Sonoma State University
PA-10: Sustainable Investment

Part 1. Positive sustainability investment

Institution invests in one or more of the following:

• Sustainable industries (e.g., renewable energy or sustainable forestry). This may include any investment directly in an entire industry sector as well as holdings of companies whose entire business is sustainable (e.g., a manufacturer of wind turbines).

• Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy). This includes investments made, at least in part, because of a company's social or environmental performance. Existing stock in a company that happens to have socially or environmentally responsible practices should not be included unless the investment decision was based, at least in part, on the company's sustainability performance.

• Sustainability investment funds (e.g., a renewable energy or impact investment fund). This may include any fund with a mission of investing in a sustainable sector or industry (or multiple sectors), as well as any fund that is focused on purchasing bonds with sustainable goals.

• Community development financial institutions (CDFIs) or the equivalent (including funds that invest primarily in CDFIs or the equivalent).

• Socially responsible mutual funds with positive screens (or the equivalent). Investment in a socially responsible fund with only negative screens (i.e., one that excludes egregious offenders or certain industries, such as tobacco or weapons manufacturing) does not count in Part 1.

• Green revolving loan funds that are funded from the endowment.

Part 2. Investor engagement

Institution has policies and/or practices that meet one or more of the following criteria:

• Has a publicly available sustainable investment policy (e.g., to consider the social and/or environmental impacts of investment decisions in addition to financial considerations).

• Uses its sustainable investment policy to select and guide investment managers.

• Has engaged in proxy voting to promote sustainability during the previous three years, either by its committee on investor responsibility (CIR), by another committee, or through the use of guidelines.

• Has 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.

• Participates in a public divestment effort (e.g., targeting fossil fuel production or human rights violations) and/or has a publicly available investment policy with negative screens, for example to prohibit investment in an industry (e.g., tobacco or weapons manufacturing).

• Engages in policy advocacy by participating in investor networks (e.g., Principles for Responsible Investment, Investor Network on Climate Risk, Interfaith Center on Corporate Responsibility) and/or engages in inter-organizational collaborations to share best practices.

This credit applies to institutions with endowments of $1 million (US/Canadian) or larger. Institutions with endowments totaling less than $1 million may choose to mark this credit as Not Applicable.  

This credit is weighted more heavily for institutions with large investment pools and less heavily for institutions with smaller investment pools. The number of points available is automatically calculated in the online Reporting Tool as detailed in the following table:

An institution earns the maximum points available for this credit by investing 60 percent or more of its investment pool in one or more of ways listed in Part 1 OR by investing at least 30 percent of its investment pool sustainably and meeting all of the investor engagement criteria listed in Part 2. Incremental points are available for Part 1 and partial points are available for Part 2. Each part is scored as follows:

Part 1

An institution earns the maximum points available for Part 1 by investing 60 percent or more of its investment pool in one or more of the ways listed above. Incremental points are awarded based on the percentage of the institution’s investment pool that is invested sustainably, as follows:

Points earned in Part 1 = ( 1.67 × A ) × ( B / C )

A = Total points available for this credit (see above)

B = Value of positive sustainability investments

C = Total value of the investment pool

For example, an institution that invested 30 percent of its investment pool sustainably would earn half of the points available in Part 1.

Part 2

An institution earns the maximum points available for Part 2 for engaging in all of the activities outlined in the criteria. Partial points are available. Points awarded according to the following formula:

Points earned in Part 2 =  ( 0.5 × A ) × ( B / 6 )

A = Total points available for this credit (see above)

B = Number of criteria met

Timeframe

Report on current policies and actions taken within the three years prior to the anticipated date of submission.

Sampling and Data Standards

Part 1

Report on a snapshot of the entire investment portfolio. Reporting on a sample of the endowment or a special fund of the endowment is not allowed for this credit. Institutions should strive to report on a representative snapshot. Institutions for which investments are handled by the university system, a separate foundation of the institution and/or a management company contracted by the institution should report on the combined activities of those entities to the extent possible and document any anomalies under “Notes about the submission”.

Part 2

Institutions for which investments are handled by the university system, a separate foundation of the institution and/or a management company contracted by the institution should report on the combined activities of those entities.