DUMAC’s investment strategy prioritizes delivering the best long-term returns with reasonable risk, while keeping our fiduciary responsibility in mind. When working with external managers, we collaborate and try to understand their ESG policies and factors that could affect the financial performance of their portfolios.
DUMAC is committed to responsible investing, both as an organization and for its clients. Our leadership team and staff incorporate responsible investing into DUMAC’s investment strategy by considering all risks, including environmental, social, and governance risks, that may impact portfolio performance.
Since most of our assets are managed by external investment managers, our engagement with them is crucial. Together we share the importance of ESG integration and support the energy transition efforts underway.
We are committed to continuously learning and evolving our understanding of ESG considerations. As a fiduciary we recognize the importance of staying up-to-date with the latest developments and best practices in this area. We are dedicated to adapting our processes and actions to ensure that we are incorporating ESG considerations in a way that aligns with industry best practices and delivers value to our clients.
Board of Trustees
Guideline on Investment Responsibility
Duke University Board of Trustees Statement on Climate Change and Investment
DUMAC, Inc. Proxy Policy
To ensure that ESG factors are fully integrated into our investment decisions, we engage in continuous dialogue with our managers to understand their views on ESG risks and to identify those that are most significant to our portfolio.
A growing list of vendors provide ESG data, but coverage remains limited to the larger capitalized public companies. Data on small and private companies poses a significant hurdle with limited reporting by providers. To counter this, in the summer of 2022, we enhanced our approach to responsible investing data collection and accelerated our actions around ESG reporting. We also established a framework to assess the environmental, social, and governance (ESG) footprint of our investments in line with the UN sustainability development goals.
For the past few years, we have conducted an annual ESG survey to engage with our managers on responsible investing and stewardship. The survey includes questions specifically related to our managers’ ESG policies, due diligence processes, and diversity and inclusion. DUMAC uses these survey results to inform our discussions with managers and our understanding of their efforts towards sustainability. To date we have received responses from the majority of our investment managers across both public and private markets and representing all asset classes we invest in.
More than half of DUMAC’s managers have either adopted a formal ESG/responsible investment policy or have incorporated ESG factors into their investment decision-making process.
Approximately, one third of our managers monitor and track ESG metrics on their portfolio companies.
The United Nations Sustainable Development Goals (UN-SDGs)
The UN-SDGs are a set of 17 global goals that were adopted by all United Nations member states in 2015. The UN-SDGs are intended to be a blueprint for achieving a better and more sustainable future for all. They address a wide range of global challenges, including poverty, inequality, climate change, environmental degradation, peace, and justice. The UN-SDGs are interrelated and rely on each other to be achieved.
Approximately $2.1 billion, 15% of the Long Term Pool’s investments are supporting the United Nations Sustainable Development Goals.
By investing in technology, services, and products that solve the world’s greatest challenges, our external managers help support the achievement of the UN-SDGs.
Rationale for Energy Investments
As fiduciaries, we believe that allocating to a diverse set of assets, including Energy, is critical. Our allocation to energy investments serves multiple purposes that enhance the overall portfolio’s risk and return profile.
- Energy investments are essential for the transition to a sustainable energy system. By investing in companies that are developing and deploying new technologies we can benefit from their growth and contribute to the global transition to a low- carbon future.
- Energy investments offer a significant source of income. With a growing global population energy demand is expected to increase, leading to higher energy prices.
- The energy sector is historically less correlated to other asset classes, providing valuable diversification benefits to the portfolio.
direct cash investments in Carbon 200 companies
of resource managers have ESG or responsible investing policies