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April 21, 2017

UMaine System marks Earth Day with new investment policy

Courtesy / University of Southern Maine
Courtesy / University of Southern Maine
University of Southern Maine students participate in the annual “Husky Day of Service” cleaning up Willard Beach in South Portland. USM and other UMaine System campuses hosted various events today tied to Saturday's 47th annual Earth Day.

Maine's public universities marked Earth Day 2017 by announcing today a new investment policy linked to sustainability. The universities also released a report that shows the seven-campus UMaine System has achieved a 34% decline in carbon emissions over the last decade.

The announcement coincides with a host of public environment-related events at the various UMaine campuses today in anticipation of the 47th annual Earth Day on April 22.

The change in the UMaine System's investment policy prioritizes environmental stewardship by taking into consideration non-financial factors that reflect environmental, social and governance, or ESG, principles when allocating assets and managing investments in the Managed Investment Pool. The pool has a market value of $287 million and includes the system's endowment funds as well as funds held for foundations tied to the University of Maine at Fort Kent, University of Maine School of Law and the University of Southern Maine.

New investment focus

In a release announcing the investment policy change, the UMaine System explained that ESG investing models include such factors as environmental sustainability, effect on carbon footprint, the treatment of workers and the transparency of their governing principles.

"ESG does not promise to completely eliminate the MIP's fossil fuel holdings; it is a process that will screen for 'best in class,'" Karl Turner, a trustee and chairman of the investment committee, said in a statement. "While we credit Divest UMaine with being proactive in placing a spotlight on climate changes, we believe in allowing our investment managers to take the approach of positively screening companies based on ESG criteria rather than negatively screening out companies. The ESG investment process will weed out the worst offenders, while also exposing our portfolio to companies whose values align with the MIP's long-term investment goal."

The UMaine System currently has three investment managers who follow ESG policies and it will be selecting new managers going forward who follow those guidelines.

According to the 2016 Global Sustainable Investment Review, $22.9 trillion of assets worldwide are being professionally managed under responsible investment strategies, an increase of 25% since 2014. A survey of 475 institutional investors conducted by State Street Global Advisors found that 84% of respondents are satisfied with the financial performance of their ESG strategy.

Reduction in carbon emissions

Achieving the 34% reduction in carbon emissions over the past decade was accomplished through "sustained, strategic investments in energy projects that achieve greater efficiency and reduce reliance on high-intensity fossil fuels," according to the news release.

The seven UMaine campuses reduced consumption of fuels such as No. 2 and No. 6 heating oil and other high-intensity fuels by 87% since 2006, to the point where those fuels now represent only 11% of the UMaine System's fossil fuel mix. Those decreases were accomplished largely by turning to renewable and "lower intensity fossil fuels" like natural gas and propane.

Maine's universities also consume approximately 12% less energy per square foot compared to Northeast peer institutions according to data compiled by Sightlines, a leading education facility and campus asset management company.

Strategic investments in biomass energy systems using locally sourced fuel at the University of Maine at Farmington and the University of Maine at Fort Kent have both reduced emissions and helped to support job growth in the state's biomass industry.

The UMaine System credited students, faculty, staff and alumni with influencing its decision to implement an environmentally sustainable policy.

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