| Overall Rating | Bronze |
|---|---|
| Overall Score | 43.58 |
| Liaison | Christopher Homeister |
| Submission Date | Oct. 30, 2023 |
Salisbury University
PA-10: Sustainable Investment
| Status | Score | Responsible Party |
|---|---|---|
|
0.50 / 3.00 |
Christopher
Homeister Director of Campus Sustainability Campus Sustainability |
Total value of the investment pool:
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) | 0 US/Canadian $ |
| Green revolving funds funded from the endowment | 0 US/Canadian $ |
A brief description of the companies, funds, and/or institutions referenced above:
VIAS unfortunately cannot break down by dollar amount for the categories listed above.
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:
Vanguard’s mission is to give investors the best chance for investment success. We believe responsible investment is consistent with our fiduciary duty to manage investments in the best interest of clients. Our policy and approach to responsible investment is outlined below.
Passive equity
Index funds have revolutionized investing by providing millions of investors with broad market exposure at a very low cost. They predominantly track benchmarks constructed without consideration of ESG criteria. Because ESG risks can undermine returns over the long run and our index funds are essentially permanent owners of the companies in which they invest, Vanguard’s Investment Stewardship team votes proxies, engages with company directors and executives, and advocates for market-wide adoption of governance best practices to address these material risks. Although we want companies to mitigate material risks, we do not dictate strategy.
Active fixed income
ESG risk is one element of Vanguard Fixed Income Group’s bottom-up financial analysis for potential investments. The team quantifies the financial materiality of ESG risk and assesses whether a security’s current valuation properly reflects that risk.
Active equity
The majority of Vanguard’s active equity funds are managed by external firms. This approach provides us with diversity of thought and broader access to top talent. Each firm has its own philosophy and process, and many consider ESG factors when selecting securities.
Vanguard’s Oversight and Manager Search team is responsible for monitoring the external managers’ performance. As part of that oversight, the team reviews the external managers’ sustainability and ESG risk practices. By allowing the managers to vote their own proxies, Vanguard enables our managers to integrate their own analysis and direct engagement with portfolio companies into their investment strategies.
ESG products
Some investors simply don’t want exposure to ESG risks or want to avoid companies that don’t align with their values. Vanguard currently offers more than a dozen exclusionary (or negatively screened) equity and fixed income ESG products across the globe. These products use transparent exclusion measures to remove certain companies from their investment universe based on predetermined ESG screening criteria.
Please see the following link for more information about sustainability at Vanguard:
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:
Please see the previous response on how we guide managers depending on the investment type.
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:
Vanguard’s board of directors and our officers have a fiduciary responsibility to seek to maximize investment returns for fund shareholders, consistent with each fund’s investment objectives and policies. When determining how to vote proxies for the corporations held by the funds, the main consideration is to maximize shareholder value.
For proxy proposals that are likely to have a major effect on shareholder value, such as mergers and acquisitions, we may cast our vote based on a fund advisor’s recommendation.
Proxy proposals fall into four broad categories.
Election of the board of directors and appointment of independent auditors
For auditor appointments, our policy is to support the corporation’s board of directors’ recommendations, unless the auditors have changed frequently or there is a reasonable concern as to the auditors’ independence.
Vanguard generally votes in support of management’s slated board of directors, although when circumstances warrant, we might not support the election of the management’s proposed board. Examples of these instances include when:
- A proxy contest occurs.
- Management compensation seems conspicuously without correlation to stock performance.
- The board fails to take appropriate actions when persistent, subpar corporate performance occurs.
Corporate social and policy issues
Shareholders are most often the ones to initiate corporate social and policy proposals. These proposals typically require that the corporation disclose or amend certain business practices and policies.
Vanguard believes that management is responsible for ordinary business matters that affect corporate profitability, directly or indirectly, and that these issues should be subject only to the corporation’s board of directors’ approval.
We might make exceptions to this position when we have adopted a specific voting policy that conflicts directly with management’s position, or when the issue has economic significance.
Issues of corporate structure and shareholder rights
Either management or shareholders can raise corporate-structure and shareholder-rights issues. Their common goal when raising these issues is to revise the corporate bylaws to affect shareholder-ownership rights.
Vanguard reviews these issues on a case-by-case basis, voting to provide each corporation’s management with the greatest operational latitude without compromising shareholders’ ownership rights. In general, our view is that barriers erected by corporations to thwart mergers or takeovers could depress the corporation’s value in the marketplace.
Executive and director compensation
Management or shareholders can make compensation proposals, although shareholders generally focus on executive, rather than director, compensation.
Management-sponsored proposals for executive compensation typically seek to link pay with specific corporate-performance indicators, such as return on equity. Another common proposal is to amend or augment executive stock-option plans.
Vanguard considers new and amended executive-compensation plans on a case-by-case basis. Our general policy is to vote in a way that provides management with the ability to provide executives fair, competitive compensation packages, without preferential treatment and without excessive dilution of shareholders’ ownership stakes.
When voting on director compensation, we consider the reasonableness of each director’s whole compensation package, including the annual retainer, any meeting fees, stock options or grants, and pension-benefit level.
Shareholder proposals targeting executive compensation typically look to limit it. A common request is to limit compensation to no more than that of the President of the United States.
Our view is that a compensation committee composed predominantly of independent directors should address executive compensation terms. We generally do not support compensation-related shareholder proposals.
For detailed proxy-voting guidelines, please see:
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:
Please see the following links which include our most recent quarterly engage report:
And a list of our investment stewardship insights:
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:
By design, our index funds buy and hold companies for as long as they are in the benchmark index. So, divestment is not an option for index funds that lack a mandate to avoid certain sectors or companies. In addition, from a real-economy perspective, there are significant limitations and downsides to divestment as an instrument of change.
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:
Data source(s) and notes about 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.