Climate Change is one of the most pressing issues of our time—and even more so for our students’ generation.
One only need examine the university’s successful sustainability initiatives to date to see why its students, faculty and staff rightfully take pride in the university for being a leader in environmental justice and sustainability. SU’s leadership is a direct result of the deep commitment and collaborative work by all in our community, most notably our students. While there is more work to do, Task Force members recognize and applaud the leadership of students in building a campus-wide movement that has led to positive change.
From the university’s Climate Action Plan to the Center for Environmental Justice and Sustainability, SU is acting to build a more sustainable world. We were the first educational institution in the state to sign the Washington Business Climate Declaration. The declaration, which President Stephen V. Sundborg, S.J., signed, states: “There is a clear and present need for action on climate change to protect our region’s natural assets, its vibrant communities and its growing economy.” In addition, there has been significant progress made in recent years to transform the campus into a sustainable and carbon neutral one. The SRI Task Force encourages the university to continue these efforts and consider new sustainability initiatives aimed at increasing energy efficiencies and reducing the university’s carbon footprint.
As a group, members of the Task Force are uniformly committed to continuing this forward momentum. We are deeply cognizant of the responsibility with which we were entrusted and the task with which we were charged.
In making its recommendations, the SRI Task Force is especially mindful of Pope Francis’ encyclical Laudato Si’ and the university’s responsibility as a Jesuit Catholic institution to be a leader in advancing sustainability and the promotion of justice. Members wrestled with and considered a broad spectrum of issues and recommendations, ultimately deciding to move forward on those where consensus could be reached. A variety of viewpoints were expressed in terms of the symbolic and actual impact divestment might have in driving social change as well as the practical impact it would have on the endowment’s investments and its investment strategy. Additionally, the Task Force intently explored and considered the challenges and difficulties of divesting from fossil fuel securities, albeit indirect investments in the SU portfolio. Doing so would place limitations on the Investment Committee’s ability to implement strategies that generate efficient returns on contributions entrusted to SU from generous donors.
The Task Force sincerely hopes that it has set a process in place that will continue to benefit the university and its Jesuit Catholic educational mission for years to come. It is a process designed to serve as a new convergence point for the university community to come together to find the best way forward for the greater good.
President Sundborg announced the creation of the Socially Responsible Investments (SRI) Task Force in March 2015 as a way to explore options in which Seattle University could further its commitment to social responsibility in making investments which are consistent with its Investment Policy Statement (IPS). The IPS states:
Consistent with the university’s Jesuit Catholic values, the [Investment] Committee will consider the university’s commitment to ethics and social responsibility in making investment decisions. While the committee remains committed to its fiduciary duty to the university’s long-term financial growth and sustainability, it also recognizes the value of non-traditional investment opportunities in providing a reasonable return as well as furthering the university’s mission and values.
The President’s announcement stated “the SRI Task Force was established in large part as a result of the dialogue the administration engaged in with Sustainable Student Action (SSA) on divestment from fossil fuels.” He went on to say that he felt it was important to find ways to take concrete steps in areas where there is consensus and to continue the progress Seattle University has already made through the Climate Action Plan and other initiatives on advancing sustainability in the university’s operations and academic programming.
The Charter for the Task Force is attached in Exhibit 1. It states that “[t]he Task Force will consider issues of social responsibility in the investment policies and practices of Seattle University. It is charged with making recommendations to the Investment Committee on socially responsible investment issues related to the investments in the university’s endowment.”
The SRI Task Force is part of the Board of Trustee’s Investment Committee and was set up for a term of one year. It consists of 11 members representing the Board of Trustees, alumni, students, faculty and staff. Task Force members include:
The members of the Task Force were appointed as follows:
The Task Force met seven times over a 12-month period. The work that was done at each of these meetings is briefly summarized below.
Meetings 1 and 2: Defined SRI Task Force goals and objectives, reviewed the endowment’s current asset allocation and investments and discussed the differences between direct investments, separately managed accounts and pooled and index funds. Cambridge Associates also reported on the endowment’s exposure to fossil fuels and what they are seeing on the SRI front with other clients and within the investment industry.
Meeting 3: Brainstormed and developed a comprehensive list of recommendation options to be vetted. All ideas outlined, including complete divestiture from fossil fuels, were kept on the table and nothing ruled out.
Meeting 4: Performed a deep dive on the comprehensive list of options, from which a short list was developed. The items were separated between those in which the group appeared to have an emerging consensus and those where consensus did not exist.
Meeting 5: Planned for the open fora with the campus community.
Meeting 6: Conducted three fora. The first one was at lunchtime, which included the six faculty authors of a letter calling for divestment that was submitted to the Administration and Board of Trustees and six leaders of Sustainable Student Action. The other two were open sessions—one in the afternoon and the other in the evening, which were open to all faculty, students and staff of the university.
Meeting 7: Finalized the SRI Task Force’s recommendations to the Investment Committee.
After considerable inquiry and discernment, the Task Force, by consensus, respectfully recommends the Investment Committee adopt each of the following recommendations no later than January 2017.
The Task Force further recommends that this subcommittee be chaired by a member of the Investment Committee who will serve as the liaison between the campus community and the Investment Committee. There should be representatives on the committee from all campus constituencies - concerned faculty, staff and students—and no more than half of whom should be members with a finance/investment background or focus. A charter for this subcommittee should be developed and approved by the Investment Committee.
It is important to note that the current portfolio does not utilize direct investments in its strategy; however, the Task Force believes that making this commitment will ensure no direct investments in fossil fuel companies are made in the future. This change will impact the investment selections made by the Redhawk Fund, the student-run investment group on campus, which is currently holding stocks in three publicly traded companies on the aforementioned lists. They would be asked to divest from those securities if this recommendation is adopted.