How Hampshire Invests

lash.jpgHow Hampshire Invests

By Jonathan Lash, President, Hampshire College

There is growing debate — much of it driven by students — about the obligation of mission-driven nonprofit organizations to consider non-economic issues in their choice of investments. Society exempts us from taxation because we serve public purposes. Donors support us because they believe that doing so contributes to the common good.

Each institution has its own mission, values, culture, and traditions to consider in making decisions about fiscal responsibility and moral obligation, but it is difficult to understand why an institution would refuse even to discuss the issues. For those of us engaged in education, this is no minor question: College and university endowments total more than $346 billion — funds provided by donors to lend long-term support to institutions they believe in. We have an obligation to those donors to manage their gifts prudently. But the investment decisions we make have more than fiscal impact. We teach by what we do as well as what we say. Our educational mission and responsibility to the future offer compelling reasons to invest in accord with our values.

 

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Should MIT Divest? A Debate on Fossil Fuel Investment

Yesterday, Tony Cortese, a Principal of the Intentional Endowments Network, moderated a debate on whether or not MIT should divest of fossil fuels.  Click here or on the image below to watch the full program on the MIT site. 

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A description of the event and speakers from MIT's website:

Join this event of the MIT Climate Change Conversation to learn about different facets of divestment from fossil fuel companies and explore whether MIT should divest its endowment as part of its response to climate change. Six prominent voices in the dialogue on climate change and energy will be staged as two teams that present PRO-divestment and AGAINST-divestment arguments in a classic debate format. The discussion will provide a nuanced view of the relevant issues being widely contested on university campuses, and in particular at MIT.  This is an unprecedented opportunity for the MIT community to hear a diversity of expert perspectives, to have questions answered, and to deepen our understanding of the opportunities, drawbacks, and alternatives to fossil fuel divestment and of how universities can address global warming.

ModeratorTony Cortese, Intentional Endowments Network

Debating for fossil fuel divestment:

  • Naomi Oreskes, Professor of History of Science at Harvard University
  • Don Gould, Trustee Pitzer College & CIO Gould Asset Management
  • John Sterman, Professor, MIT Sloan School of Management

Debating against fossil fuel divestment:

  • Brad Hager, Professor, Director of the MIT Earth Resources Laboratory
  • Frank Wolak, Professor of Economics, Stanford University
  • Timothy Smith, Director of ESG Engagement, Walden Asset Management

 

 

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Student Action at San Francisco State Foundation Board Meeting

SFSU-Thx-for-Divesting.png 

Students marching and carrying signs outside of the San Francisco State Foundation’s Board meeting on February 5th, 2015 had a slightly different message than most divestment protesters: “Thank You.” The demonstration was a show of student support regarding the Board’s decision in May 2013 to divest from coal and tar sands companies.

 

Through open and respectful engagement between students, administrators, and the board, San Francisco State became the first public university to make the commitment to divest. The foundation has also voted to look into the option of divesting from all fossil fuel companies in the future.


Last month, Robert Nava, President of the SFSU Foundation, spoke at the Intentionally Designed Endowment Forum at Arizona State. He told the story of how calls for divestment from students prompted a healthy exchange between administrators and students in looking at the costs, benefits, and practical challenges of such an action, that led to the decision to divest and has opened up an ongoing conversation about the role of endowment investment practices in broader institutional sustainability strategies.

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Living Green

Cortese-Harvard-Living-Green.jpgDavid Levin published an excellent article about Anthony Cortese in the Winter 2015 Edition of the Harvard School of Public Health Magazine. The article describes Tony's passion for the environment and his subsequently extensive environmental career from being one of the first employees of the Environmental Protection Agency in 1970, to his most recent project, launching the Intentional Endowments Network this past summer. 

Read the article on HSPH's website: Living Green.

David Levin is a Boston-based science journalist. He can be reached through his website at www.therealdavidlevin.com.  

Photo: Kent Dayton/ Harvard Chan

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On a clear day, the air outside Anthony Cortese’s office in downtown Boston is filled with the unmistakable smell of the ocean—a pungent, brinelike perfume that hangs in the morning air. It floats in from the Inner Harbor, where fishing boats lazily motor out to lobster traps set just offshore.

It’s a pure New England scene, but it wasn’t always so idyllic. Cortese, SD ’76, who grew up in Boston’s North End neighborhood, remembers the harbor very differently. Throughout his childhood in the 1950s and ’60s, few people lingered on the shoreline. Raw sewage and industrial waste often clogged the water, and the air hung heavy with soot from industrial sites and the Central Artery, an infamous stretch of elevated highway that sliced downtown Boston in half after its construction in 1959.

“We couldn’t go swimming because the harbor was so dirty. The air quality was awful, too, and there were a lot of people in the neighborhood with chronic respiratory disease,” he says. “Many of my close friends had asthma, and a lot of older people in the neighborhood had a chronic cough. People spit everywhere because their lungs were so full of mucus.”

Cortese never forgot what it was like to be surrounded by neighbors who directly suffered from these ubiquitous industrial contaminants. For him, it drove home one point: Environmental conditions are inseparable from the public’s health.

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U.S. SIF Trends Report 2014: Why SRI is Here to Stay

US_SIF_Trends_Report_Cover.pngSustainable, Responsible, and Impact (SRI)* investing is here to stay, and is only getting stronger with time. The U.S. SIF Foundation, has been tracking the industry for the past 10 years and recently published their biennial Trends Report highlighting the significant growth and advancement of the industry. According to the study, the total US-domiciled assets under management using SRI strategies increased 76 percent in the past two years, expanding from $3.74 trillion at the start of 2012 to $6.57 trillion at the start of 2014, representing nearly 18 percent of the $36.8 trillion in total assets under management.

Furthermore, in the past two years, assets incorporating ESG factors have increased threefold to $4.80 trillion. What is pushing this growth?

The report highlights various incentives that have shaped the evolution and growth of SRI in the US including: the “growing market penetration of SRI products, development of new SRI products, and a fuller integration of ESG criteria by numerous large asset managers across wider portions of their holdings.” Investors are being further persuaded by client demand for SRI products, advocates surrounding the divestment movement, and the increasing influence of organizations promoting SRI investing.  

 

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The ACUPCC Summit, Risky Business & Higher Education Sustainability Leadership

IDE-Session-ACUPCC-Summit.pngLast month Second Nature hosted the American College & University Presidents' Climate Commitment (ACUPCC) 2014 Climate Leadership Summit. More than 200 presidents, senior administrators, and sustainability champions from colleges and universities across the country attended. 

Among the highlights was a keynote address by Kate Gordon, Executive Director of the Risky Business project, which was spearheaded by Henry Paulson, Michael Bloomberg, and Tom Steyer. She clearly articulated what made this report unique and so important.  First it was a bipartisan effort, that just focused on the facts in terms of what our best science is telling us we can expect in terms of climate impacts in various regions.  To stay out of the political fray around climate change, they did not evaluate any policy recommendations, which meant they could not approach the project as a typical 'cost-benefit' analysis (like the famous Stern Review from 2006). Instead, it is a risk assessment.  

As Henry Paulson wrote in a NY Times Op-Ed in June: "viewing climate change in terms of risk assessment and risk management makes clear to me that taking a cautiously conservative stance — that is, waiting for more information before acting — is actually taking a very radical risk. We’ll never know enough to resolve all of the uncertainties. But we know enough to recognize that we must act now."

This message resonated with many of the ACUPCC Summit participants.  

On Friday we facilitated a session on the "Intentionally Designed Endowment" concept.  We started with a panel moderated by Jonathan Lash, president of Hampshire College, where we heard from:

  • Don Gould, Chair of the Investment Committee at Pitzer College,
  • Patrick Norton, VP Finance and Treasurer, Middlebury College, and
  • Susan Gary, Professor at the University of Oregon School of Law, and fiduciary responsibility scholar

Following the panel, we had engaging dialogue sessions at small tables, where participants discussed:

  • What actions they would take on their campuses to move forward conversations on intentionally designed endowments (bring in sustainable investing experts, create committees on investor responsibility, develop ESG investment policies)
  • How we might support these conversations as a network (hold regional meetings, publish details of successful approaches, engage investment managers, provide resources) 
  • What tools and resources might be needed (case studies, example policies, proxy voting guides, web portal with resources) 

Participants also indicated where they felt their institution fell on a spectrum of addressing these issues -- ranging from "barely on the radar" to "effective policy in place with a track record".  The results mirrored those from our April forum when we did a similar exercise, with some at every stage, but a concentration in the early phases of "just getting started" moving towards "constructive deliberation" regarding how to move forward: 

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The Intentional Endowments Network is working to support these institutions and all endowments in making progress on this spectrum, by hosting regional meetings, facilitating peer-to-peer and expert consultations, and providing venues for information exchange,  so that intentionally designed endowments -- that enhance financial performance by integrating sustainability risks and opportunities, while improving alignment with institutional mission and vision -- are the norm in higher education.

 

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Fossil Fuels, Investments and the Public Good

Original posting by Terry Link on Possibilitator.

Fossil Fuels, Investments and the Public Good | Possibilator

by Terry Link, November 24, 2014

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#GenerateChange for a Clean Energy Economy

The EPA Clean Power Plan proposes standards to cut carbon emissions from electric power plants - the single largest source of global warming pollution in the U.S. This plan is a crucial step toward a clean energy economy as it helps the nation become more efficient and gain international leverage while protecting the environment and health of its communities now and for future generations. 

Ceres is mobilizing hundreds businesses, investors, and individuals to support the rules before the end of the public comment period on December 1. 

Take action now! Sign the petition in support of the Clean Power Plan and join the #Generate Change campaign and help amplify the message that the Clean Power Plan will reduce carbon, create jobs and hasten the transition to a clean energy economy. 

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Passive Equity Strategies for the Low Carbon Investor Webinar

The Investor Network on Climate Risk held the Passive Equity Strategies for the Low Carbon Investor Webinar on Thursday, November 13. This webinar featured Thomas Kuh, Executive Director for ESG Indices at MSCI Inc., Sarah Gillman, Chief Financial Officer at Natural Resources Defence Council, and Peter Solli, Parter at Aperio Group. These three panelists presented three different approaches to rules-based, index investing that are available to investors today. 

Click here for a recording of the webinar. 

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Boston Carbon Risk Forum a Big Success

The Boston Carbon Risk Forum at Harvard law School in Cambridge, MA on September 29, 2014 was an outstanding event attended by about 150 local and state government, senior academic, investment industry and NGO leaders.  The presentations (available on the website) were among the most informative I have seen on several issues related to aligning endowment investments with creating a healthy, just and sustainable society.  

Bob Massie's keynote set the stage for a very engaging day by making the moral, political and financial case for the development of a new economy that is just and sustainable, the importance of government to take serious action climate disruption and how divestment of fossil fuels along with investing using ESG criteria is an important strategy.  

The presentation by Joe Curatone of Somerville and the actions by the cities of Boston, Cambridge and Somerville were impressive.  The presentations on the financial, health, social and environmental risks of a high carbon economy were especially insightful and helpful.  The response of the University of Dayton ($550 million endowment) and Pitzer College ($125 million endowment) that have divested of 200 fossil fuel companies was compelling with several novel ways of thinking about the role of higher education to complement initiatives such as the American College & University Presidents' Climate Commitment in leading a positive response to the climate crisis.

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