ESG group

Pictured, from left, are Morgane Marshall, SEC Co-Director; Sonia Marcus, Director of Sustainability; Kelsey Hall, UNCA Divest member; Erika Covey ESG Fund Manager for the Student Environmental Center; John Pierce, Vice Chancellor for Administration and Finance; Ben Underwood, Associate Vice Chancellor for Advancement Operations. / Donated photo

Following a multi-year effort initiated by UNC Asheville student leaders, the UNC Asheville Board of Trustees approved using Environmental, Social and Governance (ESG) criteria for a portion of its endowment that will be divested from fossil fuel investments.

“This is a defining moment in UNC Asheville’s trajectory, exemplary of the liberal arts and sciences in action,” said UNC Asheville Chancellor Nancy J. Cable. “It took creativity and critical thinking, financial acumen and a sense of the common good to imagine what is possible, carefully consider the options and focus on the outcomes. With this commitment to responsible investment, UNC Asheville leads the way among public universities in North Carolina and nationally, accelerating a growing movement in higher education.”

With the board’s resolution, UNC Asheville becomes the first university in the UNC System to shift a portion of its endowed funds to a manager focused on investing using ESG criteria and research and promoting shareholder advocacy. UNC Asheville plans to negotiate an agreement with Walden Asset Management and will transfer roughly 10% of the University and Foundation’s collective endowed assets to invest using ESG criteria. The estimated amount is $5 million.

The project is managed by UNC Asheville’s Vice Chancellor for Administration and Finance John Pierce, Director of Sustainability Sonia Marcus, and Associate Vice Chancellor for Advancement Operations Ben Underwood.

“Our students started the conversation back in 2015 and have been diligent and perceptive in working through the complexities of ESG investments from both a mission-based and financial perspective. Together, we explored alternatives and worked toward solutions,” said Pierce. “This is a real achievement for the university, and it’s gaining momentum nationwide. Released data from a 2017 National Association of College and University Business Officers (NACUBO) study shows that college and university endowments that use socially responsible investing (SRI) strategies can produce long-term returns that are approximately equal to those of non-SRI users. UNC Asheville’s review of the long-term returns of Walden assets which are managed using SRI strategies supports the NACUBO assertion.”

“I have also seen the tremendous impact that is possible through shifting investments not only away from areas that are contributing to climate change, but towards climate solutions in a way that is environmentally and socially responsible,” said James Smith ’19, who served as co-director of the UNCA Divestment Coalition his senior year. “This work has also led to a lot of exciting things for me personally, as I have traveled across the country several times speaking on our process at UNC Asheville, as well as why the sustainable investing movement is so important.”

Smith’s work with the UNCA Divestment Coalition was also recognized with the A.C. Reynolds Award and Thomas D. Reynolds Prize in spring 2019, one of the university’s most prestigious service awards. The chemistry and environmental communications major from Durham, N.C., presented his research at the UNC System Energy Summit hosted at Appalachian State University as well as the Global Climate Action Summit in San Francisco. He plans to continue working in the field of sustainable investing in Thailand and Japan.

The student-led UNCA Divestment Coalition also prompted the University to complete the due diligence and to take action. In February 2016, UNC Asheville’s Board of Trustees established a student-advised endowment fund with $10,000 in seed money to give students a learning opportunity and hands-on experience in ESG investing. The fund continues to be managed by the University’s Student Environmental Center.

“As a student interested in financial advising, specifically pertaining to sustainable investments, seeing the range of potential firms and a glimpse into their respective processes was incredibly beneficial. I’ve also learned the benefit of guiding clients through defining what ‘ESG Investing’ means to them in identifying their individual investment parameters,” said Erika Covey, a senior double major in management and economics from Waves, N.C., who serves as the ESG Fund intern in the Student Environmental Center. When she transferred to UNC Asheville, Covey sought opportunities to pursue a sustainability manager position, but through a Managerial Finance course discovered opportunities in sustainable finance, and she’s connecting her passion to a potential profession.

“We knew we had a better set of questions than answers at that time, so like the undergraduate research that is a hallmark of UNC Asheville, we went searching for answers,” said Underwood. “The research demonstrates that ESG investing can yield positive returns, and that’s particularly important when our investments fund scholarships. This process has been a learning opportunity for all of us, from the students who learned about finance to the staff who are working on this groundbreaking initiative.”

UNC Asheville issued a request for information (RFI) in 2017, with more than 30 respondents including international investment companies. A request for proposals (RFP) was issued in October 2018, with on-campus presentations by four finalists in spring 2019 to the endowment-investment committee, which is comprised of members from both the UNC Asheville Board of Trustees and UNC Asheville Foundation Board. UNC Asheville’s endowment also has funds from both the University and Foundation – approximately one-third and two-thirds, respectively. UNC Management Company will continue to manage roughly 90% of UNC Asheville’s endowment funds, as research, evaluation and conversations continue.

“This isn’t the end. It’s a beginning,” said Marcus. “Our students knew from the beginning that they wanted to have an impact on campus and on the UNC System, and through the process they’ve learned to work as professional collaborators and change-makers. We wanted to invest in ways that aligned with our values, and sustainability is one of the areas at the core of all that we do.”

For more information contact, Associate Vice Chancellor for Advancement Operations Ben Underwood, at 828.251.6016 or bunderwo@unca.edu.

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