The board of directors of the Foundation has approved the establishment of a new Environmental, Social and Governance (ESG) portfolio, the Foundation announced today. The portfolio allows donors to invest in strategies that emphasize sustainable investing factors and is designed to reflect the values of the Foundation and the communities it serves.
“The Foundation is excited to offer philanthropists a new way to give that aligns with and reflects their personal values,” said Barbara Fields, CEO of the Greater Worcester Community Foundation. “The ESG option empowers donors to make investments that increase their impact here in Worcester as well as globally.”
While the ESG investment option will be a separate portfolio in the GWCF's existing endowment, it was developed with guidance from the Foundation's investment adviser, Prime Buchholz, and will be managed with the same prudent oversight, Fields said. As assets grow with new donor contributions and investment performance, the opportunities for donors will expand, allowing for the introduction of ESG-oriented strategies within alternative asset classes such as private equity and hedge funds. Throughout this process, the ESG investment strategy will seek to achieve competitive returns while minimizing risk, she added.
The ESG option builds on GWCF's existing flexible options for donors. Like traditional investments, ESG investments will be used to make grants that honor each donor's wishes in perpetuity.
The ESG portfolio is a diversified portfolio that seeks to provide long-term growth with moderate risk and preservation of capital. Largely comprised of equities and bonds, it focuses on passive strategies in an effort to achieve efficient market exposure and minimize costs. Stock selection is based on the ESG ratings of companies, with a priority given to those with strong sustainability scores. Company ratings are provided by MSCI ESG Research using an independent framework to evaluate how companies compare against key ESG issues. Companies involved in businesses that are deemed to have a negative social and environmental impact are excluded from the portfolio.