Overall Rating Gold
Overall Score 69.91
Liaison Julie Hopper
Submission Date Dec. 20, 2023

STARS v2.2

University of Southern California
PA-10: Sustainable Investment

Status Score Responsible Party
Complete 2.06 / 5.00 Teresa Whitehill
Senior Investment Associate
USC Investments
"---" indicates that no data was submitted for this field

Part 1. Positive sustainability investment

Total value of the investment pool:
7,496,000,000 US/Canadian $

Value of holdings in each of the following categories:
Value of holdings
Sustainable industries (e.g., renewable energy or sustainable forestry) 42,000,000 US/Canadian $
Businesses selected for exemplary sustainability performance (e.g., using criteria specified in a sustainable investment policy) 16,000,000 US/Canadian $
Sustainability investment funds (e.g., a renewable energy or impact investment fund) 295,000,000 US/Canadian $
Community development financial institutions (CDFIs) or the equivalent 0 US/Canadian $
Socially responsible mutual funds with positive screens (or the equivalent) 0 US/Canadian $
Green revolving funds funded from the endowment 0 US/Canadian $

If any of the above is greater than zero, provide:

A brief description of the companies, funds, and/or institutions referenced above:
USC seeks to invest in sustainable industries such as renewable energy and businesses with exemplary sustainability performance such as decarbonization and energy efficiency. Sustainable investment funds include mission-led platforms that integrate ESG considerations and drive towards a net zero environment. Sustainable investments in the USC portfolio include solar energy, wind energy, carbon capture and sequestration projects, and various early-stage venture investments that seek to invest in technologies addressing global climate change.

Percentage of the institution's investment pool in positive sustainability investments:
4.71

Part 2. Investor engagement

Sustainable investment policy 

Does the institution have a publicly available sustainable investment policy?:
Yes

None
A copy of the sustainable investment policy:
Statement-on-Investment-Responsibility-Final.pdf

None
The sustainable investment policy:
One of the most important responsibilities of the Board of Trustees is to oversee the management of the Endowment with an objective to maximize returns at an appropriate level of risk. The endowment provides vital financial support in perpetuity to the academic and research missions of the University for current and future students.

As part of this duty, the Board recognizes the importance of stewardship criteria in safeguarding and promoting the Endowment’s long-term economic interests. Environmental, social, and governance (ESG) factors may impact future economic growth and the underlying fabric of a society. While the specific issues explored will vary by asset class and investment strategy, the Board recognizes that ESG factors can meaningfully influence the outcome of the Endowment’s investments. The consideration of ESG factors is also consistent with USC’s mission and unifying
values.

The purpose of this Statement is to set forth a commitment to responsible investing and to establish an Advisory Committee on Investment Responsibility to help the University act in furtherance of this commitment.

None
Does the institution use its sustainable investment policy to select and guide investment managers?:
Yes

A brief description of how the sustainable investment policy is applied:
The Investment Stewardship Policy (attached below) guides endowment investments as they relate to environmental, social, and governance issues. These issues may arise from a fund manager or underlying investment. For example, USC uses its Investment Stewardship Policy to select and guide investment managers as ESG concerns are examined during due diligence. As it pertains to a manager or fund investment, the “E” could relate to a company addressing emissions management, the “S” could relate to labor laws in the governing jurisdiction, and the “G” could relate to manager and operating company ownership. In practice, these factors are discussed and analyzed as part of due diligence. Importantly, due diligence does not end at initial investment; USC’s ongoing manager research takes ESG factors into account as part of existing investments, regulatory updates, market research, et cetera.

Proxy voting 

Has the institution engaged in proxy voting, either by its CIR or other committee or through the use of guidelines, to promote sustainability during the previous three years?:
No

None
A copy of the proxy voting guidelines or proxy record:
---

None
A brief description of how managers are adhering to proxy voting guidelines:
---

Shareholder resolutions 

Has the institution filed or co-filed one or more shareholder resolutions that address sustainability or submitted one or more letters about social or environmental responsibility to a company in which it holds investments during the previous three years?:
No

Examples of how the institution has engaged with corporations in its portfolio about sustainability issues during the previous three years:
---

Divestment efforts and negative screens

Does the institution participate in a public divestment effort and/or have a publicly available investment policy with negative screens?:
Yes

A brief description of the divestment effort or negative screens and how they have been implemented:
On February 4, 2021, the Investment Committee of the Board of Trustees voted to freeze making new investments in fossil fuels and to liquidate current fossil fuel investments.

More information: https://news.usc.edu/182493/usc-sustainability-fossil-fuel-free-investment-strategy/

Approximate percentage of endowment that the divestment effort and/or negative screens apply to:
4.80

Investor networks 

Does the institution engage in policy advocacy by participating in investor networks and/or engage in inter-organizational collaborations to share best practices?:
Yes

None
A brief description of the investor networks and/or collaborations:
USC Investment Office Staff regularly engages asset owners regarding sustainability, environmental, social, and governance issues. These issues can occur at the management, fund, and position level. The Investment Office has participated in networks and group discussions in a public and private capacity.

Optional Fields 

Website URL where information about the institution’s sustainable investment efforts is available:
https://acir.usc.edu/fossil-fuels/

Additional documentation to support the submission:
USC_Investment_Stewardship_Policy.pdf

Data source(s) and notes about the submission:
Endowment values as of June 30, 2023.

The information presented here is self-reported. While AASHE staff review portions of all STARS reports and institutions are welcome to seek additional forms of review, the data in STARS reports are not verified by AASHE. If you believe any of this information is erroneous or inconsistent with credit criteria, please review the process for inquiring about the information reported by an institution or simply email your inquiry to stars@aashe.org.