Winter 2015

Sustainable Investing

New university fund gives donors an option for endowment giving

300Wsustain fundTo advance its environmental agenda, Tufts will create a sustainability investment fund and build a new energy plant on its Medford/Somerville campus that is expected to reduce greenhouse gas emissions by 20 percent.

The new Tufts University Sustainability Fund (TUSF) will give donors the option of designating that their endowment gifts be invested in a way that acknowledges the importance of environmental, social and governance (ESG) factors. Tufts will launch the TUSF with seed funding from the university.

The $36 million energy plant will replace a 60-year-old central heating plant and will pay for itself in approximately a dozen years through anticipated energy savings. It will take advantage of the latest high-efficiency cogeneration technologies, which use a single fuel source to generate heat and electricity on site. Thermal energy for heating that otherwise would be wasted is captured to produce electricity.

“Sustainability is deeply ingrained in our campus culture,” Tufts President Anthony P. Monaco said.

Exploring a sustainability fund was a recommendation of a working group of students, faculty, administrators and trustees that Monaco appointed in April 2013 to examine the university’s role in mitigating climate change.

ESG investing is relatively new. “The sustainability fund gives us an opportunity to learn more about the feasibility and effectiveness of these kinds of investments,” Monaco said. Ideally, income generated by the fund will support sustainability programming in both academics and operations, he said.

The TUSF will be part of the university endowment, and thus will be guided by the Tufts investment policy. The first step will be to appoint a small advisory committee that will help define what constitutes an environmentally supportable or socially responsible investment.

The university does not invest in individual companies. Instead, it uses commingled or pooled funds—mutual funds are one example—in which multiple investors hold a piece of an investment portfolio in proportion to the value of their individual investments.

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