If you’ve ever wondered how Loyola continuously affords to hire professors, update buildings and fund research on top of simply operating day-to-day, the answer isn’t found solely in our tuition dollars.
While tuition does contribute, the university’s financial stability depends heavily on Loyola’s endowment — money and other donated assets that must be invested in order to provide a growing source of funding to support future students. Loyola’s endowment currently stands around $750 million, and the University’s Investment Policy and Guidelines state how this fund will be managed.
One of the newest sections of this document is part 1D: Responsible and Sustainable Investing Principles, which agrees Loyola will “prudently exercise ethical and social stewardship in its investment policy and practices.”
This includes considering the environmental impact of investment decisions. According to Loyola’s previous Chief Investment Officer, as of 2016 about two percent of the endowment was tied up in fossil fuels. While this percentage appears small, how does any amount of investment in the fossil fuel industry uphold “ethical and social stewardship” when dirty energy sources exacerbate climate change, arguably the greatest threat to social and economic livelihoods we’ve ever faced?
I first learned about Loyola’s endowment and investment policy through my involvement with the Student Environmental Alliance (SEA), an organization that has pushed sustainability at Loyola for many years.
One of SEA’s ongoing campaigns involves urging the university to remove all investments in fossil fuels from its endowment.
This act of selling holdings and ceasing to invest further in a particular company or sector is known as divestment. Divestment isn’t limited to the fossil fuel industry and has been associated with discontinuing financial involvement in things such as private prisons, Israel’s occupation of Palestine and other areas deemed unethical to the investor.
Fossil fuel divestment movements are increasingly gaining momentum, resulting in announcements such as those from Seattle University, Georgetown University, and even the country of Ireland. Loyola, as a Jesuit university, has a moral duty to care for our common home, which leaves no room for monetarily supporting and benefiting from such a destructive industry.
As the fossil fuel divestment campaign at Loyola has developed over the past five years, SEA has forged key relationships with Student Government and members of the Administration, including Eric Jones, the University’s previous Chief Investment Officer (CIO).
A university’s CIO helps advise budgeting and finance departments on fruitful investment strategies for the institution. Unfortunately, Jones left Loyola in January 2017, and a new CIO, Katharine Wyatt, wasn’t officially brought onboard until December 3, 2018. While management of the endowment and its investments didn’t cease during these 23 months, the conversation around fossil fuel divestment for Loyola certainly hit a low.
SEA’s main point of contact during this period was Wayne Magdziarz, Loyola’s Chief Financial Officer (CFO). In a meeting with Magdziarz, SEA proposed the creation of a “Socially Responsible Investment Committee,” ideally a transparent, accountable entity tasked with ensuring the university upholds the environmental sustainability principles of the Investment Policy.
This committee would advise the Board of Trustees’ existing Investment Policy Committee and would be comprised of a representative array of students, faculty, administration and others. The idea for this structure comes largely from student groups at other universities with active fossil fuel divestment campaigns.
Magdziarz supported this proposal, but postponed further action until the university hired a new CIO.
Two criteria for hiring included “Mission Alignment” with Loyola’s values, and a “Passion for Sustainable Investing,” and we’re eager to see how Wyatt will fulfill these as 2019 gets underway.
While a new year brings resolutions that are typically quickly forgotten, the students’ commitment to values-driven investing is here to stay. Now that Wyatt is officially a Rambler too, we need a partnership in which we work toward socially responsible and environmentally sustainable investments and ultimately fully divesting fossil fuels from Loyola’s growing endowment.