Managers of Harvard’s $32 bn university endowment will sign up to the UN Principles for Responsible Investment (PRI), becoming the first such endowment in the US to do so.
Harvard Management Company (HMC), which has managed the endowment for more than 40 years, says it decided to sign up to the UN PRI after a year of deliberation and as part of ongoing efforts by the university to support initiatives that encourage sustainable investment.
‘As long-term investors, we are by nature focused on material ESG factors and the responsible stewardship of our investments,’ says Jane Mendillo, president and CEO of HMC, in a press release. ‘We decided that implementing the principles put forth by this pioneering organization is a natural step for us in the evolution of our sustainable investment practices. It is consistent with our paramount focus on maximizing returns to support the mission of Harvard University.’
PRI signatories must accept a series of six principles, including the incorporation of ESG criteria into decision-making processes, the incorporation of ESG criteria into ownership policies and promotion of these principles throughout the investment industry. Signatories must also agree to seek ‘appropriate disclosure’ from others, report on their own ESG-related matters and work with others toward implementing the principles.
Harvard’s signing of the PRI comes amid increasing pressure on university endowments to actively manage their investments for social change, with many activists encouraging them to divest themselves of stocks of fossil fuel companies and others. The PRI, however, do not require Harvard to sell any specific holdings.
Harvard also announced it will become a signatory to the climate change program of the international non-profit Carbon Disclosure Project, which is pushing for greater environmental disclosure from publicly listed companies.
‘Harvard University is the first US endowment to publicly commit to investing its funds in a more responsible and sustainable manner using the PRI’s voluntary framework, and we are thrilled to welcome it to the organization,’ says Fiona Reynolds, managing director of the PRI. ‘Sustainable investment is one of the world’s fastest-growing investment trends, and Harvard’s leadership provides a model for other US universities.’
