Commencement 2012 / Year in Review: Responsible Investment

“To be a responsible investor requires transparency, accountability, and consideration of [extra-financial] factors when making investment decisions,” says Samuel F. Wohns ’14.

By HANA N. ROUSE, CRIMSON STAFF WRITER

Published: Thursday, May 24, 2012

0n April 3, approximately 25 students, including members of the Student Labor Action Movement, union organizers, and Harvard employees, gathered in front of Massachusetts Hall to celebrate Harvard’s decision not to reinvest in HEI Hotels & Resorts—a hotel chain that had come under fire in recent years for repeated allegations of failure to comply with labor regulations.

Five months earlier, many of the same students had spent the fall campaigning against Harvard’s holdings in HEI with the Occupy Harvard movement, which listed non-reinvestment in HEI among its original demands drafted in November 2011.

But while student advocates had been pushing for Harvard not to reinvest in HEI because of ethical concerns, Harvard Management Company President and CEO Jane L. Mendillo stressed that HMC’s decision had been based purely on financial considerations.

“Importantly, this decision was based on factors related to the HMC portfolio and its strategy and needs; not on concerns about HEI’s practices,” Mendillo wrote an email to University President Drew G. Faust.

The discrepancy between Occupy and HMC’s reasoning on HEI is emblematic of a deeper disconnect that exists between the investing philosophies of activists and of HMC portfolio managers. While many students are pushing for Harvard to embrace socially responsible investment standards, HMC insists that its primary responsibility is to generate strong returns for the University, not to advance social change through the markets. Continue reading Commencement 2012 / Year in Review: Responsible Investment

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Harvard, Others Face New Tactics by SRI Backers

“Our research finds that SRI does not necessarily hurt your portfolio,” says Katherine Burstein, an associate with the Mercer’s responsible investment team. “There’s proof out there that shows you can do just as well while implementing SRI policies, and in some cases you can do better.”

Article covering the Fair Harvard Fund published on May 29, 2012 in FundFire, a Financial Times service.

By Billy Nauman

Student groups across the country from high-profile colleges such as Harvard and the University of Chicago are employing new tactics to pressure university endowment managers to adopt more socially responsible investing practices.

At Harvard, a group of students has launched the “Fair Harvard Fund,” an effort to persuade the Harvard Management Co. to start a “social choice fund” for donors to give restricted monies to the endowment. The Fair Harvard Fund, run by the student Coalition for Responsible Investment, is collecting and pooling donations from Harvard students and alumni that it intends to present to the endowment manager this fall as the basis for carving out a socially responsible portfolio within the endowment.

“It’s a monetary petition to get the community to show their support for ESG [environmental, social and governance],” says Evelyn Chow, a member of the student coalition. “Harvard doesn’t have a social choice fund at all… If you would like your donation [to Harvard] to be invested responsibly, you don’t have any way of doing that in the current system.” So far, the Fair Harvard Fund has received donations from approximately 400 students and alumni. Continue reading Harvard, Others Face New Tactics by SRI Backers

A College’s Endowment Portfolio Should Match Its Mission

Josh Humphreys of the Tellus Institute wrote a guest op-ed for The Chronicle of Higher Education today entitled “A College’s Endowment Portfolio Should Match Its Mission.”

“Harvard Management Company has lost plenty of money while focusing solely on ‘enhancing the university’s financial resources,’ while Notre Dame has made plenty while marrying its money with its mission.”

We agree, Josh!

Read the whole op-ed for yourself here.

Tellus Institute: Harvard is not transparent

A report released by Tellus Institute today finds that the Harvard Management Company is “among the word offenders in transparency,” citing its failure “to identify by name the board members involved in related party transactions with the university.”

The report notes,
Harvard University fails to disclose a widely reported business relationship between Harvard Management Company (HMC), the university’s endowment manager, and an investment firm affiliated with an HMC board member.
The body of the report goes on to explain:
Harvard University, including its affiliated investment management company Harvard Management Company (“HMC”), joins Boston University among the worst offenders in transparency for similarly failing to identify by name the board members involved in related party transactions with the university. The university does not disclose potential conflicts related to the management of its $32 billion endowment on the university’s primary tax filings, under the official name of “President and Fellows of Harvard University,” but rather on an entirely separate filing by HMC, the entity responsible for managing the endowment and other assets. Continue reading Tellus Institute: Harvard is not transparent

HMC and the UNPRI

The Pacific Investment Management Company (PIMCO), whose current CEO Mohamed A. El-Erian is the former CEO of the Harvard Management Company (HMC), recently signed the United Nations Principles for Responsible Investment (UNPRI), committing its managers to integrate environmental, social, and governance due diligence into its investment strategies. PIMCO is the world’s largest bond investor and manages the world’s largest mutual fund.

The HMC, which manages the world’s largest university endowment, has not yet signed the UNPRI.

You can read the UNPRI Principles at their website, here.

Happy May Day from RI@Harvard

May 1st is International Workers Day; traditionally, celebrations and marches are held around the world by working people and labor unions to celebrate workers’ rights and the achievement of the eight-hour workday by unions in the 19th century.

The Responsible Investment at Harvard Coalition wishes a happy May 1st to all the workers at Harvard, HEI Hotels and Resorts, and every company in which Harvard invests.