Should College Endowments Reflect Green Values On Campus?
That's a reasonable question to ask in light of the results of the Sustainability Report Card 2008 which examines colleges and universities dedication to sustainability, on campuses and in endowment portfolios, and which indicates that the green spirit on campus may not be reflected in the spirit of the investment portfolio comprising the school's endowment.
Of course, there are those who are leading the way; with Harvard, Dartmouth, University of Washington, Middlebury, Carleton, and the University of Vermont all ahead of the curve.
But it seems to me to be a difficult question for any fund manager or institution to grapple with. After all, is the duty of the manager of those funds in a university or college endowment to find the best possible investment in pure financial terms, or based on both the economic and potentially unrealizable social return on campus?
I suspect it depends on who you ask.
But as Warren Buffett pointed out back in May when pressed at the annual meeting of Berkshire Hathaway shareholders as to why it was that he continued to hold on to shares of PetroChina at the time, "If we sell, then what?" His argument being that a sale would have no impact on the behavior of the Chinese government which essentially owns the company outright.
Following that logic, managers of endowments asking themselves a similar question about the social responsibility of their portfolios may not have a different answer.
I believe they would, however, do well to invest in green companies that make a compelling case for their financial commitment over an investment of equal economic value if everything else considered is the same besides their respective environmental policies.
via:: Social Funds