Climate Change & the Smith Endowment

The endowment is invested in a manner consistent with and supportive of the College’s mission and values. Smith has implemented several policies designed to support the College’s commitment to environmental sustainability:

• Smith has committed to invest $30 million in impact investments intended to generate measurable social and environmental change alongside an attractive risk-adjusted return.  Examples of such investments might be industries and funds focused on sustainable agriculture, renewable energy, energy efficiency, conservation, affordable and accessible services, and sustainable manufacturing processes.
• Smith has ceased all new investments with fossil fuel-specific managers.  Furthermore, the College has undertaken a phaseout of all current investments with fossil fuel-specific managers in the endowment. This phaseout will be achieved through the sale, maturity or liquidation of investments held by fossil fuel-specific managers. A fossil fuel-specific manager is one whose main strategy is acquiring, developing, producing or exploring for oil/gas; coal mining; or providing oil and/or gas equipment, services and/or pipelines; or that is an investment fund whose primary purpose is to invest in such issues or engage in any such business itself.

Since 2019, the Smith endowment has made significant progress toward its sustainability investment goals. As of June 30, 2023, Smith had over $20 million invested in or committed to impact investments intended to generate measurable social and environmental change alongside an attractive risk-adjusted return. The college made an additional $20 million commitment after June 30, bringing us beyond our $30 million target.

Furthermore, given Smith’s focus on fund managers pursuing deep, rigorous research, consideration of ESG factors is often a natural part of their bottom-up, fundamental investment process, particularly when focusing on long-term risks and durability of performance. Although not all third-party managers pursue sustainability-focused strategies per se, they often incorporate ESG issues into their investment practice and several are signatories of the United Nations Principles for Responsible Investment (UNPRI). As of June 30, 2023, approximately 20% of the endowment’s capital is invested with UNPRI signatories. 

At the time of Smith’s 2019 commitment to phasing out fossil fuel-specific managers, the college’s exposure totaled nearly $140 million, representing approximately 6.5% of the investment pool, and the phaseout period was projected to be 15 years. As of June 30, 2023, Smith’s exposure to fossil fuel-specific managers had declined to 3.1%.