14 December, 2022 / Comment
‘I manage my college sustainability portfolio’
By Owen Brown
Owen Brown, a mathematical economics student at Colorado college, writes about the excitement and worry of sustainable investing, and his experience at COP27
Throughout my childhood, I have always been passionate about investing. This materialised in founding my high school’s investment club and managing the sustainability portfolio at Colorado College, where I am currently studying for a bachelor’s degree in mathematical economics.
While investment clubs often focus solely on earning the highest returns, my experience was much different. My peers and I would discuss risks, including ESG risks, to our potential investments; we would get excited if we found a new sustainable opportunity; we would worry if companies failed to meet their pledged goals. This process helps develop student interest in sustainability and provides young investors with a cautious approach to corporate sustainability.
This led to me managing a sustainability portfolio at my college, where we aim to educate undergraduate students about private markets and the role sustainability plays. We do this by encouraging analysts to pitch investment/divestment ideas, providing lectures on sustainability in finance, and conducting proxy voting for a third of the college’s endowment. This gives students the tools they need to understand fundamental concepts and a decision-making opportunity for them to build experience.
ESG data topped concerns at COP27
I am also learning about sustainable investing through my course. One of my most recent classes, ‘Engaging COP27 as Ethnographers’, provided students with the opportunity to attend COP27, held in Sharm El-Sheikh, Egypt, and conduct research on an area of interest. It was at the conference I came across ESG Clarity.
I chose to follow data’s importance in ESG investments and the Adaptation Fund – a fund that finances adaptation projects for developing countries.
While attending a Climate Data Steering Committee meeting, among other ESG data meetings, the overwhelming message was about the lack of ESG risk data available to private investors. When assessing risk, many institutional investors fail to consider ESG risk factors because of minimal ESG reporting. Uniform standards can help investors make informed decisions that better support businesses actively mitigating internal ESG risks.
I also attended four days of Adaptation Fund meetings, providing insight into national policy stances. During these meetings, there were two distinct party lines: developed countries, the major contributors to the fund; and developing countries, receivers of funds for adaptation projects.
Developed countries, such as Switzerland, the US, and Canada, were advocating for less transparency in reporting on contributions; the developing countries, namely South Africa, were in fierce opposition by demanding more consistent expectations for contributions and specific documentation of unmet funding pledges.
Having the opportunity to observe international negotiations revealed the complexities of these. After my third day at COP27, I sat next to a delegate from South Korea on the bus ride home. He explained how delegates determine their policy stance and negotiation strategy: home countries will provide a briefing that details issue stances and their respective importance. The most successful delegates achieve their country’s top goals and make progress on the less important ones, as well. This provides context for why some delegations held hard stances on issues, such as transparency with pledged funds, while other delegates refrain from even voicing an opinion.
Part of the Bonhill Group.