Adding social responsibility to investing

While Temple’s investment portfolio creates a real return, it ignores environmental and social aspects.

While Temple’s investment portfolio creates a real return, it ignores environmental and social aspects.

Today, investing in public companies can yield big financial returns. At the same time, investing is a way to support socially responsible business practices. Emily-Gleason

Given the influence of investors, I was surprised to learn Temple has no official policy on promoting social and environmental responsibility through its investment in United States equities.

Temple invests portions of its endowment in indexes, such as the Standard & Poor’s 500 and individual U.S. equities, or publically traded companies, including Level 3 Communications Corp., Pioneer Natural Resources, Yum Brands Inc., Chesapeake Energy Corp., Dell Inc. and Disney. About 30 percent of Temple’s $200 million endowment is invested in U.S. equities.

All of Temple’s investments are made by a hired money manager, who is approved by the Subcommittee on Investments and the Budget and Finance Committee of the Board of Trustees.

“We do not designate that our money managers have to have strategies to pick so-called green investments,” said Anthony Wagner, the vice president, chief financial officer and treasurer of Temple. “Our main concern is to establish an asset allocation that allows us to create a 4.5 percent real return.”

Wagner also said investing in companies based on their human rights and environmental records is “more of an exception than the rule” for higher education institutions. The only guideline Temple’s money managers adhere to is a “basic approach” of “buy low and sell high,” he said.

While the “basic approach” may make yield the highest financial returns, which are used primarily for scholarships and other student needs, it is important to consider the social and environmental costs of a profit first policy.

Yum Brands Inc., owners of KFC, Pizza Hut, Long John Silver’s and A&W Restaurants, is one of the largest fast food conglomerates in the world. The company profits from selling foods harmful to public health. Obesity and related diseases like Type 2 diabetes are linked to high fat and sugar foods – the staple of fast food restaurants.

Pioneer Natural Resources makes a profit from oil drilling and recovery, with drilling sites in Texas, Alaska and South Africa. Oil combustion – the base of gasoline and diesel fuels – causes toxic air pollution and has been identified by scientists as a major cause of the carbon imbalance in the earth’s atmosphere, directly contributing to global warming.

“Universities should be obliged, as financially powerful and academic leaders, to support institutions that are working toward a better future for our planet,” said Ben Schneible, a senior international business major and former president of Temple’s Students for Responsible Business.

Later this semester, the SRB is launching a social investing project, which will focus on a portfolio of companies that “we find dedicated to their community, environment and the rest of the world,” Schneible said.

Perhaps the university and its board of trustees could take an investment cue from its students.

Emily Gleason can be reached at emily.gleason@temple.edu.

6 Comments

  1. Emily, while your enthusiasm for “green causes” is admirable, please leave the investing to the pros. The University has an obligation, much like a fiduciary one, to ensure that the endowment is invested in companies that provide growth potential,”green” or not. Secondly, show me a profitable investment in a green company with a legitimate management team and active shareholder controls, and I will put my hard earned money in it-Give us examples, isn’t that what a journalist is supposed to do? Until then, enough with this circular hippie rhetoric

    PS- “Today, investing in public companies can yield big financial returns”- Apparently you missed the largest deterioration in the equity markets in a decade.

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