Values on Campus: Why University Communities Are Embracing Sustainable Investing
As a new academic year begins, campuses fill again with the energy of higher education, a community organized, at its core, around ideas, inquiry, and the long view. This same community has long been one of the most engaged audiences for a particular idea in the world of investing: that money can, and perhaps should, be invested with attention to its effects on the world.
The connection between university life and values-aligned investing is not a coincidence. For faculty and staff in higher education, understanding it can be genuinely useful in thinking about one's own financial plan.
Campuses have long thought about this
Universities have been part of the conversation about responsible investing for decades. The question of how an institution's endowment ought to be invested, and whether it should reflect the values the institution professes, has been debated on campuses across the country for a very long time. Students, faculty, and administrators have weighed these questions in public, in committees, and in print. People who work in higher education have, in a sense, been thinking about ESG questions long before the acronym existed.
A community oriented toward the long term
Higher education is, by its nature, a long-horizon enterprise. Universities measure their work in generations of students. Research is undertaken with the understanding that its value may not be clear for years. The entire culture is oriented toward the future and toward consequences that extend beyond the immediate.
ESG investing shares that orientation. It asks the investor to weigh long-term risks and long-term effects, not only this quarter's result. For people whose professional lives are already organized around the long view, that way of thinking about a portfolio tends to feel familiar rather than foreign.
From institutional values to personal portfolios
What we increasingly see in our work with the academic community is faculty and staff asking a natural question: if these considerations matter for how my institution invests, do they matter for how I invest? Many people who have spent careers in a values-engaged environment prefer that their personal retirement savings not be disconnected from the principles that shape the rest of their working lives.
If that describes you, there is encouraging news. Values-aligned investment options have become considerably more available within the kinds of retirement plans common in higher education. Depending on your institution and its plan providers, your 403(b) or 457(b) may already offer ESG-oriented funds, or may be able to.
The availability, quality, cost, and approach of these options vary a great deal, and an ESG label alone tells you little about what a fund actually does or what it costs. This is an area where it genuinely helps to review the specifics with someone who understands both how academic retirement plans are structured and how to evaluate an ESG strategy on its merits.
Final Thought
For many in the university community, there is real value in knowing that the way you invest your own savings can reflect the same long-term thinking and sense of purpose that shape your professional life.
That alignment takes intention. It starts with understanding the options available within your retirement plan, identifying the values that matter most to you, and determining how those priorities can fit within your broader financial goals. As a new academic year begins, it may be a good time to take a closer look at whether your investments reflect not only where you want to go financially, but what matters to you along the way.
The Legacy Foundation has invested in the tools that allow us to access the metrics of companies, mutual funds or ETF’s and how they score in each ESG category compared to their peers, giving them a sustainable rating. Because of our independence when choosing investments, we aren’t limited to proprietary investments but rather a universe of choices. We are proud to be a Certified B Corporation®, reflecting our belief that doing well and doing good can go hand in hand. Our certification represents a commitment to considering the impact we have on our clients, our community, and the world around us—and to using our business as a force for positive change.
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Disclaimer:
This material was created to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The services of an appropriate professional should be sought regarding your individual situation.
Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller