Green Mountain College
| Screened Funds at Green Mountain College |
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Submitted Summer 2010 In comparison to other institutions, GMC has acted quickly in response to student persistence with requests of investment responsibility. GMC is a unique liberal arts school with an environmental mission and the administration is committed to collaborative work with students. It is well known at GMC that student activists influence administrative decisions when issues are intelligently and respectfully approached. Working strategically and collaboratively with administration often gains approval on some level which improves the odds of enacting a student agenda. GMC is also unique because the first effort to raise awareness about SRI was through a faculty member. In the 2008-2009 school year, Professor Sam Edwards began educating students about SRI in his Special Topics: Trade & the Environment course. Expanding upon that knowledge through an independent study, Rob Pudner, a former student at Green Mountain College, essentially paved the path to make SRI a future reality on this campus. Through public outreach methods like forums, conferences, surveys, and presentations, Pudner made the GMC community deeply consider the investment policies and what can be done to become socially responsible (Pudner, 3/26/10). Since Pudner’s eye-opening work, Arden Gustitus and Evan Dale worked with the Responsible Endowment Coalition to document Pudner’s progress. As SRI became increasingly on the radar of students, it was incorporated into another of Professor Edwards’ courses. In his Public Policy and the Environment course, a policy regarding SRI was written by a group of approximately ten students and presented to the Sustainability Council by three students, including myself. The policy mandated the formation of an SRI Committee, complete transparency available to the public, and specified categories in which the college can and cannot invest. The Sustainability Council revised this policy in fall 2009, but the revisions were not reviewed by the Investment Committee of the Board of Trustees because the initial proposal was too ambitious to begin. One of the first steps required by the original policy was to form an SRI Committee. The policy proposed that the committee include faculty, staff, and students. As stated in the policy, the purpose of the Committee was to oversee the Investment Committee of the Board of Trustees and ensure that the SRI implementation process happens in a timely, organized matter. Mid-spring semester of 2010, the SRI Committee formed and called its first meeting. The current Committee members are: Joe Manning, (Vice President of Finance and Administration) Frank Pauze, (Professor of Business, Director of Resort Management Program) Trisha Cloutier, and Mindy Blank (student representatives). At the first SRI Committee meeting, the goal of the committee was defined: create a strategic plan for GMC to implement SRI. The committee agreed that the assistance of Glen Danahey, GMC’s investment manager, would be useful and that an environmentally screened mutual fund was the direction to take. The committee then focused its efforts on researching which fund or funds were best suited to match GMC’s mission and investment goals; several mutual funds were reviewed, including Calvert, the Timothy Report, and Portfolio 21. Meanwhile, the SRI policy was further revised, and an implementation plan was written, stating an ambitious goal to annually increase the percentage of the endowment invested in SRI funds. Within a few weeks, the SRI Committee had selected a fund and a percentage of the endowment to move into the SRI fund. The committee proposed to immediately invest approximately 10% ($291,000) of GMC’s $3 million endowment in Portfolio 21, an environmentally screened global equity mutual fund. Though the SRI Committee has some weight in its ability to make suggestions, the final decisions regarding investing are ultimately in the hands of the Investment Committee of the Board of Trustees. In late April, the SRI Committee recommended this SRI proposal and money shift to the Investment Committee who approved the proposal within less than 24 hours. The SRI policy and implementation plan were approved with conditions of slight revision. Portfolio 21, the mutual fund in which $291,000 of GMC’s endowment was initially invested, generates returns comparable to the S&P 500 Index. Several other institutions observing socially responsible investing practices, particularly in the Northeast, also invest in Portfolio 21 (Walker, 3/29/10). Portfolio 21 seems to hold a similar mission statement to GMC’s: “Portfolio 21 invests only in companies that are integrating intelligent and forward-thinking environmental strategies into their overall business planning. We designed Portfolio 21 to address the ecological risks and opportunities of the investment process in the 21st century” (www.portfolio21.com, pg. 1&4). It is a fund that uses positive and negative screens, searching for companies that uphold environmental practices and excluding those that do not meet their criteria. “There are an increasing number of companies racing to tell us how much they care, and what they are doing to improve the planet. Figuring out which ones are backing up their words with action and which ones are greenwashing isn’t easy” (portfolio21.com, pg. 3). Portfolio 21 uses a complex set of criteria to determine which companies are financially and environmentally acceptable to be included in the mutual fund. Of the companies Portfolio 21 looks into for investment purposes, they turn down well over half because the companies do not meet their high standards (Miller, 4/20/10). Glen Danahey, the Vice President of Asset Services of Key Bank is GMC’s investment manager, was and will continue to be involved in the process of selecting funds for GMC, including Portfolio 21. With the formation of the SRI Committee, Danahey is now basing his choices for fund selection on the committee’s desired screens and recommendations. Danahey will be working closely with the SRI Committee in the following years to ensure financially sound endorsement of ongoing SRI practices. Green Mountain College is among the success stories of SRI, and though the process is just beginning, GMC is far ahead of the majority of institutions because it employs an aggressive tactic of moving money: screening. Initially instituting positive screens is a bold step, and it shows considerable hope for the future of SRI at Green Mountain College. With an implementation plan in place and approved by the Investment Committee of the Board of Trustees, the wheel is in motion, only requiring the involvement of passionate students to continue the movement. Mindy Blank graduated Green Mountain College in December 2010.
BibliographyMiller, June. Portfolio 21. Personal interview. 20 April, 2010 |