By SEI Investments Management Corporation (SIMC)
Effective May 14, 2021, the New Covenant Income Fund (the Income Fund) changed its investment strategy.
The purpose of this change was to add an environmental, social and corporate governance (ESG) implementation to the Fund. The ESG criteria will be in addition to existing social screening already used within the Income Fund.
We believe the addition of ESG criteria is consistent with the Presbyterian Principles’ objective to create a constructive vision of the directors needed for a fairer society and healthier world.
Two of the Income Fund’s managers, Income Research & Management and Western Asset Management, will directly implement the ESG criteria within their investment decision-making processes.
The ESG criteria, in addition to existing social screening, may result in an overweight (or underweight) to sectors relative to the benchmark of the Income Fund. However, changes to the composition of the Income Fund are expected to be minimal.
By Robyn Davis Sekula
New Covenant Trust Company will start utilizing new positive and negative screening tools to assist investors who want their investments to align with their values beginning April 1. These tools will allow New Covenant Trust Company to target investment in companies with a strong record of diversity, equity and inclusion.
New Covenant Trust Company is a subsidiary of the Presbyterian Foundation.
Ten percent of New Covenant Trust Company’s fees earned from this initiative will go to the Matthew 25 initiative of the Presbyterian Church (U.S.A.).
Greg Rousos, President of New Covenant Trust Company, explained that the new screening capabilities are similar to other values based investment strategies that NCTC has developed such as the fossil fuel free strategy. These strategies use an algorithm to find companies that are a fit and allocate capital to best reflect the benchmark index.