Overall Rating Platinum
Overall Score 86.83
Liaison Mark Lichtenstein
Submission Date Feb. 28, 2023

STARS v2.2

State University of New York College of Environmental Science and Forestry
PA-10: Sustainable Investment

Status Score Responsible Party
Complete 3.00 / 3.00 Brenda Greenfield
Director of Development
Development Office
"---" indicates that no data was submitted for this field

Total value of the investment pool:
41,900,000 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) 0 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) 24,800,000 US/Canadian $
Green revolving funds funded from the endowment 0 US/Canadian $

A brief description of the companies, funds, and/or institutions referenced above:

ESF uses mutual funds from Dimensional Funds Advisors (DFA) to implement the College's sustainability strategy. The funds – both domestic and international – invest in a broadly diversified group of securities with increased exposure to smaller capitalization stocks, lower relative price (value) stocks, and higher-profitability stocks relative to the market. The mutual funds further adjust the weights of all eligible companies based on environmental and social sustainability considerations, emphasizing companies with higher sustainability scores, and excluding or deemphasizing companies with lower sustainability scores.

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:

ESF Investment Policy Statement

Approved by Finance & Investment Committee - February 2012
Approved by ESF College Foundation Board of Directors – May 23, 2012
Update Approved by ESF College Foundation Board of Directors – March 15, 2016
Update Approved by ESF College Foundation Board of Directors – November 6, 2022

I. Introduction

The ESF College Foundation Investment Fund (hereafter referred to as the “Fund”) was created to provide perpetual financial support to the ESF College Foundation (the “Institution”). The purpose of this Investment Policy Statement (IPS) is to establish guidelines for the Fund’s investment portfolio (the “Portfolio”). The Board of Directors of the Institution has established the IPS with the intent to manage and invest the Fund in good faith and with the care that ordinary prudent people in a like position would exercise under similar circumstances.

The IPS also incorporates accountability standards that will be used for monitoring the progress of the Portfolio’s investment program and for evaluating the contributions of the external agent(s) hired on behalf of the Fund and its beneficiaries.

II. Role of the Finance and Investment Committee
The Finance and Investment Committee (the “Committee”) is acting in a fiduciary capacity with respect to the Portfolio, and is accountable to the Board of Directors of the ESF College Foundation and to the Executive Committee, for overseeing the investment of all assets owned by, or held in trust for, the Portfolio.

The Committee will consider the following factors, if relevant, in the management and investment of the Fund:

1. General economic conditions
2. The possible effect or inflation or deflation
3. The expected tax consequences, if any, of investment decisions or strategies
4. The role that each investment or course of action plays within the overall investment portfolio of the Fund
5. The expected total return from income and appreciation of investments
6. Other resources of the Institution
7. The needs of the Institution and the Fund to make distributions and to preserve capital
8. An assets special relationship or special value, if any, to the purposes of the Institution
9. The Institution’s intent to divest from fossil fuel based investments

The Committee will make a reasonable effort to verify facts relevant to the management and investment of the Fund and will periodically review costs related to the management of the Fund to ensure they are reasonable and appropriate.

This Investment Policy Statement sets forth the investment objectives, distribution policies, and investment guidelines that govern the activities of the Committee and any other parties to whom the Committee has delegated investment management responsibility for Portfolio assets.

The investment policies for the Fund contained herein have been formulated consistent with the Institution’s anticipated financial needs and in consideration of the Institution’s tolerance for assuming investment and financial risk, as reflected in the majority opinion of the Committee.

Policies contained in this statement are intended to provide guidelines, where necessary, for ensuring that the Portfolio’s investments are managed consistent with the short-term and long-term financial goals of the Fund. At the same time, they are intended to provide for sufficient investment flexibility in the face of changes in capital market conditions and in the financial circumstances of the Institution.

The Committee will review this Investment Policy Statement at least once per year. Changes to this Investment Policy Statement can be made only by affirmation of a majority of the Committee, and written confirmation of the changes will be provided to all Committee members and to any other parties hired on behalf of the Portfolio as soon thereafter as is practical.

III. Investment Objective and Spending Policy

The Fund is to be invested with the objective of preserving the long-term, real purchasing power of assets while providing a relatively predictable and growing stream of annual distributions in support of the Institution

For the purpose of making distributions, the Fund shall make use of a total-return-based spending policy, meaning that it will fund distributions from net investment income, net realized capital gains, and proceeds from the sale of investments. Statement

The distribution of Fund assets will be permitted to the extent that such distributions do not exceed a level that would erode the Fund’s real assets over time. The Committee will seek to reduce the variability of annual Fund distributions by factoring past spending and Portfolio asset values into its current spending decisions. The Committee will review its spending assumptions annually for the purpose of deciding whether any changes therein necessitate amending the Fund’s spending policy, its target asset allocation, or both.

Periodic cash flow, either into or out of the Portfolio, will be used to better align the investment portfolio to the target asset allocation outlined in the asset allocation policy.

IV. Portfolio Investment Policies
Asset Allocation Policy
a) The Committee recognizes that the strategic allocation of Portfolio assets across broadly defined financial asset and sub-asset categories with varying degrees of risk, return, and return correlation will be the most significant determinant of long-term investment returns and Portfolio asset value stability.

b) The Committee expects that actual returns and return volatility may vary from expectations and return objectives across short periods of time. While the Committee wishes to retain flexibility with respect to making periodic changes to the Portfolio’s asset allocation, it expects to do so only in the event of material changes to the Fund, to the assumptions underlying Fund spending policies, and/or to the capital markets and asset classes in which the Portfolio invests.

c) Fund assets will be managed as a balanced portfolio composed of two major components: an equity portion and a fixed income portion. The expected role of Fund equity investments will be to maximize the long-term real growth of Portfolio assets, while the role of fixed income investments will be to generate current income, provide for more stable periodic returns, and provide some protection against a prolonged decline in the market value of Portfolio equity investments.

d) Cash investments will, under normal circumstances, only be considered as temporary Portfolio holdings, and will be used for Fund liquidity needs or to facilitate a planned program of dollar cost averaging into investments in either or both of the equity and fixed income asset classes.

e) Outlined below are the long-term strategic asset allocation guidelines, determined by the Committee to be the most appropriate, given the Fund’s long-term objectives and short-term constraints. Portfolio assets will, under normal circumstances, be allocated across broad asset and sub-asset classes in accordance with the following guidelines:

Asset class Sub-asset class Target allocation

Total Stocks: 65%
- US Stocks: 43%
- International Stocks: 22%

Total Bonds: 35%
- US Bonds:35%

Total Cash:

f) To the extent the Portfolio holds investments in nontraditional, illiquid, and/or nonmarketable securities including (but not limited to) venture capital, hedge funds, and real estate investments, these assets will be treated collectively as alternative investments for purposes of measuring the Portfolio’s asset allocation. While not specifically considered within this policy, alternative investments may comprise no more than 15% of total Portfolio assets and, to the extent they are owned, will proportionately reduce target allocations to the three primary asset classes itemized above.

g) The equity allocation is focused on environmental sustainability to minimize the carbon intensity of the portfolio.

h) As per the joint statement issued with SUNY-ESF and its Board of Trustees, the Institution will make no direct investments in fossil fuels.

Diversification Policy:

The Portfolio’s investments will be diversified unless the Institution prudently determines that, because of special circumstances, the purposes of the fund are better served without diversification. A decision not to diversify must be clearly documented to include the special circumstances that have caused such a decision to be made and reviewed at least annually.

Diversification across and within asset classes is the primary means by which the Committee expects the Portfolio to avoid undue risk of large losses over long time periods. To protect the Portfolio against unfavorable outcomes within an asset class due to the assumption of large risks, the Committee will take reasonable precautions to avoid excessive investment concentrations. Specifically, the following guidelines will be in place:

a) With the exception of fixed income investments explicitly guaranteed by the U.S. government, no single investment security shall represent more than 5% of total Portfolio assets.

b) With the exception of passively managed investment vehicles seeking to match the returns on a broadly diversified market index, no single investment pool or investment company (mutual fund) shall comprise more than 20% of total Portfolio assets.

c) With respect to fixed income investments, for individual bonds, the minimum average credit quality of these investments shall be investment grade (Standard & Poor’s BBB or Moody’s Baa or higher).


It is expected that the Portfolio’s actual asset allocation will vary from its target asset allocation as a result of the varying periodic returns earned on its investments in different asset and sub-asset classes. The Portfolio will be rebalanced to its target normal asset allocation under the following procedures:

a) The investment manager will use incoming cash flow (contributions) or outgoing money movements (disbursements) of the Portfolio to realign the current weightings closer to the target weightings for the Portfolio.

b) The investment manager will review the Portfolio quarterly to determine the deviation from target weightings. During each quarterly review, the following parameters will be applied:

c) If any asset class (equity or fixed income) within the Portfolio is +/–2 percentage points from its target weighting, the Portfolio will be rebalanced.

d) If any fund within the Portfolio has increased or decreased by greater than 20% of its target weighting, the fund will be rebalanced.

e) The investment manager may provide a rebalancing recommendation at any time.

f) The investment manager shall act within a reasonable period of time to evaluate deviation from these ranges.

Other Investment Policies:

Unless expressly authorized by the Committee, the Portfolio and its investment managers are prohibited from:

a) Purchasing securities on margin or executing short sales.
b) Pledging or hypothecating securities, except for loans of securities that are fully collateralized.
c) Purchasing or selling derivative securities for speculation or leverage.
d) Engaging in investment strategies that have the potential to amplify or distort the risk of loss beyond a level that is reasonably expected, given the objectives of their Portfolio.

V. Monitoring Portfolio Investments and Performance

The Committee will monitor the Portfolio’s investment performance against the Portfolio’s stated investment objectives. At a frequency to be decided by the Committee, it will formally assess the Portfolio and the performance of its underlying investments as follows:

A. The Portfolio’s composite investment performance (net of fees) will be judged against the following standards:

1. The Portfolio’s absolute long-term real return objective of 5.5%.

2. A composite benchmark consisting of the following unmanaged market indexes weighted according to the expected target asset allocations stipulated by the Portfolio’s investment guidelines.

a. U.S. Equity: Russell 3000 Index
b. Non-U.S. Equity: MSCI EAFE +EM Index
c. Investment Grade Fixed Income: Barclays Capital U.S. Aggregate Bond Index
d. Non-Investment Grade Fixed Income: Barclays Capital U.S. Corporate High Yield Bond Index
e. Cash: Citigroup 3-Month T-Bill Index

B. The performance of professional investment managers hired on behalf of the Portfolio will be judged against the following standards:

1. A market-based index appropriately selected or tailored to the manager’s agreed-upon investment objective and the normal investment characteristics of the manager’s portfolio.

2. The performance of other investment managers having similar investment objectives.

C. In keeping with the Portfolio’s overall long-term financial objective, the Committee will evaluate Portfolio and manager performance over a suitably long-term investment horizon, generally across full market cycles or, at a minimum, on a rolling five-year basis.

D. Investment reports shall be provided by the investment manager(s) on a (calendar) quarterly basis or as more frequently requested by the Committee. Each investment manager is expected to be available to meet with the Finance and Investment Committee once per year to review portfolio structure, strategy, and investment performance

VI. External Management

The Board of Directors of the Institution intends to delegate the management and investment functions of the Fund to an external agent to the extent that such a delegation is prudent under the circumstances. In order to delegate prudently, the Institution must act in good faith, with the care that an ordinary prudent person in a like position would exercise under similar circumstances in:

1. Selecting, continuing or terminating an external agent, including assessing the agent’s independence including any conflicts of interest such agent has or may have;
2. Establishing the scope and terms of the delegation, including the payment of compensation, consistent with the purposes of the Institution and the Fund; and
3. Monitoring the agent’s performance and compliance with the scope and terms of the delegation.

In performing a delegated function, an external agent owes a duty to the Institution to exercise reasonable care, skill and caution to comply with the scope and terms of the delegation. Any contract that delegates a management or investment function to an external agent must provide that the contract may be terminated at any time, without penalty, with up to 60 days prior notice.

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:

The investment policy sets an aim to focus the equity allocation on environmental sustainability to minimize the carbon intensity of the portfolio. The investment advisor has reflected this goal as a primary reason for selection of sustainability mutual funds that lower the carbon intensity of the portfolio relative to standard market benchmarks and other commonly available investment options. In addition, the investment policy prohibits direct investment in fossil fuels. The investment advisor follows this directive.

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:

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:

The sustainability mutual funds, as designed by Dimensional Fund Advisors (DFA), have a primary goal of lowering the carbon intensity of the College's portfolio. In the sustainability scoring process, 85% weight is given to the carbon intensity of investments, while 15% weight is assigned to other environmental considerations such as land use and biodiversity, toxic spills and releases, operation waste, and water management.

The purpose of the carbon intensity screening process is to exclude or underweight top contributors to greenhouse gas emissions, and to exclude or underweight companies based on potential emissions from reserves.

Other negative screens are then performed to account for yet more environmental and social sustainability variables. For example, the portfolios seek to exclude companies involved in coal, palm oil, factory farming, tobacco, child labor, private prisons, cluster munitions and landmines, and civilian firearms.

As noted in the investment policy included here, the ESF College Foundation has been unequivocal in its public statement that they don’t and will not invest in fossil fuels. That was formally supported by the ESF Board of Trustees and it has been the College's position for more than six years. ESF does not invest directly with companies. As noted above, investments are in mutual funds, and the move to DFA was intended to further advance the College's ESG investment intent. The College has chosen to screen out investments in the areas noted above (DFA’s negative screens). The 85% target noted above is intended to exclude a wide range of companies beyond just fossil fuel companies. This is a screen applied to all companies that are in DFA’s portfolio.

An article from 2015 titled "ESF to Divest from Fossil Fuel Investments" affirms a public divestment effort for the College.


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:

Website URL where information about the institution’s sustainable investment efforts is available:
Additional documentation to support the submission:

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.