SRI Creates New RISE Endowment Fund

The College’s divestment debate took a break from being in the spotlight during the Fall semester, but a new initiative from the Socially Responsible Investment Club (SRI) may reinvigorate the movement. SRI has created a new sub-group, the Research and Investment in Social Equity (RISE) fund, that will focus on investing $150,000 of the College’s endowment in companies that demonstrate strength in sustainability and social responsibility in addition to considering traditional financial indicators.

The RISE fund will determine who to invest in by evaluating companies using Environmental, Social and Governance (ESG) factors. To inform their investing, the RISE fund will use a unique data set produced by Morgan Stanley Capital International (MCSI), which rates businesses in different industries based on ESG factors such as clean energy use and investment and racial and gender diversity among company executives.

SRI co-chairs Ben Chute ’13.5 and Nate Cleveland ’16.5 hope the fund will prove that considering factors like sustainability when investing is beneficial to individuals and institutions in the long-term.

“The thesis behind ESG investing is all these criteria are indicators of a strong company and a company that is well positioned to do well long into the future and further than the traditional investment horizon usually forecasts,” Chute said, adding that research has shown that “using these risk-factors to enhance your investing doesn’t hurt you at all and actually helps you invest in more sustainable companies and that puts pressure on these companies to be better.”

If the RISE fund proves to be successful, this kind of investing could be translated to the college’s entire billion-dollar endowment.

Cleveland added that the fund seeks to promote embracing what is known as the Triple Bottom Line: people, planet and profit.

“There doesn’t necessarily need to be trade-offs between making profits and supporting companies that are doing the best they can to impact society … and diminish their environmental impacts,” he said.

The fund came to life with surprising alacrity during the Fall 2013 semester as Chute used his position as the first-ever Student Liaison to the Board of Trustees to advocate for it. He noted that at first, the RISE fund was “jokingly floated around previously” but was surprised to find that many board members approved of the idea nearly immediately.

“[I’ve] been able to see the growing acceptance of this [sustainable investing] as a viable and actually advantageous strategy within the Board of Trustees,” Chute said.

SRI members working on the RISE fund are currently trying to produce a charter to outline the fund’s structure and process and are researching companies that they might want to invest in. They plan to make their first investments come February.

Both Chute and Cleveland have acknowledged the RISE fund’s position as a unique learning and teaching tool.

“There are very few other places where college kids get to manage this kind of money,” Cleveland said.

He hopes that through the fund, students can learn the vocabulary and skills required for responsible investing and the benefits of integrating ESG criteria into the evaluation of investments.

Additionally, the purchase of the MSCI data set will provide an educational opportunity for all students.

“Purchasing this data set will be really, really cool because it will shift our school’s focus,” Virginia Wiltshire-Gordon ’16, co-president of SRI, said.

“If everybody has this resource, then it is possible for … for students to start using it, for professors to start using it, for it to get integrated into the school’s curriculum,” she said. “It will increase everybody’s involvement in ESG research.”

Chute reiterated Wiltshire-Gordon’s excitement for the potential of the data set and what it means for the student body.

“I think this is something that is very consistent with Middlebury as a whole right now. Students here seem to have this immense capacity to integrate sustainability and interdisciplinary thinking into so many different things: look at the food movement, look at Solar Decathalon. Those [types of] students, … we need as many of them as possible.”

Students interest in participating in the RISE fund should attend meetings on Mondays at 5:30 in Hillcrest 103 or email Nate Cleveland at ncleveland@middlebury.edu.