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Business and Policy Areas
Business and Policy Areas
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New Report Tracks Socially Responsible Investment Practices

May 4, 2015

A new publication, Commonfund Study of Responsible Investing: A Survey of Endowments and Their Affiliated Foundations, analyzes the responsible investing policies and practices among 200 U.S. colleges and affiliated foundations. The study examines current socially responsible practices, policies and procedures; summarizes the views on responsible investing from investment committee boards; and estimates the potential for future changes in socially responsible investment practices.

The report relied on data from an online survey of the 832 higher education institutions that participated in the 2014 NACUBO-Commonfund Study of Endowments (NCSE). Commonfund study respondents encompassed 123 private, nonprofit colleges and universities and 77 public institutions. The schools participating in survey comprise a total of $88.8 billion in endowment assets as of June 30, 2014, or 17.2 percent of the $516.0 billion total included in the NCSE report.

Of the participating institutions, 53 (26.5 percent) reported that they have adopted at least one responsible investing practice for their endowments. Of these 53 "adopter" institutions, 42 (79.2 percent) are private, nonprofit institutions and 11 (20.8 percent) are public. The 147 "non-adopters" do not currently engage in any of the four practices, but they may have policies and procedures in place that relate to responsible investing or may be considering future changes to their endowment portfolios.

The survey results do indicate some impediments that schools face when considering greater adoption of socially responsible strategies. Approximately 36 percent of all respondents said they were concerned that responsible investing might lead to lower investment performance, and 15 percent identified concern about violating fiduciary duty. Thirty percent said that the lack of transparency due to investment in co-mingled funds was a substantial impediment, while 27 percent cited the need for more research to determine how environmental, social and governance (ESG) integration affects investment returns.

Contact

Ken Redd
Director, Research and Policy Analysis
202.861.2527
E-mail