At UNC Asheville one of our core values is sustainability and environmental responsibility and awareness. To this end, Chancellor Grant allocated $10,000 for an investment fund targeting funds and companies that adhere to sustainable environmental, social, and governance (ESG) principles. Initial investments were made in early 2017, with the goal of returns equal or better than the market that do not come at the expense of the planet. Currently the fund is in its infancy, we hope to grow it and provide donors with a chance to donate specifically to this fund, allowing their money to better reflect their values.
Purpose and Mission Statement
The Environment, Social, Corporate Governance (ESG) fund of the University of North Carolina at Asheville exists to further the University’s mission to incorporate economic, social and environmental sustainability into its institutional practices and curriculum. The student-managed fund originated in response to students’ concerns regarding the ethical management of the University’s endowment. The ESG fund’s success depends heavily on strong student input and ethical reinvestment to make a positive social and environmental impact. In doing so, it contributes to the education of students interested in ethical investment or seeking careers in finance by providing a unique experiential learning opportunity in security selection, portfolio and risk management, economic analysis, and investment communication within an ethical pretext.
By participating in Impact Investing as defined by the 2015 Commonfund Study of Responsible Investing UNC Asheville’s student managed ESG fund will “invest in projects, companies, funds, or organizations with the express goal of generating and measuring mission-related social, environmental or economic change alongside financial return.” Capturing an appropriate return is critical to do so, as this will ensure that the fund will be able to carry out the interests of the students by building stronger alliances with frontline communities most greatly impacted by the extractive economy and working towards a just transition towards regenerative finance.
Adherence to ESG investing principles
Popularity and investor interest have pressured investment firms to construct ESG-guided funds. One such firm, Calvert Investments, outlined ESG criteria for their ESG integration (See Calvert’s Investments Positive Screen Criteria). The fact that such a prominent firm can find financial success and clients to support such a mission grants support for this fund to adopt similar ESG screens. Rather than focus on negative screens that exclude investment options, this ESG fund’s composition will focus on positive screens that will naturally exclude certain firms and industries.While every investment may not meet all criteria, it will be management’s responsibility to ensure that investments meet as many criteria of the following criteria as possible:
- Climate / Clean Technology: Combination of Positive and Restricted/Exclusionary Strategies
- Pollution / Toxins: Combination of Positive and Restricted/Exclusionary Strategies
- Other Environmental: Combination of Positive and Restricted/Exclusionary Strategies
- Community Development: Combination of Positive and Restricted/Exclusionary Strategies
- Diversity & Equal Employment Opportunity: Combination of Positive and Restricted/Exclusionary Strategies
- Human Rights: Combination of Positive and Restricted/Exclusionary Strategies
- Labor Relations: Combination of Positive and Restricted/Exclusionary Strategies
- Board Issues: Combination of Positive and Restricted/Exclusionary Strategies
- Executive Pay: Combination of Positive and Restricted/Exclusionary Strategies
ESG Fund Quarterly Report
Projected Growth – average YTD return between the two funds is 9.57% (-4.373 percentage points behind the S&P 500). If we assume this rate to remain constant, our fund should grow to $13,100 in 3 years and $15,800 in 5 years. In ~35 years we should achieve our minimum fund size of $250,000 (assuming no additional external investments).
Portfolio Detail (as of February 2017):
|Mutual Fund||Current Market Value||Unrealized Gain/Loss||Est. Annual Income||Est. Annual Yield|