March 25, 2021
Highlights from Heartland's Sustainable Finance Hub's Deep Dive
Kristen Estell, Heartland Capital Strategies

The mission of this virtual meeting (held March 5th) was to mobilize a new wave of sustainable finance opportunities in the four-state (Western Pennsylvania, Southern Ohio, West Virginia, and Kentucky) Industrial/Appalachian region in alignment with the ReImagine Appalachia’s policy blueprint and the Marshall Plan for Middle America. Building on Heartland’s 2019 Steel Cities Capital Roundtable, we assembled sustainable investment and responsible contractor policies, models, and practices for this region, long impacted by boom-bust deindustrialization, resource depletion, and high levels of poverty, both rural and urban.

The Heartland Network originally proposed the Sustainable Investment Hub to foster workers’ capital partnerships among cities, pension funds, and the private sector to reinvest in communities left behind. “Sustainable investment” generally refers to the process of taking due account of environmental, social, and governance (ESG) considerations in investment decision-making, leading to increased investments in longer-term and sustainable investments. Locally-targeted ESG investments are sometimes called economically-targeted investments (ETIs).

To emphasize a circular economy systems approach, we have worked to build a five-legged table with the drivers of economic and sustainable development, including cities and regional institutions; developers, contractors; manufacturers and suppliers; unions and worker-directed transition groups; and sustainable finance entities (pensions, responsible fund managers, etc.). (See figure above)
The Hub concept aims to facilitate the exchange of best practices, encourage self-organized investment standards, and foster city, state, and national ESG and ETI policy implementation models. The most practical outcome is to establish a clearinghouse for clean economy manufacturing, energy, transportation, and affordable housing projects. Heartland’s Partners will engage with pension funds, the labor movement, state treasurers, environmental and other stakeholders to implement these components.

See this week’s Expresso for some highlights from the event and where we plan to go from here.  
Retirement Plans Can Help Save the World
-But Not on Their Own
David Keto, Managing Principal SRI Group

A mobilization of public and private capital on a scale not seen in the United States since the 1930s and 1940s is necessary to meet the challenge of the climate crisis. 

There is a transcendent social good to be achieved – avoiding the worst catastrophes of global warming. Moreover, overall energy costs as a share of GDP may actually go down with a more efficient, decarbonized economy. But as in the Roosevelt era, private capital will not play the decisive role it must in the time available unless part of the risk of the necessary long-term investment is shared by the federal government and, essentially, borne by the entire society. 

In particular, the US retirement system has the necessary scale to play a leading role in transitioning the economy to a decarbonized future and, further, has the need for stable, secure, long-term returns. But a federal risk-sharing role will be required to enable the retirement system to play this role and to help avert climate disaster. [READ MORE]