to identify responsible, well-managed companies that will be resilient over the long term. They are seeking opportunities to support companies and products that advance environmental and social issues, including investing in community banks and credit unions.

In 2020, while sustainable and impact investing continued on a growth trajectory, and sustainable equity funds and sustainable taxable bond funds outperformed their counterparts during the first two quarters, the Department of Labor and the Securities and Exchange Commission took on an anti-ESG agenda. They issued rulemakings that would limit the rights of shareholders and create confusion about whether fiduciaries for ERISA-governed pension plans may utilize ESG criteria or vote proxies.

Amidst the rapid growth and profile that sustainable investing has garnered in recent years, we continue to see a significant increase in ESG assets for which limited information is disclosed. As an organization that supports accountability, transparency and the use of best practice in our field, we hope that there will be greater disclosure by asset managers of the specific ESG criteria they use.

We were interested to find a healthy increase in retail investor assets subject to one or more strategies of sustainable investment. US SIF is building on this retail interest through initiatives such as a free course to help unaccredited investors learn more about sustainable and impact investing.

I hope you will explore this report and the many other resources available from our Education Center to help advance your organization’s work and the practice of sustainable and impact investment.

Sincerely,

Lisa Woll, CEO US SIF and US SIF Foundation

Report on US Sustainable and Impact Investing Trends 2020 v Contents

LIST OF FIGURES ...... VIII

ACKNOWLEDGMENTS ...... X

EXECUTIVE SUMMARY ...... 1 Overview...... 1 ESG Incorporation by Money Managers...... 2 ESG Incorporation by Institutional Investors...... 5 Investor Advocacy...... 6

I. INTRODUCTION ...... 8 Motivations and Terminology...... 10 Sidebar: Investors Consider the Future of Sustainable Investing after COVID-19...... 11 The Evolution of Sustainable Investing...... 12 Sidebar: US Individual Investors Are Enthusiastic about Sustainable Investing...... 13 Sustainable Investing Strategies...... 14 Structure of This Report...... 15

II. ESG INCORPORATION BY MONEY MANAGERS ...... 16 Key Trends...... 17 Background...... 18 A Closer Look at Themes, Strategies and Motivations ...... 19 Sidebar: Sustainable Finance Plans Advance Globally...... 23 Registered Investment Companies ...... 29 Alternative Investment Vehicles ...... 33 Other Commingled Funds ...... 35 Undisclosed Investment Vehicle Assets ...... 36 Community Investing ...... 40

III. ESG INCORPORATION BY INSTITUTIONAL INVESTORS ...... 44 Key Trends ...... 45 Background...... 46 A Closer Look at Themes, Strategies and Motivations...... 48 Public Funds...... 57 Insurance Companies...... 59 Educational Institutions...... 59

vi Contents Philanthropic Foundations...... 60 Sidebar: ERISA, Private Sector Plans and Sustainable Investing Options...... 61 Labor Funds...... 63 Faith-Based Institutions...... 64 Healthcare Institutions...... 64 Other Nonprofit Organizations...... 65 Family Offices ...... 66

IV. INVESTOR ADVOCACY ...... 68 Key Trends...... 69 The Tools of Investor Advocacy...... 70 Sidebar: The SEC Acts to Constrain Shareholder Voices...... 71 The Institutions and Money Managers Involved in Investor Advocacy...... 73 Highlights from Recent Proxy Seasons...... 75 Sidebar: Murder of George Floyd Spurs Racial Justice Investor Initiatives...... 80

V. METHODOLOGY ...... 87

VI. ABOUT THE PUBLISHER ...... 94

ENDNOTES ...... 95

APPENDICES ...... 97 Appendix 1: Glossary of Environmental, Social and Governance Criteria...... 97 Appendix 2: Mutual and Exchange-Traded Funds Incorporating ESG Criteria...... 99 Appendix 3: Community Investing Institutions...... 109 Appendix 4: Money Managers Incorporating ESG Criteria...... 122 Appendix 5: Institutional Investors Incorporating ESG Criteria...... 127 Appendix 6: Proponents of Shareholder Resolutions on ESG Issues 2018-2020...... 133

Report on US Sustainable and Impact Investing Trends 2020 vii List of Figures

EXECUTIVE SUMMARY ...... 1 Figure A Sustainable Investing in the United States 1995–2020...... 1 Figure B Sustainable Investing Assets 2020...... 2 Figure C Money Manager Assets, by Type, Incorporating ESG Criteria 2020...... 2 Figure D ESG Categories Incorporated by Money Managers 2018–2020...... 3 Figure E Top Specific ESG Criteria for Money Managers 2020...... 3 Figure F Institutional Investor ESG Assets, by Investor Type, 2020...... 4 Figure G ESG Categories Incorporated by Institutional Investors 2018–2020...... 4 Figure H Top Specific ESG Criteria for Institutional Investors 2020...... 5 Figure I Types of Investors Filing Shareholder Proposals 2018–2020...... 6 Figure J Leading ESG Issues 2018-2020, by Number of Shareholder Proposals Filed...... 7

I. INTRODUCTION ...... 8 Figure 1.0 Sustainable Investing in the United States 2020...... 8 Figure 1.1 Sustainable Investing in the United States 2005–2020...... 10 Figure 1.2 Sustainable Investing in the United States 1995–2020...... 12

II. ESG INCORPORATION BY MONEY MANAGERS ...... 16 Figure 2.0 Sustainable Investing Assets 2020 ...... 16 Figure 2.1 Growth of ESG Incorporation by Money Managers 2005–2020...... 18 Figure 2.2 Money Manager Assets, by Type, Incorporating ESG Criteria 2020...... 19 Figure 2.3 ESG Categories Incorporated by Money Managers 2018–2020...... 20 Figure 2.4 Leading ESG Criteria, by Assets, for Money Managers 2020...... 21 Figure 2.5 Frequency of ESG Criteria Incorporation in Investment Vehicles 2020...... 22 Figure 2.6 Leading Environmental Criteria for Money Managers 2020...... 22 Figure 2.7 Leading Social Criteria for Money Managers 2020...... 24 Figure 2.8 Leading Governance Criteria for Money Managers 2020...... 25 Figure 2.9 Leading Product-Related Criteria for Money Managers 2020...... 26 Figure 2.10 ESG Incorporation Strategies by Money Managers 2020...... 27 Figure 2.11 ESG Incorporation by Asset Class by Money Managers 2020...... 28 Figure 2.12 Passive vs. Active ESG Asset Management by Money Managers 2020...... 28 Figure 2.13 Reasons Money Managers Report Considering ESG Factors 2020...... 29 Figure 2.14 ESG Incorporation by Registered Investment Companies 2012–2020...... 30 Figure 2.15 ESG Categories Incorporated by Registered Investment Companies 2020...... 31 Figure 2.16 Leading ESG Criteria for Registered Investment Companies 2020...... 31 Figure 2.17 ESG Incorporation by Alternative Investment Vehicles 2012–2020...... 32 Figure 2.18 ESG Categories Incorporated by Alternative Investment Vehicles 2020...... 33 Figure 2.19 Leading ESG Criteria for Private Equity and Venture Capital Funds 2020...... 33 Figure 2.20 Leading ESG Criteria for Property Funds and REITs 2020...... 34 Figure 2.21 Leading ESG Criteria for Hedge Funds 2020...... 35

viii List of Figures Figure 2.22 ESG Incorporation by Other Commingled Funds 2012–2020...... 36 Figure 2.23 Leading ESG Criteria for Other Commingled Funds 2020...... 37 Figure 2.24 ESG Incorporation in Undisclosed Investment Vehicle Assets 2012–2020...... 38 Figure 2.25 Leading ESG Criteria, by Assets, for Undisclosed Investment Vehicle Assets 2020...... 39 Figure 2.26 Community Investing Institution Assets 2012–2020...... 41 Figure 2.27 Other Community-Related Investment by Money Managers 2020...... 42

III. ESG INCORPORATION BY INSTITUTIONAL INVESTORS ...... 44 Figure 3.0 Sustainable Investing Assets 2020 ...... 44 Figure 3.1 Growth of ESG Incorporation Reported by Institutional Investors 2005–2020...... 46 Figure 3.2 Institutional Investor ESG Assets, by Investor Type, 2020...... 46 Figure 3.3 Types of Institutional Investors Incorporating ESG Criteria 2012–2020...... 47 Figure 3.4 ESG Categories Incorporated by Institutional Investors 2018–2020...... 48 Figure 3.5 Leading ESG Criteria Reported by Institutional Investors, by Assets 2020...... 49 Figure 3.6 Leading Environmental Criteria for Institutional Investors 2020...... 50 Figure 3.7 Leading Social Criteria for Institutional Investors 2020...... 51 Figure 3.8 Leading Governance Criteria for Institutional Investors 2020...... 52 Figure 3.9 Leading Product-Related Criteria for Institutional Investors 2020...... 53 Figure 3.10 ESG Incorporation Strategies by Institutional Investors 2020...... 54 Figure 3.11 ESG Incorporation by Asset Class by Institutional Investors 2020...... 55 Figure 3.12 Passive vs. Active ESG Asset Management by Institutional Investors 2020...... 55 Figure 3.13 Reasons Institutional Investors Report Considering ESG Factors 2020...... 56 Figure 3.14 Leading ESG Criteria for Public Funds 2020...... 57 Figure 3.15 Leading ESG Criteria for Insurance Companies 2020...... 58 Figure 3.16 Leading ESG Criteria for Educational Institutions 2020...... 60 Figure 3.17 Leading ESG Criteria for Foundations 2020...... 62 Figure 3.18 Leading ESG Criteria for Faith-Based Institutions 2020...... 63 Figure 3.19 Leading ESG Criteria for Healthcare Institutions 2020...... 65 Figure 3.20 Leading ESG Criteria for Other Nonprofit Organizations 2020...... 66 Figure 3.21 Leading ESG Criteria for Family Offices 2020...... 67

IV. INVESTOR ADVOCACY ...... 68 Figure 4.0 Sustainable Investing Assets 2020 ...... 68 Figure 4.1 Types of Investors Filing Shareholder Proposals 2018–2020...... 74 Figure 4.2 Leading ESG Issues 2018-2020, by Number of Shareholder Proposals Filed...... 75 Figure 4.3 Shareholder Proposals on Environmental and Social Issues 2018–2020...... 76 Figure 4.4 Highest Votes on Environmental and Social Proposals 2018–2020...... 77 Figure 4.5 Environmental and Social Proposals, by Status, 2016–2020...... 78 Figure 4.6 Shareholder Proposals on Governance Issues 2018–2020...... 84

Report on US Sustainable and Impact Investing Trends 2020 ix Acknowledgments

PUBLISHER ISS ESG US SIF Foundation Morningstar National Association of College and PROJECT DIRECTORS University Business Officers Meg Voorhes, US SIF Foundation Public Employee Retirement Administration Joshua Humphreys, Croatan Institute Commission (PERAC) Sustainable Investments Institute RESEARCH TEAM Matt Aitken, Croatan Institute DATABASE AND SURVEY DEVELOPMENT Sharlene Brown, Croatan Institute Winston Tsang, Radberry Christi Electris, Croatan Institute Farzana Hoque, US SIF Foundation DESIGN AND LAYOUT David LeZaks, Croatan Institute Jackie Temkin, Afton Design Co. Susan Paykin, Croatan Institute Christopher Phalen, US SIF Foundation SPECIAL THANKS Jaime Silverstein, Croatan Institute Katherine Abib, US SIF Greg Bischak, CDFI Fund ADVISORY COMMITTEE Sam Bonsey, The ImPact Molly Betournay, Clean Yield Asset Management David Brewer, Calvert Impact Capital Sarah Cleveland, Sarah Cleveland Consulting Ginny Brooks, US SIF Sarah Cohn, Sustainalytics Jane Bulnes-Fowles, US SIF Justin Conway, Calvert Impact Capital Justin Conway, Calvert Impact Capital Steve Falci, Impax Asset Management Natacha Dunker, PERAC Ivy Jack, Northstar Asset Management Georges Dyer, Intentional Endowments Network Pooja Khosla, Entelligent Oscar Gonzalez, CDFI Fund Mamadou-Abou Sarr, V-Square Quantitative Jon Hale, Morningstar Management Sara Hamilton, Family Office Exchange Timothy Smith, Boston Trust Walden Joseph Lee, California Department of Insurance Jackie VanderBrug, US Trust Bank of America Joy Lusk Tom Woelfel, Pacific Community Ventures Karen McMahon, PERAC Angelo Robles, Family Office Association DATA PROVIDERS Adam Sickle, US SIF Association for the Advancement of Ann Solomon, Inclusiv Sustainability in Higher Education Mike Tipton, BrightScope | ISS Market Intelligence Brightscope | ISS Market Intelligence Bing Waldert, Cerulli Associates CDFI Fund, US Treasury Department Trace Welch, The ImPact California Department of Insurance Heidi Welsh, Sustainable Investments Institute Cerulli Associates Lisa Woll, US SIF Inclusiv Intentional Endowments Network

x Acknowledgments Executive Summary

Sustainable investing in the United States continues to expand at a healthy pace. The total US-domiciled assets under management using sustainable investing strategies grew from $12.0 trillion at the start of 2018 to $17.1 trillion at the start of 2020, an increase of 42 percent. This represents 33 percent, or one in three dollars, of the $51.4 trillion in total US assets under professional management.

Overview FIGURE A Sustainable Investing in the United States 1995–2020 Since 1995, when the US SIF Foundation first measured the size of the US sustainable ESG Incorporation Overlapping Strategies Shareholder Advocacy investment universe at $639 billion, assets have increased $18,000 more than 25-fold, a compound $16,000 annual growth rate of 14 $14,000 percent. The most rapid growth has occurred since 2012. (See $12,000 Figure A.) $10,000

$8,000 Through surveying and research undertaken in 2020, the US SIF $6,000 Foundation identified, as shown $4,000

in Figure B: Assets (in Billions) Total $2,000

• $16.6 trillion in US-domiciled $0 assets at the beginning of 2020 held by 530 1995 1997 1999 2001 2003 2005 2007 2010 2012 2014 2016 2018 2020 institutional investors, 384 US SIF Foundation. money managers and 1,204 SOURCE: community investment and governance (ESG) criteria • $2.0 trillion in US-domiciled institutions that practice “ESG in their investment analysis assets at the beginning of incorporation”—applying and portfolio selection. 2020 held by 205 institutional various environmental, social investors or money managers

Report on US Sustainable and Impact Investing Trends 2020 1 FIGURE B Sustainable Investing Assets 2020

ESG Incorporation Filing Shareholder Resolutions By Money Managers on Behalf of Overlapping Institutional Investors Individual/Retail Investors $4,550 Billion Strategies $1,658 Billion ( By Money Managers on Behalf of $1,462 Billion) Money Managers Institutional Investors $12,014 Billion $322 Billion

ESG Incorporation

Shareholder Resolutions Total: $17,081 Billion SOURCE: US SIF Foundation.

that filed or co-filed as managed on behalf of shareholder resolutions on institutional investors as shown FIGURE C ESG issues at publicly traded in Figure B. Money Manager Assets, by Type, companies from 2018 through Incorporating ESG Criteria 2020 2020. • $3.1 trillion—19 percent—were managed through registered Total Net Assets (in Billions) investment companies such as Registered Investment ESG Incorporation by mutual funds, exchange-traded Companies Money Managers funds, variable annuities and $3,102 closed-end funds, as shown in Alternative Funds The US SIF Foundation identified Figure C. $716 384 money managers and Other Commingled Funds 1,204 community investing • $716 billion—4 percent—were $985 institutions incorporating ESG managed through alternative Community Investment criteria into their investment investment vehicles, such as Institutions $266 analysis and decision-making private equity and venture processes. The $16.6 trillion in capital funds, hedge funds and Undisclosed Investment Vehicles $11,493 ESG incorporation assets they property funds. represent is a nearly 43 percent increase over the $11.6 trillion in • $266 billion in assets were such assets identified in 2018. managed by community investing institutions. Of this 2020 total: • $985 billion in money manager • $4.6 trillion were managed on ESG assets were managed behalf of individual investors, through other commingled and $12.0 trillion were identified funds.

SOURCE: US SIF Foundation.

2 Executive Summary • The majority—$11.5 trillion, or 69 percent—remains FIGURE D largely opaque as they were ESG Categories Incorporated by Money Managers 2018–2020 managed through undisclosed investment vehicles and the 2020 2018 managers for 60 percent of these undisclosed $16,134 Social vehicles—$6.9 trillion—also $10,839 did not disclose the specific $15,975 ESG factors that they consider, Governance reporting only that they $10,764 consider ESG in general. $15,967 Environment $10,144 In terms of assets, money managers incorporate ESG Products $4,942 factors fairly evenly across $4,487 environmental, social and governance categories, as $0 shown in Figure D. $3,000 $6,000 $9,000 $12,000 $15,000 $18,000

• Overall, in asset-weighted Total Assets (in Billions)

terms, money managers SOURCE: US SIF Foundation. incorporated social factors slightly more than environmental and governance

FIGURE E Top Specific ESG Criteria for Money Managers 2020

Sustainable Climate Change/ Natural Resources/ Carbon Anti-Corruption Board Issues Agriculture Executive Pay

$4.18 $2.44 $2.39 $2.38 $2.22 Trillion Trillion Trillion Trillion Trillion

Percent Increase in Assets Affected since 2018

39% 10% 66% 81% 122%

SOURCE: US SIF Foundation.

Report on US Sustainable and Impact Investing Trends 2020 3 criteria. Social criteria • However, climate change affecting $2.4 trillion in assets incorporation by money remains the most important under management, a 66 managers increased 49 specific ESG issue considered percent increase from 2018. percent from 2018 to $16.1 by money managers in asset- trillion. weighted terms. The assets • Sustainable natural resources to which this criterion applies and agriculture grew by 81 • Environmental criteria as a increased 39 percent from percent to $2.4 trillion in whole grew faster than social 2018 to 2020 to $4.2 trillion, assets under management. or governance factors over the also shown in Figure E. past two years, increasing 57 • Conflict risk was the largest percent, from $10.1 trillion to • Anti-corruption was the social criterion at $1.8 trillion nearly $16.0 trillion. largest governance criterion, assets under management, with growth of 10 percent from although this was a decrease • Among all specific ESG 2018, affecting $2.4 trillion in from 2018 of 22 percent. criteria, governance factors money manager assets. related to executive pay saw the greatest growth, increasing • Board issues also ranked high 122 percent since 2018 to $2.2 among the top specific ESG trillion, as shown in Figure E. criteria for money managers,

FIGURE F FIGURE G Institutional Investor ESG Assets, ESG Categories Incorporated by Institutional Investors 2018–2020 by Investor Type, 2020 2020 2018 Public 54% Insurance Companies 36% $5,737 Education Social 6% $5,244 Foundations 2% Labor $4,310 1% Environment Other 1% $3,493

Governance $3,858 $3,453

Products $2,956 $2,935

$1,000 $2,000 $3,000 $4,000 $5,000 $6,000

Total Assets (in Billions)

SOURCE: US SIF Foundation. SOURCE: US SIF Foundation. NOTE: Other consists of family offices, healthcare institutions, faith-based institutions and other nonprofits that collectively represent about 1 percent of ESG assets in 2020.

4 Executive Summary FIGURE H Top Specific ESG Criteria for Institutional Investors 2020

Conflict Risk Sustainable (Terrorist or Climate Change/ Natural Resources/ Repressive Regimes) Carbon Tobacco Board Issues Agriculture

$2.73 $2.61 $2.47 $2.28 $2.18 Trillion Trillion Trillion Trillion Trillion

Percent Increase in Assets Affected since 2018

-8% 17% -3% 32% 95%

SOURCE: US SIF Foundation.

ESG Incorporation by understood as representing the • Social criteria were applied Institutional Investors most transparent institutional to more than 92 percent. investors in the United States. The assets managed in The US SIF Foundation also The group included institutional accordance with social criteria conducted research on 530 asset owners and plan sponsors increased 9 percent since institutional asset owners with such as public funds, insurance 2018, as shown in Figure G. $6.2 trillion in ESG assets, companies, educational equivalent to 51 percent of institutions, philanthropic • Investment policies related the $12.01 trillion that money foundations, labor funds, to conflict risk affected $2.7 managers identified as hospitals and healthcare plans, trillion, as shown in Figure institutional assets. Because faith-based institutions, other H, making it the single most money managers do not nonprofits and family offices. prominent ESG criterion disclose information about their among institutional investors, institutional clients, the data Of this $6.2 trillion in institutional in asset-weighted terms. received from our direct research ESG assets: of institutional investors shows • Continuing a trend that began how and why they incorporate • Public funds represented the in 2012, criteria related to ESG criteria into their investment largest share—54 percent climate change and carbon analysis and portfolio ($3.4 trillion)—as shown in emissions remained the most selection. The institutional ESG Figure F. important environmental issue incorporation trends revealed for these institutions, affecting through this research should be $2.6 trillion.

Report on US Sustainable and Impact Investing Trends 2020 5 • Tobacco remained in the for institutional investors, filed, from 2018 through top five specific ESG criteria affecting almost $2.2 trillion in 2020, was corporate political for institutional investors, assets, a 95 percent increase activity. Investors filed 270 although slightly decreasing since 2018. proposals on this subject from 2018 by 3 percent to from 2018 through 2020. affect $2.5 trillion in assets in These resolutions focused 2020. Investor Advocacy on company contributions aimed at influencing • Board issues were the From 2018 through the first elections or on corporate most prominent governance half of 2020, 149 institutional lobbying to influence laws criterion reported by investors and 56 investment and regulations. Many of institutional investors, managers collectively controlling the targets were companies incorporated into the nearly $2.0 trillion in assets at that have supported management of $2.3 trillion in the start of 2020 filed or co-filed lobbying organizations that assets, a 32 percent increase shareholder resolutions on ESG oppose regulations to curb from 2018. issues. (See Figures B and I.) greenhouse gas emissions.

• Sustainable natural resources • As shown in Figure J, the • Fair labor and equal and agriculture ranked as leading issue raised in employment opportunity the second most heavily shareholder proposals, based issues also rose to the top, weighted environmental issue on the number of proposals with shareholders filing 228 proposals between 2018 and 2020, which included several resolutions calling for gender FIGURE I pay equity. Types of Investors Filing Shareholder Proposals 2018–2020 • A surge in shareholder Public 68.0% Faith-based 28.8% proposals on climate change Money Manager 16.3% Money Manager 27.3% that began in 2014, as Labor 11.3% Foundation 17.1% investors wrestled with the Faith-based 1.5% Public 10.2% prospects of “stranded” carbon Family Office 1.4% Labor 7.8% assets and US and global Healthcare 1.2% Other/Nonprofit 3.4% efforts to curb greenhouse gas Foundation 0.3% Healthcare 2.9% emissions, has continued: 217 Family Office 1.4% proposals were filed from 2018 Education 1.0% through 2020.

ESG Shareholder Proponents ESG Shareholder Proponents • The proportion of shareholder 2018–2020, by Assets 2018–2020, by Number proposals on social and environmental issues that receive high levels of support has been trending upward as well. During the proxy seasons of 2012-2014, only two shareholder proposals on environmental and social issues that were opposed by management received majority support, while 26 SOURCE: US SIF Foundation.

6 Executive Summary FIGURE J Leading ESG Issues 2018-2020, by Number of Shareholder Proposals Filed

2018 2019 2020

Corporate Political Activity

Labor & Equal Employment Opportunity

Climate Change

Executive Pay

Independent Board Chair

Special Meetings

Written Consent

Human Rights

Board Diversity

Proxy Access

0 50 100 150 200 250 300

SOURCE: US SIF Foundation, ISS ESG, Sustainable Investments Institute.

such proposals received • Investors are engaging in other total assets and 77 money majority support in 2018 ways than filing shareholder managers with $7.8 trillion in through 2020. resolutions. A subset of survey assets under management, respondents, including 44 reported that they engaged in institutional asset owners dialogue with companies on with more than $1 trillion in ESG issues.

Report on US Sustainable and Impact Investing Trends 2020 7 I. Introduction

FIGURE 1.0 Sustainable Investing in the United States 2020

ESG Incorporation Filing Shareholder Resolutions

By Money Managers on Behalf of Overlapping Institutional Individual/Retail Investors $4,550 Billion Strategies Investors ( By Money Managers on Behalf of $1,462 Billion) $1,658 Billion Institutional Investors $12,014 Billion Money Managers $322 Billion

ESG Incorporation Shareholder Resolutions Total: $17,081 Billion

SOURCE: US SIF Foundation.

8 I. Introduction Sustainable investing continues to grow rapidly in the United States. The institutions and individuals practicing one or more strategies of sustainable investment share a desire to achieve long-term competitive financial returns. As a result, they consider environmental, social or corporate governance (ESG) issues as they make decisions about their portfolios or engage with the companies they own. They embrace sustainable investing strategies to manage risk, fulfill fiduciary duties or generate social and environmental benefits.

One-third of all investment assets institutions that practice “ESG Over the last 25 years, particularly under professional management incorporation”—applying since 2012, the assets engaged in the United States—$17.1 various ESG criteria in in sustainable investing strategies trillion out of $51.4 trillion—are investment analysis and have grown significantly. (See held by institutions, investment portfolio selection, and Figures 1.1 and 1.2.) companies or money managers that either consider ESG issues • $2.0 trillion in US-domiciled • In 1995, when the US SIF in selecting investments across assets at the start of 2020 Foundation published its a range of asset classes or file held by 205 institutional first report on sustainable shareholder resolutions on investors or money managers investing trends, $639 billion ESG issues at publicly traded that filed or co-filed were identified as using companies. shareholder resolutions on sustainable strategies. ESG issues from 2018 through These findings are based on a 2020. • In 2010, the Foundation found survey and additional research $3.1 trillion in sustainable that the US SIF Foundation These two segments of assets, investing assets under commissioned in 2020. Through after eliminating double management, up more than 13 this research process, the counting for assets involved in percent over the start of 2007, Foundation identified: both strategies, yield the overall despite the decline in several total of $17.1 trillion (see Figure broad market indices such as • $16.6 trillion in US-domiciled 1.0), a 42 percent increase over the S&P 500 over the same assets at the outset of 2020 the $12.0 trillion that the US period. held by 530 institutional SIF Foundation identified in investors, 384 money sustainable investing strategies • The 2014 tally of $6.6 trillion, managers and 1,204 at the outset of 2018. more than double the community investing comparable sum from 2010,

Report on US Sustainable and Impact Investing Trends 2020 9 FIGURE 1.1 Sustainable Investing in the United States 2005–2020

(In Billions) 2005 2007 2010 2012 2014 2016 2018 2020

ESG Incorporation $1,704 $2,123 $2,554 $3,314 $6,200 $8,098 $11,632 $16,563

Shareholder $703 $739 $1,497 $1,536 $1,716 $2,558 $1,763 $1,980 Advocacy

Overlapping ($117) ($151) ($981) ($1,106) ($1,344) ($1,933) ($1,401) ($1,462) Strategies

Total $2,290 $2,711 $3,069 $3,744 $6,572 $8,723 $11,995 $17,081

SOURCE: US SIF Foundation. NOTE: Overlapping assets involved in some combination of ESG incorporation (including community investing) and shareholder advocacy are subtracted to avoid potential effects of double counting. Prior to 2010, assets subject to ESG incorporation were limited to socially and environmentally screened assets and did not include assets that considered only governance criteria.

reflected not only the overall performance, but also believe Just as there is no single recovery of the financial that these investments should motivation for sustainable markets over that period, but be used to help contribute investing, there is no single also the dramatic growth in to advancements in social, term to describe it. Investors the assets and numbers of environmental and governance use sustainable investing, ESG investment funds considering practices. They may actively investing, impact investing, ESG criteria and reporting on seek investments—in areas such responsible investing, green these processes. as community development or investing, mission-related conservation—that are likely to investing, socially responsible • The 42 percent rise in US provide important societal or investing and values-based sustainable investing assets environmental benefits. investing, among others. For since 2018 has outpaced consistency and simplicity, the growth in professionally Some investors embrace this report generally uses the managed assets in the United sustainable investing strategies term “sustainable investing” States over that period, which to manage risk and fulfill or “sustainable and impact rose 10 percent. fiduciary duties; they may review investing.” ESG criteria as part of their due diligence process to assess What unites these investment Motivations and the quality of management approaches—and what Terminology and the likely resilience of their ultimately distinguishes them portfolio companies in dealing from the broader universe of There is no single motivation for with future challenges. Some are assets under management practicing sustainable investing. seeking hidden sources of alpha in the United States—is the Some investors are driven by (financial outperformance) over explicit incorporation of ESG their personal values and goals, the long term. Indeed, a growing issues into investment decision their institutional mission, or body of academic research making, fund management the demands of their clients, shows a positive link between or shareholder engagement constituents or plan participants. corporations’ ESG and financial activities. This report seeks to They aim for strong financial performance. quantify these various forms of

10 I. Introduction Investors Consider the Future of Sustainable Investing after COVID-19

“We believe that the pandemic other respondents did not virus. Similarly, a large asset has highlighted human fragility specifically comment on whether management firm said, “We… and will bring about a permanent, the field would expand, but believe companies managing heightened focus on well-being offered other thoughts on ESG risks and opportunities are and a related commitment to clean how the field would evolve.) built on firmer foundations to cities and sustainable living.” Some thought that the COVID brace and survive downturns.” epidemic, by exposing the “It’s critical to remain mindful weaknesses in the social fabric Seven respondents specifically that this is a crisis that has and the vulnerabilities of many mentioned that climate risk and shattered lives and wrecked businesses, would reinforce the transition from fossil fuels economies all around the world. interest in ESG factors. will continue as a driver for the ESG is not a solution to a crisis, growth of sustainable investing. but an opportunity for relief and Nearly half of the respondents A foundation representative recovery.” expect social factors to gain commented, “The shift of more more prominence as an ESG capital from fossil fuels to clean “We think that post COVID-19, criteria. As the hospital system energy will grow stronger as ESG issues will become even respondent put it, “Given the oil rout continues.” He more important and mainstream the racial and social climate, noted, too, that low-carbon for investors, especially those particularly in the United investments have outperformed concerning social aspects.” States, the ‘S’ portion of ESG investments that hold fossil fuel will continue to gain focus.” companies. Similarly, a private These are three of the responses Respondents predicted that equity manager said he and his to an optional question on our diversity and racial and gender colleagues are beginning to hear 2020 Trends Report survey equity will gain more attention, from traditional energy managers asking for their opinions on “how as will strategies that promote who are pivoting away from US sustainable/ESG investing wellbeing and preventive health fossil fuel oriented opportunities will evolve by 2025, and and see employees as assets. to focus on new energy themes particularly in the wake of the around better efficiency and COVID-19 pandemic.” Another driver leading to renewables. continued expansion of Thirty-one recipients responded, sustainable investing is its A few respondents thought including 20 money managers proven financial results and the that the next five years would ranging from specialist materiality of ESG factors. One witness improved levels of private equity firms to large investment firm commented, reporting by companies on ESG and diversified investment “given the relative out- factors and either predicted management firms with more performance of ESG funds, the or expressed hope that ESG than $1 trillion in total assets fiduciary case for it is stronger rating systems would improve under management. In addition, than ever, as is the case for or become more standardized. two faith-based institutions, one corporations to uphold their And two private equity managers hospital system, five foundations social contract.” Another predicted increased demand for and three family offices replied. respondent noted that most technology-enabled products and ESG funds outperformed in services to enable remote work, The majority expected continued the first quarter of 2020, when assure cybersecurity under these growth of sustainable investing financial markets first reacted conditions and reduce costs. over the next five years. (The to the global spread of the

Report on US Sustainable and Impact Investing Trends 2020 11 strategic investment activity and to identify the motivations for FIGURE 1.2 using them. Sustainable Investing in the United States 1995–2020

ESG Incorporation Overlapping Strategies Shareholder Advocacy The Evolution of $18,000 Sustainable Investing $16,000 The history of investing for $14,000 impact stretches over centuries. Religious investors from $12,000 Jewish, Christian and Islamic $10,000 faiths and many indigenous $8,000 cultures have long considered the broad impacts of their $6,000 financial decisions, giving $4,000

careful consideration to the way Assets (in Billions) Total $2,000 economic actions affect others around them and shunning $0 investments that violate their traditions’ core beliefs. 1995 1997 1999 2001 2003 2005 2007 2010 2012 2014 2016 2018 2020

SOURCE: US SIF Foundation. Sustainable investing in its present form arose in the aftermath of the social and cultural transformations socially responsible mutual These events inspired of the 1960s and 1970s as funds combining investment investment research firms the civil rights, feminist, exclusions, proactive to collect more extensive consumer, antiwar and investment in companies with data in order to assess the environmental movements strong labor and employment environmental systems and raised awareness about a host policies, as well as shareholder performance of publicly traded of social, environmental and advocacy. In the 1980s the companies. The 1980s also economic problems and made anti-apartheid campaign witnessed a new interest in the connection to corporate motivated endowments and corporate governance, as and investor responsibility. other institutions to protest public and labor pension funds Aided by regulatory changes South Africa’s system of racial joined together to defend their by the US Securities and apartheid by divesting their interests after a growing number Exchange Commission portfolios of companies doing of companies adopted anti- (SEC), a growing number of business in the country or by takeover defenses that infringed individual and institutional engaging with companies there on shareholder rights. investors filed the first dozens to use their economic leverage of shareholder resolutions to to work for meaningful change. The issues that sustainable raise environmental and social Environmental catastrophes investing practitioners consider responsibility concerns at the at Chernobyl, Ukraine, and continue to evolve. Following the annual meetings of US publicly Bhopal, India, and the Exxon success of the anti-apartheid traded firms. Valdez oil spill in Alaska were campaign, many institutional flashpoints for investor concerns investors developed similar The early 1970s also saw the over pollution, energy use and strategies to divest or engage launch of the first modern environmental management. with regimes that pose “conflict

12 I. Introduction US Individual Investors Are Enthusiastic About Sustainable Investing

A number of recent surveys have clean water and clean energy Large majorities in the Morgan confirmed that US individual present significant growth Stanley survey believed their investors, including retirement plan opportunities.1 investment decisions could help participants, continue to be very improve the world. interested in sustainable investing. Similarly, a 2019 study by the Morgan Stanley Institute for • Seventy-one percent of all According to a 2019 survey by Sustainable Investing of 800 US survey respondents—and Natixis Investment Managers of individual investors with assets 85 percent of millennials— 1,000 US employees, including 700 of $100,000 or more concluded agreed that “[i]t is possible participants in 401(k) and other that investor familiarity with for my investment decisions defined contribution plans: and enthusiasm for sustainable to influence the amount of investing “is at an all-time high.” climate change caused by • 61 percent said they would It reported that 85 percent of all human activities.” be more likely to contribute, respondents—and 95 percent or increase contributions, to of millennials—were interested • More than 80 percent of the their workplace retirement in sustainable investing, up 75 survey respondents agreed savings plan if they knew their and 86 percent, respectively, with the statement “It is investments were doing social from the levels in a survey the possible for my investment good, and Institute conducted two years decisions to create economic earlier.2 growth that lifts people out of • 74 percent believed that poverty.” companies that provide

risk” due to their poor records of environmental investing in criteria into their business on human rights or because they recent years. strategies. Some of these funds foment violence or terrorism. have explicit missions to support Sustainable investment analysts such goals as sustainable As globalization extended now routinely ask whether agriculture, clean energy, transit- supply-chain operations into companies meet reporting and oriented development, education, emerging markets across the performance standards in areas fair trade or healthcare. world, sustainable investors such as climate risk, executive have questioned multinational pay, human rights, supply-chain Religious investors and corporations about their impact management and use of toxic those involved in the social on the countries in which chemicals. transformations of the 1960s they and their contractors do and 1970s also sought to business, whether related to the Sustainable investing has not use their investments to aid environment or to their use of been limited to publicly traded in community development sweatshop or child labor. securities. A number of other efforts throughout the United investment vehicles—including States and abroad. Community Concerns over the risks private equity and venture capital development banks, credit associated with climate change funds, responsible property unions, loan funds and and stranded fossil fuel assets funds and hedge funds—now affordable housing groups have broadened the scope routinely incorporate ESG impact started forming in the 1970s.

Report on US Sustainable and Impact Investing Trends 2020 13 The Community Reinvestment Sustainable Investing industry peers. This strategy Act of 1977 further encouraged Strategies also includes avoiding investment in low-income companies that do not meet communities. Additionally, with Sustainable investors generally certain ESG performance the Tax Reform Act of 1969, US focus on at least one of two thresholds. foundations gained the ability broad strategies, discussed to meet their annual charitable further below. One is • Negative/Exclusionary distribution requirements in incorporating ESG criteria into Screening: The exclusion part through program-related investment research, analysis, from a fund or plan of certain investments that complement decision-making and portfolio sectors or companies and extend their grantmaking. construction across a range involved in activities of asset classes. A second is deemed unsustainable or The community investing filing shareholder resolutions controversial. industry developed further in at publicly traded companies the mid-1990s with revisions to and practicing other forms of • Impact Investing: Investment the Community Reinvestment investor engagement across in companies, organizations Act and the formation of the asset classes. and funds with the explicit US Treasury’s Community intention to generate positive Development Financial ESG INCORPORATION social and environmental Institution (CDFI) Fund. Along In ESG incorporation, asset impact alongside a financial with the creation of the New managers complement traditional, return, which can range from Markets Tax Credit and other tax quantitative techniques of below market to market rate. incentives, these developments analyzing financial risk and return helped usher new forms of with qualitative and quantitative • Sustainability Themed placed-based investment into analyses of ESG policies, Investing: Thematic portfolio low-income communities. performance, practices and construction around impacts. ESG incorporation can be specific ESG areas, such as US impact investors have accomplished in numerous ways: gender-lens investing, clean supported the development technology, sustainable food of responsible financial • ESG Integration: The and agriculture, renewable services in low- and middle- systematic and explicit energy, or place-based income countries, too. Many inclusion of ESG risks investing. international microfinance and opportunities into the institutions have grown from process of financial analysis, ESG incorporation strategies nonprofits dependent on which can include adjusting are not mutually exclusive, foreign investment to regulated estimated future cash flows or and money managers may microfinance banks that can modeled discount rates based employ more than one within accept local deposits from the upon evaluation of ESG- their investment products. As customers to whom they have related risks and opportunities discussed in later chapters, the historically lent. and identifying and measuring two ESG incorporation strategies the impact of off-balance- that are most broadly employed sheet ESG-related assets and today, based on the assets liabilities. affected, are ESG integration and exclusionary screening. • Positive/Best-in-Class: Investment in sectors, SHAREHOLDER companies or projects RESOLUTIONS AND selected for positive ESG INVESTOR ENGAGEMENT performance relative to Engagement involves the actions sustainable investors

14 I. Introduction take to communicate with Many engaged shareholders Some sustainable investors companies and capital markets also dialogue with corporate also speak out for legislative on ESG issues of concern. management over issues of and regulatory changes that concern, whether directly or will lead to greater corporate For owners of shares in through investor networks. accountability and disclosure on publicly traded companies, Shareholder resolutions on ESG ESG issues. shareholder advocacy can take issues generally aim to improve the form of filing and co-filing company policies and practices Asset owners and asset shareholder resolutions on and to promote the long-term managers are becoming more ESG issues and actively voting concerns of shareholders and engaged with management on their proxies at company other stakeholders. ESG issues not only in public annual general meetings in equities, but across other asset support of such resolutions. classes.

Structure of This Report

The next three chapters of this report detail the Chapter IV: “Investor Advocacy,” analyzes various strategies and practitioners represented trends in active ownership strategies, such as in the total $17.1 trillion of sustainable investing filing shareholder resolutions and engaging with assets cited in this introduction. companies in order to hold them accountable for their environmental, social and governance Chapter II: “ESG Incorporation by Money Managers,” performance and impact. It also examines the examines the incorporation of ESG issues by money highlights and successes of the shareholder managers across a wide range of investment proposals filed on ESG issues from 2018 to 2020. vehicles—mutual funds, including those underlying annuity products; exchange-traded funds; alternative The final sections provide additional details and investment vehicles such as venture capital, private context for the findings. equity, hedge and property funds; and other commingled products and separate accounts. Chapter V: “Methodology,” presents the methods It also looks at the asset growth of community and sources used to compile this report. investing institutions, such as banks, credit unions and loan funds. It quantifies the scope and scale Chapter VI: “About the Publisher,” provides of investment vehicles incorporating ESG factors, information about the US SIF Foundation and US SIF. the leading ESG criteria incorporated by money managers and other key trends that are shaping the Appendices: The first appendix is a glossary of ESG field and driving growth. incorporation criteria. Appendices 2-6 list: mutual funds and exchange-traded funds incorporating ESG Chapter III: “ESG Incorporation by Institutional criteria, community investing institutions, money Investors,” analyzes leading ESG incorporation managers engaged in ESG incorporation, institutional trends among institutional asset owners, such as investors engaged in ESG incorporation, and public funds, insurance companies, educational institutions and managers that have recently filed or institutions, philanthropic foundations, labor co-filed shareholder resolutions on ESG issues. funds, hospitals and healthcare plans, faith-based institutions, other nonprofits and family offices.

Report on US Sustainable and Impact Investing Trends 2020 15 II. ESG Incorporation by Money Managers

FIGURE 2.0 Sustainable Investing Assets 2020

ESG Incorporation Filing Shareholder Resolutions By Money Managers on Behalf of Overlapping Institutional Individual/Retail Investors $4,550 Billion Strategies Investors ( By Money Managers on Behalf of $1,462 Billion) $1,658 Billion Institutional Investors $12,014 Billion Money Managers $322 Billion

Total: $17,081 Billion

SOURCE: US SIF Foundation. NOTE: ESG incorporation assets in this figure include those in community investing institutions.

16 II. ESG Incorporation by Money Managers Money managers and financial institutions now incorporate environmental, social and governance (ESG) issues into their investment research, analysis and decision making, across portfolios that totaled $16.6 trillion at the start of 2020, as shown in Figure 2.0. This is a 43 percent increase from the $11.6 trillion in ESG incorporation assets money managers reported in 2018. Of the current sum, $12.0 trillion was managed on behalf of institutional clients, a 40 percent increase from 2018, and $4.6 trillion for individual retail or high-net- worth clients, a 50 percent increase from 2018. These ESG assets are managed by 384 asset management firms and 1,204 community investing institutions.

The rate of growth in ESG managers that do not disclose 43 percent over the past two incorporation among money their investment vehicles years, to reach $16.6 trillion at managers remains robust, incorporating ESG issues. the beginning of 2020. reflecting increased client demand and the continued • The final section examines • However, nearly 70 percent of “mainstreaming” of sustainable community investing, including these assets—$11.5 trillion— investing. an analysis of the growth remain largely opaque, as of community development the firms where they are This chapter is divided into four financial institutions (CDFIs). managed provided little detail sections: It looks at community on the specific investment development banks, credit vehicles through which they • The first examines the unions, loan funds and incorporated ESG criteria. leading themes, strategies venture capital funds, as well and motivations that money as the leading community • Moreover, the managers managers disclose for development criteria that for 60 percent of these incorporating ESG criteria into money managers incorporate uncategorized assets—$6.9 asset management. in other kinds of investment trillion—also did not disclose vehicles. any specific ESG factors that • The second section provides they consider, reporting only more detailed analysis of ESG that they consider ESG in trends by various kinds of Key Trends general. investment vehicles. • The assets managed • The number of registered • The third section analyzes by money managers investment companies that trends among money incorporating ESG criteria rose incorporate ESG analysis

Report on US Sustainable and Impact Investing Trends 2020 17 increased by over 14 percent • The other specific ESG Of the $16.6 trillion in ESG and their assets by 19 percent criteria that affect more than assets, the majority—nearly 70 since 2018; mutual funds, $2 trillion in assets relate to percent—are managed through ETFs and closed-end funds all anti-corruption, board issues, undisclosed investment vehicles, shared in this growth. sustainable natural resources as shown in Figure 2.2. The and agriculture, executive pay US SIF Foundation was able • Alternative investment funds’ and tobacco. to classify the remaining $5.1 ESG assets increased 22 trillion in ESG assets by the type percent from $588 billion to of investment vehicle through $715 billion, and the number Background which they are managed, from of funds increased 16 percent registered investment companies from 780 to 905; this growth The assets that money managers such as mutual funds, variable has been particularly apparent report as incorporating annuities, ETFs and closed-end among venture capital and ESG factors have increased funds, to alternative investment private equity funds. substantially over the last funds such as private equity and decade from $569 billion to venture capital funds, hedge • The assets of community $16.6 trillion, as shown in Figure funds or property funds, to investing institutions have also 2.1. Growth spiked between other commingled funds and grown, increasing 44 percent 2012 and 2014, when these community investing institutions. to $266 billion. Credit unions assets increased 240 percent; are driving this growth, with a ESG assets then rose 69 percent Registered investment companies 49 percent increase in assets from 2014 to 2016, 44 percent comprise 19 percent of money and a 23 percent increase from 2016 to 2018, and 42 manager ESG assets, and mutual in the number of community percent from 2018 to 2020. funds are the largest of these development credit unions. in terms of number of funds

• Climate change is the most important specific ESG issue considered by money managers in asset-weighted FIGURE 2.1 terms; the assets to which Growth of ESG Incorporation by Money Managers 2005–2020 this criterion applies have increased by 39 percent since $18,000 $16,564 2018 to $4.2 trillion. Growth in $16,000 climate-related investing has $14,000 increased against a backdrop of growing investor concern $12,000 $11,632 about accelerating climate $10,000 risks, including stranded fossil-fuel assets, extreme $8,000 $8,098 Total Assets (in Billions) Total weather events and wildfires, $6,000 $4,803 and with major money $4,000 managers such as BlackRock $1,412 modifying their stance on $2,000 $569 $178 $202 climate change’s impact on 0 investment returns.

2005 2007 2010 2012 2014 2016 2018 2020

SOURCE: US SIF Foundation.

18 II. ESG Incorporation by Money Managers FIGURE 2.2 Money Manager Assets, by Type, Incorporating ESG Criteria 2020

Total Assets (in Billions)

Mutual Funds $3,060 Variable Annuities $17 ETFs $21 Closed-End Funds $3 Alternatives $716 $16.6 Trillion Other Commingled Funds $985 Sustainable Community Investment Institutions $266 Investments Assets Undisclosed Investment Vehicles $11,493

SOURCE: US SIF Foundation.

and assets: 718 mutual funds related, environmental, social, Across the ESG assets with $3.1 trillion in assets under governance and product-related reported by money managers, management were identified. The categories. (See Appendix 1 the greatest share—$16.13 number of alternative funds is for this list of ESG criteria.) trillion—incorporated social or still larger, at 905 total funds, but They also had the option to community criteria, as shown in they are spread across various write in additional specific ESG Figure 2.3. This is an increase vehicles such as private equity, criteria which are referred to in of 49 percent from 2018, when hedge funds, and property and this report as “other” criteria. social and community criteria real estate funds and manage Respondents could also write in were also the predominantly fewer assets on the whole—only if they used general integration ranked criteria in asset-weighted $716 billion. of ESG issues, which is referred terms. This year, money to as “general” in this analysis. managers with $15.98 trillion in assets took governance criteria A Closer Look at Money managers incorporate into consideration, followed Themes, Strategies ESG criteria into their investment by managers with $15.97 and Motivations decisions for a variety of reasons trillion in assets that focused and for different kinds of clients. on environmental criteria. Through the US SIF Foundation This section highlights leading Growth in assets subject to survey process, money ESG criteria for all types of environmental criteria was the managers could select up money managers and provides most substantial compared with to 32 criteria considered insight into their motivations 2018, increasing 57 percent. by each of their products, and strategies for sustainable Finally, product-related criteria, broken into community- investing. such as restrictions on tobacco

Report on US Sustainable and Impact Investing Trends 2020 19 FIGURE 2.3 ESG Categories Incorporated by Money Managers 2018–2020

2020 2018

Social $16,134 $10,839

$15,975 Governance $10,764

Environment $15,967 $10,144

Products $4,942 $4,487

$3,000 $6,000 $9,000 $12,000 $15,000 $18,000

Total Assets (in Billions)

SOURCE: US SIF Foundation. NOTE: Social category includes community-related criteria. See Appendix 1.

or firearms, affected the smallest Approaches to ESG investment vehicles incorporate pool of assets—$4.94 trillion. incorporation can vary widely. a single issue or criterion. This As the data here reveal, there is relative percentage of single- As in 2018, money managers a need for greater disclosure by issue investment vehicles has collectively continue to managers into their investment declined with each successive report that they apply general vehicles, how they integrate Trends report, as more money environmental, social or specific ESG factors into their managers embrace broader governance factors across investment process and what ESG incorporation criteria. Just a majority of their ESG those criteria are. The trends over half of investment vehicles incorporation assets, as presented here around specific incorporate two to four general shown in Figure 2.4. While investment vehicles and specific or specific factors, while 37 some of these managers also ESG criteria reflect only the most percent incorporate at least five. provide detail on the specific transparent money managers. ESG criteria they consider ENVIRONMENTAL ISSUES (e.g., climate change, board In terms of the number of ESG At the beginning of 2020, money issues), as also shown in factors incorporated by asset managers reported that they Figure 2.4, the majority of ESG managers, the vast majority incorporated environmental incorporation assets identified of investment vehicles—95 factors into $16.0 trillion in assets in this report were described by percent—have explicit policies under management. Managers their money managers simply related to incorporating two or disclosed that $13.4 trillion of as incorporating general ESG more specific or general ESG those assets were managed factors without further specifics. factors. As shown in Figure according to general, unspecified 2.5, only 5 percent of ESG environmental criteria.

20 II. ESG Incorporation by Money Managers FIGURE 2.4 Leading ESG Criteria, by Assets, for Money Managers 2020

Environmental—General $13,449

Social—General $13,379

Governance—General $13,173

Climate Change/Carbon $4,178

Anti-Corruption $2,438

Board Issues $2,389 Sustainable Natural Resources/Agriculture $2,375

Executive Pay $2,223

Products—General $2,187

Tobacco $2,091 Conflict Risk (Terrorist or Repressive Regimes) $1,776

Pollution/Toxics $1,773

Human Rights $1,419

Community—General $1,359

Military/Weapons $1,151

Environmental—Other $1,113

Green Buildings/Smart Growth $1,088

$2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000

SOURCE: US SIF Foundation. Total Assets (in Billions) NOTE: Data are aggregated across all investment vehicle types, including separate account vehicles and undisclosed investment vehicles.

For those managers who world’s largest asset managers believe that sustainable investing disclosed more specific are incorporating climate change is the strongest foundation for environmental criteria, climate and other sustainability issues as client portfolios going forward.”1 change continued to rank material investment risk factors. highest, affecting $4.2 trillion in He writes, “Our investment The movement for fossil fuel assets under management, a conviction is that sustainability- divestment also continued to 39 percent increase from 2018. and climate-integrated portfolios grow, and US money manager In his most recent annual letter can provide better risk-adjusted assets explicitly managed to CEOs, Larry Fink, chairman returns to investors. And with according to fossil-free mandates and chief executive officer of the impact of sustainability on increased 65 percent since 2018 BlackRock, highlighted that the investment returns increasing, we to $374 billion. As Figure 2.6

Report on US Sustainable and Impact Investing Trends 2020 21 highlights, however, the pool of Assets under management FIGURE 2.5 assets under fossil-free policies is reported as factoring in pollution Frequency of ESG Criteria far smaller than the assets relating and toxics decreased by 13 Incorporation in Investment to several other environmental percent to $1.8 trillion. This Vehicles 2020 themes, from clean technology includes waste management, to green building and smart recycling and water purification. Single Criterion 5% growth, that many investors Finally, money managers with 2–4 Criteria 58% view as solutions to curb or $530 billion in assets under 5+ Criteria 37% mitigate climate change. Issues management highlighted a related to sustainable natural growing interest in biodiversity, resources and agriculture grew a criterion that was specified to $2.4 trillion, an 81 percent by managers under “other increase from 2018, as money environmental” in both 2018 managers increasingly embrace and 2020. It moved up to eighth “regenerative” and organic place in asset-weighted terms agriculture and sustainable as investors grow more aware forestry investment. Furthermore, of de-forestation risks and 80 percent of money managers conservation opportunities. who cited sustainable natural resources also factored in climate SOCIAL ISSUES SOURCE: US SIF Foundation. change, implying a growing At the beginning of 2020, social NOTE: The frequency of ESG incorporation concern about rising CO levels factors were incorporated into is as a percentage of total number of ESG 2 investment vehicles. This figure excludes and investment risk at the land- $16.1 trillion in assets under separate accounts and undisclosed energy-water nexus. management, making them investment vehicles. the largest category of ESG

FIGURE 2.6 Leading Environmental Criteria for Money Managers 2020

Environmental—General $13,449

Climate Change/Carbon $4,178 Sustainable Natural Resources/Agriculture $2,375

Pollution/Toxics $1,773

Environmental—Other $1,113

Green Building/Smart Growth $1,088

Clean Technology $1,067

Biodiversity $530

Fossil Fuel Divestment $374

$2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Total Assets (in Billions) SOURCE: US SIF Foundation.

22 II. ESG Incorporation by Money Managers Sustainable Finance Plans Advance Globally

Around the globe, countries The EU’s Shareholder Rights The United Kingdom’s Green are stepping up to craft and Directive2 requires asset managers Finance Strategy focuses on three implement plans to embed greater and owners to publish their elements: sustainability, particularly on company engagement policies, climate change, into their financial as well as annual reports detailing 1. Mainstreaming climate and industries. how successful the engagements environmental factors as have been. The Plan’s ESG a financial and strategic Of the emerging sustainable disclosure framework will also imperative, finance plans, the include low-carbon investment European 2. Mobilizing private finance for “Action Plan on benchmarks related to greenhouse Union’s clean and resilient growth, and Sustainable Finance” covers by gas emission reductions and the far the largest segment of the transition to a low-carbon economy 3. Cementing UK leadership in global financial industry. The Plan to provide investors with better green finance. mandates: information on the carbon footprint of their investments and improve The United Kingdom has a strong 1. a unified EU classification comparability of information. focus on the financially material system (the “taxonomy”), risks associated with climate has released a similarly 2. a clarification of asset managers’ Canada change. The government plans robust plan along with a final and institutional investors’ to give all financial regulators a report from the Expert Panel on fiduciary duties and disclosure formal mission to help ensure an Sustainable Finance. The final requirements on sustainability orderly, market-led transition to report addresses three groups of 3 considerations in investments, a net zero emissions economy. interrelated issues. Parliament is working on 3. low-carbon benchmarks, and legislation to require pension 4. that investment advisers provide 1. The first is shifting Canada’s trustees to publish detailed better advice to clients on climate change conversation reports in line with the Taskforce sustainability risks. from burden to opportunity. The on Climate-related Financial aim is to entice the Canadian Disclosures (TCFD)4 on how they

financial sector to participate in manage the financial risks of The taxonomy identifies economic the transition to a competitive climate change.5 Additionally, like activities that can make a low-emissions economy and the European Union, the United substantial contribution to climate ensure that government and Kingdom mandates that asset change mitigation or adaptation industry join forces to pursue owners and asset managers while avoiding significant harm to opportunity and manage risk. publicly disclose stewardship four other environmental objectives: policies. sustainable use and protection of 2. The second group focuses water and marine resources, the on building out disclosure, transition to a circular economy, legal clarity and supportive In Australia, the Australian pollution prevention, and protection professional services for Sustainable Finance Initiative of biodiversity and ecosystems. sustainable finance. was launched in late 2017 to These classifications will then be 3. The third group looks at develop a Sustainable Finance used by financial professionals developing and scaling Roadmap, which is due to be to “score” securities and various transformative market released in late 2020. Though the process is not government led, financial products in their portfolios. structures and financial products around such sectors government representatives are involved. In its December 2019 The Plan’s corporate disclosure as clean technology, oil and progress report, the Initiative set rules broaden the definition of natural gas, infrastructure, out several recommendations materiality to include non-financial buildings, and electricity for listed companies regarding metrics such as a company’s generation and transmission. consideration and disclosure of impact on the climate. In addition, climate risk.

Report on US Sustainable and Impact Investing Trends 2020 23 FIGURE 2.7 Leading Social Criteria for Money Managers 2020

Social—General $13,379 Conflict Risk (Terrorist or Repressive Regimes) $1,776

Human Rights $1,419

Community—General $1,359

Health $953 Community Relations/ Philanthropy $858

EEO/Diversity $833

Social—Other $833

Affordable Housing $720

$2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Total Assets (in Billions) SOURCE: US SIF Foundation.

criteria money managers review. by 36 percent from 2018 to $1.4 Health-related criteria also Managers disclosed that $13.4 trillion in 2020. Unspecified, emerged as statistically trillion of those assets were general community criteria significant this year as a managed according to general, represented $1.4 trillion in assets criterion written in by managers, unspecified social criteria, as under management, a more than who said they applied it across shown in Figure 2.7. six-fold increase from 2018. $953 billion assets under management. Assets affected For money managers who by community relations/ provide more detailed philanthropy increased by explanations of the social 40 percent to $858 billion in criteria they consider, conflict 2020. EEO/diversity remained risk remains the highest ranked relatively stable at $833 billion specific criterion in asset- Climate change in assets under management. weighted terms, applied across remains the Other social criteria and $1.8 trillion in assets under highest ranked affordable housing both management. This category increased by over 30 percent includes policies that restrict specific criterion in in 2020 to $833 billion and investment in companies asset-weighted $720 billion assets under doing business with terrorist terms for money management, respectively. or repressive regimes, such as managers. (For a detailed breakdown, Sudan and Iran. The third largest by investment vehicle, of the category of social criteria was money managers considering human rights, but the assets community relations, affordable reported as affected by human housing and other community- rights considerations decreased related criteria, see Figure 2.27.)

24 II. ESG Incorporation by Money Managers FIGURE 2.8 Leading Governance Criteria for Money Managers 2020

Governance—General $13,173

Anti-Corruption $2,438

Board Issues $2,389

Executive Pay $2,223

Political Contributions $1,056

Governance—Other $1,005

$2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Total Assets (in Billions) SOURCE: US SIF Foundation.

CORPORATE GOVERNANCE Reflecting perhaps the growing managers applied an ESG At the beginning of 2020, public discussion of income integration policy across assets. money managers reported that inequality, assets managed Restricting tobacco investment they incorporated governance with regard to executive was the most popular specific factors into $16.0 trillion in compensation grew by 122 product-related issue, affecting assets under management. percent since 2018, to $2.2 $2.1 trillion in assets under Of this total, $13.2 trillion of trillion. After many years of management; however, this assets under management, or 82 shareholder advocacy and was a 28 percent decrease percent, were applied to general, engagement, money managers from 2018. The consideration unspecified governance factors. also increasingly considered of military and weapons criteria related to corporate issues also decreased—by Assets under management political contributions and 40 percent—to $1.2 trillion. factoring in anti-corruption lobbying activities; assets By contrast, restrictions on continued to be a leading subject to these criteria grew by nuclear power continued to factor and increased to $2.4 80 percent to $1.1 trillion. expand to affect $812 billion trillion. Board issues, such in assets under management. as consideration of directors’ PRODUCT-RELATED Other product criteria that did independence, diversity and CRITERIA not fit the established product responsiveness to shareholders, The incorporation of product- categories affected another $935 affected $2.4 trillion in assets related criteria increased by billion in assets; many of these under management as well, an 10 percent from 2018 to 2020 included asbestos exposure increase of 66 percent since to affect $4.9 trillion in assets and restrictions relating to 2018. A number of recent reports under management. genetically modified organisms. have supported the importance of gender, racial, ethnic and Within this category, general, ESG INCORPORATION demographic diversity on boards unspecified product-related STRATEGIES to help companies gain diverse criteria ranked the highest Of the 384 money managers perspectives to innovate and with $2.2 trillion in assets included in this report, a respond to challenges and under management, as shown subset of more than 100 money disruptions.6 in Figure 2.9. Many of these managers with more than $3.6

Report on US Sustainable and Impact Investing Trends 2020 25 FIGURE 2.9 Leading Product-Related Criteria for Money Managers 2020

Products—General $2,187

Tobacco $2,091

Military/Weapons $1,151

Products—Other $935

Nuclear $812

Product Safety $765

Alcohol $495

Gambling $314

Pornography $277

Animal Testing/Welfare $254

Faith-Based $139

0 $500 $1,000 $1,500 $2,000 $2,500

SOURCE: US SIF Foundation. Total Assets (in Billions) trillion in combined ESG assets income, or other asset classes under management responded such as cash or alternatives. to additional survey questions Managers were also asked what about their ESG incorporation percentage of their assets were strategies and asset allocation. managed in passive investment Managers were first asked to strategies that track indices. specify what percentage of ESG integration was their ESG assets were affected As shown in Figure 2.10, ESG the most commonly by one or more of the following integration was the most strategies: ESG integration, reported strategy in commonly reported strategy negative or exclusionary terms of both the in terms of both the assets strategies, positive or best- assets involved and involved and percentage of in-class strategies, impact money managers employing it, investing or sustainability percentage of money at $3.5 trillion and 74 percent themed strategies. In 2020, the managers employing it. respectively. The second most US SIF Foundation also asked reported strategy was negative money managers about the or exclusionary screening, allocation of their overall assets reported by 69 percent of this under management across group of money managers and three broad categories of asset affecting $740 billion of their classes: public equity, fixed assets under management.

26 II. ESG Incorporation by Money Managers FIGURE 2.10 ESG Incorporation Strategies by Money Managers 2020

Number of % of Managers Assets Affected

Money Managers Reporting (in Billions)

ESG integration: the systematic and explicit inclusion by investment managers of ESG risks 83 74% $3,491 and opportunities into traditional financial analysis

Negative/exclusionary: the exclusion from a fund or plan of certain sectors or companies based on 77 69% $740 specific ESG criteria

Positive/best-in-class: investment in sectors, companies or projects selected for positive ESG 67 60% $143 performance relative to industry peers

Impact investing: targeted investments, often made in private markets, aimed at solving social 66 59% $46 or environmental problems

Sustainability themed investing: the selection of assets specifically related to sustainability in 54 48% $367 single- or multi-themed funds

Total Responding 112 $3,601

SOURCE: US SIF Foundation. NOTE: Some managers disclosed using multiple strategies within funds, so affected assets may overlap and percentages do not sum. Managers of Community Development Loan Funds who responded voluntarily to these questions are also included.

Although nearly equal numbers assets provided a breakdown may not be representative of of this subset of managers of their ESG assets by asset the broader universe of ESG reported using positive class. Fifty-eight said they incorporation covered in this screening and impact investing invested in publicly traded fixed report, but it does indicate strategies, impact investing income across $1.8 trillion—or that sustainable investing is affected a significantly lower 50 percent of the combined not confined to publicly traded level of assets, only $46 billion ESG assets of all respondents equity. compared with $143 billion to this question. Although even in positive or best-in-class more managers, 87, reported A subset of 106 money screening. Sustainability-themed investing in publicly traded managers with over $3.6 investing, although cited by equity, these reported holdings trillion in combined ESG fewer than half the money made up only 38 percent of the assets responded to questions managers in this group, was ESG assets managed by all the regarding their use of passive applied across $367 billion in question respondents. Fifty-eight and active investment strategies. assets, making it the third-place managers also reported investing As shown in Figure 2.12, the ESG incorporation strategy in in other asset classes, such as vast majority of this self- asset-weighted terms. cash or alternatives, affecting 12 selected group of managers percent of the combined assets reported using actively managed As shown in Figure 2.11, a subset represented. The aggregate strategies across $3.4 trillion of 113 managers with more than asset class breakdown of the in assets. Only 28 managers $3.5 trillion in combined ESG 113 respondents to this question reported using passive

Report on US Sustainable and Impact Investing Trends 2020 27 FIGURE 2.11 ESG Incorporation by Asset Class by Money Managers 2020

Number of Affected Assets Percent of

Money Managers (in Billions) ESG Assets

Publicly Traded Bonds or Fixed Income 58 $1,776 50%

Publicly Traded Equity 87 $1,346 38%

Other (e.g. Cash, Private Assets, Real 58 $440 12% Assets)

Total Responding 113 $3,562 100%

SOURCE: US SIF Foundation. NOTE: Some money managers reported investing in more than one asset class across their ESG assets, so totals do not sum. strategies across $239 billion responded to an additional set 80 percent of this subset, cited in their ESG assets. Although of questions on their motivations social or environmental impact most ESG strategies are actively for incorporating ESG criteria as a motivation for incorporating managed, during four of the into their investment process. As ESG factors across $3.5 trillion past five years, net flows into shown in Figure 2.13, the largest in assets under management. passively managed sustainable percentage of them, managing The desire to improve returns investing funds have exceeded $2.1 trillion in ESG assets, cited was cited by 73 percent of net flows into actively managed risk mitigation as a motivation. this group of managers with funds, highlighting the widening A slightly smaller group of $2.4 trillion in assets. Nearly availability of index funds managers, but with nearly $3.6 as many managers, but with incorporating ESG criteria.7 trillion in combined ESG assets slightly more assets, cited under management, cited client mission as a motivation for their MOTIVATIONS FOR ESG demand as a motivation, making consideration of ESG factors. INCORPORATION it the largest reported reason A slightly lower percentage of A slightly larger subset of 113 for incorporating ESG factors, in managers—64 percent—with money managers with combined asset-weighted terms. nearly $3.6 trillion in ESG assets, ESG assets of $3.6 trillion A similar number of managers, cited fiduciary duty, making this

FIGURE 2.12 Passive vs. Active ESG Asset Management by Money Managers 2020

Number of Affected Assets Percent of

Money Managers (in Billions) ESG Assets

Actively Managed 99 $3,379 93%

Passively Managed 28 $239 7%

Total Responding 106 $3,618 100%

SOURCE: US SIF Foundation. NOTE: Some money managers reported using both active and passive management across their ESG assets, so totals do not sum.

28 II. ESG Incorporation by Money Managers FIGURE 2.13 Reasons Money Managers Report Considering ESG Factors 2020

Number of % of Managers ESG Assets Reason Money Managers Responding (in Billions)

Risk 95 84% $2,062

Client Demand 92 81% $3,569

Social or Environmental Impact 90 80% $3,476

Returns 82 73% $2,355

Mission 79 70% $2,445

Fiduciary Duty 72 64% $3,557

UN Sustainable Development Goals 52 46% $406

Regulatory Compliance 24 21% $3,345

Total Responding 113 $3,621

SOURCE: US SIF Foundation. NOTE: Managers of community development loan funds who responded to these questions are also included. Respondents could choose multiple reasons, so counts and percentages do not sum.

the second highest motivation Registered Investment 718, and their total assets for incorporating ESG factors, Companies have increased 19 percent to in asset-weighted terms. Forty- $3.1 trillion. According to the six percent of respondents with As highlighted in Figure Investment Company Institute’s $406 billion in ESG assets cited 2.14, the assets of registered 2020 Investment Company Fact the UN Sustainable Development investment companies such as Book, all US-based mutual funds Goals as a motivation—an option mutual funds, variable annuity held $21.3 trillion in assets under that was added as a response funds, exchange-traded funds management at the beginning for the first time in 2018. As in and closed-end funds that of 2020.8 Thus, the sustainable 2018, fewer than a quarter of incorporate ESG investing mutual funds described in this the managers responding to criteria have grown from just report constitute 15 percent of this question cited regulatory $645 billion in 2012 to $3.1 the total assets of US-domiciled compliance as a motivation, trillion at the start of 2020, a mutual funds. but in 2020 they represented a nearly five-fold increase. more substantial portion of ESG EXCHANGE-TRADED FUNDS assets—$3.3 trillion—than the Within this group, MUTUAL (ETFs) incorporating ESG factors $1.9 trillion associated with this FUNDS predominate, both continued to grow from 2018 to response in 2018. in the number of funds and 2020. Total ETF ESG assets more the assets they represent. than doubled to $21 billion, and Since 2018, the total number the number of funds increased of sustainable mutual funds 36 percent to 94. has increased 13 percent, to

Report on US Sustainable and Impact Investing Trends 2020 29 FIGURE 2.14 ESG Incorporation by Registered Investment Companies 2012–2020

Left Axis: Mutual Funds Variable Annuities Closed-End Funds Exchange-Traded Funds

Right Axis: Number of Funds

$3,500 1,000

$3,000 800 $2,500

600 $2,000

$1,500 400

$1,000 Number of Funds Total Assets (in Billions) Total 200 $500

$0 0 2012 2014 2016 2018 2020

# Assets # Assets # Assets # Assets # Assets

Mutual Funds 302 $455.7 415 $1,675.1 475 $1,718.3 636 $2,580.3 718 $3,060.4 (ex-Variable Annuity)

Variable 31 $184.8 41 $249.7 16 $16.9 18 $17.0 13 $17.0 Annuities

Closed-End 7 $1.4 4 $7.3 3 $0.7 7 $2.9 11 $3.3 Funds

Exchange- Traded 21 $2.5 20 $3.5 25 $3.5 69 $7.4 94 $21.0 Funds

Total 361 $645 480 $1,936 519 $1,739 730 $2,608 836 $3,101.8

SOURCE: US SIF Foundation. NOTE: Asset values are in billions.

Although still a small category funds incorporating ESG criteria Finally, both the number within the sustainable investing increased to 11 with $3.3 billion of VARIABLE ANNUITIES universe, CLOSED-END FUNDS in assets under management, incorporating ESG criteria and also saw growth in line with that a 14 percent increase in assets the associated assets under of mutual funds that incorporate from 2018. management held relatively ESG factors. At the start of steady, with 13 funds and $17 2020, the number of closed-end billion in total net assets.

30 II. ESG Incorporation by Money Managers As shown in Figure 2.15, social FIGURE 2.15 criteria constituted the largest ESG Categories Incorporated by Registered Investment Companies 2020 ESG category incorporated into the management of registered Number of Funds Assets (in Billions) investment companies in asset- Social 728 $3,076 weighted terms, affecting $3.08 trillion in assets under Environment 737 $3,070 management across 728 funds. This was closely followed Governance 707 $3,034 by environmental criteria at $3.07 trillion in assets under Products 412 $775 management; however, more funds (737) incorporated Total Across All Categories 836 $3,102 environmental criteria than social factors. Corporate SOURCE: US SIF Foundation. governance criteria were a close NOTE: Analysis based on assets of mutual funds, including those underlying variable annuity products, exchange-traded funds and closed-end funds. third, with $3.03 trillion in assets under management across 707 funds. Product-specific criteria FIGURE 2.16 were considered to a far lesser Leading ESG Criteria for Registered Investment Companies 2020 degree, affecting 412 funds with $775 billion in net assets. Number of Funds Assets (in Billions) Figure 2.16 disaggregates the Environmental—General 473 $2,504 use of ESG criteria by registered Governance—General 454 $2,499 investment companies at a more granular level. More Social—General 447 $2,498 than $2.5 trillion in registered investment company assets Climate Change/Carbon 287 $1,327 reported incorporating general ESG issues without specifying Social—Other 155 $1,202 precisely which ESG criteria

Governance—Other 86 $1,107 or themes. However, 287 funds with $1.3 trillion in Conflict Risk (Terrorist or assets explicitly reported 163 $812 Repressive Regimes) incorporating climate change or carbon-related criteria into Board Issues 313 $626 their investment process, an increase of 63 percent since Executive Pay 203 $617 2018 in the assets affected. Anti-Corruption 211 $617 Thus, it is again the leading specific ESG issue for registered Pollution/Toxics 208 $541 investment companies in asset- weighted terms. The number Human Rights 321 $537 of registered investments companies reporting that they Total Across All Criteria 836 $3,102 assess climate change issues has increased substantially, SOURCE: US SIF Foundation. from 180 in 2018 to 287 in 2020. NOTE: Analysis based on assets of mutual funds, including those underlying variable annuity The “other social” and “other products, exchange-traded funds and closed-end funds. Some managers incorporate multiple ESG criteria, so totals do not sum.

Report on US Sustainable and Impact Investing Trends 2020 31 governance” criteria affect a Social criteria related to conflict Next, board issues were similar range of assets under risk, such as doing business incorporated into the management, $1.2 trillion in terrorist states or repressive management of 313 registered and $1.1 trillion respectively, regimes, affected 163 funds with investment companies with $626 although “other governance” $812 billion in assets, making billion in combined assets under criteria were incorporated by it the second largest specific management, and two other fewer funds than other social ESG criterion incorporated by governance criteria—executive factors. registered investment vehicles, in pay and anti-corruption— asset-weighted terms. followed closely behind, each

FIGURE 2.17 ESG Incorporation by Alternative Investment Vehicles 2012–2020

Left Axis: Venture Capital and Private Equity Funds Property Funds and REITs Hedge Funds

Right Axis: Number of Alternative Investment Funds

$800 1,000

800 $600

600

$400

400 Number of Funds $200 Total Assets (in Billions) Total 200

$0 0 2012 2014 2016 2018 2020

# Assets # Assets # Assets # Assets # Assets

Venture Capital 178 $57.2 212 $135.4 275 $124.9 565 $282.6 681 $438.1 and Private Equity Funds

Property Funds and 84 $69.8 88 $85.1 102 $69.6 108 $272.4 126 $242.0 REITs

Hedge Funds 39 $5.3 36 $3.4 36 $11.7 107 $32.6 98 $35.4

Total 301 $132.3 336 $223.9 413 $206.3 780 $587.6 905 $715.5

SOURCE: US SIF Foundation. NOTE: Asset values are in billions.

32 II. ESG Incorporation by Money Managers affecting the management of more FIGURE 2.18 than 200 registered investment ESG Categories Incorporated by Alternative Investment Vehicles 2020 companies with $617 billion in combined assets.

Number of Funds Assets (in Billions) Pollution and toxics were considered by 208 funds with Environment 863 $698 $541 billion in assets, while 321 funds with $537 billion in assets Social 820 $685 incorporated social factors related Governance 770 $667 to business and human rights.

Products 72 $38 Alternative Investment Vehicles Total Across All Categories 905 $716

ESG alternative investment SOURCE: US SIF Foundation. Some managers incorporate criteria from more than one ESG category, so totals do not sum. vehicles, which are generally NOTE: organized as unregistered partnerships and available only FIGURE 2.19 to accredited investors, include Leading ESG Criteria for Private Equity and Venture Capital Funds 2020 hedge funds, venture capital and private equity funds, as well as real estate investment Number of Funds Assets (in Billions) trusts (REITs) or other property funds focused on investments Environmental—General 369 $416 in farmland, timberland, and real estate. At the start of 2020, $716 Social—General 365 $416 billion in capital was identified under the management of 905 Governance—General 364 $415 alternative investment vehicles, Affordable Housing 8 $8 a 22 percent increase in assets identified since 2018 and a more Clean Technology 77 $8 than fivefold increase since 2012. Product Safety 27 $6 Environmental criteria are the Sustainable Natural top consideration for alternative 67 $6 Resources/Agriculture fund managers, with 863 funds and $698 billion in assets Climate Change/Carbon 46 $5 under management affected, as shown in Figure 2.18. This Small & Medium Businesses 56 $4 is a 15 percent increase in the number of alternative investment Pollution/Toxics 44 $3 funds that took environmental factors into account and a 20 Board Issues 30 $3 percent increase in assets since 2018. Social and governance Total Across All Criteria 681 $438 criteria were also considered by funds representing more than SOURCE: US SIF Foundation. NOTE: Some managers incorporate multiple ESG criteria, so totals do not sum.

Report on US Sustainable and Impact Investing Trends 2020 33 investment strategies. Although FIGURE 2.20 managing a relatively smaller Leading ESG Criteria for Property Funds and REITs 2020 segment of the capital in this asset class, the ranks of General Number of Funds Assets (in Billions) Partners (GPs) managing social and environmental impact- Green Building/Smart Growth 71 $212 focused private equity funds Community Relations/ are growing rapidly. To cite one 47 $174 Philanthropy manifestation of this growth, membership in Impact Capital Social—General 23 $169 Managers, a new network for North American GPs, has more Climate Change/Carbon 13 $154 than doubled since its launch Clean Technology 6 $153 in 2018, to more than 50 GPs managing over $11 billion in Sustainable Natural combined capital.9 26 $140 Resources/Agriculture Affordable housing and clean Community Services 11 $135 technology were the two top specific factors for private Community—Other 4 $133 equity and venture capital Pollution/Toxics 2 $133 managers, in asset-weighted terms, each applied across $8 Fossil Fuel Divestment 1 $133 billion in assets. However, only eight funds reported targeting Environmental—Other 1 $133 affordable housing, whereas clean technology was cited by Governance—Other 67 $78 77 funds. Product safety and sustainable natural resources Total Across All Criteria 126 $242 and agriculture each affected $6 billion in assets, but there US SIF Foundation. SOURCE: was a similarly wide dispersion NOTE: Some managers incorporate multiple ESG criteria, so totals do not sum. among the number of funds incorporating those issues, at 27 and 67, respectively. $667 billion in assets. However, an increase of 55 percent in product-related criteria dropped assets from 2018. More than The number of significantly among reporting half of the venture capital and PROPERTY considering ESG alternative asset managers, private equity funds identified FUNDS criteria grew to 126 in 2020 affecting only $38 billion in here, representing more than from 108 in 2018; however, assets across 72 funds, down $415 billion in assets, reported assets decreased from $272 from $133 billion across 139 incorporating general ESG billion to $242 billion. Property funds in 2018. criteria, as shown in Figure 2.19. funds and REITs nevertheless remain the second largest The number of PRIVATE EQUITY Far fewer private equity and set of alternative investment AND VENTURE CAPITAL venture capital funds reported vehicles tracked in this report. FUNDS considering ESG criteria incorporating specific ESG This category includes direct grew to 681 with $438 billion factors, and these were often investments in real assets in assets under management, part of more explicit impact

34 II. ESG Incorporation by Money Managers such as residential property, FIGURE 2.21 commercial development, Leading ESG Criteria for Hedge Funds 2020 farmland or timberland, as well as equity portfolios managed Number of Funds Assets (in Billions) through REITs. Governance—General 44 $22 In 2020, a majority of these funds—71, with $212 billion in Environmental—General 39 $17 assets—incorporated green building and smart growth Social—General 37 $15 criteria. Community relations Anti-Corruption 39 $13 and philanthropy was the next most widely considered factor, Climate Change/Carbon 39 $11 reported by 47 funds with $174 billion in assets. Climate change Board Issues 39 $11 and carbon criteria affected the management of a far smaller Governance—General 36 $11 number of funds (13) with $154 billion in assets. While just Clean Technology 39 $11 six funds reported that they Executive Pay 37 $10 consider clean technology, they represent $153 billion in assets, Product Safety 37 $10 a 40 percent increase from 2018. One of the fastest growing Total Across All Criteria 98 $35 concerns for property funds is sustainable natural resources SOURCE: US SIF Foundation. and agriculture, which grew NOTE: Some managers incorporate multiple ESG criteria, so totals do not sum. 164 percent in asset-weighted terms since 2018 to affect $140 billion across 26 funds. Whether motivated by concerns about As shown in Figure 2.21, Other Commingled Funds climate change or sustainable specific criteria incorporated food systems, investor interest in by hedge funds included anti- OTHER COMMINGLED FUNDS regenerative agriculture through corruption, climate change and include investment pools that specialized farmland funds carbon, board issues and clean have been commingled for has grown noticeably in recent technology. Although these multiple investors but do not years.10 criteria represented 39 funds, readily fit into any other vehicle their assets ranged from $11 category used in this report. This Finally, the number of HEDGE billion to $13 billion. Executive miscellaneous category includes: FUNDS decreased slightly from pay and product safety affected 107 in 2018 to 98 funds, with $35 $10 billion each in asset weighted • privately managed nonprofit billion in net assets, in 2020: they terms, representing 37 funds. trusts, remain the smallest category of Sixty-three percent of hedge alternative investment vehicles fund assets incorporated general • loan funds and private debt within the ESG investment governance criteria and 49 funds that are not community universe. percent incorporated general development financial environmental criteria; general institutions, social criteria were incorporated into 43 percent of assets. • collective investment trusts, and

Report on US Sustainable and Impact Investing Trends 2020 35 FIGURE 2.22 ESG Incorporation by Other Commingled Funds 2012–2020

Left Axis: Other Commingled Funds

Right Axis: Number of Funds

$1,000 300

$800

200 $600

$400 100 Number of Funds Total Assets (in Billions) Total $200

$0 0 2012 2014 2016 2018 2020

# Assets # Assets # Assets # Assets # Assets

Other Commingled 45 $234 73 $297 70 $651 203 $753 252 $985 Funds

SOURCE: US SIF Foundation. NOTE: Since 2018, we included various loan funds and private debt funds that are not captured in the Community Investing section.

• other pooled investment since 2012. Other commingled related and community criteria vehicles, generally managed funds account for 6 percent of were reported by two funds with for specific types of total money manager assets. $69 billion in assets. Criteria institutional investors, such as related to human rights affected religious organizations, Taft- Conflict risk emerged as the 18 funds with $65 billion in Hartley pension plans or other leading ESG criterion for other assets under management. labor union funds. commingled funds, in asset- weighted terms, representing The category of other $388 billion in assets under Undisclosed Investment commingled funds has become management, but only three Vehicle Assets increasingly significant in recent funds reported incorporating this years, as shown in Figure 2.22. In criterion. The majority of other ESG incorporation into asset 2020, money managers reported commingled funds—more than management is growing rapidly, 252 funds with $985 billion in 160 funds with more than $100 but transparency is not keeping assets under management, an billion in assets—incorporated pace with the field’s rapid increase in assets of 31 percent general, unspecified ESG evolution. Indeed, 173 money since 2018 and over 320 percent criteria. Unspecified product- managers included in this study

36 II. ESG Incorporation by Money Managers consequently constitute the bulk FIGURE 2.23 of these uncategorized money Leading ESG Criteria for Other Commingled Funds 2020 manager assets that reportedly incorporate ESG criteria in Number of Funds Assets (in Billions) some way. Over the last two years, nearly 120 new US-based Conflict Risk (Terrorist or 3 $388 Repressive Regimes) investment managers joined the PRI, further magnifying this Governance—General 163 $102 phenomenon.

Environmental—General 163 $102 Managers of these assets in undisclosed investment vehicles Social—General 162 $101 generally fall into two, sometimes Products—General 2 $69 overlapping groups:

Community—General 2 $69 • The first group consists of money managers that Human Rights 18 $65 responded to the US SIF Foundation survey and Social—Other 7 $59 chose the “other/not listed”

Climate Change/Carbon 26 $34 miscellaneous category of investment fund type rather Labor 16 $34 than one of the investment vehicle categories described Board Issues 13 $33 earlier in this chapter. Here, managers may have decided Total Across All Criteria 252 $985 to lump groups of assets together by ESG criteria

SOURCE: US SIF Foundation. rather than listing every single NOTE: Some managers incorporate multiple ESG criteria, so totals do not sum. product. This group represents $2.0 trillion in assets. A did not fully disclose information Responsible Investment (PRI), a small subset of this group, about the types of investment global network, began requiring representing $500 billion in vehicles for pools of assets its signatories to disclose assets under management, that they reported managing data in publicly available did not disclose specific ESG according to ESG criteria. These Transparency Reports. Although criteria associated with these undisclosed investment vehicle the PRI reporting framework uncategorized pools of assets, assets therefore constitute an provided a new source of reporting only that these opaque pool of $11.5 trillion—69 information on ESG asset assets were subject to general percent of all ESG assets management, PRI signatories ESG criteria. reported by money managers. have not been required to disclose publicly the specific • A second group consists of As shown in Figure 2.24, the ESG criteria they consider or to money managers that did assets in these undisclosed enumerate the specific funds not respond to the US SIF investment vehicles have and vehicles affected by their Foundation’s information increased 53 percent since 2018, ESG incorporation practices. request. These managers may extending a growth pattern that PRI signatories that do not have filed PRI Transparency started in 2014, at the same clearly disclose their investment Reports or released other time that the the Principles for products and vehicles forms of public disclosures

Report on US Sustainable and Impact Investing Trends 2020 37 about their ESG investing associated with them; instead, reporting by money managers policies and practices but the reporting managers only on separate account assets did not provide assets referred to ESG factors in remains too heterogeneous to disaggregated by vehicle general. track specific vehicles in precise, type. This group of managers quantifiable ways. Although some did not disclose investment Additionally, it should be respondents provide detailed vehicles across $9.5 trillion noted that these undisclosed information about composite in ESG assets under investment vehicle assets do pools of individual separately management. Of this pool of include “separate accounts,” managed account strategies, assets without an identified reported by 75 firms and other responding managers investment vehicle type, $6.4 constituting approximately 9 combine multiple strategies trillion in assets also did not percent of the total $11.5 trillion in into one entry, which results in have specific ESG factors uncategorized assets. However, uneven comparisons across this

FIGURE 2.24 ESG Incorporation in Undisclosed Investment Vehicle Assets 2012–2020

Left Axis: Separate Accounts Undisclosed Vehicles

Right Axis: Number of Managers

$12,000 200

$10,000 150 $8,000

$6,000 100

$4,000

50 Number of Managers Total Assets (in Billions) Total $2,000

$0 0 2012 2014 2016 2018 2020

# Assets # Assets # Assets # Assets # Assets

Separate 86 $335 88 $431 51 $674 80 $1,002 75 $1,078 Accounts

Other Assets 9 $2 27 $1,849 66 $4,699 89 $6,497 112 $10,415

Total 93 $337 111 $2,280 113 $5,373 159 $7,499 173 $11,493

SOURCE: US SIF Foundation. NOTE: This figure counts the number of firms reporting these assets rather than the number of funds or vehicles involved.

38 II. ESG Incorporation by Money Managers FIGURE 2.25 Leading ESG Criteria for Undisclosed Investment Vehicle Assets 2020

Environmental—General $10,322

Social—General $10,180

Governance—General $10,097

Climate Change/Carbon $2,743

Products—General $2,104 Sustainable Natural Resources/Agriculture $2,091

Anti-Corruption $1,820

Board Issues $1,805

Tobacco $1,692

Executive Pay $1,648

Labor $1,381

Community—General $1,276

Pollution/Toxics $1,057

$2,000 $4,000 $6,000 $8,000 $10,000 $12,000

Total Assets (in Billions) SOURCE: US SIF Foundation.

category. Without commensurable assets are subject to general $2.1 trillion. Governance criteria responses about ESG ESG criteria. In addition, general, related to anti-corruption and incorporation through separate unspecified product-related board issues follow closely account vehicles, these assets criteria are incorporated into the behind in asset-weighted are considered undisclosed management of $2.1 trillion of terms, incorporated into the investment vehicle assets. these uncategorized assets. management of $1.8 trillion.

Despite the limitations in Among more specific ESG In 2018 as in 2020, climate transparency and disclosure of factors, environmental factors change, anti-corruption measures the funds through which these predominate. Climate change and tobacco restrictions were in assets are managed, some and carbon is the leading the top five specific ESG criteria ESG incorporation trends can criterion associated with these for these undisclosed investment be quantified among these pools, affecting $2.7 trillion in vehicles. However, sustainable undisclosed investment vehicle assets under management, agriculture/natural resources and assets. Figure 2.25 highlights followed by sustainable natural board issues moved into the top that 87 to 90 percent of these resources and agriculture with five in 2020 from eighth and ninth

Report on US Sustainable and Impact Investing Trends 2020 39 place, respectively, in 2018 when lower income communities in the fund assets increased by 57 these criteria were applied to just United States. percent since 2018, to more $1 trillion in assets. than $370 million, although their The US SIF Foundation has numbers and assets remain the also tracked US-based loan smallest segment of community Community Investing funds that provide microfinance investing institutions analyzed lending and other forms of here. Community investing is a vital capital to entrepreneurs and form of sustainable and impact small businesses outside the COMMUNITY DEVELOPMENT investing that the US SIF United States. BANKS are regulated banking Foundation has tracked for more institutions that operate than two decades. The community investing sector much like their conventional has experienced rapid growth counterparts but focus their COMMUNITY INVESTING over the last decade. Community lending and banking services INSTITUTIONS investing assets nearly doubled in lower-income communities. In the United States, community between 2014 and 2016, then They typically offer services investing institutions direct increased by just over 50 available at conventional banks capital to communities and percent between 2016 and to both individual and business individuals underserved by 2018, and most recently grew by customers, including federally conventional financial services. 44 percent between 2018 and insured savings, checking, They typically provide capital 2020. The number of community money market and individual for small businesses, affordable investing institutions stood at retirement accounts and housing units, charter schools, 1,204 in 2020, up from 1,145 in certificates of deposit. grocery stores and other 2018. community amenities. They also COMMUNITY DEVELOPMENT provide responsible lending Community development CREDIT UNIONS (CDCUs) are products and related programs credit unions constitute the regulated depository institutions to help consumers avoid the largest group of community that are member-owned and predatory lenders that are often investing institutions, in asset- cooperatively controlled. CDCUs found in low-income areas. weighted terms. Assets among offer federally insured accounts credit unions grew 49 percent and other financial services Their numbers include banks, since 2018 to more than $180 offered by conventional credit credit unions, loan funds and billion, and their numbers unions but are mission-driven venture capital funds that increased substantially as well to responsibly serve low- are certified and overseen from 370 to more than 450. income and other underserved as community development Although smaller in assets and communities. financial institutions (CDFIs) by declining in number, community the CDFI Fund, a division of the development loan funds According to Inclusiv, formerly US Department of the Treasury. nevertheless remain the most known as the National In addition, the community numerous kind of community Federation of Community investing institutions tracked by investing institution. There were Development Credit Unions, the US SIF Foundation include nearly 600 community loan funds there were 454 CDCUs with $184 numerous credit unions not with $27 billion in combined billion in combined assets at the certified as CDFIs but with a assets in 2020. Community outset of 2020. longstanding mission of serving development venture capital

40 II. ESG Incorporation by Money Managers FIGURE 2.26 Community Investing Institution Assets 2012–2020

Left Axis: Community Development Banks Community Development Credit Unions Community Development Loan Funds Community Development Venture Capital Funds

Right Axis: Number of Community Investing Institutions

$300 1,400

$250 1,200

1,000 $200 800 $150 600 $100 400 Number of Funds Total Assets (in Billions) Total

$50 200

$0 0 2012 2014 2016 2018 2020

# Assets # Assets # Assets # Assets # Assets

Community Development 88 $30.1 75 $23.2 119 $37.9 139 $42.2 139 $54.7 Banks

Community Development 311 $17.1 260 $26.1 339 $65.1 370 $123.3 454 $184.3 Credit Unions

Community Development 620 $13.9 532 $14.9 571 $18.3 619 $19.6 596 $26.9 Loan Funds

Community Development Venture 24 $0.3 13 $0.2 14 $0.2 17 $0.2 15 $0.4 Capital Funds

Total 1,043 $61.4 880 $64.3 1,043 $121.6 1,145 $185.4 1,204 $266.3

SOURCE: CDFI Fund, Inclusiv, Calvert Impact Capital. NOTE: Credit unions include all members of the National Federation of Community Development Credit Unions as well as credit unions certified as CDFIs. Loan funds include US-based international microfinance vehicles. Only the assets of banks and venture capital funds that are certified CDFIs are included in this table.

Report on US Sustainable and Impact Investing Trends 2020 41 COMMUNITY DEVELOPMENT against investor losses. funds certified as CDFIs. The LOAN FUNDS (CDLFs) pool International loan funds, which balance of $6.0 billion, according investments from individuals represent a subset of CDLFs to data provided by Calvert and institutions to further for the purposes of this report, Impact Capital, represents the community development, often focus their lending and equity assets of loan funds managed in specific geographic regions. investments overseas, typically by US-based international Unlike depository institutions providing or guaranteeing microfinance organizations. like banks and credit unions, small or microfinance loans CDLFs do not have federally to entrepreneurs and small COMMUNITY DEVELOPMENT insured deposits, but they take businesses. VENTURE CAPITAL (CDVC) many other steps to safeguard is a form of private equity investor money, including using At the outset of 2020, $26.9 investment targeted at collateralized loans, setting billion was invested in 596 financially underserved low- and aside loan-loss reserves, and community development loan moderate-income communities pledging the institution’s or funds. Of this sum, $20.9 billion that seeks to generate good fund’s net worth to protect was invested in domestic loan jobs, wealth and entrepreneurial

FIGURE 2.27 Other Community-Related Investment by Money Managers 2020

Registered Other Undisclosed Investment Alternatives Commingled Investment Total Companies Funds Vehicle Assets

Community-related Assets Assets Assets Assets Assets # # # Criteria (in Billions) (in Billions) (in Billions) (in Billions) (in Billions)

Affordable Housing 50 $45.0 13 $8.8 8 $0.53 $664.7 $716.8

Community Relations/ 71 $443.6 58 $177.2 4 $0.0 $234.3 $855.2 Philanthropy

Community Services 52 $75.4 49 $145.3 10 $0.1 $56.6 $277.4

Fair Consumer Lending 55 $52.0 19 $1.8 8 $0.3 $149.1 $203.2

Microenterprise 30 $29.7 13 $0.9 4 $0.0 $37.1 $67.7

Place-Based Investing 10 $4.3 39 $3.1 3 $0.0 $4.9 $12.3

Small & Medium 31 $17.0 58 $3.9 5 $0.5 $31.9 $53.2 Businesses

Community—Other 11 $18.7 15 $0.5 6 $0.1 $1,277.4 $1,296.7

Total Across 114 $502.1 146 $200.0 22 $0.9 $2,206.4 $2,907.2 Community Criteria

SOURCE: US SIF Foundation. NOTE: Some managers incorporate multiple community-related criteria, so totals do not sum.

42 II. ESG Incorporation by Money Managers capacity. As a form of private MONEY MANAGERS investment vehicles. The equity, community development CONSIDERING COMMUNITY most significant community- venture capital funds are CRITERIA related criterion for these also analyzed as part of the In addition to the four types unspecified vehicles was alternative investment vehicles of community investing affordable housing, affecting discussed previously (but before institutions described above, $665 billion in assets. Registered aggregation, the assets of money managers consider investment companies these funds are controlled for community-related criteria accounted for the second any potential effects of double and themes across numerous largest pool of assets—$502 counting). Within this category, other investment vehicles and billion—considering community- 15 CDVC funds with $373 million asset classes. As Figure 2.27 related criteria, and alternative in assets under management shows, investment vehicles investment managers applied were certified as CDFIs by the with $2.9 trillion in total assets community criteria across start of 2020. reported that they incorporated $200 billion in assets. Other some form of community- commingled funds accounted related criteria. Most of these for the smallest pool of assets— assets—$2.2 trillion—were only $900 million—considering managed through undisclosed community criteria.

Report on US Sustainable and Impact Investing Trends 2020 43 III. ESG Incorporation by Institutional Investors

FIGURE 3.0 Sustainable Investing Assets 2020

Total: $17,081 Billion

SOURCE: US SIF Foundation.

44 III. ESG Incorporation by Institutional Investors To understand how and why institutional asset owners incorporate environmental, social and governance (ESG) criteria into their investment analysis and portfolio selection, the US SIF Foundation gathered more detailed data on or from 530 institutional investors in nine categories. These were public funds, insurance companies, educational institutions, philanthropic foundations, labor funds, hospitals and healthcare plans, faith-based institutions, other nonprofits and family offices.

The assets subject to ESG examines the leading themes, companies doing business criteria among this group strategies and motivations with conflict risk countries, of institutions totaled $6.18 institutional investors report primarily Sudan and Iran, trillion, equivalent to 51 percent for incorporating ESG criteria remains the top ESG factor of the $12.01 trillion that into asset management. The institutional asset owners money managers identified second section provides more incorporate into their as institutional assets, as detailed analysis of how ESG investments. shown in Figure 3.0. Because incorporation is practiced money managers do not within the nine segments of • Climate change and carbon disclose information about institutional asset owners emissions is the leading their institutional clients, the in descending order of their environmental issue reported data collected on these 530 collective ESG assets. by institutions, which take this institutional investors provides issue into account in portfolios the basis for the analysis of totaling $2.61 trillion, compared institutional ESG investing Key Trends with $2.24 trillion in 2018. trends in this chapter. The institutional ESG incorporation • Among the institutional • Another leading environmental trends described in this investors included here, public issue considered by investors chapter should be understood funds represent both the is sustainable natural as representing the most largest value of ESG assets resources and agriculture, transparent institutional under management and the reflected in $2.18 trillion and up investors in the United States. largest number of institutions 95 percent since 2018. reporting the incorporation of This chapter, which draws from some form of ESG criteria in • The top governance criterion institutional investors’ direct their investments. for institutional investors survey responses or from their is board-related issues, public information, is divided • In asset-weighted terms, the addressed across $2.28 into two main sections. The first restriction of investments in trillion in assets and up 32

Report on US Sustainable and Impact Investing Trends 2020 45 FIGURE 3.1 FIGURE 3.2 Growth of ESG Incorporation Reported by Institutional Investors Institutional Investor ESG Assets, 2005–2020 by Investor Type, 2020

Public 54% $7,000 $6,180 Insurance Companies 36% $6,000 $5,608 Education 6% $4,725 $5,000 Foundations 2% $4,042 Labor 1% $4,000 $2,484 Other 1% $3,000 $1,880 $2,026 $2,000 $1,490

Total Assets (in Billions) Total $1,000

2005 2007 2010 2012 2014 2016 2018 2020

SOURCE: US SIF Foundation.

percent since 2018, followed broken into community- SOURCE: US SIF Foundation. by executive pay, affecting related, environmental, social, NOTE: Other consists of family offices, healthcare institutions, faith-based institutions $2.18 trillion and up 29 percent. governance and product-related and other nonprofits that collectively represent Assets incorporating anti- categories. They also had the about 1 percent of ESG assets in 2020. corruption issues increased 40 option to specify any other ESG percent to $1.61 trillion. criteria they considered. Governance Criteria, provides • Other prominent social issues The manner in which a more thorough explanation for institutional investors are investors incorporate each of each of the ESG issues labor issues, assessed in of these criteria varies. For discussed in this report. $1.58 trillion of assets and example, “tobacco,” “military/ up 2 percent, while equal weapons” and “fossil fuel” The assets to which institutional employment opportunity and signify industries or sectors investors report they apply ESG diversity was reflected in $1.51 that investors may seek to criteria are slightly greater—10 trillion, down 6 percent. avoid. Criteria such as “clean percent—than the ESG technology” and “place-based incorporation criteria reported • Tobacco, a sustainable investing” may be selected by 496 US institutional investors investment issue for decades, by investors actively pursuing in 2018. Institutional ESG affects $2.47 trillion in investment in these fields. Other incorporation assets identified institutional investor capital. criteria such as “labor,” “EEO/ by the US SIF Foundation have diversity” and “sustainable grown 315 percent since 2005. natural resources” may (See Figure 3.1.) Background represent metrics upon which investors evaluate companies. Among the institutional Through the US SIF Foundation Appendix 1, the Glossary of investors included here, public survey process, institutions Environmental, Social and funds represent both the could select up to 32 criteria

46 III. ESG Incorporation by Institutional Investors FIGURE 3.3 Types of Institutional Investors Incorporating ESG Criteria 2012–2020

Left Axis: Public Insurance Companies Education Healthcare Faith-based Foundation Other/Nonprofit Family Office Labor Right Axis: Number of Institutional Investors

$7,000 700

$6,000 600

$5,000 500

$4,000 400

$3,000 300 Number of Funds $2,000 200 Total Assets (in Billions) Total

$1,000 100

0 0 2012 2014 2016 2018 2020

# Assets # Assets # Assets # Assets # Assets

Public 69 $1,980 184 $2,740 184 $2,710 178 $3,040 181 $3,360

Insurance <10 $96 <10 $758 <10 $1,505 10 $2,042 17 $2,213 Companies

Education 103 $254 108 $317 82 $293 93 $317 114 $378

Healthcare 19 $40 19 $71 10 $32 10 $37 11 $25

Faith-based 36 $53 40 $72 38 $44 38 $24 36 $27

Foundations 95 $60 102 $69 128 $64 124 $68 126 $97

Other/ <10 $0.9 17 $13 18 $13 31 $14 33 $15 Nonprofit

Family Office <10 $0.5 <10 $2 <10 $2 <10 $4 <10 $6

Labor <10 $0.2 <10 $0.3 <10 $62 <10 $61 <10 $59

TOTAL 336 $2,484 480 $4,042 477 $4,725 496 $5,608 530 $6,180

SOURCE: US SIF Foundation.

Report on US Sustainable and Impact Investing Trends 2020 47 generally, but without specifying FIGURE 3.4 which particular ESG issues they ESG Categories Incorporated by Institutional Investors 2018–2020 consider. Institutions also had the option to check “other” or to 2020 2018 report factors considered that were not listed in the survey. Social $5,737 $5,244 ENVIRONMENTAL ISSUES Environment $4,310 Environmental issues continue $3,493 to gain attention among institutional investors. In Governance $3,858 2020, the US SIF Foundation $3,453 identified $4.31 trillion in $2,956 institutional assets associated Products $2,935 with environmental criteria, a 23 percent increase from 2018.

$0 Investment portfolios with one $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 or more environment-related criteria are now managed by Total Assets (in Billions) 285 institutional investors, US SIF Foundation. SOURCE: compared with 253 identified in NOTE: Social category includes community-related criteria. See Appendix 1. 2018. Figure 3.6 shows the most important environmental criteria, largest value of ESG assets in this chapter collectively in asset-weighted terms, for under management and the apply various social criteria institutional investors in 2020. largest number of institutions to $5.74 trillion in assets. reporting the incorporation of Governance and environmental Climate change and carbon some form of ESG criteria in considerations affect a smaller emissions remain the most their investments. Insurance sum of the institutional investor important specific environmental companies rank second in the assets reported, at $4.31 trillion issue, a trend that began in value of ESG assets under and $3.86 trillion, respectively. 2012. The assets affected management, although data from Policies related to products, increased 17 percent from 2018 fewer than 20 institutions are such as restrictions on tobacco to $2.61 trillion in 2020. analyzed. These two segments or weapons investments, affect each represent over $2 trillion $2.96 trillion. Of these four broad The US government announced in in ESG assets. Foundations categories, the institutional June 2017 that it would withdraw represent the second largest assets subject to environmental from the 21st Conference of the number of institutions reporting criteria have grown the most Parties (COP21) of the United involvement in sustainable and since 2018 in absolute and Nations Framework Convention impact investing, although their relative terms. on Climate Change agreement affected assets are far less. (See (the “Paris Agreement”). Figures 3.2 and 3.3.) Figure 3.5 shows the leading However, a range of other ESG issues reported by entities, including state and institutional investors, in asset- city governments as well as A Closer Look at weighted terms. Continuing a businesses and investors, created Themes, Strategies trend first observed in 2014, new initiatives to demonstrate and Motivations several institutional investors their commitment to reducing in 2020 reported that they carbon emissions. These include As shown in Figure 3.4, the 530 incorporate environmental, America’s Pledge, the US Climate institutional investors reflected social or governance issues Alliance and the We Are Still In

48 III. ESG Incorporation by Institutional Investors FIGURE 3.5 Leading ESG Criteria Reported by Institutional Investors, by Assets 2020

Conflict Risk (Terrorist or Repressive Regimes) $2,726

Climate Change/Carbon $2,613

Tobacco $2,474

Board Issues $2,280

Sustainable Natural Resources/Agriculture $2,183

Executive Pay $2,175

Anti-Corruption $1,614

Labor $1,578

EEO/Diversity $1,510

Environmental—General $1,483

Governance—General $1,466

Environmental—Other $1,393

Social—General $1,363

$1,000 $2,000 $3,000

Total Assets (in Billions) SOURCE: US SIF Foundation. NOTE: Some institutional investors reporting that they have adopted strategies of ESG incorporation, but without specifying which specific ESG issues they consider, account for the assets in the “General” environmental, social and governance categories.

Declaration. Investor scrutiny of investment decisions. In June climate risk is likely to continue. 2017, the TFCD released its The Investor Agenda, formed final recommendations on in 2018, is a global coalition of how investors and companies Climate change investors representing more than can more effectively provide remains the most $35 trillion in assets that have climate-related disclosures in important specific agreed to pursue investments, their annual financial filings. The corporate engagement and policy US Commodity Futures Trading environmental advocacy to achieve the goals of Commission released a report in issue reported by the Paris Climate Accord. 2020 on the financial costs and institutional consequences of climate change. investors. The Financial Stability Board’s Task Force on Climate-Related Sustainable natural resources Financial Disclosures (TFCD) and agriculture, reflected in has also supported investors $2.18 trillion in assets and up 95 seeking to incorporate climate percent since 2018, is the second change criteria into their most common specific

Report on US Sustainable and Impact Investing Trends 2020 49 FIGURE 3.6 Leading Environmental Criteria for Institutional Investors 2020

Climate Change/Carbon $2,613

Sustainable Natural Resources/Agriculture $2,183

Environmental—General $1,483 Environmental—Other $1,393 Green Building/Smart Growth $1,196 Clean Technology $1,124 Pollution/Toxics $950 Fossil Fuel Divestment $770

0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

Total Assets (in Billions) SOURCE: US SIF Foundation.

environmental issue reported by tar sands projects. The assets SOCIAL ISSUES institutional investors, followed under management affected by As was the case in 2018, by green building and smart such policies have expanded concerns over social issues growth affecting $1.20 trillion in significantly: just $14 billion affected the largest share of assets, clean technology ($1.12 was identified in 2014. A range ESG assets—$5.74 trillion at trillion), pollution and toxics of campaigns led by 350.org, the beginning of 2020, a 9 ($950 billion) and fossil fuel Divest-Invest Philanthropy, percent increase over the assets divestment ($770 billion). university student groups, institutions reported as subject to state lawmakers and city level social criteria in 2018. Fossil fuel divestment policies grassroots organizations have grew by 13 percent in asset- moved scores of institutional As shown in Figure 3.7, weighted terms among this group investors to address this issue. investment policies related of investors compared with the to conflict risk (terrorist or slightly smaller group tracked in Institutional investors, primarily repressive regimes) affect $2.73 2018. The US SIF Foundation’s insurance companies, identified trillion, making it the single 2020 survey was the fourth to other environmental issues that most prominent ESG criterion track institutional investors that were not specifically listed as in asset-weighted terms, as it divested in some way from fossil response options in the survey, has been since 2010. In 2020, fuels. This included divesting including water, biodiversity the US SIF Foundation identified from the largest oil, gas and impacts, and issues related to 203 institutions that applied coal corporations in terms of energy, chemicals, mining and this criterion, primarily toward proven carbon reserves or from utility companies. Sudan and Iran. The majority companies developing coal or of these institutions are public

50 III. ESG Incorporation by Institutional Investors FIGURE 3.7 Leading Social Criteria for Institutional Investors 2020

Conflict Risk (Terrorist or Repressive Regimes) $2,726

Labor $1,578

EEO/Diversity $1,510

Social—General $1,363 Human Rights $1,345 Health and Wellness $1,246

Gender Lens $1,011

Prison-Related Issues $698

Social—Other $590

Anti-BDS $545

$1,000 $2,000 $3,000

Total Assets (in Billions) SOURCE: US SIF Foundation. funds complying with legislation investment in the country. The Policies related to labor— to restrict investments in Investors Against Genocide including consideration of companies doing business in initiative provides investors with companies’ workplace health these countries. information and resources to and safety protections, avoid companies in targeted employee retention programs Sudan has been the site of sectors in Sudan. and union relations—affected conflict for many years. In $1.58 trillion, about the same as 2017, the United States relaxed Iran concerns many institutional in 2018. Criteria related to equal sanctions first imposed two investors because of its nuclear employment opportunity and decades ago. Though it is now program activities. It also remains diversity affected $1.51 trillion legal for US companies to sell on the US State Department’s list in assets, a 6 percent decrease goods and services to Sudan, of state sponsors of terrorism. In over the same period. Reported government-sponsored attacks 2018, the Trump administration assets related to human rights on civilians in Darfur and other ended the 2015 nuclear deal concerns—beyond repressive regions have continued, and with Iran signed by the Obama regimes—also fell slightly over Sudan’s transition government administration and several other the past two years from $1.45 has struggled to stop violence Western countries and reinstated trillion in affected assets to across the country.1 In addition, all the sanctions that had $1.35 trillion. Sudan remains on the US previously been revoked. Even State Department’s list of state while the United States was still Although health and wellness sponsors of terrorism, which, a part of the 2015 Iran nuclear was not one of the 32 ESG despite easing of sanctions, deal, most state-level economic criteria options in the survey, effectively precludes US sanctions remained in place. institutional investors wrote in

Report on US Sustainable and Impact Investing Trends 2020 51 FIGURE 3.8 Leading Governance Criteria for Institutional Investors 2020

Board Issues $2,280

Executive Pay $2,175

Anti-Corruption $1,614

Governance—General $1,466

Political Contributions $1,228

Governance—Other $695

0 $500 $1,000 $1,500 $2,000 $2,500 SOURCE: US SIF Foundation. Total Assets (in Billions)

this issue as affecting aggregate body of research demonstrates an anti-Boycott, Divestment assets of $1.25 trillion. This that greater gender diversity and Sanctions (BDS) criterion, development is largely due to boosts company profitability and which was not on the survey’s two large insurance companies performance.2 original list of 32 ESG criteria. who reported that they consider The anti-BDS movement this criterion as part of their Prison-related issues saw major opposes the Palestinian effort sustainable investments. growth in affected assets, a to boycott, divest from and/or 284 percent increase from 2018 sanction Israeli companies to Another prominent social issue to $698 billion in institutional protest the Israeli government’s among institutions is gender assets. Prison-related criteria stand toward Palestine and lens investing, with affected can involve the consideration of Palestinians. assets increasing 16 percent to risks associated with for-profit $1.01 trillion. In the last several prison companies and with The anti-BDS movement, which years, institutional investors companies providing services to prohibits investments in funds have increasingly sought prisoners at predatory pricing, or companies that boycott or investment products across or the social costs of companies divest from Israeli companies, asset classes that focus on refusing to hire ex-prisoners. A has gained traction in recent companies that help women number of institutions along with years throughout the United advance and on organizations various advocacy groups have States. A number of states have that assist women and their expressed concern about private instituted legislation that public families living in poverty or in prison companies because funds must comply with anti- under-served communities. of their profit incentive to BDS criteria, and Congressional To meet this demand, money incarcerate people, particularly legislation was introduced on managers are increasingly those from communities of color the topic in 2019.3 This criterion offering fund products expressly and immigrant communities. was reported across $545 billion tied to addressing gender issues in institutional assets under or that use gender-lens criteria In addition, several public management in 2020. as a significant factor in their funds wrote in that they apply investment decisions. A growing

52 III. ESG Incorporation by Institutional Investors FIGURE 3.9 Leading Product-Related Criteria for Institutional Investors 2020

Tobacco $2,474

Military/Weapons $1,300

Products—Other $1,022

Product Safety $395

Pornography $91

Alcohol $86

Gambling $76

Nuclear $69

Animal Testing/Welfare $45

0 $500 $1,000 $1,500 $2,000 $2,500

Total Assets (in Billions) SOURCE: US SIF Foundation.

independence, diversity, pay and resolutions addressing this responsiveness to shareholders, issue, as discussed in Chapter which affected $2.28 trillion 4.) As noted in the glossary Gender-lens investing and increased 32 percent in Appendix 1, this criterion is another prominent since 2018. Consideration of involves the consideration of issue for institutional executive pay affected $2.18 companies’ management and trillion, a 29 percent increase. disclosure of corporate political investors. Anti-corruption, involving the spending or lobbying activities, consideration of companies’ and of risks associated with policies to prevent bribery, corporate political activities. racketeering and other corrupt

practices, was reported across PRODUCT-RELATED CORPORATE GOVERNANCE $1.16 trillion in institutional CRITERIA Institutional asset owners assets, up 40 percent from 2018. The avoidance of investments in reported applying governance certain products that are seen criteria to $3.86 trillion of Political contributions and as detrimental or controversial investments at the beginning lobbying were reported across is one of the oldest strategies of of 2020, compared with $3.45 $1.23 trillion, a 26 percent sustainable investing. As of the trillion at the start of 2018. decline from two years beginning of 2020, institutional prior. (However, investors asset owners reported that they As shown in Figure 3.8, the top have also signaled concern considered product-related governance criterion identified about corporate political criteria across $2.96 trillion in for institutional investors was contributions and lobbying by assets. Figure 3.9 shows the , the board-related issues filing or supporting shareholder leading product-related criteria consideration of the directors’

Report on US Sustainable and Impact Investing Trends 2020 53 for institutional investors. In and weapons criteria declined companies affected $86 billion in line with past years, tobacco 14 percent to $1.30 trillion in assets, while investment criteria remains the most prominent 2020, after increasing more than related to gambling, nuclear product issue in asset-weighted 17-fold from 2012 to 2018. The power and to animal welfare terms, affecting $2.47 trillion in US SIF Foundation identified and testing each affected less institutional investor assets. 88 institutional investors that than $80 billion. applied this criterion in 2020, A major trend since 2012 has compared with 92 in 2018. STRATEGIES FOR ESG been the dramatic growth in INCORPORATION institutional assets incorporating In terms of other specific A subset of 60 institutions out military and weapons criteria, criteria, product safety issues of the 530 captured in this but this trend reversed slightly were addressed across $395 report disclosed additional in 2020, even though mass billion, a 224 percent increase information about the ESG shootings continue to be a over what was reported by incorporation strategies they major issue in the United States, institutions in 2018. Avoidance use. As shown in Figure 3.10, with 340 occurring in 20184 of companies involved in ESG integration, practiced by and 417 in 2019, according pornography affected $91 billion 68 percent of the respondents to the Gun Violence Archive.5 in assets. Policies for restricting to this question, affects the The assets affected by military investments in alcohol largest portion of assets under

FIGURE 3.10 ESG Incorporation Strategies by Institutional Investors 2020

Number of % of Institutional Affected Assets Institutional Investors (in Billions) Investors Responding

ESG integration: the systematic and explicit inclusion by investment managers of ESG risks 41 68% $495 and opportunities into traditional financial analysis

Negative/exclusionary: the exclusion from a fund or plan of certain sectors or companies based on 39 65% $414 specific ESG criteria

Sustainability themed investing: the selection of assets specifically related to sustainability in 32 53% $11 single- or multi-themed funds

Positive/best-in-class: investment in sectors, companies or projects selected for positive ESG 38 63% $70 performance relative to industry peers

targeted investments aimed Impact investing: 48 80% $13 at solving social or environmental problems

Total Responding 60 $913

SOURCE: US SIF Foundation. NOTE: Some institutions disclosed using multiple strategies within funds, so affected assets may overlap and percentages do not sum.

54 III. ESG Incorporation by Institutional Investors FIGURE 3.11 ESG Incorporation by Asset Class by Institutional Investors 2020

Number of Affected Assets Percent of ESG

Institutional Investors (in Billions) Assets

Other (e.g. Cash, Private Assets, 50 $552 64% Real Assets)

Publicly Traded Equity 48 $201 23%

Publicly Traded Bonds or Fixed Income 47 $115 13%

Total Responding 57 $868 100%

SOURCE: US SIF Foundation. NOTE: Some institutions reported investing in more than one asset class, so totals do not sum.

FIGURE 3.12 Passive vs. Active ESG Asset Management by Institutional Investors 2020

Number of Affected Assets Percent of

Institutional Investors (in Billions) ESG Assets

Actively Managed 54 $582 81%

Passively Managed 31 $139 19%

Total Responding 56 $721 100%

SOURCE: US SIF Foundation. NOTE: Some institutional investors reported using both active and passive management across their ESG assets, so totals do not sum.

management—at $495 billion. The public funds responding actively or passively managed. Negative/exclusionary screening to this question primarily use strategies affect the second negative screening only, whereas Fifty-seven institutional largest portion of assets under philanthropic foundations, faith- investors responded to the management, at $414 billion. based institutions and family survey question about the asset offices use the full range of class breakdown of their ESG Eighty percent of these strategies. assets, as shown in Figure institutional investors reported 3.11. Among this group, 48 using impact investing. However, This year’s survey for the institutions reported $201 billion the assets they reported in this second time included questions of their aggregate ESG assets strategy were much lower: just $13 regarding the asset class in publicly traded equities, and billion. breakdown of institutional 47 institutions reported $115 investors’ ESG assets, and billion in fixed income. Fifty whether these assets are institutions reported investing

Report on US Sustainable and Impact Investing Trends 2020 55 FIGURE 3.13 Reasons Institutional Investors Report Considering ESG Factors 2020

Number of % of Institutions ESG Assets Reason Institutions Responding (in Billions)

Risk 35 54% $919

Fiduciary Duty 27 42% $883

Returns 35 54% $772

Mission 61 94% $725

Social or Environmental Impact 55 85% $723

Client Demand 21 32% $705

Regulatory Compliance 6 9% $680

Sustainable Development Goals 22 34% $10

Total Responding 65 $952

SOURCE: US SIF Foundation. NOTE: Institutions cited multiple rationales, so affected assets and number of institutional investors overlap.

in other asset classes, such as reported by these respondents, surveys. Fulfilling fiduciary duty cash and private assets, across the breakdown between active affected $883 billion, followed by $552 billion of their aggregate and passive management was improving financial returns with assets. (The prominence of other 81 percent and 19 percent, $772 billion. asset classes in this subset is respectively. largely due to one public fund Fulfilling mission and pursuing that reported that nearly all of its MOTIVATIONS FOR ESG social benefit were cited by the assets were invested in assets INCORPORATION largest number of respondents, other than publicly traded equity A subset of 65 institutions, 61 and 55 respectively, including or fixed income.) with $952 billion in ESG assets, the majority of foundation and responded to an additional faith-based respondents. Fifty-six institutional investors series of questions about why responded to the question they incorporate ESG criteria This year’s survey for the second about their use of passive into their investments. time included fulfilling one or versus active management more of the UN Sustainable strategies as shown in Figure As Figure 3.13 highlights, Development Goals (SDGs) as an 3.12. Almost all the institutions the top motivation in asset- option. Twenty-two respondents, in this group used active weighted terms was managing or 34 percent of the subset, management and over half used risk, affecting $919 billion. This indicated the SDGs as a passive strategies. Of the $721 was also the top motivation motivation across $10 billion in billion in combined ESG assets identified in the 2018 and 2016 assets. In 2018, 23 percent of

56 III. ESG Incorporation by Institutional Investors FIGURE 3.14 Leading ESG Criteria for Public Funds 2020

Conflict Risk (Terrorist or Repressive Regimes) $2,488

Labor $1,446

Board Issues $1,378

Tobacco $1,338

Climate Change/Carbon $1,337

EEO/Diversity $1,323

Executive Pay $1,273

Political Contributions $1,179

Military/Weapons $1,166

Human Rights $1,089

Green Buildings/Smart Growth $1,088

Sustainable Natural Resources/Agriculture $1,065

0 $500 $1,000 $1,500 $2,000 $2,500

Total Assets (in Billions) SOURCE: US SIF Foundation.

92 respondents for this question options are generally provided out the top five in 2020 (replacing indicated the SDGs as a reason through defined benefit or executive pay and political across $4 billion in assets. defined contribution plans contributions). alongside some 529 college savings programs. As shown in Figure 3.14, by far Public Funds the most prominent ESG criterion At the start of 2020, public funds considered by public funds Public funds managed for reported that they considered based on the assets affected federal, state, county and 12 criteria across more than $1 was restricting investment in municipal governments, trillion in assets, compared with companies doing business in including public employee just six criteria crossing this conflict risk countries, primarily pension plans and other publicly threshold in 2018. Sudan and Iran. This has been pooled portfolios, incorporate the top criterion for public funds ESG criteria across $3.40 trillion Three of the top five issues were since 2007, although the assets in assets, the largest share of the same as in 2018—conflict risk, affected decreased by nearly 6 institutional assets, and a nearly board issues and tobacco—while percent since 2018. 11 percent increase since 2018. labor issues and climate change Public sustainable investment and carbon emissions rounded

Report on US Sustainable and Impact Investing Trends 2020 57 Labor issues—the consideration The largest governance criterion The most prevalent product of companies’ labor or employee was board issues—affecting issue was tobacco avoidance, relations programs, employee $1.38 trillion in assets, a 12 which was up 29 percent from involvement, health and safety, percent increase from 2018. 2018 to $1.34 trillion in affected employment and retirement Executive pay—considering public fund assets. Military and benefits, union relations or companies’ executive pay weapons criteria were addressed workforce reduction—was the top practices, especially whether across $1.17 billion in public fund social issue after conflict risk, and pay policies are reasonable and assets, up 24 percent. up 40 percent since 2018 to $1.45 aligned with shareholders’ or trillion in assets. Among social other stakeholders’ long-term Climate change and carbon criteria the next largest was equal interests—was next, up 7 percent emissions remained the top employment opportunity and to $1.30 trillion in assets affected. environmental issue for public diversity, affecting $1.32 trillion The consideration of companies’ funds at the start of 2020, affecting in assets, a 34 percent increase. political contributions and $1.34 trillion in assets, compared Human rights issues were lobbying followed, affecting $1.18 with $972 billion two years addressed across $1.10 trillion, up trillion in assets, about the same earlier. Green building and smart 18 percent from two years prior. as in 2018. growth and sustainable natural

FIGURE 3.15 Leading ESG Criteria for Insurance Companies 2020

Governance—General $1,121

Social—General $1,121

Environmental—General $1,121

Climate Change/Carbon $1,000

Tobacco $930

Sustainable Natural Resources/Agriculture $923

Other Products $851

Anti-Corruption $851

Executive Pay $851

Board Issues $851

Products—Other $851

Health and Wellness $851

Environmental—Other $851

0 $500 $1,000 $1,500

Total Assets (in Billions) SOURCE: US SIF Foundation.

58 III. ESG Incorporation by Institutional Investors resources and agriculture each and wellness” as a criterion it from the $143 billion identified affected nearly $1.10 trillion. Each applied to these assets. in 2018. Conflict risk, which of the three environmental criteria had been the top issue from increased more than 35 percent in Some insurance companies also 2010 to 2018, followed, affecting affected assets since 2018. reported that they incorporate $185 billion, although this was ESG issues, but without a decline of 36 percent from specifying particular criteria 2018. Two other social issues in Insurance Companies among a significant portion of the top five arehuman rights, assets as indicated by the general accounting for $185 billion, and With $2.21 trillion in assets categories. See Figure 3.15. equal employment opportunity affected by ESG issues, and diversity, affecting $175 the investment portfolios of billion. In terms of specific ESG insurance firms constitute Educational Institutions criteria, sustainable natural the second largest pool of resources and agriculture institutional capital that was Educational institutions in was also identified in the top reported to be subject to some aggregate reported $378 billion five, addressed across $176 form of sustainable investment in assets at the start of 2020 billion. Both human rights and policy. This is an increase of 8 that were subject to various sustainable natural resources percent from the $2.04 trillion in ESG criteria, constituting the moved into the top ESG ESG assets identified in 2018. third largest pool of institutional criteria in 2020 for educational An important data source for capital with ESG assets after institutions due to a large this segment was the Insurer public funds and insurance university system citing these Climate Risk Disclosure Survey companies. This is an increase of criteria for the first time. organized by the California 19 percent from the $317 billion Department of Insurance. identified in 2018. The 2020 Other important specific issues survey identified 114 educational in terms of assets affected were While the ESG assets identified institutions incorporating ESG fossil fuel divestment, up 20 were significant, only 17 issues, compared with 93 percent to $100 billion, tobacco, institutions are represented. This institutions in 2018. which declined 56 percent to compares with 10 insurance $86 billion, and prison-related companies reporting in 2018. As issues, up more than six-fold shown in Figure 3.15, in terms of from $10 billion to $61 billion. specific issues, the leading ESG criterion for insurers is climate In 2020, climate As of 2020, more than 100 change and carbon emissions change was for the educational institutions have affecting $1.00 trillion in assets, first time the top convened official committees followed by with $930 on investor responsibility, tobacco criterion reported by billion and sustainable natural compared with about 80 in 2018.6 resources and agriculture with educational These campus committees take $923 billion. In 2018 tobacco institutions varying forms but often provide a was the top specific issue, with formal forum for stakeholders to climate change and carbon update endowment ESG policies emissions coming second. and practices. Educational institutions are increasingly In 2020, climate change and , mentioning ESG considerations Anti-corruption executive carbon emissions was for pay and board issues each the first time the top criterion in their investment policy affected $851 billion in assets reported by educational statements, and more are that were all accounted for by institutions, affecting $233 committing money to sustainable one insurance company. That billion, a 63 percent increase investment funds. Several company also wrote in “health nonprofit organizations and

Report on US Sustainable and Impact Investing Trends 2020 59 FIGURE 3.16 Leading ESG Criteria for Educational Institutions 2020

Climate Change/Carbon $233

Conflict Risk (Terrorist or Repressive Regimes) $185

Human Rights $185

Other Products $178

Sustainable Natural Resources/Agriculture $176

EEO/Diversity $175

Products—Other $164

Social—Other $143

Community—Other $133

Governance—Other $133

Fossil Fuel Divestment $100

Tobacco $86

Environmental—General $61

Prison-Related Issues $61

Governance—General $61

0 $100 $200 $300

Total Assets (in Billions) SOURCE: US SIF Foundation.

networks such as the Sustainable from many other institutional portions of their assets. This Endowments Institute and the investors, however, by may be starting to change. Intentional Endowments Network their explicit philanthropic provide endowments, students missions. A fundamental The US SIF Foundation identified and other stakeholders with reason for foundations to over 120 foundations in 2020 support, data and research on adopt sustainable and impact that apply one or more ESG sustainable investment issues. investment strategies is to have criteria to $97 billion in assets additional tools to advance under management collectively, their programmatic goals and accounting for 2 percent of the Philanthropic Foundations generate positive impact. total institutional ESG assets Although a few foundations discussed in this chapter. Like other institutional apply ESG criteria across their These aggregate ESG assets of investors, foundations tend to entire endowments, foundations foundations have increased 43 be invested for the long term. typically have considered ESG percent since 2018, although the Foundations are distinguished criteria across relatively small number of foundations reporting stayed roughly the same.

60 III. ESG Incorporation by Institutional Investors ERISA, Private Sector Plans and Sustainable Investing Options

The United States has the largest Accounts, Master Trusts, and by ISS Market Intelligence’s pension fund market in the world. 103-12 Investment Entities—and BrightScope platform, a leading With more than 700,000 private they exist for both defined benefit source of retirement plan data sector workplace retirement and defined contribution plans. from Form 5500 filings and plans, it covers 136 million audited financial statements. participants and represents over In 2016, the total assets reported $10 trillion. To date, only a small by DFEs was $5.8 trillion Using data reported in 2018 proportion of these assets have across 14,806 plans. Within the Form 5500 Schedule H, been invested in mutual funds and 2016 DFE filings, the US SIF BrightScope was able to analyze registered investment companies Foundation found approximately 58,590 401(k) plans totaling that explicitly consider ESG $56.6 billion across 482 $4.5 trillion which disclosed factors. That is despite the fact plans invested in funds that their investment menu. In that seven of the 15 investment incorporate ESG criteria. asset-weighted terms, they management firms that constitute Following the same approach represented about 79 percent the top 10 defined benefit and in 2018, the US SIF Foundation of the aggregate assets—$5.6 the top 10 defined contribution found that the total assets in the trillion—of all 659,055 401(k) managers in the United States are 2018 Schedule D filings for DFEs plans in 2018. signatories to the Principles for were $8.2 trillion across 15,845 Responsible Investment.7 plans.8 The US SIF Foundation Of this group of 58,590 401(k) was then able to identify within plans, Brightscope found DIRECT FILING ENTITIES 2018 DFE filings $95.7 billion that 11,488—nearly one- The US SIF Foundation analyzed across 988 plans invested in fifth—had assets invested in data filed by plans known as ESG integration funds, as shown funds that meet its “Socially Direct Filing Entities (DFEs) to in the table below. Conscious Fund” tag based on determine the extent to which the description of the fund’s they invest plan assets in the 401(K) PLANS investment strategy in its registered investment vehicles To better understand the state prospectus. The total that these tracked in this report that of ESG incorporation in defined plans invested in the Socially incorporate ESG criteria (see contribution retirement plans, Conscious funds in 2018 was Appendix 2). which make up a growing $21.3 billion. majority of private sector DFEs include the following four workplace retirement plans, categories—Common/Collective the US SIF Foundation also Trusts, Pooled Separate obtained an analysis conducted

2016 2018 Growth 2016–2018

Number of plans investing in ESG 482 988 105.0% incorporation funds

Assets in ESG incorporation funds $56.6 $95.7 69.6% (in Billions)

Total assets of DFE plans (in Billions) $5,800 $8,200 41.4%

Report on US Sustainable and Impact Investing Trends 2020 61 FIGURE 3.17 Leading ESG Criteria for Foundations 2020

Tobacco $70

Conflict Risk (Terrorist or Repressive Regimes) $48

Climate Change/Carbon $26

Clean Technology $25

Affordable Housing $24

Military/Weapons $15

Alcohol $12

Fossil Fuel Divestment $10

Sustainable Natural Resources/Agriculture $4

Community Services $4

EEO/Diversity $4

Small & Medium Businesses $4

Prison-Related Issues $3

0 $10 $20 $30 $40 $50 $60 $70

Total Assets (in Billions) SOURCE: US SIF Foundation.

Foundations are required to a “significant purpose” of the issue, affecting $26 billion, make an annual 5 percent investment for the foundation.10 while clean technology was “qualifying distribution” from Program-related investments, addressed across $25 billion. their assets “to accomplish a by definition, involve only a The foundation assets affected religious, charitable, scientific, small portion of foundations’ by climate change and clean literary, educational, or other total assets. technology considerations permitted public purpose....”9 increased eight-fold since Some foundations also make The top two issues in asset- 2018, primarily because of one program-related investments, weighted terms remain the same foundation that checked these which the Internal Revenue as between 2014 and 2018— two criteria for the first time in Service defines as investments tobacco and conflict risk, as 2020. Fossil fuel divestment that provide capital to nonprofit seen in Figure 3.17. policies were reflected in $10 and for-profit enterprises billion, up 43 percent since primarily to advance the mission Among environmental criteria, 2018, and sustainable natural of the giving foundation. climate change and carbon resources and agriculture Income generation must not be emissions was the top affected $4 billion.

62 III. ESG Incorporation by Institutional Investors FIGURE 3.18 Leading ESG Criteria for Faith-Based Institutions 2020

Human Rights $24.4

Military/Weapons $21.7

Tobacco $21.7

Gambling $19.4

Alcohol $19.0

Pornography $18.9

Nuclear $18.5

Prison-Related Issues $15.8

Climate Change/Carbon $9.7

Community Services $8.7

Clean Technology $7.6

Sustainable Natural Resources/Agriculture $7.2

Affordable Housing $7.2

Green Buildings/Smart Growth $6.1

Pollution/Toxics $6.0

0 $5 $10 $15 $20 $25

Total Assets (in Billions) SOURCE: US SIF Foundation.

The most prominent community Military and weapons avoidance Confluence Philanthropy, issue was affordable housing, affected $15 billion, and alcohol DivestInvest Philanthropy, affecting $24 billion, a six- avoidance affected $12 billion. Exponent Philanthropy, Mission fold increase from 2018 due Investors Exchange, The ImPact to a new foundation marking The 100% IMPACT Network of and Transformational Investing it as a criterion in 2020. Other Toniic specifically supports a in Food Systems, an allied community and social issues membership of foundations and initiative of the Global Alliance include community services, other accredited investors who for the Future of Food. equal employment opportunity have committed 100 percent of and diversity and small their assets to positive social businesses, each affecting and/or environmental impact. Labor Funds $4 billion. Prison-related Other networks and resources investment restrictions affected for foundations involved in the Of the labor funds surveyed $3 billion. various forms of sustainable in 2020, only a few reported and impact investing include incorporating any kind of ESG

Report on US Sustainable and Impact Investing Trends 2020 63 criteria into their investments. Islamic charitable organizations. Healthcare Institutions They account for $59 billion in Networks that support faith- ESG assets, slightly lower than based investors include the The US SIF Foundation identified the level identified in 2018. Interfaith Center on Corporate 11 hospitals and healthcare Responsibility (ICCR) and plans that managed $25 billion The only specific criterion Catholic Impact Investing in ESG assets at the start of considered by these funds Collaborative, among others. 2020. The most prominent ESG was labor, affecting $258 criterion for this segment of million in assets. This The top criterion for faith-based investors remained tobacco, involves the consideration of investors for the first time was affecting $15 billion. The companies’ labor or employee human rights, with affected American Medical Association relations programs, employee assets up 30 percent from 2018 and the American Hospital involvement, health and safety, to $24.4 billion, whereas the top Association encourage tobacco- employee and retirement issue was tobacco between 2010 free investing, and many benefits, union relations or and 2018. Another important hospitals restrict tobacco from workforce reduction. social issue identified was their portfolios to align their prison-related issues, addressed investment strategies with their Many labor funds use shareholder in $15.8 billion in assets and up mission. advocacy strategies without also 31 percent from 2018. practicing ESG incorporation Additionally, some hospitals because they typically prefer to Avoidance of investments organized as nonprofits be fully invested in the market as related to military/weapons, or affiliated with religious “universal investors.” As a result, tobacco, gambling, alcohol, communities incorporate other they tend to be active shareholder pornography and nuclear power ESG criteria that reflect broader resolution proponents. Unions were among the most prominent missions. Human rights was have also been active in product issues in asset- the second most important shareholder coalitions such as the weighted terms, as highlighted issue in asset-weighted terms, Ceres Investor Network, in which in Figure 3.18. addressed across $13 billion at labor funds representing over the beginning of 2020. $170 billion in aggregate assets The most important are members.11 environmental issue in asset- In terms of specific issues, weighted terms was climate product safety came next change and carbon emissions, and was considered across Faith-Based Institutions considered across $9.7 billion $7 billion in assets. Other in assets and an increase of product-related issues identified Faith-based institutional 47 percent since 2018. Other were exclusionary screens for investors reported $27 billion in environmental criteria—clean pornography, nuclear power, aggregate ESG assets, compared technology, sustainable and military/weapons, each with $24 billion in 2018. resources and agriculture, affecting $4 billion in assets. green buildings and smart A wide range of religious growth and pollution and Investments addressing faith- organizations are represented toxics—each affected between based issues affected $6 billion among faith-based institutions, $6 and $8 billion in assets. in 2020. from large Protestant denominational pension boards The top community issues Healthcare institutions applied with billions of dollars in were community services ($8.7 fossil fuel divestment policies assets, to much smaller local billion) and affordable housing to $3 billion in assets, while Catholic congregational orders, ($7.2 billion). sustainable natural resources churches and Jewish and

64 III. ESG Incorporation by Institutional Investors FIGURE 3.19 Leading ESG Criteria for Healthcare Institutions 2020

Tobacco $15

Human Rights $13

Environmental—Other $8

Product Safety $7

Faith-Based $6

Environmental—General $6

Pornography $4

Nuclear $4

Military/Weapons $4

Fossil Fuel Divestment $3

Sustainable Natural Resources/Agriculture $1

0 $5 $10 $15

Total Assets (in Billions) SOURCE: US SIF Foundation.

and agriculture accounted for compared with $14 billion in to clean technology criteria $1 billion. Some healthcare 2018. The number of nonprofits totaled $2.8 billion and to green institutions reported that they identified stayed about the same, buildings and smart growth addressed environmental issues, with 31 in 2018 and 33 in 2020. totaled $2.3 billion. Investment but did not specify the criteria, policies addressing climate as seen in Figure 3.19. As in 2018, investment policies change and carbon emissions regarding the avoidance and pollution and toxics each of tobacco were the most affected $2.3 billion in assets, Other Nonprofit prominent in asset-weighted with sustainable natural Organizations terms, affecting $9.8 billion in resources and agriculture close assets. In terms of specific ESG behind at $2.1 billion. Institutional investors criteria, the social criteria of in this category include human rights and labor both Nonprofit organizations also research, advocacy and trade ranked close to the top with considered community-related associations, but exclude the each affecting $8.3 billion. criteria, including fair consumer philanthropic foundations lending, community services, discussed previously. Nonprofit Environmental issues followed, and assisting small and medium organizations accounted for with fossil fuel divestment businesses, with each of these $15 billion in assets subject to policies affecting $4.3 billion issues affecting almost a billion ESG criteria at the start of 2020, in assets. Investments subject dollars.

Report on US Sustainable and Impact Investing Trends 2020 65 FIGURE 3.20 Leading ESG Criteria for Other Nonprofit Organizations 2020

Tobacco $9.8

Governance—General $8.3

Environmental—General $8.3

Social—General $8.3

Human Rights $8.3

Labor $8.3

Fossil Fuel Divestment $4.3

Clean Technology $2.8

Green Buildings/Smart Growth $2.3

Climate Change/Carbon $2.3

Pollution/Toxics $2.3

Sustainable Natural Resources/Agriculture $2.1

Community Services $0.7

Fair Consumer Lending $0.7

Small & Medium Businesses $0.7

0 $2 $4 $6 $8 $10

Total Assets (in Billions) SOURCE: US SIF Foundation.

In 2015, the nonprofit impact investment fund, as a Family Offices organization World Resources wholly-owned subsidiary. The Institute (WRI) launched Nature Conservancy has a The US SIF Foundation first a Sustainable Investing “conservation investing unit,” tracked family offices, including Initiative. WRI began to NatureVest, which it uses to trusts, in 2012. As in previous incorporate environmental, create and execute deals in years, the survey identified fewer social and governance issues a variety of sectors to deliver than a dozen family offices, in the management of its both conservation results and including both single-family own endowment, while also financial returns. Examples offices and multi-family offices, serving as a resource to such as these have increased that incorporated ESG issues in other asset owners. In 2017, the visibility of sustainable and the investment process. However, the conservation-focused impact investing as an option for leaders of three US family office nonprofit Rare launched the other nonprofits. associations indicated to US SIF Meloy Fund for Sustainable Foundation staff that around 10 Community Fisheries, an percent of family offices in the

66 III. ESG Incorporation by Institutional Investors United States, or more than 1,000 The top criteria for family offices Family offices addressed a mix family offices, are engaged in in 2020 related to environmental of other environmental, social, sustainable investing, but tend issues, with climate change and governance and product- not to respond to surveys. carbon emissions and clean related issues with about $4.6 technology each affecting $4.8 billion each, ranging from While the family office assets billion, up 71 percent and 85 prison-related issues and using ESG criteria reported to percent, respectively, from 2018. community services to political the US SIF Foundation are small Board issues, sustainable natural contributions and military and overall, they increased 50 percent resources and agriculture and weapons avoidance, as shown from $4.0 billion to $6.0 billion small and medium businesses in Figure 3.21. over the past two years. came in close behind, each affecting $4.7 billion.

FIGURE 3.21 Leading ESG Criteria for Family Offices 2020

Climate Change/Carbon $4.8

Clean Technology $4.8

Board Issues $4.7

Sustainable Natural Resources/Agriculture $4.7

Small & Medium Businesses $4.7

Labor $4.6

Political Contributions $4.6

Microenterprise $4.6

Green Buildings/Smart Growth $4.6

Prison-Related Issues $4.6

Fossil Fuel Divestment $4.6

Community Services $4.6

Military/Weapons $4.6

Tobacco $4.6

Affordable Housing $4.6

$5 $4.4 $4.6 $4.8

Total Assets (in Billions) SOURCE: US SIF Foundation.

Report on US Sustainable and Impact Investing Trends 2020 67 IV. Investor Advocacy

FIGURE 4.0 Sustainable Investing Assets 2020

Total: $17,081 Billion

SOURCE: US SIF Foundation.

68 IV. Investor Advocacy Filing shareholder resolutions on environmental, social or governance issues at publicly traded US companies is one of the most visible and verifiable ways in which investors can practice advocacy and engagement ownership, whether or not they also use ESG criteria to select these companies for their portfolios. The US SIF Foundation therefore counts the assets engaged in filing or co-filing shareholder resolutions as a component of the overall tally of assets engaged in sustainable in investing, as shown in Figure 4.0.

Investors can also encourage Key Trends • The leading issue raised in their portfolio companies to shareholder proposals, based review or improve their ESG • From 2018 through the first on the number of proposals policies, practices and strategic half of 2020, 149 institutional filed from 2018 through planning through their proxy investors and 56 investment 2020, was disclosure and voting and by sending letters or managers collectively management of corporate engaging in dialogue with both controlling a total of $1.98 political spending and publicly traded and privately trillion in assets at the start lobbying. Shareholders filed held portfolio companies, either of 2020 filed or co-filed 270 proposals on this subject directly or through investor shareholder resolutions on ESG during this period. Many of networks. issues. the targets were companies that have supported trade This chapter will explore these • In addition to or apart from organizations that oppose responsible ownership and filing shareholder resolutions, regulations to curb greenhouse advocacy practices, including 44 institutional asset owners, gas emissions. the assets and numbers of the with more than $1 trillion in institutional investors and money total assets, reported on the • Investors are also focusing managers that engage in them. US SIF Foundation’s survey attention on ending de facto It also examines the trends that they engaged in dialogue workplace discrimination on and successes of shareholder with companies on ESG issues, the basis of ethnicity and sex. proposals on ESG issues from as did 77 money managers, From 2018 through mid-2020, 2018 through 2020. with $7.8 trillion in assets under investors had filed a total of management. 228 proposals on these and related fair labor issues.

Report on US Sustainable and Impact Investing Trends 2020 69 • Investors continue to wrestle Regulatory developments voting (It was not final at the with whether US corporations over the last few decades time of publicaton of this report). are doing enough to assess have encouraged investors to their climate risk and to meet take a thoughtful approach to In addition, regulations adopted the challenges laid down by proxy voting. In 1988, the US by the Securities and Exchange the Paris Climate Accord: 217 Department of Labor wrote a Commission (SEC) in 2003 proposals were filed on climate letter, in response to a query have required mutual funds and issues from 2018 through 2020. from the chair of Avon Products’ investment advisors to disclose Retirement Board, concluding how they vote on proxy issues. • The proportion of shareholder that proxy voting should be proposals on social and considered a fiduciary duty and FILING SHAREHOLDER environmental issues that exercised solely in the interests RESOLUTIONS receive high levels of support of plan beneficiaries. Shareholders can increase has been trending upward. their involvement and During the proxy seasons shape discussion at their of 2012 through 2014, only companies’ annual meetings two shareholder proposals and boardrooms by filing opposed by management Shareholders can proposals on ESG issues. By on environmental and social shape discussion filing resolutions, which may issues received more than at their companies’ then proceed to a vote open to 50 percent support. In the all investors of the company, next three-year period, 2015 annual meetings and shareholders bring important through 2017, that number boardrooms by filing issues to the attention of rose to 10. In the most recent proposals on ESG company management and three seasons, from 2018 issues. the board of directors, often through 2020, the number receiving media attention and of environmental and social educating the public as well. proposals receiving majority A company’s annual proxy support despite management The Department of Labor statement is a public document opposition nearly tripled to 26. elaborated further on the that can be retrieved online at 2 fiduciary duty of proxy voting the SEC’s “Edgar” site. in Interpretive Bulletin 94-2, The Tools of Investor saying that fiduciaries should The rules governing the process Advocacy maintain accurate records of of filing shareholder resolutions their proxy voting and spell are the regulations and bulletins PROXY VOTING out their guidelines of proxy that the SEC has issued under Shareowners in publicly traded voting formally as part of their Section 14a-8 of the Securities companies are entitled to overall statements of investment Exchange Act of 1934. Under vote their shares on items policy. In 2016, the Department a revision to the rule the SEC that are presented, whether of Labor issued Interpretive issued in 2020, shareholders are by management or by other Bulletin 2016-01 on shareholder eligible to file a proposal at a shareholders, for a vote at the rights restating its “longstanding company if they meet one of the corporation’s annual general position…that the fiduciary act following three conditions: meeting. The agenda for the of managing plan assets which meeting and related materials are shares of corporate stock • They have owned at least that is mailed to investors ahead includes decisions on the voting $2,000 of the company’s of the annual meeting is called a of proxies and other exercises shares for at least three years, “proxy statement,” leading to the of shareholder rights.”1 However, term “proxy voting.” the Department of Labor issued • They have owned at least a proposal in 2020 to limit proxy $15,000 of the company’s stock for at least two years, or

70 IV. Investor Advocacy The SEC Acts to Constrain Shareholder Voices

In September 2020, the company’s proxy statement to company’s future shareholders’ Securities and Exchange be voted on at the company’s meetings from 3, 6, and 10 Commission promulgated a annual general meeting. percent to 5, 15, and 25 percent. rule, over near unanimous It also places the burden of opposition, which will The changes, approved by a engagement solely on the undermine the shareholder 3-2 vote, shrink the ability of proponent and eliminates the engagement process in the investors to file shareholder ability of smaller shareholders to United States. As described at proposals to ensure companies aggregate their shares in order the beginning of this chapter, address key ESG business risks. to meet the eligibility thresholds. shareholder advocacy is a key Before the new rule, an investor part of responsible ownership needed to hold $2,000 in stock The changes to Rule 14a-8 will and management. Investors for one year to be eligible to file be particularly disadvantageous have long had the right to a shareholder resolution. The to retail investors and smaller bring environmental, social new rule raises that threshold institutional investors. or governance issues to the significantly by instituting a attention of the management tiered system that requires a Historically, shareholder and shareholders of publicly shareholder to hold $25,000 for proposals have provided a low- traded companies. one year, $15,000 for two years cost method for shareholders to or $2,000 for three years to be communicate with management The new rule fundamentally eligible to submit a proposal. and each other about the future changes Rule 14a-8 of the of their company and important Securities and Exchange Act The new rule also revises the policy issues affecting it. The of 1934. Rule 14a-8 deals with levels of shareholder support new rule threatens to reduce the criteria and thresholds a proposal must receive in these lines of communication. needed for an investor to have successive years to be eligible a proposal included on a public for resubmission at the same

• They have owned at least designated representative—must whether the company can omit $25,000 of the company’s attend the annual meeting in the proposal from the meeting stock for at least one year. person to present the proposal agenda and proxy statement or formally. (Under SEC rules, must include it. (For more details on these companies can treat a resolution revisions, see sidebar.) that is not presented as if it had Shareholder resolutions do not never been filed.) need majority support to have an Proposals generally need to impact. Since the vast majority address corporate environmental, Companies receiving proposals of shareholder resolutions are social and governance questions can challenge them at the SEC advisory—phrased as requests considered significant public based on the proposal’s content to management—management policy issues and cannot pertain or the ability of the proponents is not legally obligated to to “ordinary business” issues to prove they meet share implement them even when such as employee benefits, ownership requirements. The they do pass. (An exception personnel changes or the sale SEC then notifies both corporate is shareholder proposals that of particular products. Finally, management and the filers of call for bylaw amendments, the shareholder proponent—or a the resolution with its opinion on which have to be implemented

Report on US Sustainable and Impact Investing Trends 2020 71 if they pass.) Nevertheless, annual appeals to thousands of in many cases when votes global corporations asking them become significant, directors to report on their greenhouse heed the concerns raised in Investors can often gas emissions and to assess advisory proposals and find augment their the risks and opportunities ways to improve their policies messages to portfolio they face from climate change, or disclose more information in companies, or gain as well as on water and forest response. Additionally, before management issues. As of 2020, 2020 the SEC generally allowed economies of scale in over 500 institutional investors— resolutions that consistently these efforts, by joining with aggregate assets of $106 earned the support of 10 investor networks. trillion—had lent their names percent or more of the shares to the initiative, and more than voted to be resubmitted year 8,400 global companies disclose after year, keeping them in the to the CDP.4 eye of management and other DIALOGUE, ENGAGEMENT shareholders. In the United States, the Ceres AND NETWORKS Investor Network represents In addition to or instead of Shareholder resolutions can approximately 140 institutional filing shareholder resolutions, also be effective even if they investors and money managers concerned investors often never come to vote. The with more than $15 trillion in communicate directly with process of filing often prompts assets. In addition to providing the management of portfolio productive discussion, leading a forum for its members to companies. Many shareholder to agreements between the coordinate filings of shareholder advocates file resolutions filers and management that resolutions on climate issues, only after efforts to pursue enable the filers to withdraw it also issues public policy discussions with managements their resolutions, either because statements and urges company of portfolio companies have of immediate agreements with management to address climate been rebuffed or have not companies or because of good change.5 Another investor been fruitful. Others may file faith offers of further dialogue. coalition on climate concerns is shareholder resolutions more Many companies are open to the Climate Action 100+. Formed readily, to meet filing deadlines, negotiating with proponents in 2017, it now has a global but make clear in their filing either to find common ground membership of 450 institutional letters to companies that they on an issue or to remove investors and money managers are open to engagement that potentially controversial items that together represent over might lead to agreements where from the proxy statement.3 $40 trillion in assets. They have the resolution can be withdrawn. pledged to call on the companies The Interfaith Center on in which they invest to curb Sustainable investors can often Corporate Responsibility greenhouse gas emissions augment their messages to (ICCR) and the Ceres Investor and strengthen climate-related portfolio companies, or gain Network coordinate many financial disclosures.6 some economies of scale of the resolutions that are in these efforts, by joining filed at US companies on Many sustainable investors work investor networks focusing on ESG issues. Through these with the 30 Percent Coalition, particular aspects of corporate networks, potential filers can a group whose members responsibility and disclosure. find co-filers to lend weight to represent $5 trillion in assets Through CDP (formerly the their appeals and ensure that under management and that Carbon Disclosure Project), sufficient representatives are seeks to ensure that “corporate for example, asset owners available during the busy annual boardrooms reflect the gender, and investment managers can meeting season to present the racial and ethnic diversity of the become signatories to the CDP’s resolution. United States workforce.”

72 IV. Investor Advocacy In another initiative, 125 investors institutional investors from asset-weighted terms, public representing a collective $1.88 around the world managing funds dominated this arena, trillion in assets, have signed the more than $70 trillion in accounting for nearly $1.35 Investor Statement Regarding the assets.9 Signatories pledge trillion (or 68 percent) of the Need for Corporate Workplace to “incorporate ESG issues assets of all institutional investor Equity Transparency. Citing a into investment analysis and and money manager filers, as number of studies that companies decision-making processes,” shown in Figure 4.1. However, with diverse boards, management as outlined by the PRI’s first they represented just 21 of the and staff team perform better principle. PRI provides a global filing institutions. than their less diverse peers on platform to facilitate collaborative various financial measures, the shareholder engagement When numbers of institutions signatories call on companies to initiatives among its signatories. rather than assets are “increase investors’ accessibility considered, faith-based to information related to their institutions were the leading workplace equity policies and The Institutions and institutional investor segment practices across gender, race, Money Managers Involved filing resolutions. Fifty- ethnicity, sexual orientation, in Investor Advocacy nine—more than a third of the and other federally protected institutional proponents in 2018 classes.”7 As noted earlier, the assets of to 2020—were faith-based institutional asset owners and investors. More recently, responding to an mutual fund companies and initiative led by Domini Impact other investment managers that Dialogue: Forty-four institutions Investments, 335 investors filed or co-filed shareholder with $1.06 trillion in assets representing $9.5 trillion resolutions from 2018 through reported on the survey that in aggregate assets under mid-2020 are included in this they engage in dialogue with management signed the “Investor report’s overall tally of assets companies on ESG issues, Statement on Coronavirus engaged in sustainable investing roughly comparable with the Response.” It urges the business strategies. In addition, the 49 institutions, with nearly $1.1 community to take steps to assist US SIF Foundation’s survey trillion in assets, that answered their employees and thereby of money managers and this question affirmatively in help maintain communities and institutional investors provided 2018. (In 2016, 57 institutions, social fabric in a time of grave insights on the extent to which with $912 billion in assets, crisis. Specifically, it encourages they engage in formal dialogue answered yes to this question.) companies to provide paid leave with portfolio companies and to all employees, including part- advocate on public policy Public Policy: Survey recipients time and contract employees, relating to corporate ESG were also asked whether prioritize health and safety, disclosure and practice. they “attempted to influence maintain employment levels and governmental policy or industry supplier/customer relationships INSTITUTIONAL INVESTORS regulation in 2018 or later to as much as possible, and to Filing Shareholder Resolutions: require companies to improve restrain executive compensation From 2018 through mid-2020, their ESG impacts.” Twenty-three during the crisis.8 149 institutional asset owners institutions with total assets of with $1.66 trillion in assets have $901 billion reported that they A global network for investors filed or co-filed shareholder did, relatively unchanged from interested in corporate resolutions on ESG issues. This the 24 institutions with total management of ESG issues is is relatively unchanged from assets of $957 billion responding the Principles for Responsible the preceding period of 2016 to affirmatively to this question in Investment (PRI), which counts mid-2018, when 165 institutional 2018. (In 2016, 25 institutions as endorsers more than 1,100 investors with $1.56 trillion with total assets of $918 billion investment managers and in assets filed resolutions. In answered yes to this question.)

Report on US Sustainable and Impact Investing Trends 2020 73 MONEY MANAGERS Dialogue: At the same time, Public Policy: In addition, 46 The number and assets of 77 money managers, with $7.8 money managers with collective money managers involved in trillion in total assets under assets under management filing resolutions have stayed management, reported in 2020 of $7.8 trillion said that relatively steady since 2018, that they engage in dialogue they attempted to influence but there was a decrease in the with companies on ESG issues, governmental policy or industry number and assets of money a decrease from the 88 money regulation on corporate ESG managers reporting that they managers, with $9.6 trillion in impacts. This is relatively engaged in corporate dialogue. total assets under management, unchanged from the 48 money who responded yes to this managers with collective Filing Shareholder Resolutions: question in 2018. Taking a assets under management of Fifty-six mutual fund companies slightly longer view, however, $6.7 trillion who answered this and other asset managers, the money managers reporting question affirmatively in 2018. with $322 billion in assets, that they engage in dialogue (In 2016, 36 money managers filed or co-filed shareholder has increased modestly since representing $4.6 trillion in resolutions on ESG issues from 2016, when 61 managers with assets answered this question 2018 through mid-2020. This $6.9 trillion in assets under affirmatively.) compares with 54 managers, management responded yes to with $202 billion in assets, that this question. filed resolutions in 2016-18. Highlights from Recent Proxy Seasons

FIGURE 4.1 During the proxy seasons of Types of Investors Filing Shareholder Proposals 2018–2020 2018 through 2020, sustainable investors concentrated their efforts on improving board Public 68.0% Faith-based 28.8% oversight and corporate Money Manager 16.3% Money Manager 27.3% disclosure of ESG issues and Labor 11.3% Foundation 17.1% risks. As shown in Figure 4.2, Faith-based 1.5% Public 10.2% the leading initiatives—based Family Office 1.4% Labor 7.8% on the number of shareholder Healthcare 1.2% Other/Nonprofit 3.4% proposals filed—were proposals Foundation 0.3% Healthcare 2.9% requesting that companies Other/Nonprofit <0.1% Family Office 1.5% Education 1.0% exercise greater oversight over their political spending and ESG Shareholder Proponents ESG Shareholder Proponents lobbying, improve or report on 2018–2020, by Assets 2018–2020, by Number labor practices and report or act on climate change issues.

ENVIRONMENTAL AND SOCIAL ISSUES A roundup of the leading categories of environmental and social proposals from 2018 through 2020, based on the numbers filed and the numbers that came to votes, appears in Figure 4.3. SOURCE: US SIF Foundation.

74 IV. Investor Advocacy FIGURE 4.2 Leading ESG Issues 2018-2020, by Number of Shareholder Proposals Filed

2018 2019 2020

270 Corporate Political Activity

Labor & Equal Employment Opportunity 228

Climate Change/Carbon 217

Executive Pay 173

Independent Board Chair 167

Special Meetings 157

Written Consent 142

Human Rights 131

Board Diversity 120

Proxy Access 106

0 50 100 150 200 250 300

SOURCE: ISS ESG, Sustainable Investments Institute, US SIF Foundation NOTE: Data for 2020 show numbers of proposals filed for 2020 meetings through July 15, and all vote results known as of July 15.

As shown by the number of Institute, they are discussed in issues earned average support proposals filed each year, this chapter in the “Governance of 23 percent or more in the last investors have focused in Issues” section to be consistent three years, and seven of them particular on fair labor issues, with the classification used in also won majority support. which included several the preceding two chapters.) resolutions calling for gender The public health crisis created pay equity. A close second Climate change and fair by the over-prescription of in terms of the number employment issues also appear addictive opioid painkillers also of proposals filed are the to be high-level concerns for drew shareholders’ concern. challenges and risks posed investors based on the average Resolutions asking Assertio by climate change. The third level of support these proposals Therapeutics, Rite Aid, Walgreen highest category was human receive. Proposals requesting Boots Alliance and Johnson rights, covered in a number of companies to act on climate & Johnson for reports on their disparate resolutions. (Although change received average support involvement in the opioid crisis political spending and lobbying consistently of 24 percent earned majority support. proposals are classified in or more, and seven received the “social” category by majority support from 2018 Investors weighed in on another proxy research firms ISS and through 2020, as shown in Figure epidemic—gun violence—with Sustainable Investments 4.4. The proposals on fair labor majority support for resolutions

Report on US Sustainable and Impact Investing Trends 2020 75 asking American Outdoor has been trending upward. has also been rising. From Brands and Sturm, Ruger & Co. During the proxy seasons 2014 through 2016, 22 to 23 to report on how they could of 2012 through 2014, only percent of the proposals on improve gun safety and mitigate two shareholder proposals environmental and social issues harm from their products. opposed by management on that came to votes received environmental and social issues support levels of 30 percent or Perhaps the most striking received more than 50 percent more. In 2017, the proportion of high vote result was the Jesuit support. In the next three-year proposals clearing this threshold Conference’s 2019 proposal period, 2015 through 2017, that rose to 28 percent. to GEO Group, a private number rose to 10. In the most prison operator, asking for recent three seasons, from Since 2018, 38 percent or more disclosure about its 2018 through 2020, the number more of the environmental and controversial migrant detainee of environmental and social social proposals that have facilities. It earned 87.9 percent proposals receiving majority come to votes have cleared this support after the company support despite management threshold. Figure 4.5 shows the declined to oppose it. opposition nearly tripled to 26. total number of shareholder proposals filed over the last five The proportion of shareholder A related measure—the years as well as subtotals by proposals on social and proportion of resolutions that final status. environmental issues that receive support of 30 percent receive high levels of support or more of the shares voted— One analyst described the

FIGURE 4.3 Shareholder Proposals on Environmental and Social Issues 2018–2020

Number of Number of Average Vote (%) Resolutions Filed Resolutions Voted

2018 2019 2020 2018 2019 2020 2018 2019 2020

Environment: 86 67 64 26 18 16 31.4 24.5 34.5 Climate Change

Environment: 21 20 22 10 10 6 17.5 22.4 26.4 Other Issues

Human Rights 39 49 43 13 21 18 16.5 27.5 25.3

Labor & Equal 69 71 88 14 34 32 27.9 23.8 23.5 Employment Opportunity

Sustainability 36 24 18 10 1 7 38.2 28.2 14.1 Reporting/Management

Other Environmental & 52 30 34 21 9 21 Social Issues

Total 303 261 269 94 93 93

SOURCE: Sustainable Investments Institute. NOTE: Data for 2020 show numbers of proposals filed for 2020 meetings through July 15, and all vote results known as of July 15.

76 IV. Investor Advocacy FIGURE 4.4 Highest Votes on Environmental and Social Proposals 2018–2020

Company Issue Proponent Year Vote (%)

GEO Group Report on human rights policy implementation Jesuit Conference 2019 87.9*

Rite Aid Publish sustainability report Sisters of St. Francis of Philadelphia 2018 79.97

Genuine Parts Report on human capital management As You Sow 2020 79.08

Report on Paris-compliant plan to cut carbon Dollar Tree Jantz Management 2020 73.52 footprint

Fortinet Report on diversity programs Nia Impact Capital 2020 69.98

Sturm, Ruger Report on gun safety and harm mitigation Catholic Health Initiatives 2018 68.79

O’Reilly Automotive Report on human capital management As You Sow 2020 65.96

Assertio Therapeutics Report on opioid crisis UAW Retiree Medical Benefits Trust 2018 62.29

Rite Aid Report on opioid crisis UAW Retiree Medical Benefits Trust 2018 61.38

Fastenal Report on diversity programs As You Sow 2020 61.14

Johnson & Johnson Report on opioid crisis Illinois State Treasurer 2020 60.92

Walgreens Boots Alliance Report on opioid crisis Mercy Investment Services 2019 60.53

Kinder Morgan Publish sustainability report New York State Common Retirement Fund 2018 60.37

Kinder Morgan Report on 2-degree analysis and strategy Zevin Asset Management 2018 59.66

Genesee & Wyoming Adopt GHG reduction targets Calvert Investment Management 2018 57.24

Middleby Publish sustainability report Trillium Asset Management 2018 57.16

Newell Brands Report on executive diversity Trillium Asset Management 2019 56.59

Report on Paris-compliant plan to cut carbon Ovintiv United Church of Canada 2020 56.41 footprint

Report on climate-related extreme weather Phillips 66 As You Sow 2020 54.7 impacts

Report on Paris-compliant plan to cut carbon J.B. Hunt Transport Services Trillium Asset Management 2020 54.49 footprint

Ameren Report on coal ash risks School Sister of Notre Dame, Central Pacific 2018 53.24

Anadarko Petroleum Report on 2-degree analysis and strategy As You Sow 2018 53.03

Enphase Energy Publish sustainability report Sustainvest Asset Management 2020 52.34

American Outdoor Brands Report on gun safety and harm mitigation Sisters of the Holy Names 2018 52.16

Chipotle Mexican Grill Report on mandatory arbitration NYC pension funds 2020 51

Travelers Report on EEO and affirmative action Trillium Asset Management 2019 50.91

Range Resources Report on methane emissions/reduction targets Unitarian Universalists 2018 50.26

SOURCE: Sustainable Investments Institute. *This resolution was supported by management. Report on US Sustainable and Impact Investing Trends 2020 77 trend as part of the growing acceptance of ESG integration. FIGURE 4.5 Environmental and Social Proposals, by Status, 2016–2020 Historically, investors treated environmental Voted …and receiving >30% support Omitted Withdrawn and social issues very Not Presented for Other Reasons differently compared to governance proposals, 400 with many abstaining from 350 voting on these matters, and even more being very 300 reluctant to support such proposals that may have 250 appeared disconnected from investment management 200 fundamentals. However, as 150 ESG integration takes hold, recent voting trends indicate 100 that we are entering a new era, whereby investors no 50 Number of Shareholder Proposals Number of Shareholder longer compartmentalize environmental and social 0 issues as a separate category 2016 2017 2018 2019 2020 from governance shareholder proposals. We are now Filed 268 337 303 255 269 dealing with ESG shareholder proposals, and every proposal Voted 141 142 94 93 93 type is evaluated based on its merits and relative ...and to company and industry receiving 32 40 39 38 35 >30% support practice.10

...and Some of the recent percentage 23% 28% 41% 41% 38% highlights and shareholder receiving advocacy success stories on >30% support environmental and social issues Omitted 37 67 56 40 45 are detailed below. Withdrawn 88 122 149 117 118 Fair Labor and Pay Standards: For much of the past decade, Not Presented the majority of shareholder for Other 2 6 4 5 5 Reasons proposals filed on fair labor standards asked companies SOURCE: Sustainable Investments Institute. to adopt non-discrimination NOTE: Counts in 2020 are as of mid-July. In addition to the proposals that are omitted, withdrawn policies with regard to sexual or voted, some proposals that are filed are not considered because of company mergers or orientation and gender identity. because the proponents failed to present them. Investors strongly supported these proposals, frequently giving them majority support. Given this context, shareholder

78 IV. Investor Advocacy proponents had leverage in Automotive to report on human persuading companies to put the capital management earned requested policies in place. majority support of 79 and 66 Investors are asking percent, respectively. In the last few years, as companies to report anti-discrimination policies on gender pay gaps A related initiative led by the on sexual orientation have New York City Comptroller’s and other EEO issues become commonplace at US Office has asked companies to corporations, responsible and indicators. provide breakdowns, by race investors have focused on and sex, of their workforce using other persistent workplace the nine job categories defined discrimination issues. by the US Equal Employment In 2019, 15 proposals on the Opportunity Commission. The An initiative that began in 2016 racial and gender pay gap came five proposals that came to has asked companies to report to votes, averaging 27 percent votes in 2018 through 2020 on the gender pay gap. By 2018, support. The proponents had earned average support over 40 it had grown to more than 30 less success in 2020, when percent. proposals filed by Arjuna Capital, the average support for the 12 the New York City pension proposals that came to votes The #MeToo movement has funds and other investors, averaged just 12 percent. added urgency to and reinforced and the proponents reported Notable withdrawal agreements shareholder efforts to increase several successful withdrawal in the last two years included corporate transparency negotiations. Arjuna, for Citigroup, which agreed to regarding sexual harassment example, withdrew its proposal provide data on its global in the workplace. In April 2019, at American Express when the median gender pay gap, and McDonald’s, responding to company agreed to report on Pfizer, which agreed to bring a shareholder proposal from pay differentials between men in outside experts to assess Clean Yield Asset Management, and women by the end of 2018 whether it has a gender pay gap disclosed that it is not requiring and to make pay adjustments globally or a racial gap within employees to agree to mandatory as necessary for a goal of 100 the United States. arbitration of harassment and percent gender pay equity. New discrimination claims and that it York City Comptroller Scott Another group of proposals, will inform its board of directors Stringer announced that eight filed mostly by Trillium Asset if a nondisclosure agreement is of the financial and healthcare Management and other sought in a case of harassment companies where it had filed investment firms, have asked or discrimination. This victory gender pay equity proposals companies to report on EEO follows similar decisions by in 2018—Abbott Laboratories, and affirmative action. These Microsoft and Alphabet to Aetna, Baxter International, proposals benefited from strong eliminate mandatory arbitration Edwards Life Sciences, Metlife, support from investors. The and nondisclosure clauses as Principal Financial Group, nine proposals on this issue conditions of employment. In Progressive and Travelers— that came to votes from 2018 to 2020, a resolution from the New had agreed to “disclose new 2020 have consistently gained York City pension funds asking information on how they support of at least 28 percent, Chipotle to report on its use of identify and eliminate gender and one proposal to Travelers in mandatory arbitration won 51 pay disparities among their 2019 earned majority support of percent support. employees.”11 just over 50 percent. Similarly, As You Sow’s proposals asking Genuine Parts and O’Reilly

Report on US Sustainable and Impact Investing Trends 2020 79 Murder of George Floyd Spurs Racial Justice Investor Initiatives

The murder of George Floyd spaces and company candidates. They noted that and resulting demonstrations engagements; asset management firms would focused on centuries of racial benefit from the broader range of injustice, combined with the 2. Embedding a racial equity perspectives and networks that disproportionate impact of and justice lens into our own more diverse asset management COVID-19 on communities of organizations; teams can provide. color, have galvanized investors to make public commitments 3. Integrating racial justice into The 2021 proxy season is likely to incorporate a racial justice investment decision-making to see continued emphasis on lens into their investment and engagement strategies; diversity as sustainable investors analysis, decision-making and respond to the events of 2020 in engagement strategies. 4. Reinvesting in communities; drafting and filing shareholder and resolutions. In the last few years, These developments, which board, executive, and workplace took place several months 5. Using the investor voice to diversity have become intensified into 2020, are not reflected in advance anti-racist public areas of focus for shareholder the ESG incorporation criteria policy. campaigns, but gender parity and that money managers and LGBTQ+ equality have received institutional investors reported Investor coalitions such as far more explicit attention. To at the beginning of the year—the Confluence Philanthropy, address racial inequality, however, snapshot date for the US SIF Intentional Endowments Network, some investors have tried to Foundation survey. At the start the Interfaith Center on Corporate tackle issues that often have of 2020, a total of 114 money Responsibility, Mission Investors disproportionate impacts on managers controlling $833 billion Exchange, Racial Justice communities of color, such as and 159 institutional investors Investing, and Transform Finance prison divestment, community with $1.5 trillion in AUM reported are among those fostering disinvestment, responsible that they consider EEO/diversity explorations within their networks lending, fair housing, product as a focus area in their investment of how racism and implicit bias safety and environmental justice. decision-making process, a can affect the investment process. level of emphasis that in asset- The calls for racial equity may weighted terms is relatively In July, the SEC’s Asset also prompt more asset managers unchanged from 2018. Management Advisory Committee to engage with corporations to convened a meeting to discuss disclose the practices and metrics In June 2020, 128 organizations the general lack of diversity behind their diversity goals and the and individuals, including US SIF, in the asset management role these goals play in shaping signed an “Investor Statement of industry. Participants, including racial equity within their board Solidarity to Address Systemic representatives of the Diverse rooms, C-suites, workplaces, Racism,”12 with a call “to action Asset Managers Initiative, communities and supply chains. and accountability to achieve National Association of Securities If so, the next edition of this racial equity.” Signatories Professionals and the Association report may show in quantitative committed to five key actions: of Asian American Investment terms that racial equity is gaining Managers, urged the SEC ground as an ESG consideration in 1. Actively engaging with, to require reporting by asset investment analysis. amplifying, and including management firms on their Black voices in investor efforts to recruit racially diverse

80 IV. Investor Advocacy Climate Change: A surge in to produce the requested reports that agreed to set or disclose shareholder proposals on from ExxonMobil (where the reduction goals for greenhouse climate change began in 2014 Fund’s proposal as noted earlier gas emissions: Emerson as investors wrestled with the had received 62 percent support Electric, Home Depot, Vertex prospects of “stranded” carbon in 2017), PPL (56.8 percent in Pharmaceuticals and Vistra assets, US and global efforts to 2017), American Electric Power, Energy.15 curb greenhouse gas emissions DTE Energy, Dominion Energy and the calls by 350.org and and Southwestern Energy. In 2020, proponents were other groups for divestment buoyed by several majority votes from fossil fuel companies. for climate-related resolutions. While more than 80 proposals Jantz Management’s call at on climate concerns were filed Dollar Tree for a report on its in 2018, the numbers tapered In 2020, proponents greenhouse gas emissions goals slightly in 2019 and 2020. were buoyed by received 74 percent support, several majority votes the third highest vote ever won In the 2018 season, many by a climate-related proposal shareholder proponents found for climate-related opposed by management.16 that they were able to secure resolutions. agreements from companies, Human Rights: Sustainable in some cases after those investors filed dozens of proposals had received high resolutions on a wide range votes in the previous years. The Miller/Howard investment of human rights issues from Several companies in 2018 firm was able to withdraw 2018 through 2020. Many agreed to produce assessments resolutions concerning control of these proposals did not of how their business operations of methane emissions at four oil go to votes after proponents could be aligned with the goal and gas companies—Anadarko secured agreements from target of preventing a rise in global Petroleum, Devon Energy, EQT companies. In 2018, religious temperatures of greater than 2 and Energen—in 2018 when investors filed proposals at degrees Celsius above the pre- they agreed to improve their several companies requesting industrial era. disclosures about mitigating them to report on their methane leaks. Notably, EQT, procedures to ensure that their The New York State Common which is the largest natural gas global suppliers follow ethical Retirement Fund, for example, producer in the United States, recruiting practices and do not announced early in 2018 that has joined an industry initiative employ forced or bonded labor. it had secured an agreement to reduce methane emissions to They withdrew the proposal from Duke Energy to produce a no more than 1 percent across at Amazon, when it agreed to climate change risk assessment the chain from wellhead to discuss the issue further, and that includes an analysis of the burner tip.13 Trillium withdrew a at Hershey’s, McDonald’s and Paris Climate Agreement goals. proposal at EOG in 2019 when Williams Sonoma when those The Fund’s 2017 proposal to the company agreed to “reduce companies agreed to adopt Duke with this request had won its methane emissions this year stricter standards for their the support of 46 percent of while establishing a quantitative suppliers or to publish reports the shares voted. After filing or methane emissions reduction on their due diligence efforts.17 re-filing resolutions at several goal for next year.”14 energy companies in 2018 with In 2019 and 2020, a large similar requests, the Fund also In 2019, proponents withdrew proportion of the shareholder was able to secure agreements proposals at four companies resolutions filed on human rights

Report on US Sustainable and Impact Investing Trends 2020 81 asked companies across a wide to votes, typically receive high US companies. Concerned range of industries to assess the support. From 2018 to 2020, for shareholders want companies human rights risks within their example, sustainability reporting to exercise proper oversight operation and supply chains and requests at Rite Aid, Kinder to ensure that these payments report back to shareholders. Morgan, Middleby and Enphase serve the best interests of the The seven proposals that went Energy received majority firms and their shareholders and to votes in 2020 earned 26 support. will not harm their reputations. percent support, on average; the six proposals voted on in 2019 GOVERNANCE ISSUES The campaign on political averaged support of 29 percent. Sustainable investors, including spending, advised by the Center public pension funds, labor for Political Accountability The standout among resolutions funds and investment firms, seek (CPA), has been waged by related to human rights based to strengthen the governance an investor coalition that on vote results was the 88 of portfolio companies so includes pension funds, labor percent earned by the resolution that directors and executives unions, environmental groups at The GEO Group. It asked consider and adopt policies in and sustainable investment GEO, which operates private the long-term interests of the managers. Since the start of this prisons and immigrant detention companies, their shareholders initiative in 2004, the CPA and centers, for details on how it and other stakeholders. its allies have persuaded scores implements its formally stated of major companies to disclose commitment to the human rights As shown in Figure 4.6 (and and require board oversight of detainees and inmates in also in Figure 4.2), the leading of their political spending with light of the serious allegations governance issues during the corporate funds. Today, slightly about human rights abuses at 2018-2020 proxy seasons, more than 50 percent of S&P 500 its immigrant detention centers. in terms of the number of companies today either disclose While the company, prompted by proposals filed, concerned or prohibit contributions to state the resolution and its support, corporate political activity, legislative, judicial and local produced a report by the end of with 270 resolutions filed over candidates, political parties, 2019, the Jesuit Conference and the past three seasons. In political committees and other its religiously affiliated co-filers addition, substantial numbers political entities organized have found it inadequate and of proposals asked companies under Section 527 of the are pressing the company for to establish independent Internal Revenue Code, such greater effort on improving board chairs and to facilitate as Democratic and Republican conditions at its detention shareholders’ ability to call governors’ associations and centers.18 special meetings. While “Super PACs.”19 relatively few proposals were Sustainability Reporting: filed or voted on board diversity, In a related initiative, since Requests related to a host of there were numerous signs that 2012 the American Federation corporate responsibility issues the issue is gaining traction of State, County and Municipal have been raised over the years among major investors. Employees and Walden Asset in requests for sustainability Management have led a coalition disclosures and reports. This is Corporate Political Activity: of more than 60 investors an issue where investors have Investor demands for disclosure that have asked companies frequently been able to obtain and oversight of corporate to report as well on indirect withdrawal agreements when political spending and lobbying political spending—lobbying the target companies agree expenditures have long been expenditures through trade to expand disclosures. Such one of the leading issues raised associations and nonprofit proposals, when they do go in shareholder proposals at organizations that do not have

82 IV. Investor Advocacy to report their donors. The filers Proposals on political spending that 53 percent of S&P 500 have often asked companies and lobbying averaged support companies’ boards had separate to explain their membership between 24 and 27 percent chair and CEO positions in 2019, in organizations whose from 2012 through 2018, but compared with 37 percent in lobbying positions contradict have seen a notable increase 2009. The chair was independent the companies’ policies on in support in the last two years. at 34 percent of S&P 500 issues such as climate change, In 2019, the 23 proposals companies in 2019, compared fair employment and public that went to a vote averaged with just 16 percent 10 years health. Coalition members 32 percent support, with one earlier.22 have particularly targeted proposal, filed by United Church companies that are members Funds at Mallinckrodt, earning Since the start of the 2015 proxy of the American Legislative majority support of 80 percent. season, calls for independent Exchange Council (ALEC), which In 2020, the 28 proposals voted board chairs have seldom lobbies against renewable through the end of July had earned majority support, with energy mandates at the state earned average support of 33 ISS counting just four. Notably, level and opposes federal efforts percent, with two—at Alaska though, two of those majority to reduce greenhouse gas Air and McKesson—earning votes occurred in 2020, at Baxter emissions. majority support of 52 percent. International and Boeing.23 Altogether, the campaign has A major highlight in the 2018 succeeded in persuading more Special Meetings and Written proxy season was ExxonMobil’s than 90 companies to improve Consent: The most successful announcement in July that it their lobbying disclosure.21 group of shareholder proposals was quitting ALEC. According on governance in the 2018- to a company representative, Independent Board Chair: 2020 period, based on their the precipitating factor was Investors concerned about average vote support, were ALEC’s efforts to persuade good governance have long requests that companies the federal government to called for US companies to amend their bylaws to reduce drop its statement that climate separate the positions of chief to 10 or 15 percent the share change is a threat to public executive officer and board ownership threshold required health. Notably, Exxon’s chair, and to ensure the board of shareholders to be eligible announcement came just weeks chair is independent—not a to call for a special meeting. after a shareholder proposal, current or former executive of Led by individual investors, the led by the United Steelworkers the company. Since the CEO number of proposals filed on this and joined by 25 co-filers, and board chair are the two subject zoomed from 18 in 2016 asked Exxon to disclose its most authoritative positions to more than 82 in 2018. These federal and state lobbying, in a boardroom, assigning proposals have consistently including payments to ALEC. both these roles to a single averaged more than 41 percent Verizon withdrew from ALEC in individual removes the checks support in the last three years. September 2018, a few months and balances critical to good after a lobbying disclosure governance. Following closely behind in proposal filed by Boston terms of the number of Common Asset Management Although it is common practice proposals filed in recent years received 36 percent support in other industrialized countries and their levels of support, at the company’s annual to separate these two positions, are calls for companies to meeting. In total, more than 110 the practice has lagged in the amend their bylaws to allow companies have left ALEC in United States. Still, there has shareholders to submit the face of questions from their been progress in the last several proposals outside of the annual shareholders.20 years. Spencer Stuart reports meeting and to solicit written

Report on US Sustainable and Impact Investing Trends 2020 83 FIGURE 4.6 Shareholder Proposals on Governance Issues 2018–2020

Number of Number of Average Vote (%) Resolutions Filed Resolutions Voted

2018 2019 2020 2018 2019 2020 2018 2019 2020

Board Diversity 35 45 40 4 4 5 22.5 37.0 32.4

Corporate Political 86 97 87 58 62 55 28.8 33.5 36.7 Activity

Executive Pay 63 58 52 40 30 27 23.3 19.9 22.3

Independent Board Chair 53 65 49 46 61 43 31.7 29.6 34.8

Proxy Access 50 37 19 36 30 13 32.9 34.2 29.4

Special Meetings 82 32 43 61 27 42 41.5 44.9 41.8

Written Consent 40 41 61 37 35 54 40.7 40.0 37.6

Other Governance Issues 109 158 137 54 92 91

Total 518 533 488 336 341 330

SOURCE: ISS, Sustainable Investments Institute. NOTE: Data for 2020 show numbers of proposals filed for 2020 meetings through July 15, and all vote results known as of July 15. NOTE: Board diversity proposals exclude 1 on ideological diversity filed by conservative group in 2018, 9 in 2019 and 6 in 2020. Of these proposals, 1 came to vote in 2018, 7 in 2019 and 3 by July 15 in 2020, averaging less than 2 percent support.

consent to them from other shareholder right to call a using their say-on-pay votes. shareholders. special meeting or to act by From 2011 through 2019, written consent is principally the percentage of Russell As two legal analysts explained: about speed: it enables 3000 companies that failed shareholders to act sooner to get majority support from Shareholder power to call a than they would otherwise be shareholders on their pay plans 24 special meeting or to act by able to act. has generally ranged between written consent [are] relevant 1.5 and 2.0 percent, with the The enactment if shareholders want to take Executive Pay: highwater mark occurring in of the Dodd-Frank Wall an action without having 2012, when 2.5 percent of Street Reform and Consumer to wait for the next annual the Russell 3000 failed to win meeting. Because virtually Protection Act in 2010 made it approval.25 any action that can be taken mandatory for publicly traded at a special meeting or by companies to allow an advisory In addition to weighing in written consent can also be vote on pay at least every on management-sponsored taken at an annual meeting, three years. Shareholders have advisory resolutions on pay, and because an annual generally been understated in meeting has to be held, a public funds, labor funds and

84 IV. Investor Advocacy individual investors have filed fewer than 1 percent in 2013.27 diversity on boards has lagged shareholder proposals to correct The proxy access campaign behind, with ISS reporting that or curb various executive has continued in the last three the percentage of Russell 3000 pay practices they view as years, but with lower numbers of board seats held by members problematic. On average, proposals filed as the universe of racial and ethnic minorities though, support from other of targets without proxy access reached 10 percent, also setting investors has been muted, as provisions has declined. a new record. ISS noted that shown in Figure 4.6. of the board vacancies in the Board Diversity: For decades, Russell 3000 created by departing Proxy Access: Until recently, sustainable investors have directors, 45 percent were filled shareholders wishing to propose pressed for companies to actively by women in 2019 and 15 percent alternative candidates to the seek racial and gender diversity by members of racial and ethnic single slate of candidates on their boards, and these efforts minorities.29 approved by the company’s have received more visibility and nominating committee had to allies in recent years. Sustainable and responsible send out their own alternative investors continue to file proxy ballots, which few resolutions asking companies to have the resources to do. In make a formal commitment to 2015, however, New York City increase board diversity. In 2018, Comptroller Scott Stringer Notably in 2020, two a new variant of this proposal spearheaded a “proxy access” shareholder proposals emerged, with 14 companies shareholder campaign. The calling for independent asked to adopt the “Rooney comptroller’s proposal, on behalf Rule” used by the National of the city’s pension funds, board chairs earned Football League to require the asked target companies to majority support. nominating committee to send present a proxy access bylaw a list of potential nominees for to shareholders for approval. director seats that includes It specified that the bylaw qualified women and minority should allow shareholders In early 2012, when fewer than candidates. The majority of that have collectively owned 3 13 percent of the board seats of board diversity proposals percent of the company’s stock the S&P 1500 (10.6 percent) or in recent years have been continuously for three years to the Russell 3000 (11.6 percent) withdrawn when the proponents 28 have access to the company’s were filled by women, a group secured these commitments proxy statement to nominate of institutional investors calling from companies in advance of alternative candidates for up to itself the Thirty Percent Coalition the annual meeting. a quarter of the board seats. emerged with the aim to change that statistic. Its original goal Investors also appear to be more The campaign took off. From was to increase the percentage willing to vote “no” in board 2015 through 2017, the New York of board seats held by women to elections where all board seats City funds and other investors 30 percent by 2015. are held by men. Sustainable filed more than 400 proxy access investment firms have typically proposals. The proposals that Although the Coalition’s original voted against the re-election came to votes often received deadline has not been met, the of directors on the nominating majority support. By the end percentage of Russell 3000 board committees of boards lacking of 2017, 475 US companies seats held by women reached racial and gender diversity. had adopted proxy access 19 percent in 2019, a record provisions, including 65 percent high, according to ISS. Progress The New York State Common of the S&P 500,26 compared with with regard to racial and ethnic Retirement Fund, CalPERS, and

Report on US Sustainable and Impact Investing Trends 2020 85 the Massachusetts and Rhode While director opposition These shareholder efforts Island pension funds also have votes typically average 3 have been augmented by the used a “Vote No” approach for percent to 4 percent, average actions of state legislatures. inadequately diverse boards. votes against all-male boards In September 2018, California Larger asset managers such are significantly higher—and passed a law requiring all as State Street and BlackRock rising….Notably, opposition publicly traded companies appear to be following suit.30 votes at all-male S&P 1500 headquartered in the state boards have more than BlackRock, in its 2018 proxy to have at least one woman doubled since 2015, with voting guidelines, says “we on their boards by the end of those chairs receiving an would normally expect to see 2019 or face a one-time fine of average opposition vote of at least two women directors 15.2 percent this year vs. just $100,000. By the end of 2021, on every board” and that if “a 3.6 percent for the same role California companies, depending company has not adequately at boards that are 20 percent on their boards’ size, will need accounted for diversity in its female.32 to have at least two or three board composition, we may women directors or face fines vote against the nominating/ As a further example of this of $300,000.34 Several other governance committee trend, by June 2020, 13 male states are considering legislation members.”31 board nominees to eight all-male to require publicly traded boards failed to win majority companies headquartered within The combined effect of voting support for their elections. ISS their boundaries to report on guidelines such as these was reports that the lack of gender their board diversity or to meet noticeable in 2018. As the EY diversity appears to have been a board diversity requirements. Center for Board Matters notes: factor in all of the losses.33

86 IV. Investor Advocacy V. Methodology

To identify assets under professional management in the United States engaged in sustainable investing strategies, the US SIF Foundation employs a combination of direct surveying as well as primary and secondary research. This section describes the data sources, data qualification and research process employed for this report.

This report is primarily a managers and mutual funds to money managers and quantitative, behavioral study. included in this study therefore institutional investors from March The research team sought to may not consider themselves through July 2020. The research measure professionally managed to be “environmental,” “social” team also reviewed annual investment assets that fall within or “impact” investors or reports, financial statements, at least one of the key strategies actively involved in “sustainable SEC forms ADV from money of sustainable investing: (1) the investing.” managers, IRS form 990 filings incorporation of environmental, by nonprofit organizations and social and corporate governance At the same time, a subset US Department of Labor form (ESG) criteria into investment of 139 money managers and 5500 filings by plan sponsors. In analysis and portfolio selection, 132 institutional investors addition, the team gathered data which includes the activities of responded to survey questions from third-party service providers community investing institutions; that provided additional insights and trade associations of and (2) the filing or co-filing of into the motivations, techniques community investing institutions, shareholder resolutions on ESG and additional activities behind investment companies and issues. their sustainable and impact institutional investors. investment practices. As a behavioral study, the For the purpose of this report, an report avoids making qualitative institution or money manager is judgments about intent. If an Calculation of Sustainable engaged in sustainable investing institution or money manager Investing Assets if its investment activities confirms that it uses at least included ESG incorporation or one sustainable investment The US SIF Foundation, along filing shareholder resolutions on strategy, regardless of intent, with research team members at ESG issues, as described below. its assets are included in the the Croatan Institute, distributed report. Some investors, money an online information request

Report on US Sustainable and Impact Investing Trends 2020 87 ESG INCORPORATION ESG incorporation data in 2018. but could not be confirmed as If the institution or money Estimates for these institutions’ having done so since 2018 were manager incorporated one or ESG assets were based on their not included in the shareholder more ESG criteria as an explicit reported ESG assets from the advocacy subtotal of the report’s part of an investment policy 2018 Trends Report and updated aggregate sustainable investing or practice as of December based on their most recently universe. 31, 2019, only that portion available information as of of the portfolio’s investment December 31, 2019. The assets of investors involved assets subject to those ESG in both ESG incorporation and factors was credited toward the The assets, as of December 31, shareholder advocacy were sustainable investment assets 2019, of US-based community controlled to avoid double aggregated in this report. Each investing institutions were counting these assets in the qualifying money manager or also included in the ESG aggregation of the broader institution had to report that it incorporation section of the sustainable investment universe. considered ESG criteria, along report. The definitions of with the assets affected by these community investing institutions criteria, in one or more of the and data sources for their assets Additional Survey Data following ways: are described in “Data Sources and Enumeration” below. The US SIF Foundation also used • responding to the US the online information request SIF Foundation’s online FILING SHAREHOLDER to gather responses from money information request; RESOLUTIONS managers and institutional asset The US SIF Foundation counts owners that would provide • responding to research team an institution as a shareholder insights into the motivations, members who interviewed proponent if it sponsored techniques and additional them by telephone or or co-sponsored at least activities behind their sustainable corresponded with them by one shareholder resolution and impact investment practices. email; or on ESG issues, as tracked by the Interfaith Center on These survey questions asked • providing the relevant data Corporate Responsibility (ICCR), recipients about: in publicly available sources Institutional Shareholder Services such as annual reports, (ISS) or Sustainable Investments • the ESG incorporation prospecti, websites, filings Institute, between 2018 and techniques they use with with the SEC, Department of summer 2020. For each such five not mutually exclusive Labor, IRS or other relevant institution, the total US-domiciled response options (e.g., government agency or assets under its management negative/exclusionary, Transparency Reports to the as of December 31, 2019, were positive/best-in-class, ESG Principles for Responsible included in the shareholder integration, sustainability- Investment. resolutions subtotal of the themed and impact), aggregate sustainable investment If asset data were unavailable universe. Some institutions • the breakdown of their ESG as of December 31, 2019, then self-reported filing shareholder incorporation assets by asset publicly available data closest to resolutions during this time class, that date were used. period but were not tracked by the above organizations. • the breakdown of their ESG In addition, the research team In those cases, the research incorporation assets by active counted institutions that did not team contacted the institutions versus passive management, respond to the 2020 survey but to confirm the information. and either did respond to the 2018 The assets of institutions that survey or otherwise reported self-reported filing resolutions

88 V. Methodology • the reasons they consider ESG Data Sources and • a list of US managers with criteria in investment selection Enumeration sustainable investment or and/or investor advocacy, with ESG funds maintained by eight not mutually exclusive With its research partners, the Morningstar, and response options. US SIF Foundation developed an information request that • responsible and impact Survey recipients were also was circulated via email to 682 investment networks such as asked if they engaged in: money managers and 1,146 the Principles for Responsible institutional investors. Money Investment, the Ceres • filing or co-filing shareholder managers and institutional Investor Network, the Carbon resolutions on ESG issues, investors responding to this Disclosure Project and the information request provided Global Impact Investing • dialogue with current or much of the data for this report. Network. potential investees in order to Supplementary data were improve the companies’ ESG obtained through other primary Based on responses to the practices or disclosure, either and secondary source research. information request and primary directly or through a service and secondary research in fund provider representing their prospectus documents, annual assets, and MONEY MANAGERS AND reports, statements of additional COMMUNITY INVESTING information, press releases, SEC • attempts to influence INSTITUTIONS forms ADV and other SEC filings, governmental policy or The online information request media reports and other public industry regulation to require described earlier was one and private data, the research companies to improve their important component of the team was able to identify a ESG impacts. US SIF Foundation’s research universe of 397 money managers into asset management firms with $43.8 trillion in combined In 2020, a question was added and investment advisors that assets under management. Of to the survey asking the incorporate ESG criteria into these money managers, 384 recipient’s opinion on how US investment analysis or decision were found to incorporate ESG sustainable/ESG investing will making. The information criteria into their investment evolve by 2025, particularly request asked for data on analysis and decision-making in the wake of the COVID-19 the firms’ total US-domiciled processes, affecting $16.6 trillion pandemic. assets under management, the in assets under management. US-domiciled assets subject to The research team relied solely ESG criteria, each US-domiciled In addition, the US SIF on survey responses for the investment vehicle and product Foundation sought to identify answers to these questions. incorporating ESG criteria and US community investing It did not attempt to supply, the specific ESG criteria applied. institutions (including US-based augment or corroborate this microfinance funds with information through secondary The request targeted US SIF international operations). The research, with the exception of members as well as non- US SIF Foundation defines a respondents who filed or co-filed member firms, identified through community investing institution shareholder resolutions on ESG the following sources: as a private sector organization, issues for annual meetings in whether for-profit or nonprofit, 2018 or later, as noted above. • a proprietary database that has a primary mission of of managers and funds providing access to credit, maintained by the US SIF equity and financial services to Foundation, communities underserved by traditional financial institutions. This includes, but is not limited

Report on US Sustainable and Impact Investing Trends 2020 89 to, community development philanthropic foundations, request and additional research, financial institutions (CDFIs) public and government this report identified 553 certified by the US Department retirement plans and institutional investors with total of the Treasury. Sources investment pools and nonprofit assets of $10.3 trillion. Of these included the following: organizations. institutions, 530 were confirmed as incorporating ESG criteria • the Department of the The information request across $6.2 trillion in assets as of Treasury’s CDFI Fund, for the targeted US SIF members December 31, 2019. assets of banks, credit unions, as well as non-member loan funds and venture capital institutions, identified through The $6.2 trillion of ESG funds certified as CDFIs; the following sources: incorporation assets identified through this research totaled • Inclusiv (formerly named • a proprietary database 51 percent of the $12.0 trillion the National Federation of of managers and funds in ESG assets that money Community Development maintained by the US SIF managers identified as Credit Unions), for the assets Foundation, and institutional. Money managers do of its members (not all of not readily disclose information which are certified CDFIs); and • responsible and impact about their institutional clients, investment networks such as so the US SIF Foundation relies • Calvert Impact Capital, for the Ceres Investor Network, on information reported by the assets of US-based DivestInvest Philanthropy, institutional investors for the international microfinance Intentional Endowments report’s analysis of institutional funds, which channel capital Network and the Principles for ESG investment assets in to microfinance institutions Responsible Investment. Chapter III. The institutional ESG and community development incorporation trends described in projects abroad. The information request was the report should be understood circulated to contacts at 1,146 as representing the most From these combined sources, institutional investors. The transparent institutional investors the US SIF Foundation research team also conducted in the United States. constructed a total enumeration additional research in publicly of 1,204 community investing available sources including SHAREHOLDER institutions with total assets annual reports and financial RESOLUTIONS AND under management of $266 statements, IRS form 990 filings THEIR FILERS billion. by nonprofit organizations, Based on data provided by assets reported by colleges ICCR, ISS and the Sustainable and universities to the National Investments Institute, along INSTITUTIONAL INVESTORS Association of College and with verified self-reported To measure institutional University Business Officers, shareholder filers, the US investor assets subject to assets reported by retirement SIF Foundation identified ESG criteria, the US SIF plans to the Department of Labor, 205 shareholder proponents Foundation collected data on and assets reported by asset among institutional investors various types of institutional owners that are signatories to and money managers (not asset owners, including the Principles for Responsible including individual shareholder educational institutions, faith- Investment. Between investor proponents) who filed or co-filed based investors, family offices, responses to the information at least one resolution on an hospitals and healthcare plans, ESG issue since 2018. Foreign insurance companies, labor investors without any identifiable unions and Taft-Hartley plans, presence in the United States

90 V. Methodology and individual investors were Quality Control clients. The institutional-retail excluded from research. and Elimination of breakdown was also determined Double Counting by research on information The research team was able publicly available through SEC to identify the total assets To calculate the total universe forms ADV and annual reports. of the majority of these of US-domiciled assets under proponents—149 institutional management subject to Based on consultation with investors and 56 money sustainable investing strategies, community investing experts, managers with $2.0 trillion the research team aggregated the US SIF Foundation research in combined assets under the assets derived from the team allocated community management, as of December various research phases. First, investing institution assets to the 31, 2019. Of these assets, $1.5 however, rigorous controls were retail and institutional categories trillion were confirmed as also put into place to avoid potential of money managers’ ESG subject to ESG incorporation sources of double counting, incorporation assets as follows: into investment decision making including the following: or analysis, and consequently • 65 percent of community controlled for the potential • money managers, community development bank and effects of double counting prior investing institutions or community development to aggregation. investment advisors that credit union total assets were sub-advise other investment estimated as individual or TOTAL ASSETS UNDER vehicles already tracked; “retail” client account assets, PROFESSIONAL and 35 percent were estimated MANAGEMENT IN THE • investment advisors that as institutional, and UNITED STATES use “funds of funds” or To determine the total assets separate account platforms • 100 percent of community under professional management that merely redirect assets development loan funds and in the United States, the US into funds already tracked venture capital funds were SIF Foundation relied upon (although the counts of assigned to the institutional data provided by Cerulli these funds of funds remain portion of money manager Associates, based on the total in the analysis in Chapter ESG assets. assets reported by US-based II on ESG incorporation by investment managers, plan money managers since they Extensive verification was sponsors, endowments and still represent an investable conducted for each section foundations after controlling product with their own of the report, through cross- for double counting. As of characteristics); or checking multiple data sources December 31, 2019, Cerulli and individually contacting estimated, $51.4 trillion were • shareholder resolution investment managers and under professional management proponents that also investment officers at in the United States, up from incorporate ESG criteria into institutions where appropriate. $46.6 trillion at year-end 2017. their investments. Particular care was taken to track ESG criteria according Additionally, money managers only to the assets subject to were asked to report the amount a particular mandate. Thus, if of assets in each investment only a portion of an institutional vehicle belonging to institutional investor’s portfolio was subject clients, and the amount of to environmental factors, for assets belonging to retail example, only that portion was or high-net-worth individual credited as such.

Report on US Sustainable and Impact Investing Trends 2020 91 Conservative Bias: into their investment decisions ENGAGEMENT AND Note on Undercounting in highly tailored ways. However, SHAREHOLDER ADVOCACY investments made directly by This report does not include the Although the US SIF Foundation individuals are only captured assets of any individual investors and its research partners make in this report if the individual involved in filing shareholder a best effort at comprehensively investors utilized a money resolutions on ESG issues. It also tracking the assets engaged in manager, investment vehicle or excludes the assets of money sustainable investing strategies, other institution whose assets managers or institutions that certain assets are not included are included in the report. filed shareholder resolutions in the report’s overall aggregate Additionally, the assets of high- if they failed to respond to the sustainable investing universe net-worth “angel” investors that information request and if their for various reasons. This make direct private investments— assets were unavailable through inability to capture certain for example, through investor publicly available sources. Also assets involved in sustainable networks fostered by groups such excluded from the subtotal were investing strategies introduces as Social Venture Circle and the the assets of any institution or a conservative bias into this Slow Money Alliance—cannot money manager that reported report’s methodology. Assets readily be captured through filing shareholder resolutions, but that are not captured in the current methods, unless they did not sponsor or co-sponsor a report’s aggregate figures are made through intermediaries resolution since 2018. include the following examples. included in the underlying datasets. In addition, the reported total ESG INCORPORATION assets involved in shareholder The ESG assets of institutional Substantial community advocacy only includes the investors may not be captured if investment is deployed through assets of those money managers the institution was not included entities that are not recognized and institutional investors that in the information request, as community investing filed shareholder resolutions. if it failed to respond to an institutions as defined above If investors engaged solely in information request, or if its but may be complementary to other shareholder engagement assets and incorporation of ESG the industry, such as community activities like proxy voting, issues could not be verified development corporations, letter-writing or private dialogue, through publicly available community development entities, undertaking legal action or information. low-income housing tax credits, public campaigns toward a targeted mortgage-backed company, or attempting to The assets of any institution or securities and investments made influence governmental policy manager that reported that it in accordance with Community or industry regulation to require takes ESG issues into account Reinvestment Act requirements companies to improve ESG in its investment decisions that were not made through a performance, their assets were but failed to report its assets community investing institution not included in this total. were excluded, unless publicly as defined in this report. A small available asset data were portion of these investments In short, there are a number available. may be captured through of investors, advisors and institutional investors’ assets institutions involved in With ESG information increasingly incorporating community issues. sustainable and impact investing available to the public and with However, these investments are strategies that are not readily online brokerages providing generally not included in the ESG identifiable for the purposes of ESG model portfolios for retail incorporation subtotal of the this report or whose engagement investors, individuals can now aggregate sustainable investing activities the US SIF Foundation readily incorporate ESG factors universe. does not include in its overall

92 V. Methodology measure of US-domiciled our information requests or advises against using these data assets engaged in sustainable through other publicly available for highly technical time-series investment strategies. data sources like the PRI analysis. Transparency Reports. Growth in sustainable investment Because of the reclassification Special Note on therefore has occurred in many of “Separate Accounts” as Time Series ways, including through net “Undisclosed Investment Vehicle inflows into existing products Assets” starting in 2016, in Over time, data collection and their financial performance, Figure 2.24, historical data have for the US SIF Foundation’s the development of new ESG been corrected to reflect this Trends reports has improved, products, and the adoption reclassification. In this year’s as increased numbers of money of sustainable investment report, the historical data for managers and institutions have strategies by managers and this segment have also been become more willing to disclose institutions not previously corrected to reflect the number their sustainable and impact involved in the field. For these of managers, rather than the investing activities, through reasons, the US SIF Foundation number of products.

Report on US Sustainable and Impact Investing Trends 2020 93 VI. About the Publisher

The US SIF Foundation is a Resources for the Media Media Contact Information nonprofit 501(c)(3) organization. and the Public Its objective and purpose is US SIF Foundation to support the activities and Members of the media and the 1660 L Street, NW, Suite 306 Washington, DC 20036 purpose of US SIF: The Forum public can find many resources Phone: 202-872-5361 for Sustainable and Responsible from the US SIF Foundation at Email: [email protected] Investment Inc., its sole member, www.ussif.org. by carrying out educational, US SIF Trends Report Media Contact Jody Lowe research and programmatic • The Foundation provides an Phone: (414) 376-7663 activities. online, in person and virtual Email: [email protected] course on the Fundamentals US SIF: The Forum for of Sustainable and Impact Sustainable and Responsible Investment. Investment is the leading voice advancing sustainable investing • In partnership with the College across all asset classes. Its for Financial Planning, the mission is to rapidly shift Foundation offers the only investment practices towards sustainable investment sustainability, focusing on designation in the United long-term investment and the States, the Chartered SRI generation of positive social Counselor™ (CSRIC™). and environmental impacts. Among the hundreds of US • You may also find fact sheets, SIF members are investment how-to guides and all of our management and advisory firms, recent publications as well mutual fund companies, asset as a selection of member owners, research firms, financial publications. planners and advisors, broker- dealers, community investing organizations and nonprofit organizations. Strategies to accomplish its mission include a broad array of member services, local and national convenings, and engagement with the media and policy makers.

94 VI. About the Publisher Endnotes

I. INTRODUCTION

1 Natixis Investment Managers, Retirement reality check: A generational look at defined contribution plan participation (2019). Available at https:// www.im.natixis.com/us/resources/2019-defined-contribution-plan-participant-survey. 2 Morgan Stanley Institute for Sustainable Investing, Sustainable Signals: Individual Investor Interest Driven by Impact, Conviction and Choice (2019). Available at https://www.morganstanley.com/content/dam/msdotcom/infographics/sustainable-investing/Sustainable_Signals_Individual_Investor_ White_Paper_Final.pdf.

II. ESG INCORPORATION BY MONEY MANAGERS AND FINANCIAL INSTITUTIONS

1 Fink, Larry, “A Fundamental Reshaping on Finance,” BlackRock (2020), https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter. 2 European Parliament and the Council of the European Union, “Directive (EU) 2017/828 of the European Parliament and of the Council of May 17, 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement,” May 17, 2017, accessed August 18, 2020, See articles 3g-3j, http://data.europa.eu/eli/dir/2017/828/oj (accessed August 18, 2020). See articles 3g-3j. 3 UK Government Department for Business, Energy and Industrial Strategy, Green Finance Strategy, (July 2019). Available at https://assets. publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/820284/190716_BEIS_Green_Finance_Strategy_Accessible_ Final.pdf. 4 The TCFD was established in 2015 by Mark Carney in his role as chair of the Financial Stability Board, a forum established by the G20. The TCFD published a report with recommendations for organizational best practice for managing climate-related financial risks in 2017. https://www.fsb-tcfd. org/. 5 UK Government Department for Work and Pensions, Consultation on Aligning your pension scheme with the TCFD recommendations, March 12, 2020. https://www.gov.uk/government/consultations/aligning-your-pension-scheme-with-the-tcfd-recommendations. 6 See, for example, Landaw, Jared L., Maximizing the Benefits of Board Diversity, The Conference Board (June 2020). Available at https://conference- board.org/pdfdownload.cfm?masterProductID=20869. 7 Investment Company Institute, 2020 Investment Company Fact Book, (Washington, DC, 2020), 60, https://www.ici.org/pdf/2020_factbook.pdf. 8 See https://www.impactcapitalmanagers.com/about-us-1. 9 US SIF Foundation, The Rise of ESG in Passive Investments, (2020). Available at https://www.ussif.org/files/Publications/Rise_of_ESG_%20 passiveinvestments_2020.pdf. 10 Burwood-Taylor, Louisa, “Regenerative Agriculture Is Having a Moment and 70 Investments Worth $47.5Bn Are in It,” AgFunder News (July 11, 2019), https://agfundernews.com/regenerative-agriculture-investing.html; and Electris, et al., Soil Wealth: Investing in Regenerative Agriculture across Asset Classes, Croatan Institute, Delta Institute and OARS (2019), www.soilwealth.org.

III. ESG INCORPORATION BY INSTITUTIONAL INVESTORS

1 Samy Magdy, “Sudan: Armed groups attack protest camp in Darfur, kill 13”, Associated Press, July 12, 2020, https://apnews. com/9540387adde681b5c9170ca77b0dba39#:~:text=The%20provincial%20government%20in%20North,starting%20Monday%20until%20 further%20notice.&text=The%20authorities%20in%20Kutum%20said,protesters%20to%20discuss%20their%20demands. 2 US SIF Foundation, Investing to Advance Women: A Guide for Investors (2020), 8–9. Available at https://www.ussif.org/files/Publications/ Investing%20to%20Advance%20Women_US%20SIF.pdf. 3 Congress.gov, H.Res.246—Opposing efforts to delegitimize the State of Israel and the Global Boycott, Divestment, and Sanctions Movement Targeting Israel, accessed September 11, 2020. https://www.congress.gov/bill/116th-congress/house-resolution/246/text. 4 Robinson, Melia and Skye Gould, “There were 340 mass shootings in the US in 2018—here’s the full list”, Business Insider, December 31, 2018, https://www.businessinsider.com/how-many-mass-shootings-in-america-this-year-2018-2#:~:text=There%20were%20340%20US%20 mass,and%201%2C346%20others%20were%20injured. 5 Jason Silverstein, “There were more mass shootings than days in 2019,” CBS News, January 2, 2020, https://www.cbsnews.com/news/mass- shootings-2019-more-than-days-365/. 6 Data from Intentional Endowments Network as of August 25, 2020. 7 Internal Revenue Service, Private Foundations, Qualifying Distribution – In General, https://www.irs.gov/charities-non-profits/private-foundations/ qualifying-distributions-in-general, accessed August 19, 2020. 8 Labovitch, Emmy and Nikolaj Halkjaer Pedersen, Private Retirement Systems and Sustainability: United States, Principles for Responsible Investment, 2020. Available at https://www.unpri.org/download?ac=10854. 9 Note that at the time of publication of the 2020 Trends report, the official DOL Bulletin of 2019 Form 5500 filings had not yet been published. All calculations for this analysis were done using the 2016 and 2018 Form 5500 Schedule D filings submitted as of September 18, 2020. 10 Internal Revenue Service, Program-Related Investments, https://www.irs.gov/charities-non-profits/private-foundations/program-related- investments, accessed August 19, 2020. 11 https://www.ceres.org/networks/ceres-investor-network.

Report on US Sustainable and Impact Investing Trends 2020 95 Endnotes continued

IV. INVESTOR ADVOCACY

1 Department of Labor, “Interpretive Bulletin Relating to the Exercise of Shareholder Rights and Written Statements of Investment Policy, including Proxy Voting Policies or Guidelines,” https://www.dol.gov/sites/dolgov/files/ebsa/2016-31515.pdf. 2 To retrieve a company’s proxy statement from the Edgar website at https://www.sec.gov/edgar/searchedgar/companysearch.html, first specify the company’s name or ticker. Once the company file is retrieved, specify “DEF” in the field marked “filing type” to obtain the company’s recent definitive proxy statements. 3 For examples of the impact that shareholder resolutions can have, see https://www.ussif.org/resolutions. 4 CDP Media Factsheet. April 2020. https://6fefcbb86e61af1b2fc4-c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/comfy/cms/files/ files/000/003/419/original/CDP-Media-Factsheet.pdf. 5 https://www.ceres.org/networks/ceres-investor-network/join-ceres-investor-network. 6 https://climateaction100.wordpress.com/about-us/. 7 Investor Statement Regarding the Need for Corporate Workplace Equity Transparency, accessed September 15, 2020, https://docs.google.com/ forms/d/e/1FAIpQLScI9dmj2KPsrOOri1khOiAhltyZRb-KSreUs9d2-N2WJq12QQ/viewform. 8 “Investor Statement on Coronavirus Response,” accessed August 27, 2020, https://www.iccr.org/investor-statement-coronavirus-response. 9 Principles for Responsible Investment, Reporting Framework 2017 Snapshot Report. Available at https://app.powerbi.com/ view?r=eyJrIjoiZjA2OTA5MWUtMzc4OC00MTZhLWIyZDYtYTc3NDMzOGE1OGFjIiwidCI6ImZiYzI1NzBkLWE5OGYtNDFmMS1hOGFkLTEyYjEzM- WJkOTNlOCIsImMiOjh9. 10 Kosmas Papadopoulos, Early Review of 2019 US Proxy Season Vote Results, ISS Analytics (June 15, 2019), 5, https://www.issgovernance.com/ library/early-review-of-2019-us-proxy-season-vote-results/. 11 New York City Comptroller Press Release, “Comptroller Stringer Equal Pay Initiative Drives Transparency at Eight Major US Companies,” August 9, 2018. Available at https://comptroller.nyc.gov/newsroom/comptroller-stringer-equal-pay-initiative-drives-transparency-at-eight-major-us-companies/. 12 “Statement,” Investors Commit to Address Systematic Racism Through Their Portfolios, Corporate Engagements and Policy Advocacy, https:// www.racialjusticeinvesting.org/our-statement. 13 Interfaith Center on Corporate Responsibility press release: “Shareholders call on oil and gas companies to curb methane leaks, and companies respond,” June 11, 2018. Available at https://www.iccr.org/shareholders-call-oil-and-gas-companies-curb-methane-leaks-and-companies-respond. 14 Jonas Kron, “Advocacy One-Year Roundup,” Investing for a Better World, Trillium Asset Management: Winter 2019/2020, 2. 15 Heidi Welsh, 2019 SI2 Mid-Year Review (2019), 24. 16 Patrick McGurn, Key Highlights from the 2020 US Proxy Season ISS, (June 19, 2020) 6, https://www.issgovernance.com/library/key-highlights- from-the-2020-us-proxy-season/. 17 Sol Kwon, Briefing Paper: Social (Human Rights), Sustainable Investments Institute, (March 27, 2018). 18 See https://crossc ut.com/2019/12/geo-groups-catholic-shareholders-want-change-tacomas-private-prison-within and https://www. americamagazine.org/politics-society/2019/05/28/how-jesuits-got-profit-detention-center-company-report-human-rights 19 Center for Political Accountability, The 2019 CPA-Zicklin Index of Corporate Political Disclosure and Accountability (October 24, 2019), 23, https:// politicalaccountability.net/hifi/files/2019-CPA-Zicklin-Index-Report.pdf. 20 John Keenan, “Lobbying Proposals by the Numbers,” August 3, 2020. 21 Ibid. 22 Spencer Stuart, Spencer Stuart Board Index 2019 (2019), 22, https://www.spencerstuart.com/-/media/2019/ssbi-2019/us_board_index_2019.pdf. 23 Patrick McGurn, Key Highlights from the 2020 US Proxy Season, ISS (June 19, 2020), 5, https://www.issgovernance.com/library/key-highlights- from-the-2020-us-proxy-season/. 24 Catan, Emiliano M. and Marcel Kahan, The Never-Ending Quest For Shareholder Rights: Special Meetings And Written Consent, Boston University Law Review (November 3, 2019) [Vol. 99:743 2019], 749, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3278877. 25 Kosmas Papadopoulos, Early Review of 2019 US Proxy Season Vote Results, ISS Analytics (June 15, 2019), 5, https://www.issgovernance.com/ library/early-review-of-2019-us-proxy-season-vote-results/. 26 Sidley Austin LLP, Sidley Corporate Governance Report: Proxy Access – Now a Mainstream Governance Practice (February 1, 2018). Available at https://www.sidley.com/en/insights/newsupdates/2018/02/proxy-access. 27 Sidley Austin LLP, Sidley Corporate Governance Report: Proxy Access Momentum in 2016, Notes 26, 27, 29 and 30 (June 27, 2016). Available at https://www.sidley.com/en/insights/newsupdates/2016/06/proxy-access-momentum-in-2016. 28 GMI Ratings, Variation in Female Board Representation within the United States (2012). 29 Kosmas Papadopoulos, US Board Diversity Trends in 2019, ISS Analytics (May 31, 2019). Available at https://www.issgovernance.com/file/ publications/ISS_US-Board-Diversity-Trends-2019.pdf. 30 Kosmas Papadopoulos et al, US Board Study: Board Diversity Review, ISS (April 11, 2018). Available at https://www.issgovernance.com/file/ publications/us-board-diversity-study.pdf. 31 BlackRock, Proxy Voting Guides for US Securities February 2018. 32 EY Center for Board Matters, 2018 Proxy Season Review. 33 Patrick McGurn, Key Highlights from the 2020 US Proxy Season, ISS (June 19, 2020), 4, https://www.issgovernance.com/library/key-highlights- from-the-2020-us-proxy-season/. 34 Alisha Haridasani Gupta, “California Companies Are Rushing to Find Female Board Members,” New York Times, Dec. 17, 2019, updated Jan. 14, 2020. Available at https://www.nytimes.com/2019/12/17/us/california-boardroom-gender-quota.html.

96 Endnotes Appendix 1 Glossary of Environmental, Social and Governance Criteria

Money managers and international microbusinesses in GREEN BUILDING/SMART institutional investors underserved communities. GROWTH: focus on real estate engaging in ESG incorporation that meets energy efficiency or consider various community, PLACE-BASED INVESTING: green building standards and/or investments targeting a defined environmental, social, corporate smart growth principles including geographic area both for financial governance and product-related urban infill, transit-oriented returns and to generate social factors in investment analysis, development and preservation of or environmental benefits in that decision making and portfolio open space. area. construction. Here is a list of the criteria that respondents to the POLLUTION/TOXICS: SMALL & MEDIUM BUSINESSES: consideration of toxicity of 2020 US SIF Foundation survey focus on access to credit for products and operations and/ could select. small and medium businesses or pollution management and in domestic and international mitigation, including recycling, underserved markets, as well as waste management and water Community Criteria social enterprises. purification. AFFORDABLE HOUSING: focus OTHER COMMUNITY: focus on SUSTAINABLE NATURAL on provision, development and/or community issues outside of the RESOURCES/AGRICULTURE: rehabilitation of housing for low- criteria specified above. focus on sustainable agriculture and moderate-income people. and food products as well as COMMUNITY RELATIONS/ Environmental Criteria sustainably managed natural PHILANTHROPY: consideration of resources, including timber companies’ corporate giving and CLEAN TECHNOLOGY: focus and water. community relations. on businesses dedicated to environmentally sustainable OTHER ENVIRONMENTAL: focus COMMUNITY SERVICES: technologies or efficient use of on environmental issues outside focus on provision of services natural resources. of the criteria specified above. for low- and moderate-income communities, including childcare, CLIMATE CHANGE/CARBON: education and healthcare. focus on risk and opportunities Social Criteria related to climate change and CONFLICT RISK: Exclusion or FAIR CONSUMER LENDING: greenhouse gas emissions. partial exclusion of companies focus on access to responsible that conduct business in financial services for underserved FOSSIL FUEL DIVESTMENT: countries identified as repressive people. exclusion or partial exclusion of companies engaged in the regimes or state sponsors of MICROENTERPRISE: focus on extraction or production of coal, terrorism. access to credit for domestic and oil or natural gas.

Report on US Sustainable and Impact Investing Trends 2020 97 EEO/DIVERSITY: consideration of pay policies are reasonable and MILITARY/WEAPONS: exclusion diversity and equal employment aligned with shareholders’ or or partial exclusion of companies opportunity policies and practices other stakeholders’ long-term that derive a significant portion relating to race, religion, ethnicity, interests. of their revenues from the gender and/or sexual orientation manufacture of weapons as and identity that apply to POLITICAL CONTRIBUTIONS: defense contractors or from consideration of companies’ employees, company ownership the manufacture or retailing of management and disclosure or contractors. firearms or ammunition for civilian of corporate political spending use. GENDER-LENS: focus on or lobbying activities, and of investment products or risks associated with corporate GAMBLING: exclusion or partial companies that actively support political activities. exclusion of companies involved women’s socioeconomic in licensing, manufacturing, advancement. ANTI-CORRUPTION: owning or operating gambling consideration of companies’ interests. HUMAN RIGHTS: consideration policies to prevent bribery, of risks associated with human racketeering and other corrupt NUCLEAR: exclusion or partial rights and of companies’ practices. exclusion of companies involved respect for human rights within in nuclear power production. focus on their internal operations and OTHER GOVERNANCE: governance issues outside of the exclusion or the countries in which they do PORNOGRAPHY: criteria specified above. partial exclusion of companies business. that derive a significant LABOR: consideration of portion of revenues from the companies’ labor or employee Product and Industry production or distribution of adult relations programs, employee Criteria entertainment products, owning involvement, health and safety, ALCOHOL: exclusion or partial or operating adult entertainment employment and retirement exclusion of companies involved establishments, or providing benefits, union relations or in the production, licensing and/ adult entertainment programming workforce reductions. or retailing of alcohol products, or through cable or pay-per-view in the manufacturing of products services. PRISON-RELATED ISSUES: necessary for production of consideration of risks associated PRODUCT SAFETY: consideration alcoholic beverages. with for-profit prison companies, of products’ safety and impact providing services to prisoners at ANIMAL TESTING/WELFARE: on consumers’ psychological or predatory pricing, or refusing to consideration of companies’ physical health. hire ex-prisoners. policies and practices toward TOBACCO: exclusion or partial animals in consumer product OTHER SOCIAL: focus on social exclusion of companies involved testing, where such testing is not issues outside of the criteria in the production, licensing, legally required, particularly where specified above. and/or retailing of tobacco such tests inflict pain or suffering products, or in the manufacturing on the test animals, and on the of products necessary for treatment of animals raised or Governance Criteria production of tobacco products. used for food and other goods BOARD ISSUES: consideration and services. OTHER PRODUCTS: focus on of the directors’ independence, product or industry issues outside diversity, pay and responsiveness criteria based on FAITH-BASED: of the criteria specified above. to shareholders. specifically religious grounds, generally in reference to the consideration EXECUTIVE PAY: principles of Christian, Jewish or of companies’ executive pay Islamic faiths. practices, especially whether

98 Appendix 1: Glossary of Environmental, Social and Governance (ESG) Criteria Appendix 2 Mutual and Exchange-Traded Funds Incorporating ESG Criteria

Assets Mutual Funds (in Millions) 13D Management American Trust Investment Advisors 13D Activist Fund $294.8 American Trust Allegiance Fund $26.2 1919 Investment Counsel, LLC Amundi Pioneer Asset Management (part of Stifel Trust) (fka Pioneer Investment Management Inc.) 1919 Socially Responsive Balanced Fund $228.6 Pioneer Fund $5,355.8 Aberdeen Standard Investments Pioneer Balanced ESG Fund $332.0 Aberdeen International Small Cap Fund $122.7 Arabesque Asset Management Aberdeen Global Equity Impact Fund $19.1 Arabesque Systematic USA Fund $38.5 Acadian Asset Management Arabesque Partners Acadian Emerging Market Portfolio $816.0 Arabesque Systematic USA Fund-Institutional $39.5 Accrued Equities, Inc. Ariel Investments New Alternatives Fund $228.0 Ariel Appreciation Fund $1,300.0 Aegon Asset Management US Ariel Fund $2.2 Short Duration High Yield $136.8 Ariel Focus Fund $62.8 Emerging Markets Debt Fund $47.2 Artisan Partners Affiliated Managers Group (AMG) Global Equity $255.0 AMG GW&K Enhanced Core Bond Fund ESG $33.6 Artisan Sustainable Emerging Markets Fund $52.0 GW&K Core Bond ESG Fund $215.9 Developing World $2,661.8 AFL-CIO Housing Investment Trust Focus Fund (formerly Thematic Fund) $52.0 AFL-CIO Housing Investment Trust $6,600.0 Global Discovery $107.3 AllianceBernstein Global Opportunities $3,395.0 AB Sustainable Global Thematic Fund $1,118.7 Global Value $3,075.9 AB Sustainable International Thematic Fund $326.3 High Income $3,788.3 Allianz Global Investors International $10,559.1 Allianz GI Global Sustainability Fund $169.3 International Small-Mid $1,221.0 AllianzGI Emerging Markets SRI Debt Fund $19.9 International Value $14,268.1 AllianzGI Green Bond Fund $35.5 Mid Cap $5,058.5 Allianz Water Fund $685.8 Mid Cap Value $2,270.0 AllianzGI Global Allocation Fund $287.3 Small Cap $1,837.0 Allied Asset Advisors, Inc. Value Fund $408.3 Iman Fund $140.0 Ascendant Advisors LLC American Century Investments Patriot Fund $19.9 Sustainable Equity Fund $847.4

Report on US Sustainable and Impact Investing Trends 2020 99 Aspiration Brown Advisory Aspiration Redwood Fund $100.0 Brown Advisory Sustainable Growth Fund $3,643.3 AXA Equitable Funds Management Group Brown Advisory Sustainable Bond Fund $384.1 (subsidiary of AXA Equitable Life Insurance Calvert Research and Management Company) Calvert Global Water Fund $445.3 1290 SmartBeta Equity Fund $32.4 Calvert Green Bond Fund $418.4 Azzad Asset Management, Inc. Calvert Income Fund $575.4 Azzad Ethical Fund $94.1 Calvert International Equity Fund $300.9 Azzad Wise Capital Fund $151.4 Calvert International Opportunities Fund $394.2 Baillie Gifford & Co Calvert Global Energy Solutions Fund $90.4 Positive Change $26.7 Calvert Balanced Fund $872.8 Bessemer Investment Management Calvert Bond Fund $1,759.2 Old Westbury Fund $41.0 Calvert Emerging Markets Equity Fund $2,671.4 BlackRock Calvert Equity Fund $3,766.0 BlackRock Utilities, Infrastructure & Power $383.6 Opportunities Trust Calvert Floating-Rate Advantage Fund $65.5 BlackRock Advantage ESG US Equity Fund $105.9 Calvert High Yield Bond Fund $223.2 BlackRock Liquid Environmentally Aware Calvert International Responsible Index Fund $163.5 $976.4 Fund (LEAF) Calvert Long-Term Income Fund $81.0 BlackRock Systematic ESG Bond Fund $28.3 Calvert Mid-Cap Core Responsible Index $71.2 BNY Mellon Asset Management North America Calvert Mid-Cap Fund $210.6 (AMNA) Calvert Responsible Municipal Income Fund $185.1 BNY Mellon Sustainable US Equity Fund $380.2 Calvert Short Duration Income Fund $1,748.8 BNY Mellon Sustainable Balanced Fund $13.7 Calvert Small-Cap Fund $861.8 Boston Common Asset Management Calvert Ultra-Short Duration Income Fund $988.1 ESG Impact International Fund $271.2 Calvert US Large Cap Core Responsible $2,191.5 ESG Impact US Equity Fund $41.0 Index Fund Boston Trust Walden Calvert US Large Cap Growth Responsible $105.9 Walden Equity Fund $248.0 Index Fund Walden Midcap Fund $62.0 Calvert US Large-Cap Value Responsible $519.7 Index Walden International Equity Fund $57.0 Calvert Unconstrained Bond Fund $200.8 Walden SMID Cap Fund $62.0 Candriam Boston Trust Walden Small Cap Fund $363.0 Mainstay Candriam Emerging Market Walden Balanced Fund $158.0 $140.0 Debt Fund Bridgeway Capital Management Mainstay Candriam Emerging Market $49.0 Bridgeway Aggressive Investors 1 Fund $175.0 Equity Fund Bridgeway Omni Small-Cap Value Fund $1,039.0 MS VP Emerging Markets Equity Fund $273.0 Bridgeway Small Cap Growth Fund $36.0 Capital Group Bridgeway Small Cap Value Fund $44.0 American Mutual Fund $59,892.1 Bridgeway Ultra Small Company Fund $69.0 Washington Mutual Investors Fund $117,095.5 Bridgeway Ultra Small Company Market Fund $217.0 American Funds College Target Date Series $10,410.5 Managed Volatility Fund $30.0 American Funds Portfolio Series $41,959.4 Omni Tax-Managed Small-Cap Value Fund $1,039.0 American Funds Target Date Retirement $141,682.2 Series Bridgeway Blue-Chip $558.0 Individual Mutual Funds Retirement Income Portfolio series $2,894.6

100 Appendix 2: Mutual and Exchange-Traded Funds Incorporating ESG Criteria ClearBridge Investments Dodge & Cox International Stock Fund $50,200.0 ClearBridge Sustainability Leaders Strategy $483.8 Dodge & Cox Stock Fund $74,600.0 Coho Partners Domini Impact Investments LLC Coho Relative Value ESG Fund $3.5 Domini Impact Bond Fund $160.7 Columbia Threadneedle Investments Domini Impact Equity Fund $807.5 US Social Bond Fund $57.5 Domini Impact International Equity Fund $1,198.0 Community Capital Management, Inc. DWS Investment Management Americas, Inc. CCM Alternative Income Fund $58.0 DWS ESG Core Equity Fund $203.0 CRA Qualified Investment Fund $2,310.0 DWS ESG Global Bond Fund $54.2 Quaker Impact Growth Fund $64.0 DWS ESG International Core Equity Fund $23.7 Quaker Small/Mid-Cap Impact Value Fund $29.0 DWS ESG Liquidity Fund $412.8 Cornerstone Capital Group Earth Equity Advisors Cornerstone Capital Access Impact Fund $7.0 Mutual Fund Portfolios $70.0 Crossmark Global Investments Essex Investment Management Company, LLC Crossmark Steward Global Equity Income Essex Environmental Opportunities Fund $12.1 $348.3 Fund Eventide Asset Management Crossmark Steward International Enhanced $156.6 Eventide Gilead Fund $2,610.0 Index Fund Eventide Healthcare & Life Sciences Fund $1,300.0 Crossmark Steward Large Cap Enhanced $448.9 Index Fund Eventide Multi-Asset Income Fund $128.0 Crossmark Steward Select Bond Fund $162.2 Eventide Dividend Opportunities Fund $25.0 Crossmark Steward Small Mid-Cap Eventide Limited-Term Bond Fund $51.4 $230.8 Enhanced Index Fund Fidelity Management & Research Company Crossmark Steward Covered Call Income Fidelity Select Environmental and Alternative $31.8 $191.5 Fund Energy Portfolio Dana Funds Fidelity International Sustainability $88.9 Dana Epiphany ESG Equity Fund $10.7 Index Fund Dimensional Fund Advisors Fidelity US Sustainability Index Fund $263.9 DFA Emerging Markets Social Core Equity Fidelity Sustainability Bond Index Fund $106.9 $1,572.0 Portfolio Fidelity Women’s Leadership Fund $23.9 DFA International Sustainability Core 1 $1,547.0 Firsthand Capital Management Portfolio Firsthand Alternative Energy Fund $6.2 DFA US Social Core Equity 2 Portfolio $1,326.0 Franklin Templeton Investments DFA US Sustainability Core 1 Portfolio $2,330.0 Frankin Municipal Green Bond Fund $5.0 International Social Core Equity Portfolio $1,271.0 Fred Alger Management, Inc. DFA Social Fixed Income $316.0 Alger Responsible Investing Fund $67.9 DFA Global Sustainability Fixed Income $367.0 Portfolio Friends Fiduciary Corporation Emerging Markets Sustainable Core Equity Short-Term Investment Fund $19.4 $326.0 Portfolio Quaker Green Fund $29.9 Global Social Core Equity Portfolio $64.0 Quaker Index Fund $97.5 Dodge & Cox Frontier Partners Dodge & Cox Balanced Fund $15,700.0 Frontier MFG Global Sustainable Fund’ $10.9 Dodge & Cox Global Bond Fund $434.6 GAMCO Investors, Inc. (Gabelli Asset Dodge & Cox Global Stock Fund $10,300.0 Management Company) Dodge & Cox Income Fund $63,500.0 Gabelli ESG Fund $42.0

Report on US Sustainable and Impact Investing Trends 2020 101 Glenmede Investment Management Hartford Global Impact Fund $106.0 Glenmede Women in Leadership $23.1 Hartford Schroders Emerging Markets $3,900.0 Equity Fund Glenmede Responsible ESG US Equity $25.4 Hartford Schroders International Stock Fund $465.0 GMO (Grantham, Mayo, Van Otterloo & Co) Hartford Climate Opportunities Fund $41.0 GMO Climate Change Fund $123.0 Highland Capital Management Gotham Asset Management Highland Socially Responsible Equity Fund $82.8 Gotham Enhanced 500 Plus Fund $1.1 HSBC Global Asset Management Great-West Capital Management HSBC US Govt Money Market $18,825.6 Great-West Ariel Mid Cap Value Fund $186.5 HSBC US Treasury Money Market $2,125.9 Green Alpha Advisors, LLC HSBC Strategic Income $30.3 Shelton Green Alpha Fund $70.0 HSBC US High Yield $33.6 Green Century Capital Management Impax Asset Management Green Century Balanced Fund $292.5 Pax Core Bond Fund $708.0 Green Century Equity Fund $330.2 Pax Ellevate Global Women’s The Green Century MSCI International $464.6 $77.2 Leadership Fund Index Fund Pax Global Environmental Markets Fund $967.3 GuideStone Capital Management, LLC Pax High Yield Bond Fund $374.4 Aggressive Allocation Fund $1,080.0 Pax Large Cap Fund $766.3 Balanced Allocation Fund $1,615.0 Pax MSCI EAFE ESG Leaders Index Fund $645.0 Conservative Allocation Fund $527.3 Pax Small Cap Fund $433.4 Defensive Market Strategies Fund $1,261.0 Pax ESG Beta® Dividend Fund $132.9 Emerging Markets Equity Fund $534.0 Pax ESG Beta® Quality Fund $240.5 Equity Index Fund $2,136.0 Pax Global Opportunities Fund $42.0 Extended-Duration Bond Fund $256.7 Pax Sustainable Allocation Fund $1,915.5 Global Bond Fund $609.0 Invesco PowerShares Capital Management Growth Allocation Fund $1,247.0 Invesco Summit Fund $2,602.4 Growth Equity Fund $1,698.0 Invesco Global Responsibility Equity Fund $9.3 International Equity Fund $1,314.1 John Hancock Investments Low-Duration Bond Fund $997.0 John Hancock ESG All Cap Core Fund $29.6 Medium-Duration Bond Fund $1,781.0 John Hancock ESG Core Bond Fund $62.0 Money Market Fund $1,303.0 John Hancock ESG International Equity Fund $63.2 MyDestination 2015 Fund $668.0 John Hancock ESG Large Cap Core Fund $69.2 MyDestination 2025 Fund $1,409.0 JP Morgan Asset Management MyDestination 2035 Fund $928.0 JPMorgan Intrepid Sustainable Equity Fund $31.5 MyDestination 2045 Fund $701.0 JPMorgan Municipal Income Fund $260.6 MyDestination 2055 Fund $220.0 Karner Blue Capital Small Cap Equity Fund $596.0 Karner Blue Animal Impact Fund $4.9 Value Equity Fund $1,215.0 KBI Global Investors International Equity Index $711.0 (fka Kleinwort Benson Investors) Global Real Estate Securities Fund $264.0 KBI Global Investors Aquarius Fund $55.9 Strategic Alternatives Fund $386.1 Knights of Columbus Asset Advisors Guinness Atkinson Asset Management, Inc. Catholic Investor Core Bond Fund $103.9 Guinness Atkinson Alternative Energy Fund $9.2 Catholic Investor International Equity Fund $90.4 Hartford Funds Management Company Catholic Investor Large Cap Growth Fund $83.1

102 Appendix 2: Mutual and Exchange-Traded Funds Incorporating ESG Criteria Catholic Investor Large Cap Value Fund $80.7 Morgan Stanley Institutional Corporate $139.6 Bond Portfolio Catholic Investor Limited Duration Fund $103.6 Morgan Stanley Institutional Counterpoint Catholic Investor Small Cap Equity Fund $86.5 $10.1 Global Luther King Capital Management Morgan Stanley Institutional Discovery $902.4 LKCM Aquinas Catholic Equity Fund $48.8 Portfolio Macroclimate Morgan Stanley Institutional Fund, Inc. $1,835.0 Dimensional International Sustainability Core International Opportunity $20.0 Equity Portfolio Morgan Stanley Institutional Global $142.7 Dimensional US Sustainability Core Advantage Portfolio $15.0 Equity Portfolio Morgan Stanley Institutional Global $2,130.4 Dimensional Emerging Markets $5.4 Franchise Portfolio Morgan Stanley Institutional Global DImensional Sustainable Fixed Income $5.4 $2.5 Permanence Portfolio Vert Sustainable Real Estate $5.4 Morgan Stanley Institutional Growth Portfolio $6,900.0 Matthews Asia Morgan Stanley Institutional High Yield $213.4 Matthews Asia ESG Fund $55.3 Portfolio Mesirow Financial Investment Management Morgan Stanley Institutional Short Duration $267.8 Mesirow Financial Small Cap Value Income Portfolio $8.2 Sustainability Fund Morgan Stanley Institutional Strategic $10.5 MFG Asset Management Income Portfolio MFG US Sustainable $95.2 Morgan Stanley US Core Portfolio $19.0 Miller/Howard Investments Nationwide Miller/Howard Income-Equity Fund $79.8 Nationwide Global Sustainable Equity Fund $54.8 Monteagle Funds Natixis Investment Managers Monteagle Select Value Fund $25.5 Mirova Global Green Bond Fund $36.8 Morgan Stanley Investment Management Mirova Global Sustainable Equity Fund $146.9 Morgan Stanley Institutional Fund, Inc. Asia Natixis Sustainable Future 2015 Fund $6.2 $137.4 Opportunity Portfolio Natixis Sustainable Future 2020 Fund $6.1 Morgan Stanley Institutional Fund, Inc. $55.1 Natixis Sustainable Future 2025 Fund $6.2 Emerging Markets Leaders Portfolio Natixis Sustainable Future 2030 Fund $6.7 Morgan Stanley Institutional Fund, Inc. $3,780.0 Global Opportunity Portfolio Natixis Sustainable Future 2035 Fund $5.6 Morgan Stanley Institutional Fund, Inc. Natixis Sustainable Future 2040 Fund $5.8 $2,298.6 International Advantage Portfolio Natixis Sustainable Future 2045 Fund $4.8 Morgan Stanley Emerging Markets Fixed Natixis Sustainable Future 2050 Fund $4.4 $61.6 Income Opportunities Portfolio Natixis Sustainable Future 2055 Fund $3.8 Morgan Stanley Emerging Markets Small $67.8 Natixis Sustainable Future 2060 Fund $3.2 Cap Portfolio Mirova International Sustainable Equity Fund $17.0 Morgan Stanley Frontier Markets Portfolio $137.0 Neuberger Berman Morgan Stanley Global Concentrated $21.6 Portfolio Mutual Funds - ESG Integration, Positive/ $13,420.0 Best-In-Class & Impact Investing Morgan Stanley Global Core Portfolio $11.8 New Alternatives Fund Morgan Stanley Global Fixed Income $895.2 Opportunities Fund New Alternatives Fund $234.0 Morgan Stanley Global Sustain Portfolio $29.5 Newton Investment Management (North America) Morgan Stanley Inception Portfolio $185.9 Sustainable US Equity $686.0 Morgan Stanley Insight Fund $2,200.0 Morgan Stanley Institutional Advantage $453.0 Portfolio

Report on US Sustainable and Impact Investing Trends 2020 103 Northern Trust Asset Management PGIM Fixed Income Global Sustainability Index Fund $813.9 Core Bond Fund $610.8 US Quality ESG $121.4 Corporate Bond Fund $30.6 Nuveen Absolute Return Bond Fund $2,369.5 T-C Social Choice Equity Fund $4,990.0 California Muni Income Fund $195.3 T-C Social Choice International Equity Fund $319.6 Emerging Markets Debt Local Currency Fund $72.4 T-C Social Choice Low Carbon Equity Fund $260.6 Floating Rate Income Fund $533.7 T-C Core Impact Bond Fund $4,681.9 Global Dynamic Bond Fund $75.2 TIAA-CREF Green Bond $31.4 Global Total Return Fund $2,651.2 TIAA-CREF Short Duration Impact Bond $28.6 Government Income Fund $447.5 Pacific Investment Management Co. (PIMCO) Government Money Market Fund $444.1 PIMCO Low Duration ESG Fund $293.4 High Yield Fund $9,763.4 PIMCO Total Return ESG Fund $1,400.0 International Bond Fund $35.2 PIMCO Climate Bond Fund $5.0 Muni High Income Fund $863.9 Parnassus Investments National Muni Fund $705.8 Parnassus Core Equity Fund $20,852.0 Securitized Credit Fund $27.0 Parnassus Endeavor Fund $3,842.0 Short Duration High Yield Income Fund $2,956.0 Parnassus Fixed-Income Fund $230.1 Short Duration Multi-Sector Bond Fund $1,637.4 Parnassus Mid-Cap Fund $5,074.8 Short Duration Muni Fund $151.8 Parnassus Mid Cap Growth Fund $986.2 Short-Term Corporate Bond Fund $9,868.8 Payden & Rygel Strategic Bond Fund $1,459.1 Payden Absolute Return Bond Fund $629.0 Total Return Bond Fund $49,928.0 Payden California Municipal Social Ultra Short Bond ETF $563.0 $60.8 Impact Fund PGIM Real Estate Payden Cash Reserves Money Market Fund $320.1 PGIM Global Real Estate Fund $1,717.3 Payden Core Bond Fund $933.6 PGIM Real Estate Income Fund $18.2 Payden Corporate Bond Fund $445.7 PGIM Select Real Estate Fund $28.3 Payden Emerging Markets Bond Fund $848.1 PGIM US Real Estate Fund $27.4 Payden Emerging Markets Corporate $37.2 Pictet Asset Management Bond Fund Absolute Return Fixed Income $221.2 Payden Emerging Markets Local Bond Fund $182.5 Emerging Local Currency Debt $133.6 Payden Equity Income Fund $2,600.0 Global Thematic Opportunity $371.1 Payden Floating Rate Fund $65.7 International Equity - EAFE $362.0 Payden Global Fixed Income Fund $147.5 Timber $221.2 Payden Global Low Duration Fund $87.6 Praxis Mutual Funds Payden Gnma Fund $126.2 Praxis Growth Index Fund $326.0 Payden High Income Fund $365.9 Praxis Intermediate Income Fund $587.0 Payden Low Duration Fund $850.9 Praxis International Index Fund $288.0 Payden Strategic Income Fund $134.3 Praxis Small Cap Fund $120.0 Payden US Government Fund $41.3 Praxis Value Index Fund $254.0 Pekin Hardy Strauss Inc Putnam Investments Appleseed Fund $97.0 Putnam Sustainable Future Fund $442.7 Putnam Sustainable Leaders Fund $4,958.2

104 Appendix 2: Mutual and Exchange-Traded Funds Incorporating ESG Criteria RBC Global Asset Management Screened World Equity Ex-US Fund $97.7 (Access Capital) Catholic Values Equity Fund $234.5 Access Capital Community Investment $573.0 Catholic Values Fixed Income Fund $163.9 Fund A Shelton Capital Management RBC BlueBay High Yield Bond Fund $59.0 Shelton Green Alpha Fund $70.0 RBC Emerging Markets Small Cap Equity $10.0 Fund California Tax-Free Income Fund $63.6 RBC Global Opportunities Fund $66.0 Sit Investment Associates, Inc. RBC Impact Bond $27.0 Sit ESG Growth Fund $6.8 RBC International Opportunities Fund $93.0 SKBA Capital Management, LLC RBC Emerging Markets Equity Fund $1,506.0 Baywood Socially Responsible Fund $3.1 RBC Emerging Markets Value Equity Fund $5.0 State Street Global Advisors (SSGA) Redwood Investments State Street ESG Liquid Reserves Fund - $683.0 Small Cap Growth $645.0 Premier Class Reynders, McVeigh Capital Management SunAmerica Asset Management Reynders, McVeigh Core Equity $25.0 AIG ESG Dividend Fund $27.6 Riverbridge Partners LLC T. Rowe Price Riverbridge Eco Leaders Fund $6.8 Mutual Funds $682,700.0 Rosenberg Equities Investment Management TCW 1290 SmartBeta Equity Fund $32.4 TCW Developing Markets Equity Fund $5.7 Russell Investments TCW New America Premier Equities Fund $202.3 Russell Investments Sustainable Equity Fund $269.2 Thornburg Investment Management Saturna Capital Better World International Fund $77.2 Saturna Sustainable Bond Fund $28.1 Timothy Partners, Ltd. Saturna Sustainable Equity Fund $8.8 Timothy Plan Aggressive Growth Fund $24.4 Amana Developing World Fund $33.7 Timothy Plan Conservative Growth Fund $46.8 Amana Growth Fund $2,173.6 Timothy Plan Defensive Strategies Fund $40.0 Amana Income Fund $1,371.2 Timothy Plan Fixed Income Fund $101.3 Schroders Timothy Plan High Yield Bond Fund $71.2 Emerging Market Equity Fund $3,900.0 Timothy Plan International Fund $86.3 Schroders International Stock Fund $465.0 Timothy Plan Large/Mid Cap Growth Fund $9.7 Schwartz Investment Counsel Timothy Plan Large/Mid Cap Value Fund $215.1 Ave Maria Catholic Bond Fund $394.9 Timothy Plan Small Cap Value Fund $149.4 Ave Maria Catholic Growth Fund $854.8 Timothy Plan Strategic Growth Fund $36.8 Ave Maria Catholic Rising Dividend Fund $953.1 Timothy Plan Growth & Income Blend $20.3 Ave Maria Catholic Values Fund $247.7 Timothy Plan Israel Common Values Fund $80.3 Ave Maria World Equity Fund $73.9 Tortoise Index Solutions, LLC Segall Bryant & Hamill Tortoise Energy Evolution Fund $18.9 Workplace Equality Fund $13.9 Touchstone Investments SEI Investments Management Touchstone Global ESG Equity Fund $737.0 Corporation (SIMC) Touchstone Impact Bond Fund $324.3 New Covenant Balanced Growth Fund $281.8 Touchstone International ESG Equity Fund $33.8 New Covenant Balanced Income Fund $76.3 Towle & Co New Covenant Growth Fund $430.0 Towle Deep Value Fund $93.4 New Covenant Income Fund $329.1

Report on US Sustainable and Impact Investing Trends 2020 105 Transformative Wealth Management, LLC Assets Eventide Gilead $1.0 Variable Annuities (in Millions) 1919 Investment Counsel, LLC Parnassus Core Equity $1.0 (part of Stifel Trust) Brown Advisory Sustainable Growth $1.0 1919 Variable Socially Responsive $37.1 Calvert Emerging Markets Equity $1.0 Balanced Fund Calvert Small Cap $0.5 Amundi Pioneer Asset Management (fka CRA Fixed Income $0.5 Pioneer Investment Management Inc.) DFA Global Sustainable Fixed Income $3.0 Pioneer Equity Income VCT Portfolio $128.5 DFA International Sustainable Core Equity $2.0 Pioneer Fund VCT Portfolio $113.5 DFA US Sustainable Equity $3.0 AXA Equitable Funds Management Group (subsidiary of AXA Equitable Life Insurance Green Century Balanced $1.0 Company) Pax Global Opportunities $0.5 1290 VT Socially Responsible Portfolio $2.9 Portfolio 21 $0.5 Calvert Research and Management Triboro Investment Management, LLC Calvert VP SRI Balanced Portfolio $367.3 Triboro Socially Responsible $1.5 Calvert VP SRI Mid Cap Portfolio $36.0 Trillium Asset Management Macquarie Investment Management Global Equity $606.8 (formerly Lincoln National) (Sub-Advisor = Delaware Investments) UBS Asset Management LVIP Delaware Social Awareness Fund $732.7 UBS International Sustainable Equity Fund $218.2 Nationwide UBS US Sustainable Equity Fund $34.4 NB NVIT SOC RESP-I $119.0 UBS Engage For Impact Fund $23.0 Nuveen Vanguard CREF Social Choice Account $15,154.8 Vanguard FTSE Social Index Fund $7,500.0 T-C Life Social Choice Equity Fund $71.0 Vanguard Global ESG Select Stock Fund $107.5 Rosenberg Equities Investment Management Vert Asset Management 1290 VT Socially Responsible Portfolio $2.9 Vert Global Sustainable Real Estate Fund $41.2 Timothy Partners, Ltd. Viking Fund Management, LLC Timothy Plan Conservative Growth Variable $13.6 Integrity Growth & Income Fund $35.4 Timothy Plan Strategic Growth Variable $17.1 Wells Fargo Asset Management Variable Annuity Life Insurance Co (VALIC) Equity Funds $62,540.2 VALIC Company I Global Social Fixed income funds $330,942.4 $327.0 Awareness Fund Westfield Capital Management Company VALIC Company II Socially Responsible Fund $682.4 Sustainable Growth Equity strategy $45.0 Zeo Capital Advisors Zeo Capital Advisors $10.0

106 Appendix 2: Mutual and Exchange-Traded Funds Incorporating ESG Criteria Assets Etho Capital ETFs (in Millions) Etho Climate Leadership US ETF $76.7 Alpha Architect First Trust Advisors Freedom 100 Emerging Markets ETF $19.2 First Trust NASDAQ Clean Edge Green $144.5 ALPS Advisors Energy Index Fund ALPS Clean Energy ETF $133.5 First Trust NASDAQ Clean Edge Smart Grid $27.2 Infrastructure Index Fund Barclays Capital First Trust Global Wind Energy ETF $75.5 Barclays Women in Leadership ETN $40.9 First Trust Water ETF $536.2 Beyond Investing Global X Management Company US Vegan Climate ETF $17.3 Global X Conscious Companies ETF $199.4 BlackRock Global X S&P 500 Catholic Values ETF $264.8 iShares Global Clean Energy ETF $431.4 Impact Shares iShares MSCI KLD 400 Social Index Fund $1,845.2 Ticker: NACP $2.9 iShares MSCI ACWI Low Carbon Target $491.9 Impact Shares Sustainable Development iShares ESG 1-5 Year USD Corporate $2.2 $163.7 Goals Global Equity ETF Bond ETF Impact Shares YWCA Women’s iShares ESG USD Corporate Bond ETF $89.7 $6.9 Empowerment ETF iShares MSCI EAFE ESG Optimized ETF $1,490.9 Impax Asset Management iShares MSCI EM ESG Optimized ETF $880.6 Global Women’s Leadership ETF $18.0 iShares MSCI Global Impact ETF $75.0 Inspire (CWM Advisors) iShares MSCI USA ESG Optimized ETF $1,490.9 Inspire 100 ETF $97.5 iShares MSCI USA ESG Select ETF $1,193.7 Inspire Corporate Bond Impact ETF $118.1 iShares ESG MSCI USA Leaders ETF $1,836.8 Inspire Global Hope ETF $167.1 iShares ESG MSCI USA Small-Cap ETF $112.6 Inspire Small/Mid Cap Impact ETF $89.1 iShares ESG US Aggregate Bond ETF $155.3 Inspire International ESG ETF $12.5 iShares Global Green Bond ETF $42.8 Invesco PowerShares Capital Management iShares Self-Driving EV and Tech ETF $30.1 PowerShares Cleantech Portfolio $242.8 Candriam PowerShares Global Clean Energy Portfolio $63.0 IQ Candriam ESG US Equity ETF $15.3 PowerShares Global Water Portfolio $208.2 Change Finance PowerShares Water Resources Portfolio $1,200.0 Change Finance US Large Cap Fossil Fuel $12.7 PowerShares WilderHill Clean Energy Free ETF $284.9 Portfolio Columbia Threadneedle Investments Invesco ESG Revenue ETF $26.4 Columbia Sustainable Global Equity $16.2 Invesco Global ESG Revenue Fund $26.4 Income ETF Invesco Solar ETF $514.9 Columbia Sustainable International Equity $5.2 Income ETF Janus Henderson Investors (fka Janus Capital Management) Columbia Sustainable US Equity Income ETF $4.3 The Organics ETF $5.4 DWS Investment Management Americas, Inc. The Long-Term Care ETF $18.2 MSCI ACWI ex USA ESG Leaders Equity ETF $7.6 The Obesity ETF $10.2 Xtrackers MSCI EAFE ESG Leaders $9.6 Equity ETF Krane Funds Advisors Xtrackers MSCI Emerging Markets ESG KraneShares MSCI China Environment ETF $2.0 $7.5 Leaders Equity ETF Legg Mason Partners Fund Advisor Xtrackers MSCI USA ESG Leaders Equity ETF $1,664.0 Clearbridge Dividend Strategy ESG ETF $9.0 Xtrackers S&P 500 ESG ETF $120.7 Clearbridge Large Cap Growth ESG ETF $102.1

Report on US Sustainable and Impact Investing Trends 2020 107 Nationwide Timothy Partners, Ltd. Nationwide Maximum Diversification US Core Timothy Plan High Dividend Stock ETF $99.4 $114.3 Equity ETF Timothy Plan International ETF $25.6 Nationwide Maximum Diversification $16.5 Timothy Plan US Large Cap Core ETF $140.1 Emerging Markets Core Equity ETF US Small Cap Core ETF $23.0 Northern Trust Asset Management Tortoise Index Solutions, LLC FlexShares STOXX Global ESG Impact $96.9 Index Fund Tortoise Global Water ESG Fund $15.6 FlexShares STOXX US ESG Impact Van Eck Associates Corporation $63.4 Index Fund (subsidiary of Van Eck Global) Nuveen VanEck Vectors Environmental Services ETF $37.9 VanEck Vectors Global Alternative ESG Emerging Markets Equity ETF $62.3 $110.5 Energy ETF ESG International Developed Markets $53.8 Equity ETF VanEck Vectors Green Bond ETF $26.7 ESG Large-Cap Growth ETF $126.3 Vanguard ESG Large-Cap Value ETF $129.5 Vanguard ESG International Stock ETF $699.3 ESG Mid-Cap Growth ETF $59.9 Vanguard ESG US Stock ETF $1,000.0 ESG Mid-Cap Value ETF $51.3 ESG Small-Cap ETF $53.8 ESG US Aggregate Bond ETF $79.1 Nuveen ESG High Yield Corporate Bond ETF $52.9 Nuveen ESG Large-Cap ETF $14.8 Pacer Advisors Pacer Military Times Bes ETF $1.4 Pacific Investment Management Co. (PIMCO) PIMCO Enhanced Short Maturity Active $17.0 ESG ETF PIMCO RAFI ESG US ETF $13.0 PGIM Fixed Income Active High Yield Bond ETF $27.6 ProShares ProShares S&P 500 ex-Energy ETF $14.3 Sage Advisory Services Sage ESG Intermediate Credit ETF $19.0 State Street Global Advisors (SSGA) SPDR Emerging Markets Fossil Fuel $28.0 Reserves Free SPDR MSCI EAFE Fossil Fuel Reserves Free $93.9 SPDR MSCI Low Carbon Target $59.4 SPDR S&P 500 Fossil Fuel Free $494.0 SPDR SSGA Gender Diversity Index $118.9 SPDR S&P Kensho Clean Power ETF $39.0 Strategy Shares EcoLogical Strategy ETF $53.3

108 Appendix 2: Mutual and Exchange-Traded Funds Incorporating ESG Criteria Appendix 3 Community Investing Institutions

Community Development Banks Commonwealth National Bank Community Bank of the Bay American Plus Bank, N.A. Community Commerce Bank Amory Federal Savings and Loan Association Concordia Bank and Trust Co. Bank 2 Copiah Bank Bank of Anguilla Cross Keys Bank Bank of Brookhaven Delta Bank Bank of Cherokee County, Inc. Farmers and Merchants Bank Bank of Commerce Farmers-Merchants Bank & Trust Company Bank of Franklin FBT Bank & Mortgage (Fordyce Bank & Trust Company) Bank of Kilmichael First American National Bank Bank of Lake Village First Bank of Linden Bank of Okolona First Choice Bank Bank of St Francisville First Eagle Bank Bank of Winona First General Bank Bank of Zachary First Independence Bank BankFirst Financial Services First National Bank and Trust BankPlus First Security Bank Bay Bank First Southwest Bank Beneficial State Bank First State Bank BNA Bank FNB Oxford Bank BOM Bank FNBC Bank Broadway Federal Bank Franklin State Bank & Trust Company Caldwell Bank & Trust Co. Friend Bank Carver Federal Savings Bank GN Bank Carver State Bank Golden Bank, NA Catahoula LaSalle Bank Great Southern Bank Central Bank of Kansas City Guaranty Bank & Trust Century Bank of the Ozarks Guaranty Bank and Trust Company of Delhi Citizens Bank Harbor Bank of Maryland Citizens Bank & Trust Company Holmes County Bank and Trust Company Citizens Bank of Weir Homeland Federal Savings Bank Citizens National Bank of Meridian Industrial Bank Citizens Progressive Bank INSOUTH Bank Citizens Savings Bank and Trust Company International Bank of Chicago Citizens Trust Bank Legacy Bank & Trust Company City First Bank of DC, NA Liberty Bank and Trust Company City National Bank of New Jersey Magnolia State Bank Colfax Banking Company Mechanics and Farmers Bank Columbia Savings and Loan Association Mechanics Bank Commercial Bank, Kemper County, DeKalb Mississippi Merchants & Farmers Bank of Greene County Commercial Capital Bank Merchants & Farmers Bank of Holly Springs, MIssissippi

Report on US Sustainable and Impact Investing Trends 2020 109 Merchants & Marine Bank West Alabama Bank & Trust Merchants & Planters Bank Winnsboro State Bank & Trust Co. Metro Bank Mission National Bank Mission Valley Bank Community Development Credit Unions Mitchell Bank Native American Bank, NA 1199 SEIU Federal Credit Union Neighborhood National Bank 121 Financial Federal Credit Union New Haven Bank 1st Bergen Federal Credit Union Noah Bank 1st Choice Credit Union OneUnited Bank 1st Financial Federal Credit Union Optus Bank Abyssinian Baptist Church Federal Credit Union Oxford University Bank Advia Federal Credit Union Pacific Global Bank Afena Pan American Bank & Trust Alive Credit Union Partners Bank All Souls Federal Credit Union Peoples Bank Allegan Community Federal Credit Union Pike National Bank Allegiance Credit Union Planters Bank & Trust Company Alliance Credit Union Ponce Bank Alpena Community Credit Union PriorityOne Bank Alternatives Federal Credit Union Progressive National Bank Altra Federal Credit Union Pulaski Savings Bank ANECA Federal Credit Union Quontic Bank Appalachian Community Federal Credit Union Richton Bank and Trust Company Arbuckle RiverHills Bank Ascension Credit Union Robertson Banking Company Ascentra Credit Union Royal Business Bank Assemblies Of God Credit Union Savoy Bank Associated Credit Union of Texas Security Bank and Trust Company Astera Credit Union Security Federal Bank Atchison Village Credit Union Security State Bank of Oklahoma Athol Credit Union South Georgia Banking Company Awakon Federal Credit Union Southern Bancorp Bank BOND Community Federal Credit Union Southern Independent Bank Banco Cooperativo de Puerto Rico Spring Bank Bay Federal Credit Union St Landry Homestead Federal Savings Bank Bayport Credit Union State Bank & Trust Company Blackhawk Community Credit Union Sunrise Banks, NA Border Federal Credit Union Sycamore Bank Brewery Credit Union Tensas State Bank Brightstar Federal Credit Union Texas National Bank Brookland Federal Credit Union The Bank of Vernon Brooklyn Cooperative Federal Credit Union The Cleveland State Bank Buckeye State Credit Union The Cottonport Bank Buffalo Cooperative Federal Credit Union The First, A National Banking Association Calcoe Federal Credit Union The Jefferson Bank Campco Federal Credit Union The Samson Banking Company Canopy Credit Union Tri-State Bank of Memphis Caribe Federal Credit Union Union Bank & Trust Company Carolina Foothills Federal Credit Union United Bank Carter Federal Credit Union United Bank of Philadelphia CASE Credit Union United Mississippi Bank Cencap Federal Credit Union VCC Bank Central Willamette Community

110 Appendix 3: Community Investing Institutions Centric Federal Credit Union Cooperativa de Ahorro y Credito de Mayaguez Chadron Federal Credit Union Cooperativa De Ahorro y Crédito de Moca Chicago Municipal Employees Federal Credit Union Cooperativa de Ahorro y Crédito de Oficiales de Credit Chippewa County Unionstodia de Puerto Rico Choctaw Federal Credit Union Cooperativa de Ahorro y Crédito de Rico Dairy Church of the Master Federal Credit Union Cooperativa de Ahorro y Crédito de Rincón Citizens Choice Federal Credit Union Cooperativa de Ahorro y Crédito de Salinas City Center Credit Union Cooperativa de Ahorro y Crédito de Santa Isabel Civic Federal Credit Union Cooperativa de Ahorro y Crédito de Yauco Clean Energy Federal Credit Union Cooperativa de Ahorro y Crédito del Colegio de Clearwater Credit Union Ingenieros y Agrimensores de Puerto Rico Clinchfield Cooperativa de Ahorro y Crédito del Sindicato Coastal Community Federal Credit Union Puertorriqueño de Trabajadores Coastal Federal Credit Union Cooperativa de Ahorro y Crédito Dr. Manuel Zeno Gandía Cobblestone Country Federal Credit Union Cooperativa de Ahorro y Crédito Familiar Progresista Columbine Federal Credit Union Cooperativa de Ahorro y Crédito Hatillo Commodore Perry Federal Credit Union Cooperativa de Ahorro y Crédito Hermanos Unidos Community 1st Credit Union Cooperativa de Ahorro y Crédito IslaCoop Community Choice Credit Union Cooperativa de Ahorro y Crédito Jesús Obrero Community Credit Union Cooperativa de Ahorro y Crédito La Comerieña Community Credit Union of Florida Cooperativa de Ahorro y Crédito La Sagrada Familia Community First Credit Union Cooperativa de Ahorro y Credito Las Piedras Community First Guam Federal Credit Union Cooperativa de Ahorro y Crédito Lomas Verdes Community Plus Federal Credit Union Cooperativa de Ahorro y Crédito Municipales Guaynabo Community Promise Federal Credit Union Cooperativa de Ahorro y Crédito Naguabeña Community South Credit Union Cooperativa de Ahorro y Crédito Oriental Concord Federal Credit Union Cooperativa de Ahorro y Crédito Padre Macdonald Consolidated Federal Credit Union Cooperativa de Ahorro y Crédito Pepiniana Cooperativa de Ahorro y Crédito Aguas Buenas Cooperativa de Ahorro y Crédito Rodríguez Hidalgo Cooperativa de Ahorro y Crédito Aiboniteña Cooperativa de Ahorro y Crédito Roosevelt Roads Cooperativa de Ahorro y Crédito Barrio Quebrada de Cooperativa de Ahorro y Crédito San José Camuy Cooperativa de Ahorro y Crédito Saulo D. Rodríguez Cooperativa de Ahorro y Crédito Caribe Coop Cooperativa de Ahorro y Crédito TUCOOP Cooperativa de Ahorro y Crédito Cidreña Cooperativa de Ahorro y Crédito Vega Alta Cooperativa de Ahorro y Crédito Credit Unionpey Alto Cooperativa de Ahorro y Crédito Vegabajeña Cooperativa de Ahorro y Crédito de Adjuntas Cooperative Center Federal Credit Union Cooperativa de Ahorro y Crédito de Arecibo Cooperative Federal Cooperativa de Ahorro y Crédito de Barranquitas Core Credit Union Cooperativa de Ahorro y Crédito de Cabo Rojo Corpus Christi SP Credit Union Cooperativa de Ahorro y Crédito de Camuy Cosmopolitan Federal Credit Union Cooperativa de Ahorro y Crédito de Florida CoVantage Credit Union Cooperativa de Ahorro y Crédito de Jayuya Credit Union of Atlanta Cooperativa de Ahorro y Crédito de Juana Díaz Credit Union One Federal Credit Union Cooperativa de Ahorro y Crédito de la Asociación de Credit Uniontting Edge Federal Credit Union Maestros de Puerto Rico Dade County Federal Credit Union Cooperativa de Ahorro y Crédito de la Federación de Day Air Federal Credit Union Maestros de Puerto Rico DC Credit Union Cooperativa de Ahorro y Crédito de la Universidad de Deer Valley Federal Credit Union Puerto Rico Democracy Federal Credit Union Cooperativa de Ahorro y Crédito de Lajas Demopolis Federal Credit Union Cooperativa de Ahorro y Crédito de Lares y Región Diamond Lakes Federal Credit Union Central Dupaco Community Cooperativa de Ahorro y Crédito de Manati DuPont Community Credit Union Cooperativa de Ahorro y Crédito de Maunabo Eagle One Federal Credit Union

Report on US Sustainable and Impact Investing Trends 2020 111 East Baton Rouge Teachers Federal Credit Union Greater Cleveland Community Credit Union East End Baptist Tabernacle Federal Credit Union Greater Kinston Credit Union East End Food Co-Op Federal Credit Union Greater New Orleans Federal Credit Union El Paso Area Teachers Federal Credit Union GreenState Credit Union ELGA Credit Union Greylock Federal Credit Union Embark Federal Credit Union GTE Federal Credit Union Empire Financial Federal Credit Union Guadalupe Centers Federal Credit Union Empower Federal Credit Union Guadalupe Credit Union Empowerment CD Federal Credit Union Guardians Credit Union Engage Federal Credit Union Gulf Coast Community Entertainment Industries Federal Credit Union Harborstone Credit Union Envision Hawaii Central Federal Credit Union Episcopal Community Federal Credit Union Hawaii Federal Credit Union EquiShare Credit Union Hawaii First Federal Credit Union Essential Federal Credit Union Heritage Financial Federal Credit Union Everence Federal Credit Union Hill District Federal Credit Union Everyone’s Federal Credit Union Holy Rosary Credit Union Express Credit Union Hope Credit Union Fairwinds Federal Credit Union HopeSouth Federal Credit Union Faith Community United Credit Union Horizon Credit Union Faith Cooperative Federal Credit Union Horizon Federal Credit Union Federation of Greene County Employees Federal Credit Houston Metropolitan Federal Credit Union Union Icon Federal Credit Union Ferguson Federal Credit Union IH Mississippi Valley Credit Union FIDECOOP Illiana Financial Credit Union Fidelis Federal Credit Union Industrial Credit Union of Whatcom County Financial Partners Federal Credit Union Innovations Federal Credit Union First American Credit Union Interstate Unlimited First Central Credit Union Ironworkers USA Federal Credit Union First Family Israel Methcomm Federal Credit Union First Financial Credit Union Jefferson Financial Federal Credit Union First Imperial Credit Union JetStream Federal Credit Union First Unity Federal Credit Union Katahdin Federal Credit Union FirstLight Federal Credit Union Kauai Government Employees Federal Credit Union Five Star Credit Union Kerr County Federal Credit Union Florida A&M University Federal Credit Union Kinecta Federal Credit Union Florida Credit Union LAFederal Credit Union Florida State University Federal Credit Union Lake Huron Federal Credit Union Fort Financial Federal Credit Union Lake Trust Credit Union Fox Valley Credit Union Lakota Federal Credit Union Frankenmuth Credit Union Lanai Federal Credit Union Franklin First Federal Credit Union Latah Federal Credit Union Freedom Credit Union Latino Community Credit Union Freedom First Federal Credit Union Leaders Credit Union Freedom Northwest Federal Credit Union Legacy Financial Federal Credit Union GECredit Union of El Paso Lewis Clark Credit Union Genesee Co-op Federal Credit Union Lexington Avenue Federal Credit Union Gesa Credit Union Light Commerce Credit Union Glamour Community Federal Credit Union Lighthouse Community Credit Union Goldenwest Federal Credit Union Local Government Federal Credit Union Government Printing Office Federal Credit Union Louisiana Federal Credit Union Grasslands Federal Credit Union Lower East Side People’s Federal Credit Union Great Lakes Credit Union Lower Valley Credit Union Greater Centennial Federal Credit Union Magnolia Federal Credit Union

112 Appendix 3: Community Investing Institutions Manatee Community Federal Credit Union Nuvista Federal Credit Union Maple Federal Credit Union Omni Community Credit Union MariSol Federal Credit Union One Detroit Credit Union Maroon Financial Credit Union One Source Federal Credit Union Mazuma Federal Credit Union OnPath Federal Credit Union MECredit Union of Baltimore Ontario Montclair Schools Federal Credit Union Members Credit Union Opportunities Credit Union Members Exchange Orion Members First Community Credit Union Orlando Federal Credit Union Members First Credit Union Oswego County Meritus Credit Union Ouachita Valley Metropolitan Teachers Our Mother Of Mercy Federal Credit Union Miami Postal Service Federal Credit Union Panhandle Educators Michigan First Federal Credit Union Park Community Credit Union Michigan State University Federal Credit Union Park Manor Christian Church Credit Union Mid Minnesota Federal Credit Union Partners Federal Credit Union Mid Oregon Federal Credit Union Pasadena Service Federal Credit Union Molokai Community Federal Credit Union Paul Quinn Federal Credit Union Mount Airy Baptist Church Federal Credit Union Peach State Federal Credit Union Mount Lebanon Federal Credit Union Pelican State Credit Union Mount Vernon NY Postal Employees Federal Credit Peninsula Community Federal Credit Union Union Peoples Advantage Federal Credit Union Mountain Star Federal Credit Union Phenix Pride Federal Credit Union Mt. Zion Indianapolis Federal Credit Union Pheple Federal Credit Union Multipli Credit Union Pine Bluff Cotton Belt Muskegon Co-op Federal Credit Union Point West Credit Union NAS JRB Credit Union Premier America Credit Union Natco Credit Union Premier Federal Credit Union Nebraska Rural Community Federal Credit Union Prime Financial Credit Union Neighborhood Trust Federal Credit Union Primera Cooperativa de Ahorro y Crédito de Puerto Rico Neighbors Federal Credit Union Priority Credit Union New Community Federal Credit Union Profinance Federal Credit Union New Covenant Dominion Federal Credit Union Public Service Credit Union New Horizon Federal Credit Union Puerto Rico Federal Credit Union New Life Credit Union Pyramid Federal Credit Union New Orleans Firemen’s Federal Credit Union Ravalli County New Pilgrim Federal Credit Union Regional Federal Credit Union New York University Federal Credit Union Resource One Federal Credit Union Newrizons Federal Credit Union REV Federal Credit Union NextMark Federal Credit Union Rio Grande Credit Union Norstate Federal Credit Union Rio Grande Valley Credit Union North Coast Credit Union River City Federal Credit Union North Jersey Federal Credit Union River Region Credit Union Northeast Community Credit Union Rocket Federal Credit Union Northeast Community Federal Credit Union Royal Credit Union Northern New Mexico School Employees Federal Credit RVA Financial Federal Credit Union Union San Mateo Credit Union NorthPark Community Federal Credit Union San Rafael Cooperativa Notre Dame Federal Credit Union Santa Ana Federal Credit Union Nova Credit Union Santa Cruz Community Credit Union NRS Community Development Federal Credit Union SCE Federal Credit Union Nueva Esperanza Community Credit Union Seattle Credit Union Nusenda Federal Credit Union SeCredit Unionrity Credit Union Nutmeg State Financial Federal Credit Union Seguros Multiples

Report on US Sustainable and Impact Investing Trends 2020 113 SELCO Community Credit Union Tucoemas Federal Credit Union Select Federal Credit Union Tucson Old Pueblo Credit Union Select Seven Credit Union UBC Credit Union Self-Help Credit Union UBC Southern Council of Industrial Workers Federal Self-Help Federal Credit Union Credit Union Sentinel Federal Credit Union Unified Homeowners Of Illinois Federal Credit Union Simplicity Credit Union Union Baptist Church Federal Credit Union Siskiyou Central Credit Union Union Baptist Greenburgh Federal Credit Union Sisseton-Wahpeton Federal Credit Union United Consumers Federal Credit Union SIU Credit Union United Federal Credit Union Skypoint Federal Credit Union University Federal Credit Union Smart Choice Credit Union University of Louisiana Federal Credit Union Softite Community Federal Credit Union University Of Michigan Federal Credit Union South Side Community Federal Credit Union University Settlement Federal Credit Union Southern Chautauqua Federal Credit Union Uno Federal Credit Union Southern SeCredit Unionrity UP Federal Credit Union Southern Teachers & Parents Federal Credit Union Upstate Federal Credit Union Southwest 66 Credit Union Urban UpBound Federal Credit Union Southwest Louisiana US Community Credit Union St. Augustine Presbyterian Federal Credit Union USAlliance Federal Credit Union St. Louis Community Credit Union USC Credit Union St. Mark United Methodist Church Credit Union Vacationland St. Philips Federal Credit Union Vantage West St. Tammany Federal Credit Union Varick Memorial Federal Credit Union Star Of Texas Credit Union Veridian Credit Union State Employees Credit Union Vermont State Employees Credit Union Stepping Stones Community Federal Credit Union Vision Financial Federal Credit Union Straits Area Federal Credit Union Vocal Credit Union Strata Credit Union Vocality Community Credit Union Sunbelt Federal Credit Union WBRT Federal Credit Union Suncoast Credit Union Washington State Employees Federal Credit Union Tabernacle Federal Credit Union Wayne-Westland Tallahassee-Leon Federal Credit Union We Florida Financial Federal Credit Union Tampa Bay Federal Credit Union Wescom Central Federal Credit Union Teachers Credit Union Whatcom Educational Credit Union Team Financial Federal Credit Union White Earth Reservation Federal Credit Union Telhio Federal Credit Union Workers’ Credit Union Texas Bay Area YS Federal Credit Union Texas Community Federal Credit Union Zeal Federal Credit Union The Finest Federal Credit Union The United Federal Credit Union Tidemark Federal Credit Union Depository Institution Holding Tinker Federal Credit Union Companies Toledo Urban Federal Credit Union Tongass Federal Credit Union American Bancorp of Illinois Total Choice Bancorp Of Okolona Total Community Action Federal Credit Union Bancorp of Winona Trailhead BancPlus Corporation Transfiguration Parish Federal Credit Union BankFirst Capital Corporation Travis Credit Union Bay Bancorporation Trius Federal Credit Union Beneficial State Bancorp Trouvaille BSJ Bancshares True Sky Credit Union Caldwell Holding Company Trust Federal Credit Union

114 Appendix 3: Community Investing Institutions Capital Bancorp MNB Ventures Carver Financial Corporation Native American Bancorporation Catahoula Holding Company Neighborhood Bancorp Central Bancshares of Kansas City Ozarks Heritage Financial Group Central Louisiana Capital Corporation PDL Community Bancorp Century Bancshares Peoples Bancshares CFBanc Corporation PGB Holdings CheckSpring Community Corporation Planters Holding Company Chickasaw Banc Holding Company PriorityOne Capital Corporation Citizens Bancshares Corporation Pyramid Financial Corporation Citizens National Bancorp Quontic Bank Holdings Corp City National Bancshares Corporation RBB Bancorp Cleveland State Bancorp RBC CNB Bancorp Riverhills Capital Corporation Commerce Bancorp SCCB Financial Corporation Commercial Capital Corporation Security Bancshares Corporation Community Bancshares of Mississippi Security Capital Corporation Concordia Capital Corporation Security Federal Corporation Copiah Bancshares SNB Holdings Delhi Bancshares South Georgia Bank Holding Company FBT Bancshares Southeast Arkansas Bank Corporation First American Bancshares Southern Bancorp First City Fund Corporation Southern Independent Bankshares First Community Bancorp Southwest Security First Eagle Bancshares St. Francisville Bancshares First National Holding Company State Capital Corporation First SouthWest Bancorporation Tensas Bancshares First State Corporation The First Bancshares First Suncoast Trust Bancshares The Magnolia State Corporation First Union Financial Corporation United Bancorporation of Alabama First Vernon Bancshares University Financial Corporation FNBC Bancorp Virginia Community Capital Franklin Bancorp Winnsboro Bancshares Franklin Bancshares Zachary Bancshares Grant Bancshares Great Southern Capital Corporation Guaranty Capital Corporation Loan Funds Harbor Bankshares Corporation Haven Capital Corporation DOMESTIC COMMUNITY DEVELOPMENT Helena Bancshares LOAN FUNDS Holmes County Capital Corporation 3CORE Homeland Bancshares AAFE Community Development Fund IBC Bancorp Access to Capital for Entrepreneurs Independent Southern Bancshares ACCION East Kilmichael Bancorp ACCION San Diego Lafayette Bancorp ACCION/Chicago Liberty Financial Services Adirondack Economic Development Corporation Louisville Development Bancorp Affiliated Tribes of Northwest Indians Financial Services M&F Bancorp Affordable Homes of South Texas Merchants & Farmers Bancshares Affordable Housing Resources Merchants & Marine Bancorp Affordable Mortgage Solutions MIssion Valley Bancorp African Development Center Mitchell Bank Holding Corporation African Economic Development Solutions MNB Holding Corporation

Report on US Sustainable and Impact Investing Trends 2020 115 Alaska Benteh Capital Cape & Islands Community Development Alaska Growth Capital BIDCO Capital for Change Albany Community Together Capital Impact Partners Albina Opportunities Corporation Capital Plus Financial All Credit Considered Mortgage Carolina Community Impact AltCap Carolina Small Business Development Fund (The AmPac Tri-State CDC Support Center) ANDP Loan Fund Catalytic Development Funding Corp. of Northern AnewAmerica CDFI Kentucky Apoyo Financiero CDCLI Funding Corporation Appalachian Community Capital Corporation Center for Community Development for New Americans Appalachian Growth Capital Center for Financial Independence & Innovation Arcata Economic Development Corporation CEN-TEX Certified Development Corporation Arkansas Capital Corporation Century Housing Corporation ASSETS Lancaster Champions Funding Aura Mortgage Advisors Charleston LDC Baltimore Community Lending Charter Schools Development Corporation Bankers Small Business CDC of California Chattanooga Neighborhood Enterprise Beaufort County Black Chamber of Commerce Chautauqua Opportunities for Development Beech Capital Venture Corporation Chehalis Tribal Loan Fund Biddeford-Saco Area Economic Development Cherokee Nation Economic Development Trust Authority Corporation Chi Ishobak Bii Gii Wiin CDLF Chicago Community Loan Fund Black Business Investment Fund Chicago Neighborhood Initiatives Micro Finance Group Black Economic Development Coalition Children’s Investment Fund Black Hills Community Loan Fund Choctaw Home Finance Corporation BlueHub Loan Fund Cincinnati Development Fund Blueprint Investment Fund Cinnaire Lending Corporation BOC Capital Corporation Citizen Potawatomi Community Development Border Financial Resources Corporation Brattleboro Development Credit Corporation City First Enterprises Brazos Valley CDC City First Homes Bridge Impact Capital Clearinghouse Community Development Financial Bridge Investment Community Development Corporation Institution Bridgeway Capital Cleveland Development Advisors Community Brightbridge Reinvestment Fund Brightpoint Development Fund CMHP Mortgage Brooklyn Alliance Capital Coastal Enterprises Build Fund Colorado Enterprise Fund Build Wealth Colorado Housing Assistance Corporation Building Hope...A Charter School Facilities Fund Colorado Housing Enterprises Business Development Corp of SC Columbus Housing Initiative Business Ownership Initiative Commerce Home Mortgage Business Resource and Investment Service Center Common Capital Business Seed Capital Communities Unlimited Businesses Invest in Growth Community and Shelter Assistance Corporation Butte Local Development Corporation Community Assets for People CAHEC Capital Community Business Partnership California Capital Small Business Financial Development Community Capital New York Corporation Community Capital of Vermont California Coastal Rural Development Corporation Community Development and Affordable Housing Fund California Community Reinvestment Corporation Community Development Capital California FarmLink Community Development Financial Institution of the CAMBA Economic Development Corporation Tohono O’odham Nation

116 Appendix 3: Community Investing Institutions Community Development Fund of Utah Enterprise Development Fund of Erie County Community Development Resources Entrepreneur Works Fund Community Development Trust Evergreen Business Capital Community Finance Community Enterprise Development Services Federation of Appalachian Housing Enterprises Community First Fund Feed the Hunger Foundation Community First Lending Fig Loans Texas Community Fund of North Miami-Dade Finance Fund Capital Corporation Community Health Center Capital Fund FINANTA Community Housing Capital First American Capital Corporation Community Housing Fund First Childrens Finance Community Housing Services Agency First Nations Community Financial Community Investment Corporation First Nations Oweesta Corporation Community Investment Fund of Indiana Flagship Enterprise Capital Community LendingWorks Florida Community Loan Fund Community Loan Fund of New Jersey Forward Community Investments Community Loan Fund of the Capital Region Four Bands Community Fund Community Neighborhood Housing Services Four Directions Development Corporation Community Partnership Development Corporation Fresno Community Development Institution Community Preservation Corporation Frontier Housing Community Reinvestment Fund Gateway Community Development Fund Community Ventures Corporation Genesis Fund Community Vision Capital and Consulting Genesis LA Economic Growth Corporation CommunityWorks Georgia Cities Foundation CommunityWorks in West Virginia Grameen America CommunityWorks North Dakota Grand Rapids Opportunities for Women Cook Inlet Lending Center Great Falls Development Authority Cooperative Business Assistance Corporation Great Lakes Womens Business Council Cooperative Fund of New England Great Northern Development Corporation Core Tech Capital Great Rivers Community Capital Corporacion para el Financiamiento Empresarial del Greater Berks Development Fund Comercio y de las Comunidades (COFECC) Greater Cincinnati Microenterprise Initiative Corporation for Supportive Housing Greater Jamaica Local Development Company Council for Native Hawaiian Advancement Greater Metropolitan Housing Corporation Craft3 Greater Minnesota Housing Fund Credit Inc. Greater Newark Enterprises Corporation Cumberland Capital Partners Greater Rochester Housing Partnership Dakota Resources Greenline Community Development Fund Dayton Region New Market Fund Grow America Fund Delaware Community Investment Corporation (DCIC) Grow South Dakota Detroit Development Fund Growth Partners Arizona Detroit Rehabilitation Initiatives Habitat for Humanity NYC Fund Dorchester Bay Neighborhood Loan Fund Habitat for Humanity of Dane County DreamSpring Habitat for Humanity of Iowa Eastern Maine Development Corporation Habitat for Humanity of Minnesota EBSV Community Development Habitat for Humanity of Oregon ECDC Enterprise Development Group Harbor Bank of Maryland Community Development Economic and Community Development Institute (ECDI) Corporation Economic Development and Financing Corporation Harlem Entrepreneurial Fund Economic Opportunities Fund Hartford Community Loan Fund Edge Fund Hartford Economic Development Corporation El Paso Collaborative for Community and Economic Hawaii Community Lending Development Hawaii Habitat for Humanity Association Enterprise Center Capital Corporation HDC Community Fund Enterprise Community Loan Fund HFHI FlexCAP Lender

Report on US Sustainable and Impact Investing Trends 2020 117 HHOC Mortgage Lendistry Hmong American Partnership ECDC Leviticus 25:23 Alternative Fund Hmong Wisconsin Chamber of Commerce Life Asset Ho-Chunk Community Capital LiftFund Home Headquarters Local Enterprise Assistance Fund Homeownership Lending Local Initiatives Support Corporation Homes Are Possible Long Island Housing Partnership Community HomesFund (La Plata Homes Fund Development Financial Institution HomeSight Long Island Small Business Assistance Corporation Homewise Louisiana Community Development Capital Fund Hope Enterprise Corporation Louisville Housing Opportunities and Micro-Enterprise Hopi Credit Association Community Development Loan Fund Housing Assistance Council Low Income Investment Fund Housing Development Fund Lowell Community Loan Fund Housing Partnership Fund Lower Brule Community Development Enterprise Housing Trust Fund of Santa Barbara County Lummi Community Development Financial Institution Housing Trust Silicon Valley Main Street Launch Houston Business development MaineStream Finance Human/Economic Appalachian Development Corporation Maryland Capital Enterprises IFF Massachusetts Housing Investment Corporation Impact CIL Mazaska Owecaso Otipi Financial Impact Development Fund Mercy Community Capital Impact Loan Fund MetroAction Impact Seven Metropolitan Consortium of Community Developers Impacto Fund Metropolitan Economic Development Association Indian Land Capital Company MHIC Indianapolis Neighborhood Housing Partnership Miami Bayside Foundation Initiative Foundation Miami-Dade Affordable Housing Foundation Innovative Changes Michigan Community Capital Institute for Community Economics Micro Enterprise Services of Oregon International Institute CDC Midlands Housing Trust Fund Invest Detroit Foundation Midlands Latino Community Development Corporation Iowa Community Capital Midwest Housing Development Fund Ithaca Neighborhood Housing Services Midwest Minnesota Community Development JARI Growth Fund Corporation Just Community Milwaukee Economic Development Corporation Kalamazoo Neighborhood Housing Services Minnesota Chippewa Tribe Finance Corporation Karuk Community Loan Fund Mission Asset Fund Kentucky Habitat for Humanity Mission Community Loan Fund Knoxville Area Urban League Montana Community Development Corporation La Fuerza Unida Community Development Corporation Montana Homeownership Network Lafayette Neighborhood Housing Services Mountain Association for Community Economic Lake County Community Development Corp. Development Lake Superior Community Development Corp. Mountain BizCapital Lakeview Community Capital Mountain Housing Opportunities Loan Fund Lakota Fund Mvskoke Loan Fund Lancaster Housing Opportunity Partnership NACDC Financial Services Landmarks Community Capital Corporation National Asian American Coalition Latino Economic Development Center National Association for Latino Community Asset Latino Economic Development Corporation (LEDC) Builders Leech Lake Financial Services National Community Reinvestment Coalition Community Legacy Redevelopment Corporation Development Fund Lei Hoolaha National Council on Agricultural Life and Labor Research Lendify Financial Fund

118 Appendix 3: Community Investing Institutions National Federation of Community Development Credit Northeast South Dakota Economic Corporation Unions (NESDEC) National Housing Trust Community Development Fund Northern Community Investment Corporation National Minority Supplier Development Council Northern Great Lakes Initiatives Business Consortium Fund Northern Maine Development Commission Native American Development Corporation Northern Shores Community Development Native Capital Access Northland Foundation Native Community Finance Northside Community Development Fund Native Partnership for Housing Northwest Access Fund Native360 Loan Fund Northwest Minnesota Foundation Natural Capital Investment Fund Northwest Native Development Fund NDC Community Impact Loan Fund Northwest Side Community Development Corporation Nebraska Enterprise Fund NYBDC Local Development Corporation NeDA Centro de Finanzas Office of Rural and Farmworker Housing Neighborhood Development Center Ohio Capital Finance Corporation Neighborhood Economic Development Corporation Oklahoma Assistive Technology Foundation Neighborhood Finance Corporation Omaha 100 Neighborhood Housing Finance Opening Doors Neighborhood Housing Services of Baltimore Oportun Neighborhood Housing Services of Duluth Opportunity Finance Network Neighborhood Housing Services of Greater Berks Opportunity Fund Community Development Neighborhood Housing Services of Hamilton Opportunity Resource Fund Neighborhood Housing Services of New York City Oregon Trail Corporation Neighborhood Housing Services of Orange County Osage Financial Resources Neighborhood Housing Services of Richmond OTR Fund I LLC Neighborhood Housing Services of Rochester Our Microlending Neighborhood Housing Services of San Antonio PACE Finance Corporation Neighborhood Housing Services of South Florida Pacific Coast Regional Small Business Development Neighborhood Housing Services of the Inland Empire Corporation Neighborhood Housing Services of Toledo Pacific Community Ventures Neighborhood Housing Services of Waco Paragon Florida Neighborhood Lending Partners of Florida Partners for Self-Employment Neighborhood Lending Services Partners for the Common Good Neighborhood Partnership Housing Services PathStone Enterprise Center NeighborWorks Capital Pennsylvania Assistive Technology Foundation Network for Oregon Affordable Housing People Incorporated Financial Services New Bedford Economic Development Council People Trust New Entrepreneurs Opportunity Fund PeopleFund New Hampshire Community Loan Fund Peoples Opportunity Fund New Hope Community Capital Peoples Partners for Community Development New Mexico Community Development Loan Fund PIDC Community Capital New Roots Fund Piedmont Business Capital NEWCORP Piedmont Housing Alliance NewWest Community Capital Pocatello Neighborhood Housing Services NHS Lending Ponce Neighborhood Housing Services NiiJii Capital Partners Portland Housing Center Nimiipuu Community Development Fund Poverty Solutions Nogales Community Development Corporation PPEP Microbusiness and Housing Development Nonprofit Finance Fund Corporation North Alabama Revolving Loan Fund Prestamos CDFI North Carolina Comm. Dev. Initiative Capital Primary Care Development Corporation North Central Massachusetts Development Corporation Prince Georges Financial Services Corporation North Philadelphia Financial Partnership Progress Fund Northeast Entrepreneur Fund Propel Nonprofits

Report on US Sustainable and Impact Investing Trends 2020 119 Providence Revolving Fund Corporation Puerto Rico NHS Springboard CDFI Quaboag Valley Business Assistance Corporation Springfield Neighborhood Housing Services Rainier Valley Community Development Fund Spruce Root Raza Development Fund Strafford Economic Development Corporation Redbud Financial Alternatives Sustainable Communities Fund Reinvestment Fund Sustainable Neighborhoods Renaissance Community Loan Fund Taala Fund Renaissance Economic Development Corporation TCHFH Lending Resident Ownership Capital Technical Assistance Corporation Rio Grande Valley Multibank Corporation TELACU Community Capital Ripple Effect Entrepreneurs Fund Tennessee Rural Development Fund Rising Tide Community Loan Fund Texas Mezzanine Fund River City Capital Investment Corporation The Affordable Housing Trust for Columbus and Franklin Rockingham Economic Development Corp. County Rocky Mountain Community Reinvestment Corporation The Alliance CDFI Rocky Mountain MicroFinance Institute The Capital Good Fund Rural Community Assistance Corporation The Cares Project Rural Electric Economic Development The Center for Rural Health Development Rural Investment Corporation The Community Development Trust Rural Nevada Development Corporation The Disability Fund Rutland West Neighborhood Housing Services The Housing Fund Sabre Finance The Housing Partnership Network Sacramento Neighborhood Housing Services The IRC’s Center for Economic Opportunity Salt Lake Neighborhood Housing Services The OpenDoor Housing Fund Salt River Financial Services Institution The Real Estate Council Community Fund San Carlos Apache Tribe Relending Enterprise The Sequoyah Fund san francisco housing accelerator fund The Working World San Luis Obispo County Housing Trust Fund Three Roots Capital Santa Fe Community Housing Trust Tierra del Sol Housing Corporation Seattle Economic Development Fund Tigua Community Development Corporation Self-Help Ventures Fund Tiwa Lending Services Seneca Nation of Indians Economic Development Topeka Shawnee County First Opportunity Fund Company Trellis Shared Capital Cooperative Trenton Business Assistance Corporation Sixup Lending Tricolor Auto Acceptance Small Business Assistance Corporation Triple Bottom Line Foundation Small Business Captial Fund of Mississippi TRP Lending SNAP Financial Access True Access Capital Corporation Solar and Energy Loan Fund of St. Lucie County TruFund Financial Services Solitas House Tulsa Economic Development Corporation South Carolina Community Capital Alliance Union County Economic Development Corporation South Carolina Community Loan Fund United Housing South Eastern Development Foundation Upper Manhattan Empowerment Zone South Eastern Economic Development Corporation Utica Industrial Development Corporation Southeast Community Capital Corporation DBA Pathway Utica Neighborhood Housing Services Lending Valley Small Business Development Corporation Southeast Kentucky Economic Development Corporation Ventana Fund Southeast Rural Community Assistance Project Ventura County Community Development Corporation Southern Bancorp Capital Partners Ventura County Housing Trust Fund Southern Illinois Coal Belt Champion Community Venture North Funding & Development Southern Mutual Financial Services Vermont Community Loan Fund Southwest Georgia United Empowerment Zone Vermont-Slauson LDC Southwest Michigan Community Development Village Capital Corporation

120 Appendix 3: Community Investing Institutions Virginia Community Development Fund Microcredit Enterprises Vital Healthcare Capital MicroVest VSJF Flexible Capital Fund L3C Oikocredit USA Washington Area Community Investment Fund Opportunity International Washington Community Reinvestment Association Pro Mujer WBD Advantage Fund Root Capital West Central Development Corporation SERRV International West Philadelphia Financial Service Institution Shared Interest Westminster Economic Development Initiative ShoreBank International / Enclude Westwater Financial Sostenica White Earth Investment Initiative TriLinc William Mann, Jr. Community Development Corporation Unitus Capria Wind River Development Fund Unitus Impact Fund Wisconsin Native Loan Fund Unitus Seed Fund Wisconsin Womens Business Initiative Corporation VisionFund International (VFI) Women’s Economic Self-Sufficiency Team Womens World Banking Isis Fund Womens Economic Ventures Working Capital for Community Needs Women’s Opportunities Resource Center Womens Venture Fund COMMUNITY DEVELOPMENT VENTURE WomenVenture CAPITAL FUNDS Woodlands Community Lenders Ariel Economic Development Fund, LLC Worcester Community Housing Resources BCLF Ventures II LLC Working Solutions CDFI BCLF Ventures Bronze Valley Corp INTERNATIONAL MICROFINANCE LOAN The Capital Corps LLC FUNDS The Community Development Venture Capital Alliance ACCION International Fund Good Jobs ACDI/VOCA Innovation Works Acumen Kentucky Highlands Investment Corporation Calvert Impact Capital Launch New York Inc. CHF International MetaFund Corporation Creation Investments National Community Investment Fund DB ECC New Orleans Startup Fund DB FINCA Microfinance Fund Renewable Manufacturing Gateway DB GCMC II RFLF 2 LLC DB Microcredit Development Fund DB Start-up Fund Developing World Markets EcoEnterprises II Elevar Equity III Envest Microfinance Cooperative Equal Exchange FINCA International Fonkoze USA Freedom from Hunger Global Partnerships Grassroots Business Fund Grey Ghost Ventures Habitat Microbuild Fund Hope International Impact Assets Microfinance Note Impact Assets Sustainable Ag Note Media Development Loan Fund Mercy Corps

Report on US Sustainable and Impact Investing Trends 2020 121 Appendix 4 Money Managers Incorporating ESG Criteria

13D Management American Century Investments 1919 Investment Counsel LLC American Trust Investment Advisors 3Sisters Sustainable Management Amundi Pioneer Asset Management 747 Capital Andrew Hill Investment Advisors Abbott Capital AQR Capital Management Aberdeen Standard Investments Arabesque Asset Management Acadian Asset Management Arabesque Partners Accrued Equities Inc. Arborview Capital Acumen Fund Ariel Investments Adams Street Partners Aristotle Credit Partners LLC Addenda Capital Artisan Partners Aegon Asset Management US ASB Capital Management LLC Affiliated Managers Group (AMG) Ascendant Advisors LLC Affirmative Investment Management Ascension Investment Management AFL-CIO Building Investment Trust Aspiration AFL-CIO Housing Investment Trust Avanath Capital Management Agriculture Capital Avanz Capital AIO FInancial AXA Equitable Funds Management Group AJF Financial Services AXA Investment Managers Akeida Capital Management Azzad Asset Management Inc. Albright Capital Management Baillie Gifford & Co Allegheny Financial Group Bain Capital LP AllianceBernstein Barclays Capital Alliant Strategic Investments Barings Allianz Global Investors Beartooth Capital Allied Asset Advisors Inc. BentallGreenOak Alpha Architect Bessemer Investment Management ALPS Advisors Beyond Investing Amalgamated Bank BlackRock

122 Appendix 4: Money Managers Incorporating ESG Criteria Blue Wolf Capital Management Community Reinvestment Fund USA Bluehub Capital Conning BNY Mellon Asset Management North America (AMNA) Conservation Resource Partners Boston Common Asset Management Contact Fund LLC Boston Trust Walden Core Innovation Capital Breckinridge Capital Advisors CoreCo Holding Bridgeway Capital Management Cornerstone Capital Group Brightwood Capital Advisors LLC Craft3 Brookfield Asset Management Inc. Creation Investments Capital Management LLC Brown Advisory Crossmark Global Investments BRP Investment Management Cultivian Sandbox Venture Partners LLC Cadence Capital Management Dalton, Greiner, Hartman, Maher & Co. LLC Calvert Impact Capital Dana Funds Calvert Research and Management Dana Investment Advisors Candriam DBL Partners LLC Cantillon Capital Management DDJ Capital Management Capital Dynamics Dev Equity Capital Group Diamond Ventures Capital Innovations Sustainable Investments Dimensional Fund Advisors Capricorn Investment Group Dodge & Cox Cardinal Capital Management Domain Timber Advisors (Timbervest) Carlson Funds Enterprise Domini Impact Investments LLC Cartica Management DWS Investment Management Americas Inc. CBIS (Christian Brothers Investment Services) Earth Equity Advisors CBRE Global Investors EcoEnterprises Capital Management CDC Deposits Corp Ecosystem Integrity Management CEI Ventures Inc. (CVI) Ecosystem Investment Partners Change Finance Ecotrust Forest Management Inc. Cherokee Investment Partners LLC Elevar Equity Clarion Partners Emerging Capital Partners ClariVest Asset Management LLC Endeavor Global Clean Yield Group Enterprise Community Partners ClearBridge Investments Esplanade Capital Closed Loop Partners Essex Investment Management Company LLC Cohen & Steers Etho Capital Coho Partners Eventide Asset Management Columbia Threadneedle Investments F.L. Putnam Investment Management Company Commonfund Falcon Investment Advisors Community Capital Management Inc. Farmland LP Community Development Venture Capital Alliance Fermat Capital Management Community Investment Management LLC Fidelity Management & Research Company

Report on US Sustainable and Impact Investing Trends 2020 123 Fifth Season Ventures Hampshire Companies First Reserve Corp. HarbourVest Partners LLC First Trust Advisors Harrington Investments Inc. Firsthand Capital Management Hartford Funds Management Company Fisher Investments Hartford Investment Management Company (HIMCO) Forefront Analytics HCAP Partners Franklin Templeton Investments Highland Capital Management Fred Alger Management Inc. Highmore Funds Freeman Spogli & Co HIP Investor Inc. Fresh Source Capital Horace Mann Life Insurance Company Friends Fiduciary Corporation Horizon Investment Services Frontier Partners Hotchkis and Wiley Capital Management GAMCO Investors Inc. (Gabelli Asset Management HSBC Global Asset Management Company) Hudson Clean Energy Partners Gazelle Finance Impact Community Capital LLC GCM Customized Fund Investment Group, LP Impact Engine Generation Investment Management US Impact Shares Genstar Capital Impax Asset Management Gerding Edlen Fund Management LLC Income Research & Management Gerdling Edlen Insight Investment Glenmede Investment Management Inspire (CWM Advisors) Global Partnerships Invesco PowerShares Capital Management Global X Management Company Iroquois Valley Farms GMO (Grantham, Mayo, Van Otterloo & Co.) Jamestown Goelzer Investment Management Janus Henderson Investors Goldman Sachs Asset Management Jennison Associates Good Capital Jensen Investment Management Inc. Gotham Asset Management JLens Network Gramercy Funds Management John Hancock Investments Grassroots Business Fund Jonathan Rose Companies Great Lakes Advisors JP Morgan Asset Management Great-West Capital Management Kairos Investment Management Company Green Alpha Advisors LLC Karner Blue Capital Green Canopy, Inc KBI Global Investors Green Century Capital Management Kennedy Capital Management GreenWood Resources (GWR) Kleiner Perkins Caufield & Byers GSSG Solar Knights of Columbus Asset Advisors GuideStone Capital Management LLC Kohlberg Kravis Roberts & Co. (KKR) Guinness Atkinson Asset Management Inc. Krane Funds Advisors GW&K Investment Management Kranenburg Financial Group Hamilton Lane Advisors LLC LaSalle Investment Management

124 Appendix 4: Money Managers Incorporating ESG Criteria Lazard Asset Management Nia Impact Capital Legg Mason Partners Fund Advisor Nomura Corporate Research and Asset Management Lexington Partners North Sky Capital LFE Capital Northern Trust Asset Management Lindsay Goldberg LLC NorthStar Asset Management Loomis, Sayles & Company Nuveen Los Angeles Capital Management Oak Hill Capital Partners Low Income Investment Fund Oblate International Pastoral Investment Trust LSV Asset Management Olympus Capital Asia Luther King Capital Management Pacer Advisors Macquarie Investment Management Pacific Investment Management Co. (PIMCO) Macroclimate Panagora Magni Global Asset Management Parnassus Investments Mariner Investment Group Pathway Capital Management Martin Investment Management LLC Payden & Rygel Matthews Asia Pegasus Capital Advisors Media Development Investment Fund Pekin Hardy Strauss Inc Meritus Ventures PGIM Fixed Income Mesirow Financial Investment Management PGIM Investments MFG Asset Management PGIM Real Estate MFS Investment Management Pictet Asset Management MicroVest Capital Management Portfolio Advisors Miller/Howard Investments Praxis Mutual Funds Mindful Investors Princeton Global Minerva Capital Group LLC Principal Global Investors Monteagle Funds ProShares Morgan Stanley Investment Management Provenance Capital Group National Community Investment Fund (NCIF) Putnam Investments Nationwide QMA Natixis Investment Managers RBC Global Asset Management (Access Capital) Neuberger Berman Reach Capital Neumeier Poma Investment Counsel Real Estate Management Services Group (REMS Group) New Alternatives Fund REAL Infrastructure Capital Partners LLC New Energy Capital Partners LLC Red Mountain Capital Partners New Markets Venture Partners Redwood Investments New Summit Investments Resource Capital Funds New Summit Investments LLC Rethink Education Newground Social Investment Reynders, McVeigh Capital Management Newton Investment Management (North America) Riverbridge Partners LLC NewWorld Capital Group Riverstone Investment Group LLC Next Wave Impact Riverwater Partners

Report on US Sustainable and Impact Investing Trends 2020 125 Robasciotti & Philipson The BELLE Michigan Fund Root Capital The Builders Fund Rosenberg Equities Investment Management The Forestland Group LLC RSF Social Finance The Jumpfund Russell Investments The Lyme Timber Company LP Safer Made The Water Council Sage Advisory Services Thornburg Investment Management Satori Capital Timothy Partners, Ltd. Saturna Capital Tortoise Index Solutions LLC Schroders Touchstone Investments Schwartz Investment Counsel Towle & Co Segall Bryant & Hamill TPG Capital Advisors SEI Investments Management Corporation (SIMC) Transformative Wealth Management,LLC SFE Investment Counsel Inc. Treetops Capital LP Shelton Capital Management Triboro Investment Management LLC Siguler Guff & Company TriLinc Global Silchester International Investors Trillium Asset Management Silver Creek Capital Management True Wealth Ventures Sit Investment Associates Inc. Turner Impact Capital LLC SJF Ventures UBS Asset Management SKBA Capital Management LLC Ullico SKY Harbor Capital Management Unreasonable Capital Small Enterprise Assistance Funds (SEAF) US Fund for UNICEF Bridge Fund Social Equity Group US Renewables Group Social Finance Van Eck Associates Corporation Sonen Capital Vanguard Southern Appalachian Fund Variable Annuity Life Insurance Co (VALIC) Stance Capital Vert Asset Management State Street Global Advisors (SSGA) Viking Fund Management LLC Stone Harbor Investment Partners LP VilCap Advisory Strategy Shares Water Asset Management Sun Life Capital (SLC) Management (US) Wellington Management Company LLP SunAmerica Asset Management Wells Fargo Asset Management SunFunder Wespath Investment Management Sustain VC Western Asset Management Sustainability Group at Loring, Wolcott & Coolidge Westfield Capital Management Company Sustainable Insight Capital Management William Blair & Company Sustainvest Asset Management Wunder Capital T. Rowe Price Zeo Capital Advisors TCW Zevin Asset Management Terra Alpha Investments

126 Appendix 4: Money Managers Incorporating ESG Criteria Appendix 5 Institutional Investors Incorporating ESG Criteria

AARP Foundation Benedictine Sisters of Mount St. Scholastica Accion Bill and Melinda Gates Foundation Adrian Dominican Sisters Bloomberg Philanthropies AIG Blue Haven Initiative Allstate Bon Secours Mercy Health Altman Foundation Boston Foundation American Baptist Churches USA Boston University American Baptist Home Mission Society Brandeis University American Cancer Society Brevard College American Family Life Insurance Bricklayers and Trowel Trades International Pension Fund American Heart Association Brotherhood Mutual Insurance Comapny American Medical Association Foundation Brown University American Public Health Association (APHA) Bullitt Foundation American University California - ScholarShare 529 Amherst College California Academy of Sciences Annie E. Casey Foundation California Community Foundation Aria Foundation California Healthcare Foundation Arizona Community Foundation California Institute of Technology Arizona State University & Foundation California Institute of the Arts Arkay Foundation California Public Employees’ Retirement System Armonia LLC (CalPERS) Austin Community Foundation California State Compensation Insurance Fund Bader Philanthropies California State Teachers’ Retirement System Ball State University Foundation (CalSTRS) Bank of the West Charitable Foundation California State Treasurer’s Office Baptist Foundation of Oklahoma California State University, Chico Baptist Health South Florida Capuchin Franciscan Province of St. Joseph (Midwest Capuchins) Barberton Community Foundation Carnegie Mellon University Baylor University Catholic Charities Diocese of Stockton Becker College Catholic Health Association of the USA Ben and Jerry’s Foundation

Report on US Sustainable and Impact Investing Trends 2020 127 Catholic Relief Services Cornell University Catholic University of America Dartmouth College Cedar Tree Foundation David and Lucile Packard Foundation Ceniarth LLC David Rockefeller Fund Center for Community Change Denison University Center for Humans and Nature Denver (CO) Employee Retirement Program Charles and Lynn Schusterman Family Foundation District of Columbia Retirement Board Charles Stewart Mott Foundation Domestic and Foreign Missionary Society of the Protestant Episcopal Church Chatham University Dominican Sisters of Hope CHE Trinity Health Dominican Sisters of San Rafael, CA Chicago Municipal Employees’ Annuity and Benefit Fund Doris Duke Charitable Foundation Chicago Medical Society Duke University Chicago Policemen’s Annuity and Benefit Fund Earlham College Chicago Teachers’ Pension Fund Earthjustice Christopher Reynolds Foundation Ecotrust CHRISTUS Health Edward W. Hazen Foundation Chubb Limited Edwards Mother Earth Foundation Church of the Brethren Benefit Trust Emory University Church Pension Fund Endowment for Health Clean Water Action / Clean Water Fund Environment America Cleveland Foundation Environmental and Energy Study Institute Colby College ESF College Foundation (SUNY) Colgate University Evangelical Lutheran Church in America College of the Atlantic Everence Association Colorado Fire and Police Pension Association Everence Foundation Colorado Public Employees’ Retirement Association FB Heron Foundation (PERA) Field Museum in Chicago Colorado State University Florida Bureau of Deferred Compensation Columbia University Florida State Board of Administration CommonSpirit Health Foothill-De Anza Community College Foundation Community Foundation for Greater Atlanta Ford Foundation Community Foundation of the Ozarks Foundation for Louisiana Community Foundation Serving Boulder County Franciscan Sisters of Perpetual Adoration Community of Christ Friends of the Earth Congregation of St. Joseph Fund for Nonviolence Connecticut Higher Education Trust Galvan Foundation Connecticut Innovations Gates Family Foundation Connecticut Retirement Plans and Trust Funds Gaylord and Dorothy Donnelley Foundation Conrad N. Hilton Foundation General Service Foundation Conservation Breeding Specialist Group George Gund Foundation Cordes Foundation

128 Appendix 5: Institutional Investors Incorporating ESG Criteria George School Johns Hopkins University George Washington University Jubitz Family Foundation Georgetown University Kaiser Permanente Georgia Employees’ Retirement System Kalliopeia Foundation Goddard College Kentucky Teachers’ Retirement System Gordon and Betty Moore Foundation KL Felicitas Foundation Grand Rapids Community Foundation Kresge Foundation Gray Matters Capital Foundation Laird Norton Family Foundation Great American Insurance Company Lane Community College Greater Cincinnati Foundation Laughing Gull Foundation Green Mountain College League of Conservation Voters Grinnell Mutual Lemelson Foundation Gundersen Health System Lesley University Hampshire College Lewis and Clark College Hanley Foundation Lincoln Community Foundation Harris and Eliza Kempner Fund Living Cities Catalyst Funds Harvard Management Company Los Angeles County Employees Retirement Association (LACERA) Hawaii Employees’ Retirement System Los Angeles Fire and Police Pensions (LAFPP) Headwaters Foundation for Justice Louisiana Baptist Foundation Heifer International Foundation Louisiana State Employees Retirement System Heinz Endowments Louisiana Teachers’ Retirement System Hull Family Foundation Loyola University of Chicago Humboldt State University Advancement Foundation Lumina Foundation for Education IDP Foundation Lydia B. Stokes Foundation Illinois Municipal Retirement Fund Maine Community Foundation Illinois State Board of Investment (ISBI) Marin Community Foundation Illinois State Treasurer Market American Insurance Company Illinois State Universities Retirement System Mary Black Foundation Illinois Teachers’ Retirement System Mary Reynolds Babcock Foundation Incourage Community Foundation Maryknoll Sisters Indiana Public Retirement System Maryland State Retirement and Pension System Inter-American Development Bank (IDB) Massachusetts Pension Reserves Investment Trust International Finance Corporation (IFC) (PRIT) Fund Iowa Municipal Fire and Police Retirement System Mennonite Education Agency (MFPRSI) Mennonite Retirement Trust Iowa Public Employees’ Retirement System (IPERS) Merck Family Fund Iowa State University Mercy Investment Services Jacksonville (FL) Police and Fire Pension Fund MetLife Jenifer Altman Foundation MetLife Foundation Jessie Smith Noyes Foundation Meyer Memorial Trust John D. and Catherine T. MacArthur Foundation Miami (FL) Firefighters’ Relief and Pension Fund

Report on US Sustainable and Impact Investing Trends 2020 129 Michigan Retirement Systems (SMRS) Ohio School Employees’ Retirement System Middlebury College Ohio State University Minneapolis Foundation Ohio Teachers’ Retirement System Minnesota State Board of Investment Omidyar Network Missionary Oblates of Mary Immaculate Oneida Nation Trust Enrollment Committee MissionPoint Partners Oregon Community Foundation Missouri Public School and Education Employee Oregon Metro Retirement Systems (PSRS/PEERS) Oregon State Treasurer’s Office Missouri State Employees’ Retirement System Oregon State University Foundation (MOSERS) Pacific School of Religion Missouri State Treasurer’s Office Palette Fund Mize Family Foundation Park Foundation Montgomery County Employees’ Retirement System (MD) Pathstone Munich Reinsurance America Pennsylvania Municipal Retirement System Naropa University Pennsylvania Public School Employees’ Retirement System Nathan Cummings Foundation Pennsylvania State Employees’ Retirement System Natural Resources Defense Council Pennsylvania State Treasurer Needmor Fund Pennsylvania State University Nevada Public Employees Retirement System Peralta Community College District New Energy Nexus Peter and Carmen Lucia Buck Foundation New England Biolabs Foundation Philadelphia Public Employees Retirement System New Jersey Pension Fund Pittsburgh Foundation New Mexico State Investment Council Pitzer College New School University Pomona College New York City Investment Fund Portico Benefit Services New York Community Trust Portland State University Foundation New York Quarterly Meeting Religious Society of Friends (Quakers) Pratt Institute New York State Common Retirement Fund Presbyterian Church (USA) North Carolina Retirement Systems Presbyterian Foundation North Carolina State University Prescott College North Dakota State Investment Board Princeton University Northeast Wilderness Trust Prudential Financial Northland College Prudential Foundation Northwest Women Religious Investment Trust Rasmuson Foundation Northwestern University Reform Pension Board Oakland (CA) Police and Fire Retirement Systems Rhode Island Employees’ Retirement Systems (PFRS) Rhode Island School of Design Oberlin College Rice University Office of the New York City Comptroller Robert and Patricia Switzer Foundation Ohio Police and Fire Pension Fund Robert Treat Paine Association Ohio Public Employees’ Retirement System (OPERS)

130 Appendix 5: Institutional Investors Incorporating ESG Criteria Robert Wood Johnson Foundation Sundance Family Foundation Rockefeller Brothers Fund SUNY New Paltz Foundation Rockefeller Foundation Surdna Foundation Rose Foundation for Communities and the Swarthmore College Environment Swift Foundation Roy A. Hunt Foundation Syracuse University RSF Social Finance (Foundation) Tara Health Foundation Saint Louis University Texas Employees’ Retirement System (ERS) Saint Paul Foundation Texas County and District Retirement System Salem State University Texas Emergency Services Retirement System Salvation Army Texas Municipal Retirement System San Francisco Employees’ Retirement System The California Endowment San Francisco Foundation The CAPROCK Group San Francisco State University Foundation The Educational Foundation of America San Jose State University & Tower Foundation The Hanover Insurance Group Santa Clara University The Hartford Insurance Company Santa Fe Art Institute The Island Institute Schmidt Family Foundation The McKnight Foundation School Sisters of Notre Dame, Central Pacific Province The Nature Conservancy Seattle City Employees’ Retirement System The Russell Family Foundation Seattle Foundation Threshold Foundation Seattle University Tides Foundation Service Employees International Union (SEIU) Master Tiedemann Advisors Trust Town Creek Foundation Sierra Club Foundation Treehouse Investments Silicon Valley Community Foundation Triple EEE Foundation Sisters of St. Dominic of Caldwell, NJ Triskeles Foundation Sisters of St. Francis of Philadelphia Tufts University Sisters of St. Joseph of Philadelphia UAW Retiree Medical Benefits Trust Skoll Foundation Union of Concerned Scientists Society for the Psychological Study of Social Issues Union Theological Seminary Solidago Foundation Unitarian Universalist Association South Carolina Retirement System Investment Commission United Church Funds South Dakota Retirement System United Church of Christ (UCC) Pension Boards Springcreek Foundation United Methodist Church Foundation SSM Health Care United Nations Joint Staff Pension Fund St. Paul (MN) Teachers Retirement Fund Association Unity College Stanford University University of California Regents State of Wisconsin Investment Board University of Colorado Foundation Sterling College University of Connecticut Foundation Sun Life Assurance Company of Canada (US) University of Dayton

Report on US Sustainable and Impact Investing Trends 2020 131 University of Florida Foundation Wheaton College (MA) University of Georgia Whitman College University of Hawaii The Wilderness Society University of Illinois & Foundation William Bingham Foundation University of Iowa & Foundation Williams College University of Maine Foundation Winslow Foundation University of Maryland Winthrop Rockefeller Foundation University of Massachusetts Foundation World Resources Institute University of Michigan Yale Dwight Hall Socially Responsible Investment Fund University of Minnesota Yale University University of North Carolina at Asheville University of North Carolina at Chapel Hill & Foundations University of North Carolina at Greensboro Investment Fund University of Northern Iowa University of Notre Dame University of Oregon Foundation University of Puget Sound University of Rochester University of Southern Maine University of Washington University of Wisconsin Foundation University System of New Hampshire & Foundations V. Kann Rasmussen Foundation Vassar College Vermont 457 Deferred Compensation Plan Vermont Community Foundation Vermont Municipal Employees’ Retirement System (VMERS) Vermont State Employees’ Retirement System (VSERS) Vermont State Teachers’ Retirement System (VSTRS) Villanova University WR Berkley Corporation WK Kellogg Foundation Wake Forest University Wallace Global Fund Walton Family Foundation Warren Wilson College Washington State Investment Board West Bend Mutual Insurance Company Western Oregon University

132 Appendix 5: Institutional Investors Incorporating ESG Criteria Appendix 6 ESG Shareholder Proponents

444S Foundation California State Teachers’ Retirement System (CalSTRS) Active Home LLC Calvert Research and Management Addenda Capital Candriam Adrian Dominican Sisters Capital Innovations Sustainable Investments AFL-CIO Capuchin Franciscan Province of St. Joseph (Midwest AJF Financial Services Capuchins) Akonadi Foundation Carlson Funds Enterprise Amalgamated Bank CBIS (Christian Brothers Investment Services) American Baptist Churches USA Change to Win American Baptist Home Mission Society CHE Trinity Health American Federation of State, County and Municipal Christensen Family Foundation Employees (AFSCME) Christensen Fund Arjuna Capital Christopher Reynolds Foundation Arkay Foundation Church of the Brethren Benefit Trust As You Sow Clean Yield Group Azzad Asset Management Inc. CommonSpirit Health Bard College Congregation of Benedictine Sisters of Boerne (TX) Benedictine Sisters of Baltimore - Emmanuel Monastery Congregation of Divine Providence of San Antonio (TX) Benedictine Sisters of Chicago Congregation of Sisters of St. Agnes Benedictine Sisters of Cullman, Alabama Congregation of St. Joseph Benedictine Sisters of Mount St. Scholastica Congregation of St. Joseph of Peace Benedictine Sisters of Virginia Congregation of the Sisters of St. Joseph of Brighton Benedictine Sisters, Sacred Heart Monastery Congregation of the Sisters of the Holy Cross Blue Haven Initiative Connecticut Retirement Plans and Trust Funds BMO Asset Management Corp. (F&C Investments) Consumer Health Foundation BNP Paribas Asset Management USA Creation Investments Capital Management LLC Bon Secours Mercy Health Dana Investment Advisors Boston Common Asset Management Daughters of Charity, Province of St. Louise Boston Trust Walden David Rockefeller Fund Bricklayers and Trowel Trades International Pension Dignity Health Fund Domestic and Foreign Missionary Society of the California Public Employees’ Retirement System Protestant Episcopal Church (CalPERS)

Report on US Sustainable and Impact Investing Trends 2020 133 Domini Impact Investments LLC Maryknoll Sisters Dominican Sisters of Hope Maryland State Retirement and Pension System Dominican Sisters of Springfield, IL Max and Anna Levinson Foundation Edward W. Hazen Foundation Mennonite Education Agency Edwards Mother Earth Foundation Merck Family Fund Felician Sisters/Felician Health Services Inc. Mercy Investment Services First Affirmative Financial Network Miller/Howard Investments Franciscan Sisters of Perpetual Adoration Missionary Oblates of Mary Immaculate Fresh Pond Capital Missouri Coalition for the Environment Friends Fiduciary Corporation Nathan Cummings Foundation GAMCO Investors, Inc. (Gabelli Asset Management Needmor Fund Company) New York City Employees’ Retirement System George Gund Foundation New York City Fire Dept. Pension Fund Glenmary Home Missioners New York City Police Dept. Pension Fund Green Alpha Advisors LLC New York City Teachers’ Retirement Fund Green Century Capital Management New York State Common Retirement Fund Harrington Investments Inc. Newground Social Investment Heartland Initiative NewsGuild Sector of the Communications Workers of Hermes (Federated) America Hexavest Nia Impact Capital HSBC Global Asset Management Northstar Asset Management IDP Foundation Inc. Northwest Women Religious Investment Trust Illinois State Treasurer Office of the New York City Comptroller Impact Shares Oneida Nation Trust Enrollment Committee Impax Asset Management Oregon Department of State Lands Indiana Laborers’ Pension Fund Oregon State Treasurer’s Office International Brotherhood of DuPont Workers Oxfam America International Brotherhood of Electrical Workers Park Foundation Pension Benefit Fund Pathstone International Brotherhood of Teamsters Pax World Funds Investor Voice Pekin Hardy Strauss Inc. Jantz Management LLC People for the Ethical Treatment of Animals (PETA) JCP Investment Partnership Philadelphia Public Employees Retirement System Jessie Smith Noyes Foundation Portico Benefit Services Jesuit Conference USA Praxis Mutual Funds JLens Network Presbyterian Church (USA) Kestrel Foundation of Maine Priests of the Sacred Heart Laborers’ District Council and Contractors’ Pension Providence St. Joseph Health Fund of Ohio Providence Trust Laird Norton Family Foundation REAL Infrastructure Capital Partners LLC Land & Buildings Capital Growth Fund LP Religious of the Sacred Heart of Mary, Western Lyons Capital LLC American Province

134 Appendix 6: ESG Shareholder Proponents Reynders, McVeigh Capital Management The McKnight Foundation Rhode Island Employees’ Retirement Systems The Russell Family Foundation Riverwater Partners Threshold Foundation Roaring Blue Lion Capital Management Tides Foundation Sarissa Capital Management Tiedemann Advisors School Sisters of Notre Dame, Central Pacific Province Timken Matthews Family Foundation School Sisters of St. Francis Trillium Asset Management Segal Marco Advisors Trio Foundation Service Employees International Union (SEIU) Master Triskeles Foundation Trust Trowel Trades Funds (owned by Comerica Bank & Shared Earth Foundation Trust) Sierra Club Foundation UAW Retiree Medical Benefits Trust Singing Field Foundation Unitarian Universalist Association Sisters of Charity of St. Elizabeth (NJ) Unite Here Sisters of Charity of the Blessed Virgin Mary United Brotherhood of Carpenters and Joiners of America Sisters of Notre Dame de Namur (MA) United Church Funds Sisters of Providence, Mother Joseph Province United Church of Christ (UCC) Pension Boards Sisters of St. Dominic of Caldwell, NJ United Steelworkers Sisters of St. Dominic of Grand Rapids Ursuline Sisters of Tildonk, US Province Sisters of St. Dominic of Racine, WI Vermont 457 Deferred Compensation Plan Sisters of St. Francis Charitable Trust - Dubuque Vermont Municipal Employees’ Retirement System Sisters of St. Francis of Philadelphia (VMERS) Sisters of St. Joseph of Carondelet of St. Paul Province Vermont Pension Investment Committee Sisters of St. Joseph of Philadelphia Vermont State Employees’ Retirement System (VSERS) Sisters of St. Joseph, Brentwood, NY Vermont State Teachers’ Retirement System (VSTRS) Sisters of the Good Shepherd Voce Capital Management Sisters of the Holy Family (CA) Wallace Global Fund Sisters of the Holy Names of Jesus and Mary Wespath Investment Management Sisters of the Humility of Mary Zevin Asset Management Sisters of the Presentation of the Blessed Virgin Mary (SD) Society of Jesus -- US Central and Southern Province Society of Jesus -- US Midwest Province Sonen Capital Southwest Regional Council of Carpenters Pension Fund Sundance Family Foundation Sustainability Group at Loring, Wolcott & Coolidge Sustainvest Asset Management Swift Foundation Tara Health Foundation The Educational Foundation of America WE ARE PROUD TO SUPPORT THE US SIF FOUNDATION

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