IMP Matrix Rating: B2
What: Abacus is a wealth management firm based in Santa Monica, California. We use their advisory services to select mutual fund and separate account managers that are passively invested against a custom benchmark yet adopt rigorous positive ESG and negative ethical screens, as well as offer the possibility to selectively buy and engage securities of “harmful” companies to enable voting via shareholders’ resolutions on ESG issues. The equity account contains more than 500 stocks and the bond portfolio contains about 20 bonds, with managers being JustInvest and PIMCO Climate Bond Fund.
Who: Given that this is a diversified portfolio, the stakeholders affected are broad-based and global.
How Much Impact: The equity portfolio produces less than half of the portfolio emissions of the benchmark (250 vs. 610 metric tons of CO2 per year). This is the equivalent of taking 79 cars off the road. The portfolio owns zero barrels of oil (vs. 31,674 in the benchmark). It contributes more than double than the benchmark to the SDG.
Nearly all of the corporate bonds purchased focus on alternative energy or carbon footprint reduction. For example, the Apple issue owned in the portfolio was issued to support their alternative energy initiatives to push the company toward 0 emissions. Another example is Digital Realty, who used the funds to reduce carbon emissions related to their data centers. The Starbucks issue was a social bond and supports sustainability projects centered on Coffee and Farmer Equity (CAFÉ) practices. These projects are centered on humane and fair working conditions, prohibition against child labor, water conservation and other types of initiatives focused on the supply chain. Other Municipal and government bonds support affordable and green housing, as well as public education.
Our Contribution: Unfortunately, however, given that this is a portfolio of publicly listed/available securities, our additionality is minimal, and only comes from the engagement we can have with individual companies whose stock we own when flagged as an opportunity for shareholder engagement. Abacus uses As You Sow to guide their approach.
Impact Risk: The main risk to the impact in this portfolio is that engagement through shareholders resolutions does not succeed.
Sample Investments: We implemented this Racial Justice Exclusion List through this mandate.