Green Mountain College
PA-14: Sustainable Investment

In FY 2011, Green Mountain College invested approximately 15% of the College's $3 million endowment in Portfolio 21, an environmentally screened global equity mutual fund. It is a fund that uses positive and negative screens, searching for companies that uphold environmental practices and excluding those that do not meet their criteria. “Portfolio 21 invests only in companies that are integrating intelligent and forward-thinking environmental strategies into their overall business planning. We designed Portfolio 21 to address the ecological risks and opportunities of the investment process in the 21st century” (www.portfolio21.com) The Socially Responsible Investment Advisory Committee (SRIAC) is now creating an ESG (Environmental Social Governance screen) to apply to all investments. This may result in growing the holdings in Portfolio 21, or it may go beyond Portfolio 21. Either way, the ESG will help identify indexed funds that match positive criteria.

The current policy is available at the following url: http://www.greenmtn.edu/administration/business_office/our-endowment.aspx. The new policy will take the form of the ESG and is not yet finished. When it is finished, it will also be publicly available.

GMC currently uses Portfolio 21 and the revolving loan fund to guide positive investments, but soon the ESG will guide all investments. The investment manager will have to sign off on investments, indicating compliance with the ESG. These investments will be reviewed annually and the Board of Trustees will have to approve of them.

In May 2013, the Board of Trustees voted to divest from fossil fuel companies following 350.org's list of the 200 largest holders of fossil fuel assets. These holdings represented approximately 1.6% of the total endowment. Therefore, even though the negative screen applied to all investments, it only affected approximately 1.6%.

Given how small GMC's endowment is, it's not cost-effective to engage closely with corporations because of the small amount of holdings in any given company. Besides the recent divestment action and the forthcoming ESG, the College maintains passive management over its endowment funds.

GMC Board of Trustee member Anthony Cortese co-chaired the steering committee for the Intentionally Designed Endowment Conference, which took place in Cambridge, MA in 2014. GMC's CFO Robert Gould and Treasurer of the Board of Trustees Catherine Parker attended the conference to share ideas about sustainable investing. The outline of the conference was as follows: "Intentionally Designed Endowment: Aligning Your Investment Portfolio with your Environmental, Social, and Governance Goals" co-hosted by Hampshire College and Second Nature on April 3-4 in Cambridge, MA. Attended by 115 college, university, and private foundation leaders, “Intentionally Designed Endowment: Aligning Your Investment Portfolio with Your Environmental, Social and Governance Goals” provided an opportunity to explore how endowment can be positioned to create a more just, healthy, and sustainable society. The conference was designed to engage participants in developing strategies, resources, and support networks that will assist them going forward and to encourage participation by a larger group of institutions. Keynote speakers included the following: - Robert Litterman, chairman of the Risk Committee and Academic Advisory Board at Kepos Capital LP (and who was on April 7 elected chair of the Commonfund Board of Trustees). - White House staff member Jonathan Greenblatt, special assistant to the president and director of the office of social innovation and civic participation in the Domestic Policy Council. Hampshire and Second Nature developed the conference to provide education and support to assist higher education leaders in communicating and working with various interested stakeholders including student groups such as the fossil fuel divestment movement. Second Nature's mission is to create a sustainable society by transforming higher education. More » http://www.secondnature.org/ Steering Committee: - Anthony Cortese, senior fellow, Second Nature (co-chair) - Jonathan Lash, President, Hampshire College (co-chair) - Dan Apfel, executive director, Responsible Endowments Coalition - Chris Davis, director, Investor Programs, Ceres - David Dinerman, COO/CFO, Zomazz, Hampshire College Trustee - Ellen Dorsey, executive director, Wallace Global Fund - David Hales, president and CEO of Second Nature - Stewart Hudson, executive director, Audubon Connecticut - Peter Kinder, Independent SRI consultant, former co-founder of KLD Investment Research, Inc. - Amanda King, director of sustainability and special advisor to the president at Bentley University - Alex Lamb, senior consultant in Ernst & Young LLP’s Climate Change and Sustainability Services practice, and Hampshire alum (99F) - Mark Orlowski, executive director, Sustainable Endowments Institute - Jonathan Scott, partner, Veritable LP, former Hampshire College Trustee - Barbara Simonetti, president, Meetings That Matter - Sue Tierney, chairman of Climate Works Planning Team: - Georges Dyer, strategic advisor at Second Nature and principal of Greenland Enterprises - Maryelizabeth Fahey, executive assistant to the board and to the chief of staff, Hampshire College - Danielle Faris, event management consultant, Yellow Chair - Michele Madia, director of sustainability financing and policy, Second Nature - Joanna Olin, chief of staff to the President, Hampshire College - Beth Ward, secretary of the College, Hampshire College Contact Information: - Joanna Olin, chief of staff, office of the President, Hampshire College jlcPR@hampshire.edu 413.559.5521 - Tony Cortese, senior fellow, Second Nature acortese@secondnature.org 617.549.4736

The endowment snapshot here is from June 30th, 2013 and is intended to represent the performance year FY 2013. The socially and environmentally responsible investment totals shown under value of holdings are not equivalent to the 15% that the SIR approved for investment in FY 2011. This is because the funds have grown at different rates and they are not actively managed by the College. The investments are based on an index, so the College is considered a passive manager. However, next year GMC intends to adjust the accounts so that over 20% will be positive investments, and all investments will meet the forthcoming ESG guidelines.