Yale was one of the first institutions to address formally the ethical responsibilities of institutional investors.  In 1969 Professors John Simon, James Tobin, William Brainard, and Charles Lindbloom along with Yale graduate students Charles Powers and Jon Gunnemann conducted a seminar entitled "Yale's Investments," which explored the ethical, economic, and legal implications of institutional investments.  Subsequently, Yale became, according to the New York Times, "the first major university to resolve this issue by abandoning the role of passive institutional investor." 


     The Yale Corporation Committee on Investor Responsibility (CCIR) considers and makes recommendations to the Corporation on policy matters related to ethical investing. It is supported by the work of the Advisory Committee on Investor Responsibility (ACIR), whose membership consists of Yale alumni, staff, faculty, and students. The Investments Office works with the ACIR and CCIR to implement policies adopted by the Corporation. Learn more about these committees and Yale’s ethical investment policies.

Climate Change

     Climate change is on the forefront of social responsibility issues.  Recognizing that greenhouse gas emissions “pose a grave threat to human existence”, the Investments Office has asked Yale’s Endowment managers not to hold companies that refuse to acknowledge the social and financial costs of climate change and that fail to take economically sensible steps to reduce greenhouse gas emissions.  This constructive approach addresses fossil fuel concerns across the entire breadth of the portfolio and has been articulated in an initial statement and a follow-up report, which noted that Yale’s managers sold holdings that were deemed inconsistent with Yale’s approach.  Both the initial statement and follow-up report were covered (here and here, respectively) by the New York Times.  The actions by the Investments Office are underpinned by the Yale Corporation Committee on Investor Responsibility’s statement that addressed divestment from the perspective of Yale’s ethical investment policies.

     Yale’s approach is predicated on the idea that consumption of fossil fuels, not production, is the root of the problem of climate change.  Targeting fossil fuel suppliers for divestment, while ignoring the damage caused by consumers, is misdirected.  Given the world’s current (and growing) energy needs, modern society could not exist without fossil fuel consumption.  Life’s basic necessities, including food and shelter, require petroleum-based products and services.  Without demand from governments, businesses and consumers, fossil fuel companies would not have a market for their products. 

     Society must transition towards cleaner energy sources.  Under Yale’s approach, investments with large greenhouse gas footprints are disadvantaged relative to investments with small greenhouse gas footprints, causing investment capital to flow towards less carbon-intensive businesses and away from more carbon-intensive businesses.  Until alternative energy technologies and infrastructures are more fully developed and more broadly implemented, fossil fuels will remain essential to support life on earth.

Yale's Wind Farm

     Investments in wind can provide substantial economic returns to the Endowment while helping the University achieve its sustainability goals. Beginning in 2007, Yale's managers, in conjunction with local wind power development firms, identified several sites with attractive capacity factors. The University's partners initiated development on a handful of sites.  One site in particular, Record Hill Wind, is fully operational and was transferred from the Endowment to the University, and is now maintained by the Yale Office of Facilities.  This project will help meet Yale's goal of reducing 2020 emissions to 10 percent below 1990 levels, furthering Yale in its quest to become the world's greenest university.