- A new report from Commonfund, NACUBO, and the Association of Governing Boards of Universities and Colleges shows a number of higher education institutions making investment decisions based on companies’ environmental, social, and corporate governance ideals and getting strong returns.
- The investment strategy is known as ESG, referring to the focus on environmental, social, and governance ideals, and while just one-quarter of institutions surveyed use the strategy, the practice seems to be growing in part because of stakeholder demands.
- University Business reports that ESG investing along with divestment could have an increasing effect on enrollment in coming years as prospective students think about more than academics when it comes to their schools of choice.
Student-led divestment campaigns at high-profile schools like Harvard, Columbia, and Swarthmore have found varying degrees of success when it comes to effecting institutional change. Columbia did divest from the private prison industry, yet Swarthmore’s board of managers held firm against pressure to divest from fossil fuels, outright refusing to do so last spring. A campaign at Harvard for divestment from fossil fuels has been ongoing for years as students continue to press and administrators refuse to take action. This new study, however, indicates that there are plenty of ways to engage in responsible investment that could quiet campus activists and still earn endowment returns, a key argument for keeping investments in controversial industries.