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Harvard University Endowment

PRI reporting framework 2018

Export Public Responses

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply
Policy components/types Coverage by AUM
          Investment due diligence framework

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

As a long-term investor, HMC is focused on material environmental, social, and governance (ESG) factors that may impact the performance of our investments, now and in the future. HMC has moved to a generalist investment model in which all members of the investment team take ownership of the entire portfolio. HMC's investment staff are focused on debate and discussion about investment opportunities, both within asset classes and across the investment universe. The Sustainable Investing team provides support and resources for staff in reviewing investment opportunities and post-investment management.  For our direct investments in natural resources, the investment team has developed a strategy which specifically states “we will go above and beyond seeking the best ESG practices.” We are committed to sustainable ownership of our direct investments in agriculture and farmland.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

HMC commits to consider material ESG factors in the course of our underwriting, analysis, and monitoring of investments to the extent reasonably practical under the circumstances. HMC defines material ESG factors as those that we have determined, in our sole discretion, have, or have the potential to have, direct impacts on a company or asset’s ability to create, preserve, or erode economic value. As part of this commitment HMC has a Sustainable Investment Policy ("SIP"). The SIP covers all asset classes under management. It specifies environmental, social and governance risk factors that, if material, HMC will consider when investing. The SIP identifies roles and responsibilities and articulates HMC's approach to sustainable investment. The SIP includes HMC's due diligence process; commitment to sustainability certification for its forestry and agricultural investments; approach to active ownership; intent to collaborate with other responsible investors and commitment to reporting on its activities.

Other Harvard University policies and procedures complement the SIP and provide a holistic framework for HMC's approach to responsible investment. For example, Harvard's Advisory Committee on Shareholder Responsibility ("ACSR"), which advises Harvard's Corporation Committee on Shareholder Responsibility ("CCSR"), developed proxy voting guidelines which help inform its recommendations with regard to voting select environmental and social issues for which the committees'' body of precedent provides a clear indication of a voting preference. HMC maintains a Proxy Voting Policy, which pertains to voting on government issues. On the rare occasion when the CCSR has instructed HMC to divest from securities, the CCSR has issued a public statement describing its rationale for doing so.

SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.



02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].

The public can view our approach to responsible investment at this url:

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

HMC’s Code of Conduct requires that HMC employees act at all times in a manner consistent with their fiduciary responsibilities to HMC and exercise care that no detriment results from conflicts of interest.  An employee is considered to have a conflict of interest when the individual either: (i) has an existing or potential financial or other interest which impairs or might impair the individual’s independence of judgment in the discharge of responsibilities; or (ii) may receive a material financial or other benefit from knowledge of information confidential to HMC.

HMC’s Conflict Policy for Directors establishes guidelines for resolving potential conflicts between the interests of HMC and those of non-employee Directors.  The Policy follows three general principles: (i) HMC Directors should ensure that Harvard University receives all appropriate investment opportunities; (ii) Director involvement in a potential conflict requires advance approval by disinterested Directors; and (iii) conflicts must be reported to the HMC Board and the Harvard University Corporation.  Each HMC Director is responsible for reporting any real or potential conflict of interest promptly to HMC’s Chief Compliance Officer ("CCO").   This information is reported to the HMC Board on a quarterly basis.


03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)