Student Teams Invest with their Hearts and Minds
By Michael Schweibinz
Business schools around the world are integrating sustainability into their core curriculums. While this shift inside academia is now relatively common, implementation strategies vary considerably, with each institution creating somewhat unique programs for their students.
For example, the University of Waterloo and the University of Massachusetts Boston have both created new courses and platforms that focus on developing responsible future managers. While other universities, like the University of Colorado, are embedding sustainability into existing courses, hoping to truly transform students into sustainability practitioners, in and out of the workplace.
The University of California Berkeley Haas School of Business and the Wilfred Laurier University two schools that are empowering students to make real world impact before even entering into the “real world.” At the Haas School, MBA students have been actively managing a socially responsible fund since 2008.
Every year, roughly 13 students [team photo right] are responsible for managing a portfolio consisting of 20 companies. Each student is assigned one to three companies of which they need to understand the nuts and bolts of operations. Students spend time analyzing risk, researching, and analyzing market trends.
But to achieve their goal and invest responsibly, these MBA students are required to go beyond the standard investment techniques. They must closely observe the behavior and management decisions “which impact each organization's environmental practices, human rights records, labor rights, community, and government relations.” By closely monitoring each firm, students are able to track and understand the environmental, social, and governance (ESG) issues of each company.
The Center for Responsible Business (CRB) originally launched the fund with $1.1 million in donations from Haas alumni. The program offers a unique learning experience at the “intersection of business and social impact.” Today, the investment pool has grown to over $2 million in assets and has realized a return of over 50% since its inception.
But the CRB’s concerns extend far beyond annual returns. Program director, Kellie McElhaney, points out its unique balance: "When it comes to socially responsible investing, many people try to lead with their heart, versus investing with knowledge of social responsibility." Clearly, students must have an acute knowledge of investments and portfolio management before understanding and making active investment decisions based on ESG factors.
The future of investing certainly appears bright when looking at the industry’s upcoming leaders. More and more students are leaving college with experience in investing with society’s best interests at heart.
At First Affirmative, we understand that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?
Mention of specific companies or securities should not be considered an endorsement or a recommendation to buy or sell that security. Past performance is no guarantee of future results.
Posted: May 21, 2014