November 24, 2020

Webster University green endowment fund to finance sustainable projects

350.org, an organization that seeks to promote low carbon emissions, produced a list of 200 companies it says account for 27 percent of the world’s carbon emissions. An estimated 2.6 percent of Webster University’s endowment portfolio is invested in those companies, according to Prime Buchholz, Webster’s risk portfolio manager.

Kris Parsons, graduate assistant to the Vice President and Chief Financial Officer Greg Gunderson at Webster, said she would like to get that number to zero.

“What these companies do is in direct opposition to what Webster is about in terms of global citizenship,” Parson said.
Gunderson said a zero percent investment in fossil fuels is an unrealistic goal because Webster’s endowments are invested in many different portfolios, composed of hundreds of companies.

To offset these investments, a separate green revolving loan fund has been given preliminary approval. The green revolving loan fund will create a path for sustainable energies and other projects to be implemented at Webster. The fund will used solely for investment in sustainable, socially responsible projects.

Parson and Lindsey Heffner, president of Webster Students for Environmental Sustainability, are chartering the green revolving loan fund. They said the charter for the fund would mirror Macalester College’s (Minn.) clean energy revolving fund.

“We believe that sustainability in your energy use is directly tied to financial stability,” Parsons said, “You can’t be completely financially stable if you’re still dependent on fossil fuels and the rising costs of that type of energy.”

Webster’s green revolving loan fund will be financed through student and alumni donations. Parsons and Heffner are working with Webster’s marketing department to begin a campaign to attract donors.

“Hopefully this is a base of alumni that the university hasn’t been as successful in taping as of yet,” Parsons said.
Webster’s fund is still in the planning stages. The fund’s startup capital goal has not been set.

The startup capital for the green revolving loan fund will be placed in a mutual fund as it is being raised. Once the startup goal is reached, a portion of the money will be left in the mutual fund and part of it will be invested in sustainable projects.

“We’re looking for enough initial capital to invest in some type of big project with a short term payback,” Parsons said.

Parsons said she and Heffner would like Webster to pledge to match all energy cost savings by 90 percent until 110 percent of the total cost of a project is paid back.

The fund will invest in sustainable and cost-cutting projects like low-flow showerheads, solar panels and energy-efficient lighting.

“We think that sustainability is a core factor in financial stability. Not only is there a moral argument for keeping our money away from fossil fuel companies, but there’s a financial argument,” Parsons said. “If you look at coal over time, that has been a very risky investment and it’s only becoming even more risky.”

A board of two students, two faculty members, a staff member and an alumnus will decide on the fund’s investment.

“The charter will state that this fund is an entity of the university, but has a specific charter ruling what it can and cannot be used for,” Parsons said.

Parson said she hopes Webster will eventually become completely sustainable.

“I think what they’re waiting on is to see whether socially responsible investment is as profitable, or more profitable than what they are currently doing,” Parson said. “We are 100 percent confident that it is.”

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