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Response to Divest Smith

March 28, 2018

Dear Members of Divest Smith:

We write in response to requests that Divest members presented when meeting with the Advisory Committee on Investor Responsibility (ACIR) at its February meeting. The requests were: 1) that the college “divest from all fossil fuels—direct, indirect, legacy holdings—and commit to no future holdings,” and 2) that the college leave Investure, its outsourced investment management firm, if Investure “fails to comply [with full fossil fuel divestment] in a timely fashion.”

The first request was addressed in October 2017, when ACIR presented—and the Smith College Board of Trustees adopted—four strategic recommendations regarding climate change and the Smith endowment. These consensus recommendations were the product of two years of community engagement and were directly informed by the report of the Study Group on Climate Change, which also had a Divest student among its members. The recommendations from ACIR did not include divestment. The four recommendations are:

Recommendation 1: Increase impact investing: 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. This enhanced commitment to impact investing aligns with values of innovation and social change at the center of the Smith experience.

Recommendation 2: Favor managers and funds adhering to environmental, social and governance (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.

Recommendation 3: 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 investments in coal that would be directly owned by Smith or held directly by Investure funds.

Recommendation 4: 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. ACIR will receive and review such reports on a quarterly basis.

In regard to your second request, ACIR met with Investure in February to ensure the firm is actively moving forward on the recommendations. Investure understands Smith’s goals and is making progress on them, including the review of new impact investment opportunities. Smith periodically reviews its relationship with Investure; the most recent such review took place in 2017 and resulted in a commitment to remain with the firm.

As a result of the work of the last several years, the college’s governance process now includes procedures for Smith community members to raise a potential issue of social responsibility and the endowment with ACIR. The issue of the Smith endowment and climate change has been raised and addressed, as outlined above; we are now in the implementation phase. We value the work that ACIR has done in reaching the four recommendations that the board adopted and look forward to keeping the Smith community advised of our progress as we implement the recommendations.


April Foley ‘69, trustee
Chair, Advisory Committee on Investor Responsibility

Deborah L. Duncan ‘77
Chair, Board of Trustees