Santa Clara University
PA-10: Sustainable Investment

Fixed Income Fund description: Multi-billion dollar fixed income manager investing across the entire spectrum of debt securities. UN PRI A+ Assessment Report on the quality of the firm's firm-wide ESG integration. More than 250 engagements since 2017 used to accelerate the sustainable development agenda & issued first annual ESG and engagement report. Expanded their ESG analysis to securitized products and municipals. Improved proprietary ESGIT systems and capabilities. Firm takes an active role in shaping the conversation of ESG integration in fixed income, cooperating with the PRI, Cambridge Institute for Sustainability Leadership, the UNGlobal Compact, Sustainability Accounting Standards Board among others. They signed the UNPrinciples for Responsible Investing in 2011.

Private Investment description: Manager focused on agriculture and water investing, with an emphasis on land optimization. Manager also re-purposes land to crops that require less water usage.

Private Equity Fund description: Private investment firm operating on a carbon-neutral basis since 2018 (second consecutive year with net zero emissions). Their investment process formally integrates ESG expertise and ESG issues are monitored at the board level. Systematically integrates their Guidelines for Responsible Investing (established in 2008). Dedicated ESG team and resources, and frequently aligns due diligence around Sustainability Accounting Standards Board (SASB) standards.

Private Investment description: Private company focused on deploying sustainable farming techniques in regions of the world that rarely use them

US Equity Fund description: Public equity manager investing across market capitalization (e.g. all cap manager). Utilizes SRI screens and incorporates ESG framework and scoring model in their decision making process.

It is available at the Investment Office at the request of various University stakeholders.

The Socially Responsible Investing guidelines are provided by staff to the Fund investment managers, who are requested to invest according to these principles. It is recognized that the implementation of these guidelines may not be possible in certain asset classes that are important to the Fund’s investment strategy. These cases typically involve partnerships, mutual funds or commingled funds which do not allow for social screening.

Sustainable investments, as with all investments under consideration, must meet suitable risk-adjusted hurdles before being considered for investment. An example is an investment that was made in a non-US agricultural startup company that brings the latest sustainable farming technology to various regions around the world, helping improve crop efficiency (yields), while lifting thousands out of poverty, and expected to generate a suitable risk-adjusted return for shareholders.

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Several of our funds have a dedicated sustainability officer, whose purpose is to consider environmental, public health, safety, and social issues associated with target companies when evaluating whether to invest in a particular company or entity, as well as during the period of ownership. This structure allows the funds to help their underlying investments (companies), through appropriate governance structures, to improve and grow in the area of long-term sustainability performance, which ultimately benefits multiple stakeholders, including environmental, social and governance issues.

Successfully engaged with an EM National Oil Company on social issues. Escalation of the issue (incl. credit, sovereign and ESG views) resulted in this issuer agreeing to move towards international accreditation (i.e. applying best practice standards) of its operations.

The investment policy does include negative screens, but it is not publicly available. It is available at the Investment Office at the request of various University stakeholders

Guided by the values associated with its mission, Santa Clara University invests its resources in institutions that are, at one and the same time, consistent with the "prudent person" principle, capable of generating a rate of return consistent with the University's Investment Policies statement, and socially responsible in their policies and practices. Socially responsible investments should positively contribute to the common good and be guided by the traditional Catholic ethical considerations. Balancing the consistent-life ethical principles and the "prudent person" principle will require judgment on the part of the Investment Office, the Investment Committee and each money manager.

General guiding principles for investing are as follows: avoid companies whose primary products are directly destructive of human life (e.g. abortion, euthanasia); avoid companies involved with governments involved in gross human rights abuses; avoid companies which consistently practice racial, ethnic, religious or gender discrimination; avoid companies whose primary business is nuclear weapons research, production, deployment and servicing; avoid companies who have been repeatedly cited for gross ecological violations.

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