Information Item# 3- Submitted by the Faculty Affairs Committee (2015/2016 - May)
Faculty Affairs Committee Statement on Divestment
The Faculty Affairs committee met with the student group Divest UNF and their faculty advisor, Dr. David Jaffee. The group wishes to see UNF and the UNF Foundation divest from investments in fossil fuels. The group also requested the establishment of an Investor Responsibility Advisory Committee, to be formally recognized by the Board of Trustees and the Foundation Board.
The Faculty Affairs committee also met with Vice President Shari Shuman, who discussed the UNF Foundation investment policies, strategies, and procedures (see below). In particular, it was noted that UNF does not directly invest in any public companies, but rather in mutual funds as well as some other investment vehicles. Given this investing model, the difficulty of divestment from fossil fuel companies was discussed as well as the fact that most public companies can be considered objectionable by one group or another. The goal of maintaining a good return on our investments, in order to fund scholarships and other needs, was also discussed.
Vice President Shuman also discussed UNF's efforts regarding sustainability (see below).
The UNF Board of Trustees Sub-Committee for Socially Responsible Investments considered a resolution on divestment in March of 2015 and decided to "maintain the current investment policy"
(see March 3, 2015 minutes).
The UNF Foundation Board has also considered divestment and also decided to maintain current policy.
The Faculty Affairs committee has decided not to put forth any resolution at this time. Should the Divest UNF group wish to further pursue the formation of an investment committee, we recommend that such a request be made directly to the UNF Foundation Board. Should such a request be approved, the Faculty Association will facilitate the election of committee members.
University of North Florida Foundation
(from Vice President Shari Shuman, 2/24/2016)
The University of North Florida Foundation is a separate 501c3 entity that is created to support the University. They have their own board and governance structure. One of the committees of the Foundation Board is an investment committee that oversees the endowed and non-endowed investments.
Previously, the Foundation invested with the assistance of a Consultant. Using the Investment Policy as a guideline, the Consultant provided research, due diligence and manager and securities recommendations. For each sector, the consultant would recommend two to three companies, managers or funds for the particular investment style, such as equity growth, equity value, or fixed income. The committee would then make the final decision on the investment selection. This resulted in a bifurcated decision-making process in which neither side, the committee or the consultant, is fully responsible for the end results, and with the ever increasing complexity of investment options a fiduciary gap. With a quarterly meeting schedule, this method of management made it difficult to be responsible to sudden moves in the market, which did not support tactical asset-allocation in the portfolio.
The committee reflected on best practices in endowment management and recognized that the focus of bigger endowments has been on a wide array of assets which include a small portion of traditional stocks and bonds and a large portion of non-traditional alternative assets in the form of hedge funds, private equity, venture capital and real assets. The benefit fit of this style of investment is greater diversification, which mitigates risk, and decreased volatility, which can smooth out distribution streams. However, given the size of the University’s endowment, directly investing in this manner was not possible.
With the desire to diversify the portfolio and remain responsive in an environment of heightened volatility and investment complexity, the committee decided to switch to an outsourced chief investment officer (CIO) management model. Using this model, the committee would serve as the governing fiduciary, setting the investment strategy including asset allocation and selecting the CIO. The CIO would then be responsible for portfolio construction based on the asset allocation, manager due diligence & ongoing monitoring, portfolio rebalancing, risk management and reporting.
The selection of a CIO provided the university with the benefit of an entire team of investment professionals. The size of the endowment however still made it difficult to invest relatively small amounts of assets in a diversified manner. The solution to this is to hold a customized portfolio of commingled pools of investment funds. With this model, the University invests in commingled pools of funds managed by the outsourced chief investment officer to gain economies of scale and access to higher-level managers, and exposure to assets in the alternative space, such as private assets, private equity, real estate, natural resources, and hedge funds. The multiple-pool structure allows the CIO to tailor the University’s investment to the asset allocation, mandated by the Investment Policy, using pools of funds in the various asset classes.
The pooled portfolio is constructed by deploying assets to best-in-breed managers in each respective investment class. The University’s endowment is a portfolio of managers, not a portfolio of direct investments. Many of these managers maintain a “black box” around the proprietary mix of assets he has selected given his investment mandate. As such, the University does not have full transparency into the holdings of these managers. The University’s assets are pooled with those of other institutions, precluding the ability of institution specific cut-outs.
The Foundation investment committee believes that their fiduciary responsibility is to maximize the rate of return for the Endowment. This then enables the Foundation to provide the maximum amount of scholarships, fellowships and professorships. The investment model outlined above provides the most prudent and efficient course for fulfilling this mandate.
UNF SUSTAINABILITY INITIATIVES
Since its founding in 1972, UNF has strived to protect the natural environment and has identified "responsibility to the natural environment" as one of its core values. UNF works to positively impact our environment through a variety of small and large ways. Through our actions, we seek to be a leader for our community in environmental responsibility. Below we list some of the broad spectrum of actions UNF has taken to be stewards of our environment and reduce our energy footprint. We believe that this multipronged approach encourages us to focus on all the various ways humans impact our environment.
- The UNF Sustainability Committee initiated the bag-less bookstore campaign in 2009. This reduced about 50,000 bags from the trash stream.
- Tray less dining in dining hall reduces water / cleaning requirements.
- All new equipment for new dining hall is more energy efficient than older equipment.
- Food services signed on to Partnership for a Healthier America which includes sustainability goals / requirements, which includes implementing a local food procurement program that increases procurement of local and sustainable foods.
- Placing two electric vehicle charging stations.
- All new vending machines are more energy efficient than older ones providing for a 44% savings in electric.
- Reduced campus energy expenditures by $600k from FY ’14 to ’15 in part to:
- Installation of LED lights and other energy efficient bulbs in buildings, roadways, parking lots, parking garages and sidewalks to reduce electric consumption.
- Integration of class schedules into HVAC controls to reduce energy consumption during unoccupied periods.
- Retro commissioning of buildings (Bldg. 43, 53) to verify building performance and reduce energy consumption.
- The UNF Environmental Center collaborates with various community groups, including the Florida Native Plant Society and the First Coast Invasive Working group, to bring conferences and workshops to the UNF campus. The center also stimulates the creation of multidisciplinary research projects related to the environment by providing seed grants for environmentally related research.
- Replaced paper towel dispensers in high use bathrooms with electric hand dryers reducing total paper consumption by 30% or roughly over 500lbs of paper over 3 months.
- In early stages of developing physical plant analytics to study energy trends in buildings, identify failures before they happen, reduce energy consumption and increase system reliability. Anticipating this initiative to have a two year or shorter return on investment.
- Except for turf, the campus landscape has low demands for irrigation, pesticides and fertilizer because staff continues to select plants that are well-suited for the campus environment.
- Controlled burns in the Sawmill Slough Preserve are an on-going effort that restores the natural condition of these mixed wetlands and longleaf pine-turkey oak woodlands. Additionally, a large culvert was built for Eco Road to allow animals to move easily between the preserve and limit the effect of mortality from cars and Eco-Adventures works with local K-12 schools to organize educational field trips in the preserve.
- Grounds keepers continue to remove invasive pest plants in the Preserve and avoid pest plants in the cultivated landscape.
- Most of the campus landscape waste is composted on site (all but large tree branches and trunks).
- Irrigation facilities are in the process of hard-wiring several more of our Maxicom controllers to enable better control over our irrigation system. UNF has also repaired old, leaky pipes and increasing the amount of drought tolerant plants. Total irrigation water savings are nearly 9 million gallons since 2011.
- Leadership in Energy and Environmental Design (LEED) is a voluntary, consensus-based, market-driven program that provides third-party verification of green buildings. All new buildings since 2005 are designed to meet at a minimum the USGBC LEED Silver Certification level.
- A group of faculty members from UNF, Jacksonville University, and Valdosta State University work collaboratively on the St. Johns River Report, which is annual report on the health of the St. Johns River.
- In order to create a healthier campus environment for all of our students, faculty, staff and visitors, the University of North Florida became a designated smoke-free campus on Aug. 1, 2015.
- The Fredrick and Ophelia Tate Ogier Gardens, commonly referred to as the UNF Organic Garden, was established in 2009.
- UNF became a signatory of the American College & University Presidents' Climate Commitment (ACUPCC) in October 2010.