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.