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The Office of Climate Sustainability announced Tuesday night in the Broadhead Center’s Bolton Family Tower Room that mission-driven institutions will focus on the logistics of university investment portfolio management and investment transparency issues. The 7th installment of the investment seminar series was held.
The conversation features insights from Jeff Mindlin, chief investment officer at Arizona State University Enterprise Partners, and Robert McGrail, director of legal and compliance at Duke University Management Company (DUMAC). It was done.
DUMAC is the organization that manages the investments of the university’s endowment, which reached $27.2 billion in 2023. DUMAC also manages Duke University’s pension plan assets, the Duke University Health System, much of the university’s working capital, and the Duke Endowment.
DUMAC operates in conjunction with an external investment manager that handles a small portfolio that includes a portion of the university’s endowment.
“We have close to 50 people, over 50 people around the world with $20 billion under management, in every asset class you can think of,” McGrail said. “If you do this directly, the complexity increases by a factor of 100.”
McGrail noted that outsourcing portfolio management is typical for institutions with such large endowments, and that DUMAC is likely to handle more assets directly than its peer institutional fund management companies.
A large part of DUMAC’s work consists of selecting portfolio managers who meet various criteria regarding responsible investment practices.
Although the organization’s main priority is to generate revenue for the university as its primary trustee, Duke University’s role as a mission-driven institution allows DUMAC to consider many non-financial factors related to the university’s value. It is also necessary to consider. These values-based concerns are primarily summarized in environmental, social and governance criteria, which McGrail says DUMAC prioritizes in vetting potential asset managers.
DUMAC’s efforts to protect the university’s position on the climate crisis have been the subject of controversial debate in recent years, with the student group Duke Climate Coalition calling on trustees to strip Duke University’s endowment from fossil fuel companies. We have been running a campaign for the past 12 years.
Student concerns regarding the operation of the Fund are collected through the Investment Responsibility Advisory Committee, not DUMAC. On February 16, ACIR published a report recommending that DUMAC not sell, arguing that current research does not provide “convincing evidence” that divestiture would be successful in reducing carbon emissions.
Mindlin shared the organization’s strategy for managing ASU’s $1.5 billion endowment. ASU has slightly different requirements as a public university with additional stakeholders.
“We try to work in a way that doesn’t politicize donations,” Mindlin said. “The university’s charter is about measuring success by who we include, not who we exclude.”
ASU Enterprise Partners has not divested from fossil fuels and instead has implemented a number of measures to ensure responsible investing, including direct ownership of securities, profiling shareholder resolutions, and direct communication with companies about their business practices. strategy is adopted.
Trustees also use carbon neutrality goals to inform investment decisions. Mindlin shared that ASU achieved net-zero Scope 1 and 2 carbon emissions in 2019. This includes direct emissions and emissions from the purchase and use of electricity, steam, heating and cooling.
ASU has set a goal of achieving carbon neutrality across Scope 1, 2, and 3 emissions in 2035, which will reduce carbon emissions up and down the value chain of university assets, including endowments. Accountability will be expanded, including:
Tim Profeta, a senior fellow in the Nicholas Institute for Energy, Environment, and Sustainability, moderated the conversation with DCC co-director and senior Brennan MacDonald. Talked about opportunities.
Regarding pursuing more robust data analysis of the foundation’s carbon footprint, he told McGrail: “I came on my own and I’m excited to see what this university’s research network can do to help you solve this problem.” I would like to see if it is possible.” “I think it will be a good partnership.”
Mr. Mindlin also emphasized the role that universities and similar mission-driven institutions can play in pioneering responsible investment practices.
“Our president likes to say higher things. [education] “We account for less than 5% of the carbon footprint, but 100% of the learning footprint,” he said. “As for those, [research] Although the activity is extremely resource intensive, it provides tools for students looking to change the world. ”
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| Associate News Editor
Zoe Korenovsky is a sophomore at Trinity University and an associate news editor in the press department.
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