Statement on Investment Policy and Fossil Fuel and Private Prison Industries
Hampshire College has had a longstanding policy of Environmental, Social and Governance (ESG)-oriented investing, which dates back to the college’s early days. As an example, Hampshire was the first college to divest from South Africa. Hampshire’s Investment Policy (adopted December 2011, amended November 2015) is grounded in ESG principles, and requires the college to favor investments that do right by the environment, employees, and supply chains, and are governed with transparency and fairness, and to disfavor investments that don’t achieve these goals.
As a result, Hampshire has not had a significant exposure to fossil fuel investments for many years. At present, Hampshire's exposure to fossil fuel investment is de minimis – less than 1 percent in what most would consider fossil fuel stocks.
The college's investment policy, in place since 2011, has likewise opposed such investments as private prisons, and Hampshire had no such holdings when this issue was raised on campus by the student group Decolonize Media Collective (DMC) in 2014 and 2015.
At the request of DMC, Hampshire modified its policy, by specifically identifying private prisons as a disfavored industry. The student group called out issues associated with investing in hedge funds, and as a result, Hampshire is now going farther to ensure compliance with our investment policy by making quarterly inquiries of these funds to confirm their alignment. The results of these inquiries are made available to all on campus, as transparency is another principle and objective of Hampshire’s approach to investing its endowment.
At its meeting in November 2015, the board of trustees listed examples of disfavored industries. The three it named are:
- fossil fuel/carbon producers and related businesses,
- the weapons and firearms industry, and
- the private prison industry and related businesses.
Hampshire does a fair amount of work to confirm that its endowment is invested consistent with its policy. Specifically:
- The college chooses to work with investment managers who are aligned with its policy, and to closely monitor what securities they hold.
- It requires transparency in all of Hampshire's investment funds. In the hedge fund arena, Hampshire confirms quarterly that it is not investing in companies or industries that it disfavors, and the college requires transparency on the hedge funds’ top holdings.
Hampshire's endowment is relatively small – as of December 2015, it was valued at $36.8 million – so almost all of it is invested in commingled funds. As a result, we invest, not at the individual security level, but instead with fund managers. Hampshire's approach to investing involves the use of positive screens to align with its institutional values: choosing investments based on their positive attributes (principally environmental, social and governance issues), rather than divesting from investments because of negative attributes; and choosing fund managers whose values are aligned with those of the college.
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