June 8, 2017 – Georgetown’s board of directors approved a Socially Responsible Investing Policy (SRI Policy) today that further aligns the university’s investment strategy with its commitment to social justice, protection of human life and dignity, stewardship for the planet and promotion of the common good.
“This SRI Policy is an important step forward for Georgetown,” says Paul Tagliabue (C’62), the board’s vice chair and leader of its working group on socially responsible investments. “It formalizes and strengthens the university’s investment policies. Recognizing that the university’s endowment is not to be used for advocating political interests, we are committed to both meeting our fiduciary responsibilities and generating resources to advance the university’s academic mission in a manner consistent with our identity as a Catholic and Jesuit institution.”
The policy was developed by the board’s working group on socially responsible investments, which was formed in 2015 following the board’s decision to divest from direct investments in companies whose principal business is the mining of coal for use in energy production.
The working group met with representatives of the student-run group GU Fossil Free (GUFF) including Science, Technology and International Affairs majors Grady Willard (SFS’18) and Samantha Panchevre (SFS’19) while developing the SRI Policy.
GUFF played a significant role in the discussions that led to the board’s 2015 divestment decision.
The working group reviewed the university’s existing policies, examined the policies and practices of other institutions in the academic and Catholic communities and analyzed the experience of other institutions regarding the impact of socially responsible investing policies on investment performance.
Georgetown’s Committee on Investments and Social Responsibility (CISR) commended the university’s efforts to develop the policy and passed a resolution in support of the policy at its May meeting.
Chaired by James Feinerman, associate dean for transnational programs at Georgetown University Law Center and the James M. Morita Professor of Asian Legal Studies, CISR is an advisory body that makes voting recommendations for SRI-related proxies for shares in companies that Georgetown owns directly, reviews proposals from Georgetown community members on SRI-related issues and provides guidance on socially responsible investing to the board’s Subcommittee on Investments of the Committee on Finance and Administration.
CISR includes members appointed by the university’s Faculty Senate, student government organizations and administration.
The university will implement the SRI Policy through four interrelated strategies:
1. Alignment – The university will use reasonable efforts to avoid investments in companies that are substantially involved in the provision of abortion services or that have demonstrated records of widespread violations of human dignity.
2. Integration – The university will incorporate environmental, social and governance (ESG) factors into its evaluation of direct investments and external investment managers.
3. Engagement – The university will continue to exercise its responsibilities as a direct shareholder by engaging with companies on the principles set forth in the SRI Policy.
4. Impact – The university will consider investments that generate a positive social impact to promote the common good, provided these investments target a market rate of return on par with similar assets in the endowment.
The full text of the SRI Policy provides additional context on these strategies.
“The university will consider impact investments in sectors that include renewable energy, energy efficiency, healthcare, financial inclusion, education-enhancing technologies and sustainable agriculture,” Tagliabue explains.
The working group also recommended the further “development of an institutional culture which brings together moral principles and individuals who are committed to integrating the spirit of this policy into the everyday life of the university” through several existing structures:
● The board’s Subcommittee on Investments will continue to oversee and monitor management of the endowment as well as implementation of the SRI Policy.
● The Investment Office will incorporate the policy into its activities, including its due diligence of investments, and will seek guidance from internal and external experts on evaluating the ESG performance of current and future investments.
● CISR will continue its advisory role with respect to the voting of proxies for shares owned directly by the university and will continue to evaluate proposals from the Georgetown community regarding investments and social responsibility, make recommendations to the board and serve as a resource to both the board and Investment Office.
Future board resolutions relating to SRI matters will be posted on an SRI website, together with the June 2015 board resolution relating to coal.
For four decades, Georgetown has worked toward ensuring that its investments are socially responsible. CISR was first established in the late 1970s and expanded in 2012 to enhance the framework for examining the university’s investments.