Ensuring Responsible Investment at MSU

By: Joey Allen, Research Assistant

CCED & broad-based working group push for strategic values, transparency in Board of Trustees’ investment practices.

Amidst global conflict, environmental and climate crises, and concerns over economic equity, higher education institutions are in a unique position to foster change through shared adopted values. When it comes to institutional investment practices, this means “putting your money where your mouth is.”

The MSU Center for Community and Economic Development (CCED) joined forces with other concerned faculty and students to form the Ad Hoc University Sustainable Investment Working Group, who recently published a report detailing findings and recommendations regarding Michigan State’s endowment, the Common Investment Fund (CIF).

This group came about due to a University Council resolution passed in November of 2021 requesting the MSU Board of Trustees (BOT) to appoint a task force examining if MSU investments are aligned with the social, economic, and environmental values as stated in the MSU Strategic Plan and the Diversity, Equity, and Inclusion (DEI) Plan. The BOT, through its Budget and Finance Committee and its Investment Advisory Subcommittee, is the administrative authority for the CIF. Though the Board chose not to appoint the recommended task force, this ad hoc team nonetheless convened and dedicated many months of research and correspondence to complete the mission of the original resolution.

The Working Group found surprisingly little public information beyond the BOT’s Investment Policy that laid out how specific investment decisions were made and how those decisions, as the Investment Policy states, “exhibit social conscience.” Neither the Budget and Finance Committee nor the Investment Advisory Subcommittee have public meetings or available minutes.

In order to better understand the actual process, the Working Group compiled a questionnaire that was presented to the Board of Trustees at their regular meeting in April of 2022. The questionnaire asked for a definition of “social conscience” and how it was ensured that investments did indeed exhibit it. The group also inquired about who the BOT had chosen as Investment Consultants and Managers of the CIF, and to what standard proxy votes are held, among other questions. A response was received several weeks later.

The Working Group’s report contains a discussion of what sustainable investment means – more specifically, the purpose of Environmental, Social, and Governance (ESG) goals – and case studies of how peer universities such as Arizona State have used ESG frameworks to outwardly reflect their values. The questionnaire, including the BOT responses and analyses of those responses, is also included. Finally, the Working Group has provided several recommendations to the Board for how to better define the values that drive MSU's investment practices and the transparency afforded to the students, alumni, and faculty about their endowment.

The report was presented to the Board of Trustees at the September 9th, 2022 regular meeting. It can be found at this link: https://ced.msu.edu/upload/Just%20Investing.pdf

The mission of the Michigan State University Center for Community and Economic Development is to advance MSU’s land-grant mission by creating, disseminating and applying knowledge to improve the quality of life in distressed communities.

Michigan State University has been advancing knowledge and transforming lives through innovative teaching, research and outreach for more than 150 years. MSU is known internationally as a major public university with global reach and extraordinary impact. Its 17 degree-granting colleges attract scholars worldwide who are interested in combining education with practical problem solving.

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