While there is a well-recognized and growing need for increased levels of long-term investment in infrastructure in United States, there is a lack of appropriate mechanisms for matching that need with long-term investment capital seeking sustainability outcomes alongside risk-adjusted returns. Sustainable infrastructure investments often do not yield the kind of high, near-term return on investment typically needed to attract private development capital, but the long-term return profile of many infrastructure investments aligns well with the portfolio targets of many pension funds and similar “patient” capital.
To help us think through this challenge of matching capital to need in responsible infrastructure investment, the IRI is pleased to welcome a new Senior Research Fellow, Waide Warner. Waide will be working on a project to explore the development of a sustainable infrastructure investment platform to engage pension funds and foundations in the financing of infrastructure projects with environmental and social benefits. Waide is also a Senior Counsel of Davis Polk & Wardwell, an international law firm based in New York. As a partner at Davis Polk for more than 25 years, he led the project finance group, advising on a broad range of U.S. and international financings, restructurings, and joint ventures in the telecommunications, transportation and power sectors across the Americas, Europe, Asia and Africa. From 2014 to 2016, he was an Advanced Leadership Fellow at Harvard University. He holds a bachelor’s degree in Sociology from Boston College, did graduate work in Sociology at the University of Chicago and received a law degree from Rutgers Law School.
To learn more about Waide and his work, reach him at Waide_Warner@harvard.edu.
Political Disclosure and Pension Investment:
Updates for Trustees
Tuesday, April 12, 2016
2:00 PM Eastern/11:00 AM Pacific
John Keenan, Corporate Governance Analyst for AFSCME;
Lisa Gilbert, Director of Congress Watch at Public Citizen;
Marian Currinder, Associate Director of the Center for Political Accountability;
Patrick Doherty, Director of Corporate Governance for the State of New York.
Join pension fund trustees, capital stewardship staff, and responsible investment professionals for a discussion on political disclosure by corporations.
Last week, the Department of Labor announced that it was withdrawing a guidance memo from 2008 for ERISA plans on Economically Targeted Investments (ETIs), reverting instead to previous guidance issued in 1994. This move had been long sought by a substantial group of responsible investors, who shared the DOL’s concern that the 2008 guidance “unduly discouraged fiduciaries from considering ETIs and ESG factors” when making their investment decisions.
This is big news in the IRI’s neck of the woods. ERISA not only governs a sizable number of pension funds directly, but it has even broader impact as a touchstone for asset owners who aren’t subject to the legislation.
At the risk of a listicle, here are three things that I took away from the announcement:
- The primary way to understand ERISA remains the same – plan fiduciaries must make their investment decisions prudently, and this means making sure that there is a process to determine that any investment is based on the plan’s goal of delivering benefits to beneficiaries. Nothing in the DOL announcement changes that fundamental obligation. The primary purpose of pension funds is to facilitate the payment of promised benefits, and their investments are a tool to fulfill this mission. If there is a change here, it is in the fact that the guidance has reverted to 1994’s focus on “participants and beneficiaries”—the stakeholders a fund is meant to serve, rather than “the economic interests of the plan”—as the immediate focus of an ERISA plan’s mission. Plan trustees should act in their beneficiaries’ interest.