Endowment report touts sustainability

The Yale Investments Office is notoriously guarded about its holdings. But this year’s endowment report, released last month, shows that the office is making a new push to invest in environmentally sustainable companies, a move that one investment expert called significant for green industries.

According to the annual report, which describes the $16 billion endowment’s performance and outlines the University’s investment strategy, companies dedicated to increasing energy efficiency are likely to do well in light of increased public awareness of global climate change. Yale invested in nine sustainable-technology companies in the past year and allocated over $100 million dollars from the University’s venture capital portfolio — more than 6.4 percent — to other similar companies, which the report calls “cleantech.”

“The next crop of success stories may just spring from the cleantech space,” the report said.

Yale’s most recent endowment publication is a “landmark report,” said Cary Krosinsky, vice president of the international environmental research company TruCost and a professor of sustainable investing at Columbia University, because it is the first large endowment publicly promoting investment in green ventures that he has heard of.

“This is very big news,” he said.

This is the first time Yale has publicly reported any of its sustainable investments, and Krosinsky said he thinks the report represents a conscious decision to publicize what they are doing. He said though Yale has performed well on sustainability rankings, it has been criticized for the endowment’s lack of transparency; the Investments Office, Krosinsky said, is sensitive to how it is perceived.

This perception has been affected by allegations that the Investments Office has invested in HEI Hotels & Resorts, a firm accused of intimidating union workers, and Wagner Forest Management, a company that is controversially leasing land in Vermont for windmill development.

One student group, the Yale Responsible Endowment Project, has protested Yale’s investment in HEI and appealed to the Advisory Committee on Investor Responsibility to increase the endowment’s transparency.

Aaron Podolny ’12, a member of the Yale Responsible Endowment Project, said he is glad the Investments Office is concerned with sustainability. But he added that he is not confident that the rest of Yale’s endowment is so sustainable.

“Yale is clearly a diversified investor,” he said. “And when they are in investments that could use improvement in terms of sustainability, it is really important that they take an active role.”

This year, Yale received an A- on the College Sustainability Report Card, created by the Sustainable Endowments Institute, up from a B+ the year before. Both years, the University got straight As in all categories, except in “endowment transparency,” in which the grade went from an F to a D.

The report only gave the specifics of four of Yale’s sustainable investments, including two American companies. One of them, Redwood City, Calif.-based Silver Spring Networks, helps utilities companies switch to energy-efficient power grids with meters and better coil technology. The other is Boston-based research and development firm Mascoma. Yale also cited its investment in two Chinese companies: windmill producer HT Blade and Suntech Power Holdings, which is the largest solar cell manufacturer in the world, according to the report.

Krosinsky said he is familiar with two of the specific companies mentioned, Silver Spring and Suntech, because his sustainable investing class at Columbia focused on them. He said Suntech is very transparent and well-run, and Silver Spring is “among the more innovative and exciting companies” in the sustainability field.

The recent endowment report also disclosed that Yale increased the percentage of the assets it invests in private equity — from 21 percent last fiscal year to 26 percent — and real assets such as timber, oil and gas, from 29 percent to 37 percent.

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