Statement on Investment Responsibility

The University of Minnesota plays a critical role in solving the grand challenges of our time. The work of the University matters to our communities, our state, and our world. Donors give generously to advance these efforts and support the University’s mission, including its commitment to sustainability and being a catalyst for a just society. The University of Minnesota Foundation (UMF) ensures that gifts from donors are well managed and used in accordance with the donors’ gift agreements.

Endowments are the permanent financial cornerstone of any great University. Donors who give endowed gifts seek to leave a legacy. Through prudent investing and market returns, the endowment provides perpetual, consistent funding to the University to support students, faculty, and staff who advance world-leading ideas and solutions.

UMF’s endowment is managed by University of Minnesota Investment Advisors (UMFIA), a nonprofit subsidiary formed in 1998 to ensure the endowment is managed by skilled investment professionals who are committed to the long-term objectives of the endowment. UMF Trustees exercise effective oversight of UMFIA’s investment process through approval of the Investment Policy developed by UMFIA under which UMFIA operates, as well as through appointment of the UMFIA Board of Directors. Some UMF Trustees are also members of the UMFIA Board of Directors.

UMFIA has a fiduciary responsibility to prudently manage the endowment. UMFIA’s objective is to preserve the long-term real purchasing power of donated assets by generating competitive risk-adjusted returns, while providing a relatively predictable and growing annual flow of funds to the University. UMFIA objectively considers non-financial factors alongside traditional financial factors to create a more complete picture of risks and opportunities.

Environmental, Social, and Governance (ESG) factors are a subset of the risk and return characteristics that UMFIA considers as a part of the investment process. UMFIA recognizes that ESG factors will vary among investments, evolve over time, and require the consideration of complex interactions among factors.

Likewise, ESG data, definitions, and standards for corporate disclosure continue to evolve. As such, UMFIA’s evaluation of non-financial factors must be dynamic over time. To be responsive to these changes, all investment policy decisions, including those involving ESG-related considerations, are guided using reasonable inquiry, evidence, judgment, and fiduciary best practices.

Relevant ESG-related factors are an essential consideration, not only for investments and investment categories, but also in selecting and evaluating external investment partners.

UMF, as stewards of perpetual capital and in the exercise of its fiduciary duty, will continue to monitor evolving best practices, including the consideration of ESG factors in the investment process. Doing so both upholds our fiduciary responsibilities and advances the mission to support the greatness of the University of Minnesota as it pursues solutions to the grand challenges of our time.