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Harvard University Endowment

PRI reporting framework 2016

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Engagement

Overview

LEA 01. Description of approach to engagement

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.3. Please attach or provide a URL to your engagement policy. [Optional]

URL

Attach document


01.4. Provide a brief overview of your organization’s approach to engagement

We articulate our approach to engagement in our Sustainable Investment Policy ("SIP").

HMC's engagement strategy for listed equity consists of two primary elements:

1) Informational engagement: HMC sends letters encouraging action and disclosure on climate change to non-renewable energy companies in which it holds stock.  HMC issues additional letters on a quarterly basis to reflect its current investment portfolio.  The first letter explains Harvard University’s concerns regarding climate change and belief that companies should identify climate risks and report on them, and also discusses the University’s support for the Sustainability Accounting Standards Board ("SASB") non-renewables standard.  The second letter asks companies to identify how they identify material sustainability factors, including climate change, and how they plan to report on these in public filings.  HMC also asks companies to consider adopting SASB as one way to gather and report on such information.

2) Involvement in collaborations: HMC is a member of CDP and the PRI Investor Working Group on Corporate Climate Change Lobbying.  HMC is working with other investors to collectively convey to world leaders and companies the need for action on climate change.

01.5. Additional information [optional]


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate your reasons for interacting with companies on ESG issues and indicate who carries these interactions out.

Type of engagement

Reason for interaction

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

02.2. Additional information. [Optional]


Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

03.3. Additional information. [Optional]

We prioritize engagement based on ESG risks that are likely to have a direct impact on business operations and shareholder value, influence risk management oversight and disclosure practices, and ultimately impact the value of our holdings.  For example, HMC engages with non-renewable energy companies in its listed equity portfolio.  The purpose of this engagement is to inform these companies of Harvard's perspective about the risks of climate change and request that these companies incorporate standards set by SASB into public filings and management practices.


LEA 04. Objectives for engagement activities

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take following your engagements.

04.3. Indicate whether your organisation defines milestones and goals for engagement activities carried out by internal staff.

04.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities.

04.5. Additional information. [Optional]


Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements

05.3. Additional information [Optional]


LEA 06. Objectives for engagement activities

06.1. Indicate if the collaborative engagements in which you are involved have defined objectives.

06.2. Indicate if you monitor the actions companies take following your collaborative engagements.

06.3. Indicate whether your organisation defines milestones and goals related to engagement activities carried out via collaborations.

06.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities.

06.5. Additional information. [Optional]

HMC has begun to undertake other efforts to assess the performance of companies and whether their performance changes due to HMC's engagement efforts.  HMC joined the PRI Investor Working Group on Corporate Climate Change Lobbying in spring 2015.  This initiative seeks to prompt companies to take action on climate change, including through lobbying actions that are consistent with the goal of preventing climate change.  Working with other companies in the initiative, HMC developed an evaluative framework that it will use to assess companies.  HMC will start to implement this evaluative framework and other activities related to the initiative in the next reporting year.  Background on the initiative is available at the following websites:  http://investorsonclimatechange.org/portfolio/pri-investor-working-group-corporate-climate-lobbying/ and http://www.unpri.org/whatsnew/investors-call-for-improvements-in-company-lobbying-on-climate-change/.  The objectives of the group can be found here: http://www.unpri.org/wp-content/uploads/Investor-Expectations-on-Corporate-Climate-Lobbying_en-GB.pdf.cently.

 


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers (Private)


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

10.2. Additional information. [OPTIONAL]


Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort (Private)


LEA 12. Engagement methods

12.1. Indicate if your engagement involved:

12.2. Additional information. [Optional]


LEA 13. Engagements on E, S and/or G issues (Private)


LEA 14. Companies changing practices / behaviour following engagement (Private)


LEA 15. Examples of ESG engagements (Private)


Communication

LEA 16. Disclosure of approach to ESG engagements

16.1. Indicate whether your organisation proactively discloses information on its engagements.

16.5. Indicate what engagement information your organisation proactively discloses to clients/beneficiaries.

Engagement information disclosed

16.6. Indicate how frequently you typically report engagements information

16.8. Additional information. [Optional]

HMC continually discloses information regarding engagement to Harvard University, its beneficiary.  HMC does so through meetings with the Corporation Committee on Shareholder Responsibility ("CCSR") eight times per year.  HMC also discloses information regarding engagement to the HMC Board of Directors on a quarterly basis. 


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