Overall Rating Gold
Overall Score 76.41
Liaison Krista Bailey
Submission Date Dec. 12, 2023

STARS v2.2

Pennsylvania State University
PA-10: Sustainable Investment

Status Score Responsible Party
Complete 1.59 / 5.00 Krista Bailey
Sustainable Campus Strategist
Sustainability Institute
"---" indicates that no data was submitted for this field

Part 1. Positive sustainability investment

Total value of the investment pool:
4,466,800,000 US/Canadian $

Value of holdings in each of the following categories:
Value of holdings
Sustainable industries (e.g., renewable energy or sustainable forestry) 0 US/Canadian $
Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy) 180,000,000 US/Canadian $
Sustainability investment funds (e.g., a renewable energy or impact investment fund) 0 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 $

If any of the above is greater than zero, provide:

A brief description of the companies, funds, and/or institutions referenced above:
"Penn State does not focus on the label assigned to any specific strategy. We are concerned with the expected returns and associated risks with a strategy. A significant number of our managers integrate sustainability and social risks into their process, but only a few of our strategies communicate sustainability into their investment process as a major criteria for selecting investments. These few investments represent approximately 2.8% of the total portfolio or $180 million."
-Joe Cullen, Chief Investment Officer, Office of Investment Management

Partly in response to student advocacy, Penn State conducted a study several years ago to evaluate investment managers who are "environmental, social and governance" (ESG) focused as compared to their non-ESG peers. This study led Penn State to hire a management firm which invests using an ESG strategy. About $175M of the investment pool is currently subject to this investment strategy. That manager did a good job but over time they were not worth paying the active fees. Money was put in index that was lower cost - not the route Penn State wanted to take. Much of the university investments are in S&P with has an ESG index. Calculations have not been done to determine distribution.

In addition, funds under other management strategies likely include investments that would fall into the "sustainability investment" category; however it was not practical to search through individual investments that are overseen by a variety of managers within different funds. Furthermore, lack of a universally-recognized definition/list of sustainability investments further complicates this task.

Percentage of the institution's investment pool in positive sustainability investments:
4.03

Part 2. Investor engagement

Sustainable investment policy 

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

None
A copy of the sustainable investment policy:
Microsoft_Word_-_Penn_State_University_Investment_Policy_Statement_2023_Revision.pdf

None
The sustainable investment policy:
The Investment policy Return Objective states that the Long Term Investment Pool will be invested to achieve maximum return with an acceptable degree of risk. Within the context of its fiduciary responsibilities Penn State Investment Council may continue to take social and environmental considerations into account in the administration of the University’s investments.

None
Does the institution use its sustainable investment policy to select and guide investment managers?:
No

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

Proxy voting 

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

None
A copy of the proxy voting guidelines or proxy record:
---

None
A brief description of how managers are adhering to proxy voting guidelines:
Penn State authorizes its investment managers to vote on its behalf. Therefore the managers who are focused on ESG investments (described above) are engaged in proxy voting on behalf of Penn State in a way that supports their environmental, social and governance goals.

Shareholder resolutions 

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?:
No

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

Divestment efforts and negative screens

Does the institution participate in a public divestment effort and/or have a publicly available investment policy with negative screens?:
No

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

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

Investor networks 

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

None
A brief description of the investor networks and/or collaborations:
Penn State investment managers network and collaborate with other institutional investors and investment managers to understand best practices and current trends with respect to ESG investing.

Optional Fields 

Website URL where information about the institution’s sustainable investment efforts is available:
https://oim.psu.edu/sites/oim/files/2023-03/2023.03.17%20PSU%20LTIP%20IPS.pdf

Additional documentation to support the submission:
---

Data source(s) and notes about the submission:
Long Term Investment Pool value is for June 30, 2022.

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.