Building a Portfolio

Building an Impact Investing Portfolio: The Putney School’s Journey

For the Putney School, the path to an impact investing portfolio was inspired by a longstanding culture of social activism within the student body.

Students had previously questioned the school’s investment policy as part of activism around apartheid-era South Africa in the 1980s and the War in Darfur in the early 2000s. Students have also taken on numerous other environmental and energy-related causes. But when they approached the board of trustees about climate change several years ago, recalled Head of School Emily Jones, it triggered a new chapter in Putney’s history.

A student group would work for more than a year alongside the board and investment committee to research and hire a new manager for the school’s endowment fund and align the school’s beliefs and investment policies.

The Path to an Impact Investing Portfolio

The Putney School is an independent secondary school in Putney, Vermont that espouses a progressive education for a sustainable future. Progressive schools value diversity of thought and culture, as well as a commitment to equity and justice.

According to Jones, in 2012 an environmentally minded student group—the Sustainability Squad—attended a lecture on global warming by noted climate change activist Bill McKibben. The speech inspired them to go to the board to push for fossil fuel divestment.

Their pitch was infused with more passion than data, so the head of the investment committee challenged them to dig into the research. Students and trustees worked in tandem on the project. Over time, the focus shifted from divestment to socially responsible investments.

By the fall of 2013, the investment committee invited the head of the student group to a meeting in New York with the school’s then-manager. “She had a fat binder of research she and the students had done, and she very quietly and politely made it clear that he hadn’t done his homework,” said Jones. “As a result of what the chair of the investment committee reported back to the full board about this meeting, the board instructed the committee to start looking for new investment advisors.” ​

A new investment advisor, the Glenmede Trust Company, N.A. (“Glenmede”) was hired soon after, and student collaboration on Putney’s impact investing portfolio continues today.

“We were attracted to Glenmede’s proactive approach to using investment as a change agent in society and by the depth of knowledge about developments in the investment arena,” Jones said. “We were also looking for a firm with people who would enjoy working with high school students, and the enthusiasm of the Glenmede people was infectious.”

Lessons Learned

Students learned a great deal about investing and how things get done in the real world. The adults learned something, too. “The topic probably would not have come to the table when it did if the students had not been involved,” Jones said. “Spurred by the students’ interest, the board was engaged in pursuing an impact investing portfolio.”

In turn, the Putney community learned from Glenmede how to structure its investment policy statement to be in concordance with its values, with the added challenge of incorporating many voices backing everything up with hard data. The entire student body had a chance to weigh in on priorities for the new strategy.

Putney looks at investing through a broad ESG lens. The school’s new policy tilts investments toward companies that are environmentally friendly, are socially aware, and have strict governance factors, while utilizing shareholder engagement techniques to affect positive change at public corporations.

The Value of Collaboration

While most of the students in the original movement have since graduated, the path to an impact investing portfolio has had a lasting imprint on the Putney curriculum, Jones said.

Casey Clark, Glenmede’s director of sustainable and impact investing, video chats with classes and has presented on investment topics before school assemblies. More recently, Clark and Jones gave a joint presentation on Putney’s student-trustee collaboration at the 2018 National Association of Independent Schools annual conference.

“Putney students today have a much better understanding about how investing can be a tool for social change,” Jones said.

The students and the trustees overcame knowledge gaps—and perhaps generation gaps—to learn about the power of collaboration.

“We can reflect on the power of hard work and a thorough process,” Jones said. “It delivered a better outcome than any single group could have achieved alone.”

Interested in building impact into your investment portfolio? View Glenmede’s webinar Impact Investing: From Concept to Reality to learn how investors are doing just that. Click here to view the replay.

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