In keeping with Loyola Marymount University’s commitment to generating long-term returns while upholding ethical obligations, the university is moving more than 15 percent of its total endowment, which stands at $642.6 million as of Sept. 30, 2021, to a managed fund that has fossil fuel exclusions, said Thomas O. Fleming Jr., the university treasurer. This decision is the result of ongoing engagement and dialogue with the Responsible Investment Advisory Committee (RIAC) and the Endowment Committee of the Board of Trustees.
The RIAC is composed of student, faculty and Jesuit representatives, and meets with the Endowment Committee at least on an annual basis. Formed in November 2017, the RIAC serves as the primary listening and discerning body at LMU for topics related to responsible investing within the endowment pool portfolio. As Eric Strauss, President’s Professor of Biology and a member of RIAC, says, “Our hope is that the work of this committee will help to transform the investment strategies of LMU. I am particularly proud of the work as it was led by devoted students who crafted the report and provided the critical energy to help us move from thought to action.”
The Endowment Committee spent time discussing investment priorities with the RIAC, which presented detailed recommendations regarding divesture in fossil fuels. The Endowment Committee then directed management to look into potential investments that would meet fossil fuel-free guidelines. Endowment Committee Chair Henry Jordan said, “The great work of the RIAC has furthered our responsible investing activities and enhanced our Trustees ability to uphold our fiduciary obligations.”
The fund, Blackrock USA IMI with Expanded Fossil Fuel Exclusions Index Fund, screens out 94 of 2486 holdings for a 92.8 percent coverage and contains no companies with fossil fuel reserves; no companies with thermal coal mining; no companies with thermal coal-based power generation; and no companies with unconventional oil and gas extraction. This move achieves one of the goals recommended by the RIAC for the U.S. public investment portion of the portfolio, and is part of an ongoing process that includes private investments.
Private investments with fossil fuel holdings constitute less than 2½ percent of the endowment and will continue to decline as these legacy investments liquidate. LMU has not made any new commitments to fossil fuel limited partnerships since 2019 and has no intention in making new commitments to fossil fuel entities going forward, said Aimee Uen, LMU senior vice president and chief financial officer.
In addition, LMU became a signatory of the United Nations-supported Principles for Responsible Investing (PRI) in July 2017, becoming the first U.S. Catholic university to do so. In spring 2019, the university formalized a Responsible Investment Policy, which guides intentional investing in accordance with international strategies that account for financial and societal concerns.
Engaging in responsible investing initiatives reflects the university’s commitment as a Jesuit Catholic institution to ethical decision making, the furtherance of justice, and stewardship initiatives, as well as the university’s mission statement
