ESG Investing

How Sustainable Investments Engage Donors, Students, and Other Stakeholders

Universities, foundations, and other institutions have diverse motivations for adopting sustainable investing. They may seek to apply their values consistently across their activities, to dedicate a greater share of their resources to creating impact, or to pursue their missions more effectively.

Another potential benefit of aligning an endowment’s portfolio with environmental, social, and governance (ESG) standards is that doing so could strengthen engagement with donors, alumni, and prospective students. Read more for a look at how universities are spreading the word about their investment activities.

How Publicizing Sustainable Funds Can Foster Engagement

Communicating with stakeholders is the final step of the Intentional Endowments Network’s roadmap for sustainable investing. This stage in particular presents opportunities to increase engagement with donors and alumni.

Sharing sustainable investing decisions fits naturally into donor engagement strategies when it highlights the organization’s mission. For example, Harvard Management Company relates its long-term ESG investing focus to its mandate to promote Harvard University’s leadership in education and research. By articulating how investment decisions stem from its mission, an organization can rally stakeholders around its core values and illustrate how it puts them into practice.

Announcing a commitment to align an endowment with ESG criteria can also bring in positive press. Major media outlets from CNN to the LA Times reported on the University of California’s divestment from fossil fuels, and Georgetown University also won coverage of its plan to divest. Favorable coverage can help build an organization’s brand as well as increase visibility with donors.

Other stakeholders may be more receptive to these announcements amid growing support for impact investing. In 2019, an investor interest survey by the Morgan Stanley Institute for Sustainable Investing found that 85% of respondents were somewhat or very interested in sustainable investing. Among millennial respondents, that figure rose to 95%. Given that younger generations are especially likely to care about impact investing, universities may be able to leverage sustainable investing commitments into engagement with prospective or current students and recent graduates.

By articulating how investment decisions stem from its mission, an organization can rally stakeholders around its core values and illustrate how it puts them into practice.

How Diverse Tools Showcase Endowments’ Progress

Organizations searching for strategies to communicate with stakeholders may find inspiration in universities that have successfully shared impact investing successes with their alumni networks and campus communities.

For instance, universities may publish information about their investment policies online. Yale University, Middlebury College, Dickinson College, and the University of Rochester are just a few colleges and universities that devote sections of their websites to responsible investing programs. Each explains the rationale behind the strategy, delves into some of the institutional histories that led to adopting the investing policy, and notes their focal social or environmental issues.

Publishing articles that detail an endowment’s sustainable approach is a complementary strategy. An article in an industry magazine may garner recognition from the broader business community, as did this piece highlighting Becker College’s experience adopting impact criteria for its portfolio. An article in an alumni magazine may be more targeted to stakeholders. In one article from UNH Today, the University of New Hampshire educates stakeholders about its endowment while acknowledging the role alumni played in its transition to ESG investing.

Organizations may also seek certifications and affiliate with groups of impact investors, which can build credibility and signal a commitment to sustainable investing. For instance, Arizona State University and Cornell University have each earned the platinum rating from the Sustainability Tracking, Assessment & Rating System. Several universities are also signatories of the Principles for Responsible Investment, including Northwestern University and Loyola Marymount University.

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