ENDOWMENT ESG POLICY
The global investment community has increasingly recognized its responsibility in promoting environmental sustainability initiatives, socially-beneficial activities, and good corporate governance in its approach to allocating capital. Environmental, Social and Governance (ESG) principles are one important framework for assessing how a company or business performs in areas that have broad effects on society.
ESG considerations include:
- Environmental impacts, such as carbon emissions, energy efficiency, climate change, resource scarcity and water use;
- Social goals, such as diversity, equity and inclusion initiatives, employee health and safety standards, and promoting workers’ rights;
- Governance considerations, including board oversight, business ethics, political influence and contributions, and executive compensation.
Values in Action
Peddie is committed to the intellectual, social and moral growth of our students, and inspires them to continually strive for the highest quality of citizenship. The Peddie Board of Trustees endeavors to reflect these values in all areas under its purview, including in its investment policy regarding the endowment.
IMPLEMENTATION
The Investment Committee (IC) will therefore incorporate an ESG policy in its investment process in the following ways:
- First, the IC and its investment consultants will engage with investment managers to evaluate their ESG-related policies as a part of our due diligence process over any prospective investment. The IC recognizes that most reputable investment managers have already adopted ESG standards into their processes, though some may not have a stated ESG policy. We will therefore seek to understand key metrics the manager uses to monitor ESG-related matters and ensure compliance with its policy or standards.
- Second, the IC will document ESG-related matters covered in due diligence as part of its decision-making process, and will take such findings into consideration before approving a new investment or investment manager.
- Third, the IC and its investment consultants will monitor ESG practices as part of their ongoing evaluation of any investment manager present in the Endowment, and will consider reducing or eliminating an investment if material breaches of ESG standards are uncovered. On very rare occasions, circumstances may arise when a manager’s actions or activities within the manager’s underlying portfolio investments are so abhorrent as to warrant the Endowment’s divestiture from those investments or investment managers. Such activities include involvement in genocide, human trafficking, slavery, corruption, embezzlement and violations of child labor laws. The IC will promptly review these instances, consider divesting from such positions, and discuss appropriate actions with the Board.
- Fourth, as part of its standard reporting, the IC will periodically provide the Board a summary of our ESG evaluation and monitoring processes, and will report any material deviations or negative findings and actions taken by the IC as a result of such findings.
Given that ESG considerations are a relatively new and evolving initiative in the investment world, the IC will review this policy on a periodic basis, and will propose any modifications to the Board for consideration.
AD HOC COMMITTEE
Rob Ruberton, Chair
Suzanne Daly
Allison Davi
Sunanda Nair-Bidkar
Mike Smith