Boston commits $150 million to ESG investing

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Boston’s commitment to environmental, social and governance, or ESG investments reflects a national trend, according to a bond analyst.

“I don’t think that in the long run it will effect credit worthiness one way or another, but ESG investing is increasingly popular with a number of investors and Boston is keeping up,” said Janney Capital Markets managing director Alan Schankel.

Mayor Martin Walsh on Thursday announced a $150 million allocation from the city’s operating budget in short-term fixed income securities of companies that maintain strong corporate ESG practices.

The city on Tuesday plans to competitively sell $145.1 million of Series 2019A general obligation bonds. Maturities will extend through 2039. Locke Lord LLP is bond counsel for the sale. PFM is the municipal advisor.

The new policy also includes Boston's Community Bank Initiative, which will commit at least $100 million of operating funds in community banks and local financial institutions. The city's operating funds consist of revenue held in short-term investments until needed for budgeted expenditures.

Additionally, Boston will collaborate with local sustainability nonprofit Ceres, which works with institutional investors and influential companies.

In joining the Ceres Investor Network, Boston will work alongside 165 other institutional investors representing more than $25 trillion in assets to advance investment practices, corporate engagement strategies and policy changes.

“We're putting our money where our values are,” Mayor Martin Walsh said.

Walsh cited as an example of successful corporate engagement the 2018 resolution New York State Comptroller Thomas DiNapoli filed asking American Electric Power to adopt company-wide targets to cut greenhouse gas emissions.

DiNapoli’s office withdrew the resolution in exchange for a public commitment by the company and published business strategy to cut, by 60% from its 2000 levels, its carbon dioxide emissions by 2030 with the long-term goal of becoming carbon neutral.

Boston has maintained triple-A ratings from Moody's Investors Service and S&P Global Ratings since 2014. S&P highlighted, beyond the city’s “very strong” economy, its climate action plan, which establishes goals for reducing greenhouse emission by 2050.

Over the past five years, Boston's revenue has increased by 25%. It has added 20,000 jobs each year, produced nearly 28,000 new homes, and added more than $9.3 billion of development in construction.

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