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Low transparency grades weigh down Duke’s sustainability score

Duke received all A’s in the 2011 College Sustainability Report Card except for two financial disclosure categories, in which Duke was given D’s.
Duke received all A’s in the 2011 College Sustainability Report Card except for two financial disclosure categories, in which Duke was given D’s.

For the fourth year in a row, Duke received a B+ on the Sustainable Endowments Institute’s 2011 College Sustainability Report Card, falling behind some of its peer institutions.

Although the University received high marks in many of the categories, it received two D’s for its policy of not disclosing where it invests its money.

Duke received D’s in endowment transparency and shareholder engagement, and A’s in all other categories, including climate change and energy, green building and student involvement. The category “endowment transparency” measures the degree to which schools release investment information, and “shareholder engagement” is an indicator of how well schools incorporate university concerns in investment decisions.

Although SEI Director of Communication Susan Paykin acknowledged that Duke performed well overall on the report, she said information about where a university is investing its money is also relevant to measuring its sustainability practices.

“It is really important for universities to be working on these on-campus, really visible sustainability issues,” Paykin said. “But it’s easy to forget because it’s not as obvious that the University is investing millions of dollars into private companies which have huge effects on social and environmental issues.”

Michael Schoenfeld, vice president for public affairs and government relations, warned against placing too much emphasis on endowment transparency as a primary indicator of a university’s sustainability activities.

“All rankings are arbitrary to some degree.... All of those [categories] in which Duke received the highest possible grades is because the actions of the University in these areas are significantly noticeable,” Schoenfeld said. “I think the impact of [the investment categories] on overall sustainability are less apparent.”

Only one in five schools makes endowment holdings available to the campus community, according to the SEI website. The average endowment transparency grade across all schools in the 2011 report was a C.

Duke received lower than average because it limits information on endowment holdings to a select group—namely members of the Board of Trustees, senior administrators and select members of the school’s community—whereas schools that receive a C usually make some portion of their endowment holdings open to the public, Paykin noted.

The University has policies of not disclosing endowment holdings for competitive reasons, Schoenfeld said.

The University’s investments had a return of 13.2 percent in the year ending June 30, 2010 and often outperform endowment returns at a number of peer institutions.

Some universities, however, have made their endowments transparent and have not suffered in their ability to produce significant returns, said Alexander Robel, Trinity ’10.

“One really good example is Dartmouth, which has a sizeable endowment and has a transparent endowment policy,” Robel said. “It has one of the highest grades in endowment transparency and they still make over 10 percent returns year in and year out.”

Dartmouth received A’s for endowment transparency and shareholder engagement in the 2011 report and an overall score of an A-.

While at Duke, Robel said he and other students confronted the administration about disclosing more endowment information. In Spring 2009, Robel collaborated with other student groups such as the Duke Democrats in circulating a petition requesting that the Duke University Management Company, a private firm that manages Duke’s assets, release details of endowment holdings upon request from any member of the University community. The petition received hundreds of signatures in a few weeks but ultimately did not result in any changes, Robel said.

Schoenfeld said although there is no anticipated change in Duke’s policy on disclosing its endowment holdings, the University did respond to concerns about investment transparency.

In 2004, the University approved the Guideline for the University on Socially Responsible Investing and set up two committees to voice the University community’s complaints to DUMAC. Concerned individuals can submit proposals that must go through the committees and other institutions before being heard by DUMAC.

The petition, however, referred to the multiple-step process as “long and difficult to navigate, as if it were intended to discourage students from questioning the endowment’s holdings.”

Despite Duke’s lower scores for transparency, the University excels among its peers in on-campus sustainability and was named one of the 120 campus sustainability leaders in 2011.

The report cited Duke’s full-time sustainability committee, its 7 percent reduction of greenhouse gas emissions since 2007, its use of local organic produce and reusable containers, its transportation system and the Duke Smart Home housing option as indicators of its efforts.

The seven schools that received A’s this year included Brown University, Dickinson College, Oberlin College and Yale University. Forty-five others received A-’s.

Also known as a “Green Report Card,” the independent evaluation by the Cambridge-based nonprofit has been prepared since 2007 for more than 300 colleges.

Data for the report card was compiled from April to September 2010 on the basis of surveys sent to administrators and information available online.


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