Western University
PA-9: Sustainable Investment

There are two possible approaches to this credit; institutions may pursue one or both. 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.

Option 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(CDFI) 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 for Option 1.
• Green revolving loan funds that are funded from the endowment

Option 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, either by its CIR or other committee or through the use of guidelines, during the previous three years
• 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
• Has a publicly available investment policy with negative screens, for example to prohibit investment in an industry (e.g. tobacco or weapons manufacturing) or participate in a divestment effort (e.g. targeting fossil fuel production or human rights violations)
• 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 US $1 million or larger. Institutions with endowments less than US $1 million may choose to omit this credit. 

An institution earns the maximum of 4 points available for this credit by investing 30 percent of its investment pool sustainably and meeting all of the investor engagement criteria listed in Option 2 (above) or by investing 60 percent of its investment pool in one or more of ways listed in Option 1. Incremental points are available for Option 1 and partial points are available for Option 2. Each option is scored as follows:

Option 1. Positive Sustainability Investment

An institution earns the maximum of 4 points available in Option 1 by investing 60 percent 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. For example, an institution that invested 30 percent of its investment pool sustainably would earn 2 points (half of the points available in Option 1).

Points for Option 1 of this credit are calculated automatically in the STARS Reporting Tool as follows:

Option 2. Investor Engagement

⅓ point is awarded for each of the policies or practices listed. An institution with all of the policies and practices listed earns the maximum of 2 points available for Part 2.

Total points for this credit are calculated automatically in the STARS Reporting Tool as follows:

Timeframe

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

Sampling and Data Standards

Option 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”.

Option 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.