| Overall Rating | Gold |
|---|---|
| Overall Score | 69.27 |
| Liaison | Mark Klapatch-Mathias |
| Submission Date | Feb. 29, 2024 |
University of Wisconsin-River Falls
PA-10: Sustainable Investment
| Status | Score | Responsible Party |
|---|---|---|
|
3.00 / 3.00 |
Amy
Zimmer University Foundation President Foundation |
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) | 3,790,993.15 US/Canadian $ |
| Community development financial institutions (CDFIs) or the equivalent | 1,919,648.15 US/Canadian $ |
| Socially responsible mutual funds with positive screens (or the equivalent) | 7,777,491.50 US/Canadian $ |
| Green revolving funds funded from the endowment | 382,501.52 US/Canadian $ |
A brief description of the companies, funds, and/or institutions referenced above:
<p>Sustainable investment funds - The Foundation utilizes an equity manager that has a Sustainable Investing research team that are dedicated to supporting portfolio managers to better understand sustainability risks. They do this by using a proprietary “ESG Risk Dashboard” in the investment process that focuses on avoiding downside risks (i.e. negative event risk) and by partnering with best-in-class third party sustainability analytics. Community development financial institutions or the equivalent - The Foundation utilizes two managers who engage in impact investing. The first focuses on affordable housing and improving living conditions by providing additional services, i.e. day-care, financial literacy, public amenities, etc. The second manager engages with bond issuers on material climate factors including emissions reduction, transition risk, climate equity and improved climate disclosure. Social responsible mutual funds with positive screens or the equivalent - The Foundation utilizes funds that have positive ESG screening processes that help screen out certain companies related to adult entertainment, alcohol, tobacco, cannabis, gambling, chemical and biological weapons, cluster ammunition, anti-personnel land mines, and other weapons. These funds also exclude companies that do not meet certain labor, human rights, environmental and anti-corruption standards as defined by the UN Global Compact Policies Green revolving loan funds that are funded from the endowment - The Foundation utilizes a fund that seeks to maximize impact by investing in bonds deemed “Green”. Meaning they focus on three broad types of issuers, green projects, solutions providers, and environmental leaders.</p>
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:
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:
<p>The sustainable investment policy is applied by the Foundation Board in the selection and monitoring of its Investment Manager(s) by understanding and reviewing the Manager's commitment to ESG and how ESG is integrated into its investment and stewardship processes, how the commitment and processes are evolving over time, and how those processes impact the portfolio risk and return. The sustainable investment policy is applied by the Manager in the selection of sustainable and impact investments, reporting to the Board with regard to its evolving commitment to ESG and the effect of its ESG policies and procedures on the portfolio risk and return.</p>
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:
<p>The Foundation has delegated responsibility for proxy voting to our contracted CIO, which deploys significant resources to stewardship. The contracted CIO has established Proxy Voting Policies and Procedures and maintains proxy voting records. However, as the Foundation does not publicly disclose our outsourced CIO, we cannot provide the guidelines or detailed records. The Investment Manager believes that ESG factors can protect and enhance the value of client investments by adding value to portfolios within the same risk/return profile. Integral to this belief is that effective stewardship of client assets is a core element of our fiduciary duty. The Manager uses active ownership to share insights and to encourage and catalyze change at the company and asset levels. The Manager believes voting rights have economic value and should be treated accordingly. Significant outcome-based engagements with considered voting activity underpins the Manager's stewardship, with a clear focus on the connection between stewardship actions and unlocking alpha to drive value at the portfolio level. The prescriptive nature of some shareholder proposals increases the complexity for investors, requiring careful consideration to balance sustainable goals against realistic and/or cost-effective improvements for companies. In 2022, the Manager voted in 12,368 Annual General Meetings, voting against management in 64% of the meetings.</p>
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:
<p>The Investment Manager dedicates significant resources to addressing the social and environmental responsibilities of the companies in which the Foundation invests. Our outsourced CIO met with a large US energy company over several years to discuss their climate strategy. While the company set forth short-term carbon reduction goals, they failed to address long-term ambitions. Our outsourced CIO worked with the company to adopt additional medium/long-term targets focused on methane intensity and overall carbon intensity and communicated to the company that the adoption of a net-zero target would be an essential input into the process for reviewing its exclusion from Sustainable Investing strategies.</p>
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:
<p>The UWRF Foundation Investment Committee and Board hired a contracted CIO to proactively invest in sustainability-focused investments without sacrificing returns, as the Foundation believes this approach will have a significant positive ESG impact and rate of return in the long run versus a negative screen-based approach.</p>
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:
<p>Yes, including, but not limited to: - In the first group of companies to endorse and sign the UN Global Compact in 2000 - Founding Signatory of the Carbon Disclosure Project in 2002 - Signatory of the UN Principles of Responsible Investment in 2009 - Founding Signatory of the Net Zero Asset Managers Initiative in 2020 - Founding Member of the Net Zero Banking Alliance in 2022</p>
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:
<p>Response to data outlier review comment:</p>
<p class="MsoNormal">Thank you for the response and questions. In partnership with the investment committee, we have reviewed the list of ESG investments and have decided to remove one of the funds from the ESG calculation that utilizes an exclusionary screen, <strong>which we originally thought fit the “or the equivalent” criteria</strong>. This removes about $345,215 from the ESG value and brings the total to $13,870,634.39 or 52.4%. For the remainder of the investments we confirm the true ESG nature that do not simply employ a negative screen. The committee utilizes an investment manager who is at the forefront of ESG investing and an original signing member of the “Net Zero Asset Managers Initiative” with the goal of net zero emissions by 2050. The investment philosophy employed mirrors this goal and ESG is fully integrated into the selection, <strong>stewardship</strong> and retention of investment managers/funds.</p>
<p class="MsoNormal">The committee utilizes ESG-integrated, sustainability focused, and impact drivers that go beyond simple exclusionary screens by hand-selecting best in class managers and investments. This is done at various levels of integration, the lowest of which utilizes ESG integration in the framework of asset selection. This means ESG is always a part of the investing process as the team has a Sustainable Investing research team, which is a group of analysts dedicated to supporting portfolio managers to better understand sustainability risks. The manager also created and utilizes a proprietary “ESG Risk Dashboard” that is employed to avoid downside risks that combines in-house analytics with best in class third party sustainability <strong>data</strong> providers.</p>
<p class="MsoNormal">In addition, the Investment Manager has selected to invest our assets in public and private direct impact investments such as: affordable housing, green energy, and climate change activists.</p>
<p class="MsoNormal">While UWRF may be <strong>leader in sustainability</strong> amongst peers, we are confident that our ESG investment framework and calculation is accurate and utilizes best in class investments to drive appropriate risk adjusted returns over multiple market cycles using investments with a larger, <strong>more sustainable,</strong> ESG impact than “exclusionary screen” funds.</p>
<p class="MsoNormal">The chair of the investment committe and our advisor are willing to have a phone call with evaluators if that is helpful. </p>
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.