California State University, Dominguez Hills
PA-10: Sustainable Investment

Socially responsible mutual funds-
1) Calvert US Large-Cap Value Responsible Index Fund (13.23% of portfolio)
2) Domini Impact International Equity Fund (7.64% of portfolio)
Sustainability investment funds:
1) TIAA-CREF Core Impact Bond Fund; ADV (8.54% of portfolio)
2) CCM Community Impact Bond Fund (5.82% of portfolio)

TAP investments are driven by the CSU Board of Trustees policy around environmental, social, and governance factors: “The California State University System is made up of 23 campuses across the state of California. The CSU educates 474,000 students every year and has one of the most diverse student bodies in the United States. The California State University Foundation and Board of Trustees manages $25 million of the CSU System’s $1.4 billion endowment. Each campus may have its own separate endowment management entity and specific investment policies.
The Board acknowledges the importance of understanding the potential risks and value that environmental, social, and governance (“ESG”) factors may have on CSU investments. Therefore, the Board expects that the consideration of ESG factors shall be integrated into the investment decision processes of the CSU. Several of its campuses’ investment policies are modeled based on these guidelines. Furthermore, the CSU System is a signatory to the Global Investor Statement on Climate Change, a statement that includes a broad range of commitments to address climate risks and opportunities.” (https://www.intentionalendowments.org/the_california_state_university_system)

This policy is specifically integrated into TAP’s Board activities and policies around long-term investing, specifically their policy around Socially Responsible Investing: “SOCIALLY RESPONSIBLE INVESTING The Board of Trustees of the California State University adopted a resolution urging auxiliary boards which make corporate investments to issue statements of social responsibility and to follow those precepts in examining past and considering future investments. In response, the TAP states a primary fiduciary responsibility to maximize investment return, while taking into consideration appropriate risk, to further its educational purposes. At the same time, California State University endeavors to be a good corporate citizen and responsible investor. The TAP recognizes that sometimes a corporation's policies or practices can cause substantial social injury; defined as, gravely injurious impact on employees, consumers, and/or other individuals or groups that results from specific actions by the company. For example, corporate actions may violate domestic or international laws intended to protect individuals and/or groups against deprivation of health, safety, or civil, political, and human rights. Where the Committee finds that a company's activities or policies cause substantial social injury, and that a desired change in the company's activities would have a direct and material effect in alleviating such injury, it may exercise practicable shareholder rights to seek modification of the company's activities to eliminate or reduce the injury, using such means as a) direct correspondence with management and b) proxy votes. If the Committee further concludes that the company has been afforded reasonable opportunity to alter its activities, and that divestment will not impair the capacity of the TAP to carry out its educational mission, then it may instruct its investment managers to divest the securities in question within a reasonable period of time.” (p. 14, https://8f8768a9-1119-4bf4-8f73-8f0793e639d5.usrfiles.com/ugd/8f8768_6f3b1c41513048bdb3ca71c82fee28db.pdf)

This policy was used as part of the RFP (Request for Proposal) used to find an OCIO (Outsourced Chief Investment Officer) Firm with a socially responsible department that would align our investment objectives to our mission. The RFP committee chose Merrill Lynch, Bank of America, as our OCIO. Foundation staff, the Executive Committee, and the Board work closely with a team including an individual specializing in Socially Responsible and ESG investing

The overall campus endowment is split between Philanthropic Foundation and Toro Auxiliary Partners (TAP). TAP provides financial management and long-term investment management of all campus funds, including Philanthropic Foundation's. The amount of endowment not reported here is from allocated funds under Philanthropic Foundation which are not at liberty to be invested (e.g. being held for donated program activities, reserved as cash, etc.).