Responsible investment allows institutions like colleges and universities to ensure that their investments are aligned with their values. Given that many schools have made commitments to diversity, the environment, their workers and local communities, it logically follows that they would want these commitments reflected in their investment policies. The status quo- blindly investing in companies that destroy the environment, mistreat their workers, build private prisons, or discriminate against employees is unacceptable—and luckily, responsible investment provides a way for schools to continue to earn the money they need, without sacrificing campus values in the process.
Colleges and universities have many opportunities to align their investments with their mission statements. These include:
- Engaging in active ownership, also known as shareholder advocacy, by taking a stance on the social and environmental impact of corporations without divesting;
- making proactive investments in companies or projects that align with the institution’s mission, such as green energy or low-income housing; and
- screening out or divesting from particular investments, such as in tobacco or conflict regions, where investments would support activities against the school’s values.
Responsible investment benefits everyone: schools continue to make the financial returns needed to fund quality education, alumni feel good that their donations are being managed in line with their values, and students know their education has not been funded unethically. Given the tremendous power of money, and the fact that over $400 billion is managed by colleges and universities, responsible investment is one of the highest-impact ways schools can support society—and its relatively easy to implement.