Sustainable Investing at the University System of Maryland Foundation

University System of Maryland (USM) students have been driving change at The USM Foundation for several years. In 2013, students circulated a petition to divest from fossil fuels with nearly 600 signatures from students at Towson University, the University of Maryland, Baltimore County and other colleges. In response, in 2014, along with the United Nations, the USM Foundation was a seed investor in the iShares MSCI ACWI Low Carbon Target ETF.The ETF tracks the results of the MSCI ACWI Low Carbon Target Index and addresses two dimensions of carbon exposure – carbon emissions and fossil fuel reserves. The fund was designed for individuals and institutions interested in environmental sustainability without divestment and provides transparency to the carbon footprint of their investments. On January 29th, 2015 a member of the USM Foundation investment team rang the NYSE's closing bell to officially usher in the new fund’s ticker onto the exchange.

“Being able to address socially responsible concerns while maintaining our fiduciary standards is critical to our investment approach,” said Sam Gallo, Chief Investment Officer of the University System of Maryland Foundation. “The iShares MSCI ACWI Low Carbon Target ETF is a low-cost investment solution that allows us to maintain full exposure to global equities while incorporating a carbon exposure reduction strategy.”

Students continued to push for greater carbon exposure reduction at the USM Foundation, and in 2014 the Ad Hoc Committee for Socially Responsible Investing was formed to evaluate a proposal to divest from fossil fuels, put forth by the USM student group Fossil Free Maryland. After consultation with the students and with national thought leaders on the topic, the Committee recommended that the Foundation should make no direct investments in the Carbon Underground 200 companies, should establish a position on the investment staff to seek out investments in renewable energy, become a signatory to the United Nations Principles for Responsible Investment, join the Intentional Endowments Network, and renew its appeal to investment fund managers to consider the carbon footprints of the companies they invest in and to choose renewable energy investments over fossil fuel investments, all else being equal. These recommendations were approved by the USM Foundation Executive Committee and the USM Foundation Investment Committee.

"It's because of the students and the positions they took that caused us to focus on it this year," said Leonard Raley, president and CEO of the foundation. "But the world is changing and we're paying attention to it. We're concerned about climate change and I think the actions that our foundation took reflect that."



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