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Harvard University Endowment

PRI reporting framework 2016

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You are in Indirect – Manager Selection, Appointment and Monitoring » Listed equity (LE) and Fixed income (FI)

Listed equity (LE) and Fixed income (FI)

Overview

SAM 03. Breakdown by passive, quantitative, fundamental and other active strategies (Private)


SAM 04. ESG incorporation strategies

04.1. Indicate which of the following ESG incorporation strategies you require your external manager(s) to implement on your behalf:

Active investment strategies

Active investment strategies

LE

Screening

Thematic
Integration
None of the above

04.2. Additional information. [Optional]

HMC strongly encourages external managers of commingled funds to incorporate relevant material ESG risk factors, but does not mandate specific active investment strategies. HMC notifies external managers of commingled funds on a quarterly basis regarding the negative screening HMC applies to its own portfolio with respect to tobacco stocks and the securities of certain companies operating in Sudan.

HMC does require external managers operating separately managed accounts where positions are held in the name of Harvard University to comply with the University's negative screening with respect to tobacco stocks and the securities of certian companies operating in Sudan.  HMC notifies such managers of these restrictions on a quarterly basis. 


Selection

SAM 05. Selection processes (LE and FI)

05.1. Indicate whether your organisation and/or your investment consultant typically do any of the following in the manager selection process for listed equity and/or fixed income.

General

LE

Review the manager’s responsible investment policies

Discuss managers' governance and management of responsible investment activities
Meet staff with responsible investment responsibilities to assess their skills and competence
Discuss minimum responsible investment expectations that managers must meet
Discuss the role managers have played in collaborative initiatives 
Ask whether the organisation is a signatory to the PRI and/or other relevant organisations
Review the manager's responsible investment reporting to clients and/or the public, (excluding PRI)
Review the manager's PRI Transparency or Assessment reports
Discuss the type of ESG reporting you expect
Assign specific weighting to ESG factors in your manager evaluation
Other general aspects in your selection process, specify
None of the above

If you select any 'Other' option(s), specify

05.2. Please describe the level of experience board members/trustees/chief-level staff have with incorporating ESG factors into investment decision-making processes.

Appointments to HMC's Board of Directors are approved by the President and Fellows of Harvard College. Ex officio members of the HMC Board include Harvard University’s President, Treasurer, and Chief Financial Officer, as well as the President of HMC. Other members of the Board, leaders in their respective fields, are selected for their investment, academic, and industry expertise, including familiarity with incorporating relevant material ESG risk factors into the investment decision-making process.  One recently retired Director, Sir Ronald Cohen, brought extensive experience in ESG integration and social impact investment to the Board. Although HMC's Board and individual Directors provide oversight of and insight to HMC's management and investment teams, they do not make investment decisions for the endowment.

Senior investment professionals generally are familar with incorporating relevant material ESG risk factors into the investment decision-making process within their asset class. During the reporting year, HMC's Chief Compliance Officer ("CCO") supervised all activities of HMC's Vice President for Sustainable Investment.  The CCO has experience in identifying relevant material ESG risk factors within the HMC portfolio and works with portfolio managers to monitor and manage these risk factors.

05.3. Provide additional information relevant to your organisation's selection approach for listed equity and/or fixed income. [Optional]


Monitoring

SAM 07. Monitoring processes (LE and FI)

07.1. Indicate whether your organisation and/or your investment consultant in the dialogue and monitoring of your external manager typically do any of the following.

General

LE

Include responsible investment as a standard agenda item at performance review meetings
Highlight examples of good responsible investment practice by other managers
Discuss if the manager has acted in accordance with your overall investment beliefs on responsible investment and ESG issues
Discuss if the manager has acted in accordance with your organisation's overall strategy on responsible investment and ESG issues
Discuss if the manager has acted in accordance with your organisation's overall policy on responsible investment and ESG issues
Review the manager's responsible investment reporting (excluding PRI)
Review the manager's PRI Transparency or Assessment reports
Review ESG characteristics of the portfolio
Review the impact of ESG issues on financial performance
Encourage your managers to consider joining responsible investment initiatives/organisations or participate in collaborative projects  with other investors
Include responsible investment criteria as a formal component of overall manager performance evaluation
Other general aspects of your monitoring, specify
None of the above

If you select any 'Other' option(s), specify

07.2. Provide additional information relevant to your organisation's dialogue and monitoring of external managers.

We encourage our managers to consider joining responsible investment initiatives and collaborate with other investors, but these efforts are not currently sufficiently systematic for us to report them above.


SAM 08. Percentage of (proxy) votes cast (Not Applicable)


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