OCIO precisely tailored for you

A tailored ESG solution helped this client reduce carbon by 50%

The needs of organizations vary when it comes to integrating ESG in their portfolios. So, a cookie-cutter approach just would not suit this university. Here is a solution tailor-built to meet both stakeholder and investment objectives.

The client

A highly-ranked regional university, with a desire to address sustainable investing within their endowment portfolio.

The challenge

To implement a sustainable investing strategy with meaningful impact, while still hitting portfolio performance objectives.

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The strategy

After years of working with an investment consultant, the foundation made the strategic decision to move to an outsourced chief investment officer (OCIO) provider—one who would be a true partner and co-fiduciary as well as help them shift the investment portfolio toward responsible investing goals. The university had an extensive background in environmental studies and was seeing a greater interest from its student body and faculty to amplify its responsible investing efforts.

The foundation hired Russell Investments as its OCIO. Russell Investments has been addressing responsible investment requirements since 2007, with a focus on reducing carbon footprint while shifting portfolios toward securities that have a higher likelihood of above-average investment performance due to financially sound sustainability practices.

This work formed the underpinnings of a new sustainable multi-asset growth strategy that would seek to generate long-term capital growth while pursuing a low-carbon approach to reduce ESG-related risks and simultaneously emphasizing exposure to green energy technology. Russell Investments spent time walking the foundation through the design of the strategy to understand if it would meet its needs, providing the required alignment of the investment portfolio with the foundation’s fundamental objectives.

The results

By partnering with Russell Investments, the university was able to immediately reduce carbon exposure in its portfolio by 50% and significantly increase its holdings in companies that are likely to benefit from growth in green energy.

This helped the university make progress toward meeting its stakeholders’ needs without adversely impacting the portfolio’s return goals—balancing its desire to invest in sustainable strategies with the need to achieve market-aligned returns. They were able to lead by example without compromising their ultimate goal to effectively steward their portfolio.

This is one story. But it's not your story.

As an institutional investor, your situation, your constraints, and your challenges are just as unique to you. If you're ready to demand a customized, holistic solution set, we'd like to talk.

 

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Rob Cittadini

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