Over the past academic year, student teams from across the U.S. participated in a first-of-its-kind student investment competition hosted by the Intentional Endowments Network (IEN). A panel of judges selected the team from the University of California, Berkeley as the inaugural winners of the SIILK Corporate Engagement Competition, for preparing the strongest investment recommendation and shareholder engagement strategy to improve company performance (and investment returns) through better environmental, social, and governance (ESG) practices.
“The competition gave us an opportunity to think about strategies for engaging with management and practice crafting a shareholder resolution,” said Katharine Hawthorne, a member of the winning team. “Highlights of the competition included learning how the other teams integrated financial and ESG considerations and seeing the different approaches to shareholder engagement for driving corporate sustainability.”
The pilot year of this competition put a new spin on the traditional approach to investment competitions by focusing on the responsibility of investors to directly engage company management on the risks and opportunities they see. IEN invited students to not only produce an investment recommendation in a publicly traded company, but also to include in their recommendation a shareholder engagement strategy for improving the company’s business performance and impact on society. Teams from four universities - Arizona State University, Bryant University, Yale University, and the winning team from the University of California, Berkeley - participated in the competition as a real-world introduction to sustainable investing.
“We launched this competition to bring more awareness to the immense opportunity to create impact through shareholder engagement in public equity investments. The scale and influence of such a mainstream asset class makes it tremendously important for students interested in entering the investment field to be able to spot opportunities to actively engage as shareholders,” said Nicole Torrico, a Program Manager at the Intentional Endowments Network. “By growing this skill set, students now and in their future careers will be able to achieve positive impact at scale while improving the financial performance of their investments.”
Each student team worked throughout the year to write an investment recommendation that included an investment thesis, financial model and valuation, quantitative ESG research and analysis, market and sector analysis with comparison to industry peers, risk identification, and a proposed shareholder engagement strategy to address an identified risk area.
While each team’s written recommendation was impressive, the judges noted that identifying a company with financial growth potential that is well positioned for ESG opportunity, not just risk management -- and focusing on SASB as a framework for ESG analysis -- made the University of California, Berkeley’s investment recommendation stand out as exceptional. Additionally, focusing on a company that is smaller in size and at the beginning of its ESG journey provides an opportunity for more significant and impactful shareholder influence. IEN released a video announcing the winning team here.
“I was very glad to participate in the inaugural competition, and was blown away by the shareholder engagement recommendations in particular,” said Gabe Rissman, co-founder and president of YourStake.org, and one of the competition judges. “ The student teams presented engagement theses that will create positive societal impact and enhance shareholder value. Corporate management should listen closely.”
Shareholder engagement has become a greater area of focus for IEN. In addition to hosting this competition, over the past year, IEN re-launched a shareholder engagement working group and collaborated with Warren Wilson College on an engagement strategy that resulted in the co-filing of 3 shareholder resolutions by the college. “Increasingly, college and universities are interested in dialogue, engagement, and proxy voting as a means of effecting more forward thinking company strategy around the climate and inequality challenges we face,” said Alice DonnaSelva, Managing Director of the Intentional Endowments Network.
This competition is part of the ongoing programming efforts of IEN’s SIILK Network, a peer learning network of students, faculty, and staff involved with student-managed investment funds and finance curriculum focused on sustainable, ESG, and impact investing. SIILK members connect to scale the uptake of sustainable investing education at colleges and universities across the country, build strong bridges between endowment investing and student-managed funds, and grow the talent pipeline, with an emphasis on bringing more women and people of color into the industry.