Overall Rating Platinum
Overall Score 86.35
Liaison Careen Arsenault
Submission Date March 3, 2022

STARS v2.2

Cornell University
PA-10: Sustainable Investment

Status Score Responsible Party
Complete 2.70 / 5.00 John Yates
Investment Analyst
Cornell University Investment Office
"---" indicates that no data was submitted for this field

Total value of the investment pool:
10,056,399,673 US/Canadian $

Value of holdings in each of the following categories:
Value of holdings
Sustainable industries (e.g., renewable energy or sustainable forestry) 117,654,667 US/Canadian $
Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy) 0 US/Canadian $
Sustainability investment funds (e.g., a renewable energy or impact investment fund) 129,110,427 US/Canadian $
Community development financial institutions (CDFIs) or the equivalent 0 US/Canadian $
Socially responsible mutual funds with positive screens (or the equivalent) 0 US/Canadian $
Green revolving funds funded from the endowment 0 US/Canadian $

A brief description of the companies, funds, and/or institutions referenced above:

Sustainable Industries: Cornell is an investor in US timberlands that are certified by the Sustainable Forestry Initiative. This category of holdings also includes investments in renewable energy, energy efficiency, energy storage, environmental credit creation, and clean technologies. Sustainable Investment Funds: As part of the fossil fuel moratorium, Cornell initiated a search for sustainable investment funds. That search has culminated in two funds, thus far, that seek to benefit from a transition to a lower carbon economy. The first fund invests in carbon allowances and is long companies aligned with the energy transition and is short carbon-intensive companies. The other fund seeks to capitalize on and support the highly material-intensive energy transition through investments in industrial metals (e.g., copper, nickel, etc.). These funds join an existing lineup of sustainability-focused funds that Cornell has been a longstanding investor in.

Additionally, about 83% of Cornell’s long-term investment assets are handled by managers who are UNPRI signatories or have another strong ESG/SRI framework in place to support their investment decision-making processes. “Sustainable investments,” based on the STARS criteria, account for 2.45% of the investment pool because of the strict qualifications for positive sustainability investments outlined by STARS. As such, a much smaller percentage (2.45% vs 83%) falls into one of the six recognized categories listed in the STARS criteria.
Cornell's focus is far boarder than this narrow definition, and seeks for greater impact over the medium and long-term.

All information is as of June 30, 2021.


Percentage of the institution's investment pool in positive sustainability investments:
2.45

Does the institution have a publicly available sustainable investment policy?:
Yes

A copy of the sustainable investment policy:
The sustainable investment policy:

The Board of Trustees’ Investment Policy Statement (IPS) stipulates that investment decisions be made with social, environmental, and similar aspects evaluated as an integral part of the financial considerations involved.
In adhering to the Board of Trustees’ IPS, Cornell formally promotes responsible investment practices by utilizing and monitoring managers who have formally adopted ESG/SRI/UNPRI/etc. considerations in their investment process. Currently, about 83% of Cornell’s long-term investment assets are handled by managers who are UNPRI signatories or have another strong ESG/SRI framework in place to support their investment decision-making processes. Cornell provides a copy of its proxy voting policy to new and existing managers, annually reviews LTI managers with respect to their ESG/ SRI practices and incorporates questions into its due diligence processes (both investment and operational due diligence), among other things, which require managers to notify Cornell if compliant with UNPRI or other responsible investor networks (or frameworks), while encouraging them to consider the relevance of such networks (frameworks) if the firm is not affiliated.


Does the institution use its sustainable investment policy to select and guide investment managers?:
Yes

A brief description of how the sustainable investment policy is applied:

Cornell's policies improve its diligence of potential managers and understanding of existing managers. Annually, Cornell reviews its managers with respect to their ESG practices, reaching out to each manager individually to request a copy of its ESG policy and a description of the ESG factors it considers in its investment process. This recurring exercise provides guidance to managers who are in the early stages of adopting a policy to help them establish a firm-wide document while reaffirming Cornell's commitment to the space.


Has the institution engaged in proxy voting, either by its CIR or other committee or through the use of guidelines, to promote sustainability during the previous three years?:
Yes

A copy of the proxy voting guidelines or proxy record:
A brief description of how managers are adhering to proxy voting guidelines:

Cornell utilizes guidance on proxy voting for both its separately managed accounts as well as guiding principles on proxy voting for its commingled vehicles.
Managers must adhere to Cornell’s proxy voting guidelines while they are engaged in a contractual relationship with Cornell’s Investment Office.

The proxy voting guidelines ask managers to vote proxies in a manner that maximizes the long-term sustainable economic value of the company. Cornell also retains the right to request a record of proxies voted in a manner inconsistent with its guidelines and to take over and exercise voting rights with respect to any securities or assets held in an account with the manager. If the Investment Office suspects (based on a manager review meeting, conversations with knowledgeable professionals, press reports, etc.) that a manager is violating the proxy voting requirements Cornell would act on our right to vote proxies directly.


Has the institution filed or co-filed one or more shareholder resolutions that address sustainability or submitted one or more letters about social or environmental responsibility to a company in which it holds investments during the previous three years?:
Yes

Examples of how the institution has engaged with corporations in its portfolio about sustainability issues during the previous three years:

Because Cornell has very few directly-held investments, it provides its investment managers latitude to engage corporations in its portfolio--including the ability, among others, to introduce shareholder resolutions, or proposals, to portfolio companies that encourage corporate responsibility and discourage practices that are unsustainable or unethical. Moreover, in recent years, OUI has undertaken two large initiatives with our managers on environmental and social issues. The first initiative promoted the adoption of responsible investment principles (as outlined by the United Nations Principles for Responsible Investment) and the second initiative emphasized the value Cornell places on diversity and inclusion (values that are fully consistent with our institution's founding principles and current practices).
Through these initiatives, we expect our managers to aid in advancing these issues through their investment practices and through their engagement with portfolio companies


Does the institution participate in a public divestment effort and/or have a publicly available investment policy with negative screens?:
Yes

A brief description of the divestment effort or negative screens and how they have been implemented:

Under Cornell’s processes, a negative screen list derives from decisions adopted through our CIR structure. The decisions create a running/dynamic set of restrictions. Most recently, Cornell instituted a moratorium on new private investments focused on fossil fuels. This moratorium will increase the list of prohibited investments, which previously included seven oil companies in Sudan that were instrumental in financing genocide in the Darfur region and various holdings in the equities of private prisons. Cornell banned investments in the Sudanese oil companies in 2006 and divested from private prisons in 2016.

Negative screens remain in place where relevant. Negative screening and divestment efforts have encompassed both pooled funds (Cornell’s investment office does not invest in mutual funds) and separately managed accounts. When Cornell banned investments in Sudanese oil companies, letters were sent to all of our managers. A similar process and review occurred at the time of divestment from private prisons. The fossil fuel moratorium is the only effort focused on new, private investments because that is where our portfolio had the most significant exposure.


Approximate percentage of endowment that the divestment effort and/or negative screens apply to:
100

Does the institution engage in policy advocacy by participating in investor networks and/or engage in inter-organizational collaborations to share best practices?:
Yes

A brief description of the investor networks and/or collaborations:

Cornell participates in forums and surveys to share best practices with peer academic institutions. The university also encourages managers to review the relevance of UNPRI or other ESG frameworks in their internal investment process.


Website URL where information about the institution’s sustainable investment efforts is available:
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Additional documentation to support the submission:
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The information presented here is self-reported. While AASHE staff review portions of all STARS reports and institutions are welcome to seek additional forms of review, the data in STARS reports are not verified by AASHE. If you believe any of this information is erroneous or inconsistent with credit criteria, please review the process for inquiring about the information reported by an institution or simply email your inquiry to stars@aashe.org.