| Overall Rating | Gold |
|---|---|
| Overall Score | 82.88 |
| Liaison | Patrick McKee |
| Submission Date | Nov. 16, 2023 |
University of Connecticut
PA-10: Sustainable Investment
| Status | Score | Responsible Party |
|---|---|---|
|
2.32 / 4.00 |
Patrick
McKee Senior Sustainability Program Manager Office of Sustainability |
"---"
indicates that no data was submitted for this field
Part 1. Positive sustainability investment
559,868,679
US/Canadian $
Value of holdings in each of the following categories:
| Value of holdings | |
| Sustainable industries (e.g., renewable energy or sustainable forestry) | 18,677,810 US/Canadian $ |
| Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy) | 69,527,373 US/Canadian $ |
| Sustainability investment funds (e.g., a renewable energy or impact investment fund) | 1,520,284 US/Canadian $ |
| Community development financial institutions (CDFIs) or the equivalent | 0 US/Canadian $ |
| Socially responsible mutual funds with positive screens (or the equivalent) | 20,572,949 US/Canadian $ |
| Green revolving funds funded from the endowment | 0 US/Canadian $ |
If any of the above is greater than zero, provide:
The UConn Foundation’s Investment Committee, in its role as a prudent steward of institutional assets, will be aware of environmental, social, and governance (ESG) principles as well as established Socially Responsible Investment (SRI) principles in its investment process. Within the context of its fiduciary responsibilities, including the duty to achieve maximized, risk-adjusted investment returns, the Investment Committee will consider such principles on an ongoing basis in the administration of the Foundation’s investment portfolio. The Committee has made social and environmental responsibility an explicit part of its mission and investment policy statement, and a regular component of its investment process.
Like most university endowments of its size, the UConn Foundation invests primarily through pooled investment vehicles managed by third-party managers. The Foundation has engaged with independent advisors BlackRock (public asset classes) and Stepstone (private asset classes) for recommendations and due diligence analysis in the manager selection process. As part of their investment and operational due diligence, both advisors incorporate robust ESG metrics into their manager selection process for the endowment. These advisors are considered industry leaders in recognizing climate risk as investment risk, promoting sustainable investing, and engaging directly with market participants to promote ESG principles. These values are strongly aligned with the mission of the UConn Foundation and will continue to shape and inform our investment philosophy going forward.
On the public asset classes, BlackRock has developed a proprietary framework to determine the level of ESG integration into the managers security selection and portfolio construction process. Managers ranked "Advanced" display the following characteristics:
• Able to articulate specific steps in the investment process where ESG information is formally reviewed at a team level
• ESG analysis is a process requirement and is conducted for every potential investment
• Team has conducted ESG research on all portfolio holdings or on every new investment idea
• Able to provide examples of ESG information influencing investment decisions, or proprietary models where ESG is directly linked to a scalable internal rating or score
• There are dedicated ESG resources integrated within investment teams that are responsible for refining ESG processes and can actively influence investment decisions on the basis of ESG criteria
The UConn Foundation considers Advanced managers as displaying exemplary sustainability performance.
Similarly, StepStone has developed its own proprietary rating scale in its due diligence process to score the level of ESG integration for private investments. This framework rates managers across the following key scoring areas:
• Policy: adoption of RI/ESG policy; policy aligned with recognized standards such as UNPRI, TCFD; policy reviewed and updated annually; diversity initiatives at GP and portfolio company levels
• Accountability: integration into responsibilities of investment professionals; investment committee oversight; annual trainings
• Investment Process: consideration during due diligence, with ESG as standard part of investment committee memos; post-investment ESG value creation initiatives, as evidenced by case studies
• Reporting: ESG regularly addressed at AGMs/LPACs; critical ESG Incidents process established; ESG KPIs tracked and included in annual/quarterly reports or separate sustainability report
• Strategy: Indication of whether sector(s) of focus may generate positive or negative environmental or social outcomes
The UConn Foundation considers top-quartile managers within their respective private asset classes as displaying exemplary sustainability performance. Additionally, the Foundation has approved numerous investments to diverse managers, climate impact funds, and funds with mandates to invest in companies with positive ESG characteristics.
Like most university endowments of its size, the UConn Foundation invests primarily through pooled investment vehicles managed by third-party managers. The Foundation has engaged with independent advisors BlackRock (public asset classes) and Stepstone (private asset classes) for recommendations and due diligence analysis in the manager selection process. As part of their investment and operational due diligence, both advisors incorporate robust ESG metrics into their manager selection process for the endowment. These advisors are considered industry leaders in recognizing climate risk as investment risk, promoting sustainable investing, and engaging directly with market participants to promote ESG principles. These values are strongly aligned with the mission of the UConn Foundation and will continue to shape and inform our investment philosophy going forward.
On the public asset classes, BlackRock has developed a proprietary framework to determine the level of ESG integration into the managers security selection and portfolio construction process. Managers ranked "Advanced" display the following characteristics:
• Able to articulate specific steps in the investment process where ESG information is formally reviewed at a team level
• ESG analysis is a process requirement and is conducted for every potential investment
• Team has conducted ESG research on all portfolio holdings or on every new investment idea
• Able to provide examples of ESG information influencing investment decisions, or proprietary models where ESG is directly linked to a scalable internal rating or score
• There are dedicated ESG resources integrated within investment teams that are responsible for refining ESG processes and can actively influence investment decisions on the basis of ESG criteria
The UConn Foundation considers Advanced managers as displaying exemplary sustainability performance.
Similarly, StepStone has developed its own proprietary rating scale in its due diligence process to score the level of ESG integration for private investments. This framework rates managers across the following key scoring areas:
• Policy: adoption of RI/ESG policy; policy aligned with recognized standards such as UNPRI, TCFD; policy reviewed and updated annually; diversity initiatives at GP and portfolio company levels
• Accountability: integration into responsibilities of investment professionals; investment committee oversight; annual trainings
• Investment Process: consideration during due diligence, with ESG as standard part of investment committee memos; post-investment ESG value creation initiatives, as evidenced by case studies
• Reporting: ESG regularly addressed at AGMs/LPACs; critical ESG Incidents process established; ESG KPIs tracked and included in annual/quarterly reports or separate sustainability report
• Strategy: Indication of whether sector(s) of focus may generate positive or negative environmental or social outcomes
The UConn Foundation considers top-quartile managers within their respective private asset classes as displaying exemplary sustainability performance. Additionally, the Foundation has approved numerous investments to diverse managers, climate impact funds, and funds with mandates to invest in companies with positive ESG characteristics.
Percentage of the institution's investment pool in positive sustainability investments:
19.70
Part 2. Investor engagement
Sustainable investment policy
Yes
None
A copy of the sustainable investment policy:
None
The sustainable investment policy:
The UConn Foundation’s investment policy provides a framework for the management of assets in the Foundation’s investment portfolio. Among other factors, the investment policy explicitly mandates that ESG principles as well as Socially Responsible Investment (“SRI”) principles are considered in all investment decisions. As a part of its responsibility for the oversight and investment of the portfolio, the Investment Committee approves all investment decisions, including those recommended by third-party advisors Blackrock and Stepstone, and ensures compliance to all guidelines outlined in the investment policy.
None
Does the institution use its sustainable investment policy to select and guide investment managers?:
Yes
A brief description of how the sustainable investment policy is applied:
The Foundation Investment Committee considers ESG and SRI principles on a continuous basis in the administration of the Foundation’s investment portfolio. This policy has guided the Committee’s decisions to invest in environmentally and socially impactful opportunities.
Investments to-date include, among others, timberland reforestation projects, companies developing novel direct air capture (“DAC”) technologies to remove CO2 from the atmosphere, and carbon fusion investments. In just the past year, the Foundation has completed commitments to four impact funds whose purpose is to invest in companies and technologies to reduce CO2 emissions, remove existing CO2 stores, and cooling the atmosphere. Additionally, since 2021, the Foundation has made commitments to seven private investment funds across five diverse-managed partners.
Investments to-date include, among others, timberland reforestation projects, companies developing novel direct air capture (“DAC”) technologies to remove CO2 from the atmosphere, and carbon fusion investments. In just the past year, the Foundation has completed commitments to four impact funds whose purpose is to invest in companies and technologies to reduce CO2 emissions, remove existing CO2 stores, and cooling the atmosphere. Additionally, since 2021, the Foundation has made commitments to seven private investment funds across five diverse-managed partners.
Proxy voting
No
None
A copy of the proxy voting guidelines or proxy record:
---
None
A brief description of how managers are adhering to proxy voting guidelines:
---
Shareholder resolutions
No
Examples of how the institution has engaged with corporations in its portfolio about sustainability issues during the previous three years:
The Foundation does not have any direct holdings of companies with which to file shareholder resolutions. All Foundation funds are in co-mingled funds with different fund managers.
Divestment efforts and negative screens
No
A brief description of the divestment effort or negative screens and how they have been implemented:
No, the University does not have a publicly available investment policy with negative screens. Our investment policy does require ESG considerations but it does not rise to the level of negative screening.
Approximate percentage of endowment that the divestment effort and/or negative screens apply to:
0
Investor networks
Yes
None
A brief description of the investor networks and/or collaborations:
Foundation leadership participates in various inter-organizational collaborations to share best practices around ESG investing, including participation on panel discussions. Such organizations include the Association of Governing Boards of Universities and Colleges (AGB), The Council for Advancement and Support of Education (CASE), and the University Foundation Financial Officers (UFFO).
Optional Fields
Additional documentation to support the submission:
Data source(s) and notes about the submission:
The UConn Foundation Investment Committee is actively drafting an updated Sustainable Investment Policy. The Foundation has engaged numerous student and faculty groups on campus to discuss concerns, preferences, and best practices around this topic.
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.