Josh Humphreys of the Tellus Institute and Jon Lukomnik, executive director at the Investory Responsibility Research Center Institute, wrote a post for the Harvard Law School Forum on Corporate Governance and Financial Regulation on ESG investing by university endowments, summarizing the new report out of the Tellus Institute that we posted about last month.
Students, alumni, donors, faculty, staff and administrators, trustees, community groups and broader civil society organizations all have competing stakes in endowment management and repeatedly exert claims on the environmental, social and governance implications of college investments. Indeed, stakeholders often drive changes to investment policies and practices around ESG issues, whether through campaigns for divestment or proactive sustainable and responsible investment or student involvement in shareholder advocacy initiatives.
In response to these dynamics in the 1960s and 1970s, endowments were among the pioneering institutional investors to adopt new policies and institutions to address social and environmental considerations in investment. Yet three decades later, endowments no longer appear to be leaders in the greatly evolved institutional ESG investment space, with very limited exceptions.