Climate Change & the Smith Endowment
The Smith College Board of Trustees, at its October 21, 2017, meeting, adopted the Advisory Committee on Investor Responsibility’s four strategic recommendations regarding climate change and the Smith endowment.
Increase Impact Investing
First, and most significantly, Smith will increase its impact investments—those intended to generate measurable social and environmental change alongside a financial return—from $9.5 million to $30 million, over time. Examples of such investments might be industries and funds focused on sustainable agriculture, renewable energy, energy efficiency, conservation, affordable and accessible services and sustainable manufacturing processes. The Investment Committee has asked Investure to identify such investments. This enhanced commitment to impact investing aligns with values of innovation and social change at the center of the Smith experience.
Favor Managers and Funds Adhering to Environmental, Social and Governance (ESG) Principles
As of June 30, 2017, 16 percent of Smith’s endowment is invested in ESG funds via 23 fund managers. The board voted to have the Investment Committee work with Investure to continue to increase the number of funds and fund managers in the endowment who have adopted ESG principles. This decision reflects the recognition that this type of investing can support the college’s broader commitments to environmental sustainability and social equity while still generating appropriate financial return.
Avoid future direct holdings in coal
As of June 30, 2017, Smith’s endowment does not have any direct coal holdings. Recognizing that coal is the most environmentally harmful fossil fuel, the board voted to avoid any future direct investments in coal. The Investment Committee will work with Investure to exclude from the endowment any new direct investments in coal that would be directly owned by Smith or held as public assets by Investure funds.
Report regularly on socially responsible investment progress
The Investment Committee of the board will work with Investure to provide regular, transparent reports to the Smith community on such metrics as fossil fuel exposure, ESG adoption and impact investments. The ACIR will receive and review such reports on a quarterly basis.