Environmental, Social and Governance Investing by College and University Endowments in the United States: Social Responsibility, Sustainability, and Stakeholder Relations
62 Pages Posted: 19 Jul 2012
Date Written: July 18, 2012
Abstract
This paper, commissioned and sponsored by the IRRC Institute, analyzes the state of environmental, social and governance (ESG) investing by college endowments, by aggregating multiple datasets addressing three areas of activity: 1) incorporation of ESG criteria into endowment management, 2) shareholder advocacy and active-ownership initiatives, and 3) governance and transparency of ESG activities. Among endowments, we find a weak understanding of ESG investing concepts and practices, due to low participation in investor networks where leading discussions of sustainable, responsible and impact investing occur. We also highlight wide variance within existing data, a general lack of transparency, and numerous problems raised by our independent verification of self-reported data. It appears that far less ESG investing activity is occurring among endowments, despite widespread association of colleges with recent campaigns such as Sudan divestment. In order to understand what activity we do find, we argue that ESG investing by endowments should be understood within the specific context of stakeholder dynamics, which distinguish endowments from foundations and other institutional investors.
Keywords: Endowments, ESG, Sustainability, Responsible Investing, SRI, Impact Investing, Finance
JEL Classification: D82, G23, I22, L31
Suggested Citation: Suggested Citation