Intentionally Designed Endowment: Aligning Your Investment Portfolio with Your Environmental, Social, and Governance Goals
Consultative Conference on April 3-4, 2014
Located at the Cambridge Marriott in Cambridge, Massachusetts
The conference is intended to help colleges and universities grappling with the question of whether and how to align investment policies with broader institutional values. This is largely uncharted territory, and we have designed a process to allow institutional leaders to explore if and how endowments should consider environmental, social, and governance (ESG) factors, and how they relate to risk and fiduciary responsibility.
We will operate the conference under the Chatham House Rule so everyone can speak freely without external attribution unless participants give explicit permission to do so. Our purpose is to provide a venue for examination of issues and strategies for considering institutional values in investing, not to advocate any specific action or approach. The program has been designed to have a logical flow that builds throughout the day and keeps participants actively engaged with multiple opportunities to learn from other participants and build relationships.
To ensure that the gathering meets the needs of the participants, we are asking invitees and participants to help us do so by giving us brief feedback on their burning questions and desired outcomes. We have received some outstanding feedback to date from 45 participants and have designed our agenda to address the identified issues. Here is a summary of their feedback, and we will further refine the agenda with feedback from others:
- Why should we consider aligning investments with ESG goals? How does this fit with our mission as educational institutions?
- What are financial costs and benefits of such alignment? Can we get good ROI with such alignment?
- What is happening across higher education and foundations and how can we learn from others who have moved forward in this area?
- What are the financial structural challenges in the market that may impede action, e.g., commingled investment funds?
- How might we discover and assess the range of strategies and products available for aligning investments with ESG goals?
- How might we effectively facilitate a constructive conversation and decision-making process across all our stakeholders?
- How might we keep informed about and support each other in addressing these issues in the future?
Thursday, April 3, 2014
3:00-6:30 p.m. Check-in at Cambridge Marriott
5:30-6:30 p.m. Welcome Reception
6:30-9:00 p.m. Opening Dinner
- 7:20 p.m. Welcome, Purpose, and Context: Jonathan Lash, President, Hampshire College
- 7:40 p.m. Keynote speaker: Robert Litterman, Kepos Capital, chairman, Risk Committee
Friday, April 4, 2014
7:30-8:15 a.m. Breakfast
Keynote Speaker: Jonathan Greenblatt, the White House, Special Assistant to the President and Director of the Office of Social Innovation and Civic Participation in the Domestic Policy Council
(8:15-8:30 a.m. Break)
8:30-9:15 a.m. Opening: Context and Conference Overview
Conversation Catalyst: Tony Cortese, senior fellow, Second Nature
Set the tone and context for the day by framing the agenda in terms of the participants' burning questions and initiating the conversation, with introductory table discussions about why you are here and what you want out of the day's conversation.
Format: Presentation/Peer-to-peer conversation
9:15-10:10 a.m. An Overview of ESG Investing: History, Trends, and Effectiveness
- Thomas Kuh, MSCI
- Chris McKnett, State Street Global Advisors
- Moderator: Alex Lamb, Ernst and Young
Overview of ESG investing historically, current, and future trends
- How values get translated into investment decisions; the function of an investment policy statement; and the concept of positive and negative screens
- Making the fiduciary case for ESG investing
- Illustrative examples of ESG strategies with superior performance
- Long-term qualitative and quantitative benefits/costs of implementing an ESG portfolio, e.g., concept of investment risks
- Conceptual/organizational barriers to ESG investing and how to address them
Format: Panel; interactive discussion with conference participants
10:10-10:40 a.m. ESG Investing Implementation: Where are you and where would you like to go?
Conversation Catalyst: Jonathan Lash, President, Hampshire College
A peer-to-peer conversation to learn the spectrum of experience in the room and highlight key questions, issues, and themes that can be revisited throughout the day.
Format: Peer-to-peer conversations
10:55-11:55 a.m. Investment Risks and Options: The Climate Case and Beyond
- Geeta Aiyer, Boston Common Asset Management
- Kenneth Locklin, Impax Asset Management
- Alice DonnaSelva, Prime Bucholz
- Moderator: Chris Davis, Ceres
Stranded asset risks
? Carbon, climate, and other risk assessment
? Low carbon investing strategies
? Dealing with comingled funds and alternative investments
Format: Interactive panel discussion with conference participants
11:55-12:45 p.m. Lunch: Small group conversations with peers and conversations catalysts
(12:45-1:00 p.m. Break)
1:00-1:45 p.m. Sustainable Investing and the Responsible Fiduciary
- Jay Youngdahl, The Youngdahl Law Firm
- Susan Gary, University of Oregon School of Law
- Keith Johnson, Reinhart Boerner Van Deuren s.c.
- Moderator: David Dinerman, CFO of ZoMazz, Inc., Hampshire College Trustee
A panel of experts will share the latest thinking on what fiduciary responsibility is and what it allows.
Format: Panel; interactive discussion with conference participants
1:45-3:15 p.m. Creating Productive Dialogue Across Stakeholder Groups: A Peer-to-Peer Conversation
- Lynn Pasquerella, President, Mount Holyoke College; Daphne Chang, Student, Mount Holyoke College
- Steve Hietsch, Associate Vice President for Financial Operations and Auxiliary Services, Dickinson College
- Patrick Norton, Vice President for Finance and Treasurer, Middlebury College (Invited)
- Jonathan Scott, Veritable, LP, former Hampshire College trustee
- Moderators: Georges Dyer, Second Nature; Dan Apfel, Responsible Endowments Coalition
An opportunity for participants to discuss the challenges and potential solutions to having open, productive dialogue on aligning investment practices with institutional values that includes all perspectives within the college or university: administrators, trustees, students, faculty, staff, alumni, community partners, and investment managers. Conversation catalysts (senior leaders from 4 colleges and universities) will initiate discussions. Participants will work in groups to provide input of effective dialogue and decision-making strategies.
Format: peer-to-peer conversations
(3:15-3:30 p.m. Break)
3:30-5:00 p.m. Closing Plenary and Next Steps
An opportunity to create individual and group plans for going forward including identifying resource needs and potential collaborators. Define what role, if any, you would like to play in local, regional, and national efforts to further ESG investing by higher education and private foundations.
Format: Peer-to-peer conversations and group summary
5-7 p.m. Networking Reception at the hotel