University of San Diego
PA-9: Committee on Investor Responsibility

"The committee responsible for this is the entire Investment Committee of the Board of Trustees. Language below is directly from the investment guidelines that the committee abides by: Socially Responsible Investing and Environmental, Social and Governance (ESG) As a long-term investor, the University supports enterprises and communities that embrace the tenets of sustainability and resiliency, reflecting the values espoused by Pope Francis’ encyclical, Laudato Si’: On Care for Our Common Home. Three key messages from Laudato Si’ that the University aligns with socially responsible investing and ESG are: 1. Climate Change is Real and It’s Happening Right Now 2. The Impacts of Climate Change are Disproportionately Affecting Disadvantaged Communities 3. We Must Work Together to Solve Humanity’s Urgent Challenges Appendix 2 contains additional information and supporting quotations aligned with the University’s mission, vision and values. The University intends to use Environmental, Social and Governance (ESG) considerations in its manager due diligence, and will seek managers that incorporate ESG issues into investment analysis and decision-making processes. These considerations include the following set of values: • Environmental Values: The University values companies that measure, manage, disclose, actively plan and take action to mitigate the environmental impact of their operations, products, and supply chain, within their surrounding community. The University values enterprises that promote solutions including, but not limited to, climate change mitigation and resilience, renewable and clean energy, clean water, environmental conservation, remediation resource efficiency and stewardship, and sustainable food and agriculture systems. • Social Values: The University values companies that actively consider environmental and social justice impacts affecting local, regional, national or global communities, including policies and practices that support inclusivity and diversity, human rights and equality, fair/direct trade, workforce well-being, human health, and safety. Consistent with the exercise of fiscal prudence and to more fully reflect its liberal arts tradition as a community committed to diversity and inclusion, the University seeks to achieve robust diversity within its investment program, seeking partnership with managers that demonstrate a commitment to diversity and inclusion in their culture and/or improving their diversity practices over time.• Governance Values: The University values companies with a corporate governance culture that promotes shareholder engagement, fair executive compensation policies, board diversity, anti‐corruption and anti‐ bribery practices, and full governance disclosure. The University intends to communicate with investment managers to address any shortfalls within their respective portfolios so as to enhance alignment with the University's values. As part of this focus, the University will avoid any future dedicated fossil fuel funds to support the transition toward a global low-carbon economy and will seek fund vehicles that exclude fossil fuels when available. By 2035, the University will seek alternatives to reduce or eliminate its exposure from fossil fuel companies resulting from investment in commingled products, coupled with an increased focus on positive impact investments in all three components of ESG. It is important to recognize that the University has a moral and fiduciary responsibility to pursue a reasonable rate of return, with appropriate diversification and risk, on its portfolio in order to support its mission and goals. Within this context, the Committee should consider factors in addition to investment return in its investment choices in order to reflect the University’s social and ethical principles, and will take proactive steps to invest in ways that are consistent with these principles. In consideration of its social responsibility in investing, the Committee will evaluate: 1) the exclusion from the portfolio securities of firms whose policies are contrary to the values the University adopts; 2) the investment in firms that demonstrate a high level of social concern; and 3) the ability to influence the social behavior of invested firms through the exercise of ownership rights. The University’s mutual funds, commingled accounts or limited partnerships are managed according to their prospectus and limited partnership agreements, so customization of guidelines is generally not possible for these investments. The University will continue to seek further transparency into ESG issues in these instruments through the entities with which it invests. The Committee will not knowingly invest in commingled funds with any onsistent with our principles. The Committee will proactively seek funds and managers who are well aligned with our mission, vision, and values.

Investment Committee of the Board of Trustees:

President James T. Harris (President)
Leo Festino (Chair)
Rob Dean (Board Member)
Peter Seidler (Board Member)
Sandro Salsano (Board Member)
Curtis Chambers (Board Member)
Jacque Dupont-Carlson(Board Member)
Sister Suzanne Cooke, RCSJ (Board Member)
John Frager (Board Member)

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