Environmental, social, and corporate governance investing might dominate the public conversation around institutional portfolios, but only the largest public pension funds in the U.S. have made significant headway in adopting impact investments. For smaller- and mid-sized defined benefit plans, a fully-integrated ESG portfolio remains a distant dream. According to a survey from Cerulli Associates, 20 U.S. public pension plans are listed as members of Climate Action 100+, an initiative to fight climate change through corporate governance. Ninety percent of respondents believed public pensions will have a moderate-to-high demand for ESG strategies in the next two to three years. When compared to other allocators, public defined benefit plans’ demand for impact investment strategies fell in the middle of the pack. The survey showed that family offices, high net-worth individuals, and foundations had even higher demand for ESG strategies in 2020.

NBC – Climate change hits poorer communities harder. For some, FEMA’s grants are out of reach.

Nearly 1,000 local governments applied for FEMA’s Building Resilient Infrastructure and Communities program, which recently announced the 406 expected recipients of its first wave of $500 million in grant funding. (Final decisions on awards will be made in September.) Interest far outstripped the available money, and many communities are set to receive nothing. Three of the wealthiest states — California, New Jersey and Washington — are on track to receive more than half of the money, for initiatives including flood mitigation, a tsunami shelter and the removal of dense undergrowth to prevent wildfires. Plenty of poorer communities will receive funding as well, but dozens will not, including Amazonia, Missouri, with a population of just over 300, which wanted to protect critical equipment for its sewer system from rising waters, and Wilson, North Carolina, which hoped to move public housing away from areas at risk of flooding.

NJ Spotlight News – NJ makes $200 million investment in climate future

While it’s not the divestment from fossil fuels that environmentalists have been seeking, New Jersey’s public-worker pension fund is looking to make a major investment in companies working to blunt climate change. Members of the New Jersey State Investment Council on Wednesday reviewed a plan to invest up to $200 million in a California-based private-equity fund called TPG Rise Climate. The fund is raising money to invest in “businesses that have a clear and measurable positive environmental impact,” according to documents distributed prior to the meeting.

Plan Sponsor – Pensions’ Long-Term Approach to ESG Risks Hinges on Engaging With Companies

In a new working paper, the Pension Research Council at the Wharton School of the University of Pennsylvania examines the long-term risks of environmental, social and governance (ESG) investing by defined benefit (DB) pension plans and how they can best mitigate these issues. The paper notes that, due to their long-term horizons, pension funds face enhanced exposures to the long-lived effects of many ESG risks.

Washington Post – Why Big Central Banks Are Becoming Climate Warriors