Illinois State University
PA-9: Sustainable Investment

Illinois State University utilizes a third-party asset management firm named Commonfund. Commonfund believes that ESG investment factors can have a material impact on long-term performance and has formally incorporated ESG factors into their due diligence process and evaluation of existing and prospective managers

Commonfund is an active participant in the ongoing development of sustainable investing practices for long-term investors. Acting on our belief that companies that pay greater attention to environmental, social and governance (“ESG”) factors may have stronger business models and potentially more favorable long-term investment performance, we became a signatory of the United Nations Principles for Responsible Investment (“PRI”) in February 2013. We were subsequently invited to join the PRI’s Private Equity Due Diligence Working Group, which has been gathering best practices for ESG integration by private equity managers and is creating a guide for general partners. We also serve on the Sustainability Accounting Standards Board Advisory Council, which is developing standards for use by publicly-listed corporations in the U.S. in disclosing material sustainability issues in their mandatory filings with the Securities and Exchange Commission. Commonfund believes that ESG investment factors can have a material impact on long-term performance so we have formally incorporated ESG factors into our due diligence process and evaluation of existing and prospective managers. For example, as part of our standard due diligence process, we ask potential managers a series of questions about whether and how they integrate analysis of financially material ESG factors into their investment process. We actively follow up with managers on their responses and engage them in dialogue about their approaches to ESG investing. Currently, we use a positive approach rather than employing negative screens that exclude specific companies or industries. Commonfund is also actively engaged in efforts to deepen the thinking around sustainable investing and to assist investors and managers who want to integrate ESG factors into their investment portfolios by distilling the existing research and contributing to the ongoing dialogue. Commonfund has published white papers and articles that provide introductions to responsible investing and contain an objective assessment of where the field currently stands.

Illinois State University utilizes a third-party asset management firm named Commonfund. Commonfund became a signatory of the United Nations Principles for Responsible Investment (“PRI”) in February 2013 and were subsequently invited to join the PRI’s Private Equity Due Diligence Working Group, which has been gathering best practices for ESG integration by private equity managers and is creating a guide for general partners.