|Submission Date||March 2, 2020|
PA-10: Sustainable Investment
Total value of the investment pool:
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)||0 US/Canadian $|
|Sustainability investment funds (e.g., a renewable energy or impact investment fund)||21,335,000 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 $|
A brief description of the companies, funds, and/or institutions referenced above:
Investure, our Outsources CIO, has a Sustainability Series in which $21,335,000 is currently invested (as of February 2020).
Percentage of the institution's investment pool in positive sustainability investments:
Does the institution have a publicly available sustainable investment policy?:
A copy of the sustainable investment policy:
The sustainable investment policy:
Smith does not make available the investment policy but has made public it’s commitment to sustainable investment, excluding new fossil-fuel manager specific investments and initiating a phase-out of existing fossil-fuel managers. Smith works with an Outsourced CIO who follows an investment policy that incorporates ESG and Sustainability considerations.
Does the institution use its sustainable investment policy to select and guide investment managers?:
A brief description of how the sustainable investment policy is applied:
Smith works with an outsourced CIO who follows an investment policy that incorporates ESG and Sustainability considerations.
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?:
A copy of the proxy voting guidelines or proxy record:
A brief description of how managers are adhering to proxy voting guidelines:
Smith's publicly stated proxy voting principles:
The primary fiduciary responsibility of our client’s investment committees comprises maximizing returns while managing risk. Nevertheless, the possession of significant assets entails the responsible exercise of the voting rights which come with common stock ownership.
Voting rights give shareholders the opportunity to effect responsible governance of publicly owned corporations. Active shareholder engagement strengthens the relationship among endowed organizations, their capital, and the companies and communities in which they invest. Many of Investure’s clients are mindful of the broader impact of their invested capital. Therefore, the clients have engaged with Investure to develop the following Proxy Voting Principles.
These clients’ Proxy Voting Principles are presented in two sections. The first addresses issues of corporate governance, while the second addresses those of environmental and social responsibility. These clients regard the principles as minimum standards. Nevertheless, these clients understand that flexibility is necessary since no single standard can apply to all industries in all parts of the globe or even to companies at different stages of their life cycles. The financial sustainability of the companies in which we are invested must remain a focus.
Many Investure clients support resolutions that foster (and oppose resolutions that inhibit) reasonable best practices in corporate governance and operations, including:
protecting the rights of all shareholders;
ensuring the integrity and clear disclosure of the corporation’s risk management, accounting, and financial reporting systems, including the independent audit, and implementing appropriate systems of control; in particular, systems for monitoring risk, financial control, and compliance with the law;
maintaining independent, diverse, committed, and focused boards and committees which represent the shareholders;
adopting comprehensive code of conduct and conflict of interest policies;
prioritizing transparency of corporate practices;
creating clear lines of responsibility and accountability within the board and management structure; and
establishing fair and transparent compensation schemes that incorporate financial and non-financial performance metrics of a company.
Environmental and Social Responsibility
Environmental and social responsibilities are important drivers of long-term value creation. The global economy increasingly relies on resources that face supply constraints as global consumption increases. In addition, to remain competitive on a global basis it is critical to attract and retain talented employees.
Many Investure clients support resolutions that encourage (and oppose resolutions that inhibit) the implementation of reasonable sustainable practices and environmental and social responsibility, including:
preparing sustainability reports and adoption of policies in accordance with reasonable codes of conduct and reporting models;
siding with transparency on environmental practices;
adopting policies that take into account the importance of protecting stakeholders and the natural environment;
eliminating workplace discrimination based on age, race, sex, sexual orientation, religion, and ethnicity;
supporting human rights standards, including protecting indigenous people’s rights and respecting cultural sensitivities;
eliminating exploitative labor practices;
providing safe workplaces; and
siding with transparency on political contribution and activities.
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?:
Examples of how the institution has engaged with corporations in its portfolio about sustainability issues during the previous three years:
Does the institution participate in a public divestment effort and/or have a publicly available investment policy with negative screens?:
A brief description of the divestment effort or negative screens and how they have been implemented:
Letter from Smith's President to the community about divestement published on October 18, 2019
"Dear Students, Staff and Faculty:
We are pleased to report that the Smith College Board of Trustees at its October meeting made a significant advance in reducing the role of fossil fuel investments in the college’s endowment. The board’s decision follows a recommendation of the Study Group on Climate Change (SGCC) to align more closely our investments with our values. The SGCC report was endorsed by the trustees in 2017.
Specifically, the board voted to approve the following two recommendations brought forward by the Advisory Committee on Investor Responsibility (ACIR), a subcommittee of the Investment Committee of the Board of Trustees:
Effective immediately, the board will direct Investure, the college’s outsourced endowment management firm, to exclude from the Smith College endowment all future investments with fossil fuel–specific managers.
The college will begin an immediate phaseout of all current investments with fossil fuel–specific managers in the Smith College endowment. This phaseout will be achieved through the sale, maturity or liquidation of investments held by fossil fuel–specific managers over a projected period of 15 years.
Note: A fossil fuel–specific manager is one whose main strategy is acquiring, developing, producing or exploring for oil/gas; coal mining; or providing oil and/or gas equipment, services and/or pipelines; or that is an investment fund whose primary purpose is to invest in such issues or engage in any such business itself. "
Approximate percentage of endowment that the divestment effort and/or negative screens apply to:
Does the institution engage in policy advocacy by participating in investor networks and/or engage in inter-organizational collaborations to share best practices?:
A brief description of the investor networks and/or collaborations:
Smith's endowment is pooled with 12 other institutions including Barnard, Carnegie Endowment for International Peace, The Edna McConnell Clark Foundation, Colonial Williamsburg, The Commonwealth Fund, Dickinson College, Houston Endowment, Henry Luce Foundation, Middlebury College, Trinity College, and The University of Tulsa. Middlebury College and several other members of this group have played a leadership role in establishing a sustainable investing alternative to the options offered by the investment managers.
Website URL where information about the institution’s sustainable investment efforts is available:
Additional documentation to support the submission:
The proxy voting principles are provided to investment managers to guide proxy voting.
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 and complete the Data Inquiry Form.