Earlham College
PAE-T2-8: Sustainable Investment Policy

As an educational institution, Earlham should consider the impact of its financial investments upon the broader society. Because Earlham College was founded by Quaker yearly meetings, which still appoint a majority of the members of the Board of Trustees, it is fitting that Earlham's investing principles and actions should reflect the values of the Religious Society of Friends. These values include the belief that the life and dignity of every person should be respected. Growing out of this belief are the Quaker testimonies concerning peace, equality, integrity, simplicity and goodwill among people and nations. Earlham hopes that, through the operation of its investment program and acting in concert with other like-minded investors, Earlham can give witness to the above values.1 Contributions toward these objectives can perhaps be accomplished either (1) by means of investing or not investing in the securities of particular corporations or government or (2) through action as a share- or bond-holder, again acting in concert with others, within the corporate structure.2 Admittedly, the majority of investments that Earlham and other buyers make in the equity3 and fixed income4 markets represent a transfer of funds between the buyer and the seller and have no direct impact — financial or otherwise — upon the corporation whose securities are being traded. Management of an educational endowment must, of course, give high and sustained attention to the responsibility to produce maximum return in order to serve Earlham's educational mission.5 By delegation from the Earlham College Board of Trustees, the Earlham Foundation serves as the Investment Committee of the College Board to assist the Board in fulfilling its fiduciary responsibility to safeguard endowment assets, including quasi-endowment funds, and to achieve favorable returns on those investments to help defray current operating expenses and to assume the long-term financial health of the College and ESR through prudent investment practices and policies. The Earlham Board of Trustees is charged with the ultimate responsibility for the adoption and interpretation of socially responsible investment policies. The Earlham Foundation is expected to adhere to such policies in managing the endowment but must consider their impact, overall or with respect to specific investments, on its charge to be a prudent and financially responsible overseer of the investment of endowment funds in making investment decisions. Both the Board of Trustees and the Foundation look to the SRIAC for guidance in meeting these responsibilities. The Directors of the Earlham Foundation have the responsibility for selecting managers with whom investments are made and for determining actions taken as to each such investment. To assist the directors and investment managers in carrying out these responsibilities in light of the societal concerns mentioned above, the boards of Earlham College and the Foundation have established the Socially Responsible Investment Advisory Committee ("SRIAC").