The Task Force met May 30 in Athens and worked out a detailed action plan, based on the initial discussions in New York and the telephone conference in April. At these meetings, the Task Force had agreed to:

• Identify which non-financial indicators are regarded as important from the Foundations’ point of view, and are judged “material” from an investment perspective.
• Review currently existing indices and screening methods to judge to what extent they meet these priorities
• Formulate the principles so they can provide a Protocol and first reference and low-risk, low-cost benchmark for foundations and financial institutions to align their investment mandates.

The chairman summarized the results of these earlier meetings, defining the primary task to “develop an approach that can identify proactive companies in a way that is acceptable for 'mainstream' endowment managers, so that they can:

• construct portfolios of proactive companies that reflect common standards of Alfa and beta, and
• Evaluate the economic performance of such portfolios compared to standard behaviour of asset management.” 

The meeting reviewed briefly the draft state of the art report prepared and expanded with the experience of the two new members to the Task Force, IDEAM of France and Calvert from the USA.

Members suggested drawing on the work of the UN Financial Industry and looking at the work of the FEER (Fed. Europeen des Expert Comptables) who also has developed Guidelines on Sustainable Investments. One should also build on the ongoing research work by the Foundation for Business and Society and IDEAM, who with Det Norske Veritas are modelling the impact of intangible assets on corporate performance.

A priority aim was seen to close the “cultural gap” between the board and senior management of foundations and the asset managers that are mandated by them to manage the endowment. It was therefore important to raise the awareness and understanding of the Foundations about what the status and performance of SRI and responsible investments is, and that it is part of a fiduciary responsibility of Foundations’ board and management.

The Task Force set therefore the following priorities for the work:

State of the Art Report
The draft report shall be extended and build on a fact-finding of present activities and opinions by Foundations: The members suggested cooperating with the EFC on an interview process (with questionnaires) that could map the present understanding and level of activity among Foundations in respect to investment guidelines. The report should describe existing socially responsible investments (like the Noyes Foundation). The report should also explore eventual legal restrictions, and may reflect views by the legal taskforce for Model Statutes for European Foundation.

The two steps for producing this report would be:

1. An initial short report on the role of SRI and the need of the Foundations to respond to new fiduciary challenges. It should:

• Give background on present responsible asset management trends
• Reflect the WSSD Bellagio statement and its follow up. Therefore it should:
• reflect GRI reporting efforts
• link to Millennium Goals and the Global Compact
• Emphasize that this is an initiative to help Foundations (not a policing function)
• and protect them against credibility challenges

The purpose of the report is to interest Foundations’ boards and senior management in the subject, and prepare a basis for an in-depth.

2. Develop a questionnaire to EFC members (click to download)

• Its aim  is to identify and describe what Foundations are doing today.
• It should allow a reflection of opinions of Foundations, both positive and critical.
• It should be addressed to chairmen of Foundations.
• It should also include the churches, and NGO’s.
• It should explore the legal restrictions for endowment and look at law in different countries.

Such a survey may be repeated every year or second year and could become a Barometer.

2.  Develop Guidelines
The second priority was to develop simple guidelines for Foundation asset managers, with the objective to “bridge the ”cultural” Gaps between programs and investments” .  These were published in Summer 2006 in the PRIME Toolkit.  Please click here.

3.  Encourage Quality Assurance
A third priority issue was the assurance that asset managers would bring the right quality to the management of endowments. Bellagio member MISTRA has supported surveys on the quality of raters. 

• There is a need for outside quality assurance of sustainable asset management
• There are few competent SRI analysts
• Need a consortium to analyse SRI research
• Also governance issues to be evaluated in foundations (fiduciary trust).

A structured process to be used within the Foundation was suggested that could have the following elements:

A: a Tool box / Training program for Foundations and their Investment managers

4.  Demonstration Fund
The proposal to “walk the talk” and develop a demonstration fund was welcomed by the task force. The idea is to make a fund available that would show how a risk-controlled sustainability fund could be managed along the principles suggested by the task force. Foundations would be invited to place a small amount of their endowment (3%-5 %) in the fund, in order to be able to compare how such a sustainability-oriented fund would compare with the financial management of their other endowments.

A certain percentage of the management fee could go to the Bellagio Forum for support of its activities.

• Find a “rational” approach that would gain the acceptance of those appointed to manage the endowments of foundations.
• Build on what others already are developing (i.e. not “reinvent the wheel”)
• Adapt the best of existing SRI thinking to the special needs of Foundations. (such as what is outlined in the UN FI programs)