Dwight Hall invests ‘responsibly’

With the Dwight Hall Socially Responsible Investment Fund, High Street may start to look a little more like Wall Street.

Members of the SRI Fund team, a student-run project founded in 2007, advise the Dwight Hall Board of Trustees in the management of $50,000, 5 percent piece of Dwight Hall’s overall endowment of less than $5 million, the rest of which is managed with the Yale Investments Office.. After two years of research and preparation, the group invested $40,000 in various mutual funds and equities last month. Although this sum constitutes only a small fraction of Dwight Hall’s endowment, SRI Committee Chair Aaron Podolny ’12 said their investments are meant to abide by strict social responsibility guidelines and serve as an educational tool to promote values of socially responsible investment.

The investment office has been criticized from the Responsible Endowment Project, a student advocacy group, for its secrecy about its holdings.

Podolny, who is also a member of the Responsible Endowment Project, similarly said he could not reveal the details of SRI’s recent investments, saying the SRI committee has not yet established with the Board what the fund’s level of transparency would be.

“It’s purely a technicality,” he said. “The policy will be in place soon and I suspect we will have full transparency.”

The other $10,000 that make up the $50,000 allotted to the SRI has been invested in a community development bank in Bridgeport. Although Podolny said this kind of mission-driven investing adheres most truly to the value of SRI, it is a low-risk investment that will result in low returns. He is expecting a 7 percent annual return on the $40,000 invested in mutual funds, he said, subject to fluctuations in financial markets.

Although the SRI hired external experts to manage their mutual fund investments, the committee’s research determined the type of company they want the mutual funds to exclude: alcohol, tobacco gambling and other industries, which SRI members call “sin-dustries”. Aside from these external experts, SRI members also depend on the advice of School of Management students to help them make informed investment decisions.

In spite of their reliance on mutual funds and other high-yielding investments for actual returns, SRI committee member Sarah Armitage ’12 said a market-driven portfolio still has a positive social impact: Armitage said the SRI committee does employ some discretion in selecting their mutual funds, but also hopes to use their votes as shareholders to influence company policies to consider ethical practices.

While the Board of Trustees technically must approve the investment on behalf of the students, Director of Finance and Administration Raymond Bendici said, Dwight Hall administrators take no direct role in this portion of the Dwight Hall endowment; accounting, budgeting and day-to-day operations of the SRI fund are handled by students.

Comments

  • Hieronymus

    I would be interested in viewing the SRI returns versus returns for the rest of the portfolio (or even for comparable non-SRI type funds/strategies).

    SRI has many traits (i.e., difficulties) in common with, e.g., Islamic investing. Who decides? Can one invest in, say, a company that runs stadium events if some of their revenue derives from alcohol/tobacco sales? What proportion is acceptable: 0%? 5%? Is the limit arbitrary and, if not, how derived?

    The discussions must be fascinating! Perhaps the YDN could report on the standards & practices, parameters and minutes of their decision-making process?