Student Council passed a resolution at its Nov. 17 meeting to support responsible investing principles for the University's $4 billion endowment.
The resolution supports a proposal by the Socially Responsible Investment Organization - a contracted independent organization at the University - that updates the University's endowment policy and includes guidelines to encourage considerations of the environmental and social implications of its investment options.
Commerce Rep. Jake Purvis and Engineering Rep. Nick Olson drafted and sponsored the resolution in response to a community concern brought forth to Council by fourth-year Commerce student Peter Elbaor on behalf of SRIO earlier this semester.
"For the past 18 months, we've been working with various staples of stakeholders at the University to push for a framework that codifies the University's attitude toward environmental sustainability and integrate it in a holistic investment framework," Elbaor said.
SRIO also is pushing for a revision of the Board of Visitors' current proxy voting guidelines.
"The University's current proxy policy requires that investors vote solely to maximize financial return and typically vote with management," Elbaor said. "This revision enhances the policy by asking that investment managers vote in favor of shareholder resolutions that advance environmental sustainability. Voting within the financial and economic interest - that wouldn't change, but the revision would allow the University to align its investment management practices with its stated environmental sustainability mandate."
University of Virginia Investment Management Company votes, by default, with management and SRIO would like UVIMCO to be a more active shareholder, especially concerning responsible investing, Olson said.
Elbaor emphasized, moreover, that the proposal would not endanger the endowment.
"Nothing in this proposal presents a tradeoff between planet and profits - big institutional investors like State Street, BlackRock and Goldman Sachs already invest this way because it's good for business," Elbaor said.
Some Council members, however, expressed concerns about the resolution and the potential to change the Board's investment rules. Council Chief Financial Officer Amanda Jenkins noted that specific elements of SRIO's policy need further clarification.
"In my opinion, the concept of a socially responsible policy is in itself a good idea, but ... there are some things that need to be fleshed out in terms of where the burden of this really lies," Jenkins said, adding that SRIO should include a clear definition of what a socially responsible investment entails in its policy.
Purvis noted that Council's support of the resolution brings SRIO one step closer to the group's goal.
"The over-arching idea is to keep in mind that we're not voting this into practice," Purvis said. "This is just one piece of support that the SRIO will take to the Board of Visitors. They'll also need a student referendum, the support of the Board and a similar group at Darden."
Though Council members cannot make UVIMCO change its investment policies, they hope to show their support and - by extension - the support of the student body for the initiative, Olson said. Purvis said the Board will have final discretion regarding its investment policy.
"It'll be up to BOV to craft the specifics ... and make the final policy," Purvis added. "Tonight's resolution will be one piece of support behind the idea of sustainable investing, which I think, generally, has many upsides and very few downsides."
SRIO presented the policy to the Presidential Committee on Environmental Sustainability in late October, and Elbaor hopes the group will be allowed to present its policy before the entire Board in early spring.
"The Presidential Committee is currently in the fact-finding stage and will get back to us," Elbaor said. "They will then make a recommendation to [University President John T. Casteen, III] and Leonard Sandridge, [University executive vice president and chief operating officer], at which point it'll go to the BOV"
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