University of New Hampshire
PA-9: Sustainable Investment

The Foundation has a separate ESG-focused investment pool established in 2015 and available to donors. The investments consists of sustainability-focused funds in three active equity managers (Boston Common, Pax World Funds and Northern Trust), as well as fixed income offerings with Vanguard Funds to create an 80/20 allocation. A small component (2%) with the NH Community Loan Fund was added in July 2017. In its legacy (unconstrained) endowment pool, the Foundation invested $3 million in fixed income instruments with the NH Community Loan Fund in July 2017. NHCLF is the CDFI for New Hampshire, making affordable financing options available to economically disadvantaged individuals and communities in the state. NHCLF is the Foundation’s first direct impact investment.

In May 2017 the UNH Foundation Board approved a modification to its investment policy stating that ESG factors will be a consideration in investment decisions and monitoring by the Foundation going forward: “…, the Committee will incorporate analysis of the environmental, social and governance characteristics of prospective investment managers as a component of the manager selection and monitoring process. The Board recognizes that reviewing such analysis can provide additional information regarding the risks that an investment manager may be subject to in achieving desired returns.”

The same vote by the Asset Allocation Committee instructed Prime Buchholz, the Foundation’s investment consultant, to incorporate such analysis in all future manager profiles and recommendations for the use of the AAC moving forward. Prime Buchholz is a knowledgeable leader in the field of ESG and sustainable investing, and is well-equipped to conduct and implement such analysis.

Due to the nature of UNHF’s investments, the Board of Directors has very limited access to proxy voting. UNHF is able to vote proxies in the two of the three active managers in its ESG portfolio, and when possible UNHF votes in favor of pro-sustainability items. Notwithstanding these limited proxy voting opportunities, in spring of 2017 the UNH Foundation asked our consultant, Prime Buchholz, to communicate UNH's new investment policy to fund managers and to ask them to report specifically on how their proxy voting practices reflect a commitment to ESG principles. We found that 7 of the 9 fund managers who responded adhere to ESG principles in their proxy voting practices. During AY '17-'18, UNH's CIR will take up the question of what/whether more specific proxy voting guidelines could be developed and used by the Foundation in the future.

UNH Foundation Treasurer Erik Gross signed on to Boston Common Asset Management's "Eco-Efficiency Engagement for 2016"--which sent letters to the most energy-intensive companies in their portfolios encouraging them to engage in efficiency efforts within their companies. See more info about the campaign below (from Boston Common Asset Management): "The initial focus list includes: · Air Liquide · BMW · National Grid · Statoil · Spectra Energy The focus list is drawn from among the most energy intensive companies among Boston Common's own portfolio holdings. We plan to customize the questions for each company based our own research of their disclosure, and practices. Boston Common has already engaged a number of U.S. and non-U.S. companies on this theme, starting in mid-2015. Our first step will be to engage companies in those industries where energy efficiency or energy productivity investments will lead to the biggest reductions in energy use/energy savings based on research published in May 2016 by ClimateWorks Australia, in conjunction with CalSTRS. Through our engagement process, we will also urge companies to adopt public goals for eco-efficiency and join the EP100, (Energy Productivity 100) an initiative of leading companies that have committed to double their energy productivity by 2030. In early 2017 we plan to publish a report in conjunction with CERES (an environmental NGO) on company best practices and key questions for investors to ask companies in 2017.

UNH works with and participates in the Intentional Endowments Network and the Sustainable Endowments Institute. In 2016 UNH Foundation staff attended the East Coast University Endowment Roundtable at Harvard Management Company and specifically the session in which IEN presented in partnership with the Principles for Responsible Investment. UNH is currently working with IEN to organize and host a convening of New England campus investment professionals in fall 2017 to focus on how to advance sustainability goals in the realm of campus endowments and investment activities. UNH also presented its recent experiences in sustainable investment, especially with respect to the UNH student-driven fossil fuel divestment efforts, at the 24th Annual Conference for Institutionally Related Foundations, held in Arizona in spring of 2016.

The $204,237,000 figure above only includes the UNH Foundation portion of the overall investment pool; it excludes the portion of the endowment that is managed by the UNH system--since the boundaries of this STARS report are for the main UNH campus as opposed to the entire UNH system. In 2014, a new investment option for UNH funds was established which specifically targets environmental, social and governance criteria. The Foundation is actively seeking to increase this ESG pool so that investment opportunities are maximized, giving the pool the greatest possible chance for achieving its long term goals. At June 30, 2017, the ESG pool totaled $1.365 million. Additional information on the ESG pool can be found at https://www.unh.edu/give/sustainable-investing-0.