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October 16, 2009

Fourth Green Report Card for Colleges Is Released
    by Robert Kropp

The Sustainable Endowments Institute recognizes 26 colleges as Sustainability Leaders, up from 15 in 2009. -- For the fourth year, the Sustainable Endowments Institute has published the College Sustainability Report Card, in which the campus and endowment sustainability activities at the 332 colleges and universities with the largest endowments in the United States and Canada are evaluated.

According to the report, "The profiled schools have combined holdings representing more than $325 billion in endowment assets, or more than 95 percent of all university endowments."

The 2010 Green Report Card grades colleges in nine categories: Administration, Climate Change & Energy, Food & Recycling, Green Building, Student Involvement, Transportation, Endowment Transparency, Investment Priorities, and Shareholder Engagement. The first six categories listed are considered to be campus categories.

Schools performed best in the Administration and Food & Recycling campus categories, with 40% attaining an A rating in Administration, and 36% receiving an A for Food & Recycling. Among the factors considered for the Administration grade are the presence on campus of personnel dedicated to sustainability, a commitment to carbon reduction, and green purchasing policies.

Fifty-two percent of the colleges surveyed are signatories of the American College & University Presidentsí Climate Commitment, which provides a framework for the transition to a climate neutral status by colleges. Among the tangible actions recommended by the Commitment is the establishment of "a policy or a committee that supports climate and sustainability shareholder proposals at companies where our institution's endowment is invested."

In 2006, the Sustainable Endowments Institute, along with Ceres and the United Nations Foundation, issued a report entitled Building a Clean Energy Future: The Role of Students and University Endowments. In his forward to the report, Mark Orlowski, Executive Director of the Institute, wrote, "While school trustees and investment professionals carefully weigh financial data, the risk that climate change poses for the bottom line of endowment returns is largely being overlooked. Thus, few schools have exercised their proxy votes on climate change and no schools have introduced shareholder resolutions on this vital issue."

The 2006 report concluded with a recommendation that five Principles for Endowment Climate Action be adopted by college endowments. The five principles are increasing transparency in endowment investments, actively voting on shareholder resolutions, committing to renewable energy investments, engaging companies on climate, and establishing a green campus fund. spoke with Orlowski, who said, "The report grew out of a conference of people from endowments and foundations, where we talked about the role of endowments in affecting climate change. We made a conscious decision to avoid much talk about negative screening, because at the time the basic information about where endowments invest was simply not available."

The 2010 Sustainability Report Card addresses the issues brought up in the 2006 report through three endowment categories: Endowment Transparency, Investment Priorities, and Shareholder Engagement. The most successful performance was recorded in the Investment Priorities category, which focused on prioritizing return on investment, investing in renewable energy funds, and investing in community development loan funds.

The Report Card found that 44% of colleges have endowment investments in renewable energy funds, and 14% have endowment investments in community development loan funds. The average grade for the Investment Priorities category was B+, compared to an average grade of B in 2009.

The weakest performances by schools were found to be in the Shareholder Engagement and Endowment Transparency categories. The average grade for Endowment Transparency was C-, and only D for Shareholder Engagement. In 2009, the average grade for Endowment Transparency was D+, and D- for Shareholder Engagement.

According to the Report card, only 9% of schools have committees composed of multiple stakeholders that helps inform the trustees on decisions on proxy voting. In the category of Endowment Transparency, 18% of schools provide the campus community with lists of endowment holdings, while 12% make their proxy voting records public.

However, according to Orlowski, "More and more schools are beginning to disclose their proxy voting decisions. But I can count on one hand the number of schools that have even a part-time staff member devoted to endowment sustainability."

The 2010 Sustainability Report Card gave 26 colleges a grade of A- or better, making them Sustainability Leaders. The number of Sustainability Leaders in 2009 was 15.

Twelve colleges received average grades of A- or better in the three endowment categories, and were recognized as Endowment Sustainability Leaders. In 2009, 14 schools received average grades of A- or better in the endowment categories.

In comparison, 80 colleges were recognized as sustainability leaders in the six campus categories.

"It's terrific that 80 schools are campus sustainability leaders," Orlowski said, "But it's also interesting to compare this number to the fact that only 12 are endowment leaders."

Orlowski concluded, "We're encouraged by the progress and the level of activity in the areas of endowment. At the same time we're only a small portion of the way there."

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