Increasingly, endowments are exploring and implementing strategies for endowment portfolios that are more closely aligning with institutional mission and sustainability goals - especially reducing the harms of racial injustice, other forms of inequality, and the climate crisis.
This Roadmap guides investors through key steps toward creating intentionally designed endowments – those that look to align investment practices with institutional mission through sustainable investing, which includes explicitly considering long-term environmental, social, and governance issues in the investment process. Throughout the Roadmap you will find links to additional resources for each of the steps, including how to apply them to specific sustainability goals.
There is no “one right way” to approach this process. The steps outlined here are not necessarily linear; each institution may take a different path, taking steps in a different order or at a different speed. The process should be iterative, with mechanisms for revisiting past steps and adjusting if needed as circumstances change or as the Board’s understanding of the issues deepens.
The Roadmap is a living document, updated regularly as stakeholders provide feedback, new supporting tools and resources become available, and as circumstances change.
An overview of the roadmap is available as a PDF for use in meetings and as a reference guide.
Step 1: Learn
Before exploring avenues for aligning the endowment with institutional mission, trustees will want to understand sustainable investing in the context of their fiduciary duty and of today's capital markets. Since the field continues to evolve, many endowments revisit the Learning step regularly. This section of the roadmap will guide your learning process and point you to educational resources on key topics.
Step 2: Build Consensus
Endowment fiduciaries will want to have a common understanding of the institution's mission and to understand how that mission might be better advanced by the endowment's investments. This section of the roadmap will give you ideas for how to bring stakeholders together to reach that common understanding.
Step 3: Establish Investment Policy
Formalizing what it means for an institution to align its endowments with its mission into a written investment policy statement is consistent with best practice for fiduciaries. This section of the roadmap will give you the tools to update your Investment Policy Statement and guiding principles for investing.
Step 4: Assess the Current Portfolio
Once an investment policy has been established, it is helpful to assess the current portfolio in relation to those guidelines. This section of the roadmap provides tools to analyze your current portfolio’s alignment with your guiding principles, including evaluation tools for use at the manager level and underlying security level.
An institution may choose to adopt sustainable investment practices across the whole portfolio or to stage in different facets of an intentionally designed endowment. This section of the roadmap provides tools for implementing sustainable investing strategies, providing a wide menu of actions that can be taken individually or together to bring your portfolio into alignment with your goals.
Step 6: Monitor the Portfolio
Aligning the endowment with mission is an iterative process and includes ongoing monitoring of the endowment portfolio in terms of both financial performance and alignment with mission. Similar to Step 4: Assess the Current Portfolio, this section of the roadmap provides tools for understanding and managing the performance of your investments - both financially, and on the impact metrics that matter to you.
Step 7: Communicate Progress
Sharing progress publicly on sustainable investment activities can signal to alumni, donors, students and faculty that the school fully embraces its institutional mission. This section of the roadmap provides ideas for sharing your story in ways that help build the field of sustainable investing, demonstrate transparency, and gain recognition for your work.