As the Luther College Endowment approaches $200 million, the college is now incorporating environmental, social and governance (ESG) considerations into its investment approach.
In its initial steps, Luther has made revisions to its investment policy statement to recognize new Socially Responsible Investing (SRI) goals. SRI is any investment strategy that considers both financial return and social/environmental good to bring about positive social change. The approach is to consider ESG factors broadly. Portfolio management decisions will continue to be made with the long-term return and support of the college as a primary objective.
"While we have considered ESG and SRI in the past, we are excited to more formally incorporate them as part of our investment process,” said Connie Plaehn, chair of the Luther College Board of Regents Investment Committee. “The Investment Committee intends for these actions to be the first step in incorporating ESG and expects to refine the approach and implementation over time as the ESG landscape and investment options available evolve. While future investment decisions will be made considering the lens of SRI principles, our role as fiduciary of the endowment will remain paramount."
Luther has also shifted away from asset allocation in natural resources and moved into infrastructure, and has recently hired a manager with an investment strategy built around ESG factors.
“Sustainability is integral to the management of an endowment that is intended to support the mission of Luther College long term,” said Andrew Bailey, vice president for finance and administration. “Recent changes to the college's investment policy statement acknowledge that consideration of ESG factors aligns with the investment committee's fiduciary responsibility to generate a sustainable financial return.”
Luther’s endowment has grown from $56 million in 2000 to nearly $200 million today.
“A growing endowment is indicative of the impact that Luther College has had on so many lives, representing generous contributions from donors to support transformational experiences for current and future students,” said Bailey. “The growth from new gifts and strategic investments increases funding for scholarships, internships, research opportunities, program enrichment and other practices centered around the student experience.”
Moving forward, Luther's newly created Responsible Investment Advisory Committee will interact with the Board of Regents’ investment committee to help the wider campus community learn more about Luther's attention to ESG considerations and its commitment to socially responsible investments. Composed of students, faculty and staff, the advisory committee is chaired by the director of Luther's Center for Sustainable Communities.
Luther College is home to more than 1,800 undergraduates who explore big questions and take action to benefit people, communities and society. Our 60+ academic programs, experiential approach to learning and welcoming community inspire students to learn actively, live purposefully and lead courageously for a lifetime of impact. Learn more at luther.edu.