Dear University Community,
As I near the completion of my first year as your president, I write to share news of an important decision the Board of Trustees made at the recommendation of our Outsourced Chief Investment Officer (OCIO), finance leadership, and myself. After careful consideration of our investment options and how best to align them with our values while also meeting our fiduciary obligations to the University, the Endowment’s Investment Committee voted to move a portion of our investments to funds dedicated to environment-, social-, and governance-oriented (ESG) strategies, thus enhancing our commitment to sustainable investing. ESG funds also integrate diversity of leadership and boards into the investment process.
While it is important to note that the University has been consistently underweight in fossil fuel investments, which made up less than 5% of our current portfolio, the Board chose to not only look at ways to divest from fossil fuels but also how best to reinvest assets in managed ESG investment funds so our funds work for positive change. Effective May 13, 2022, the Endowment’s Investment Committee voted to reinvest 16% ($32 million as of March 31, 2022) of endowment funds in dedicated ESG equity strategies, enhancing our commitment to sustainable investing.
Notably, the strategies include not holding assets in companies that show involvement in fossil fuels extraction and thermal coal power and investing to further clean energy, resource efficiency, sustainable consumption, circular economy, and water sustainability.
The mission of our Endowment is to generate a permanent stream of contributions of maximum value to support the operating needs of the University. Our investment policy also notes that we should strive to match our investments with our University principles. With this change, we have taken an important step to do that while taking into consideration appropriate levels of risk to achieve short and long-term financial goals.
This decision is a result of numerous iterations of analysis and several thoughtful discussions by our Investment Committee. I would especially like to thank our 2021-22 ASUR president Chloe Levine who spurred this work and engaged with our Trustees to advocate for this important change.
Krista L. Newkirk