Shane TedderThe University of Kentucky will offer a Student Managed Investment Fund (SMIF) Course focused on Sustainability in the fall of 2022. A focus on sustainability in the investment world is often denoted by the acronyms ESG (Environment Social and Governance) or RI (Responsible Investing). At this time there are less than 50 reported examples of this type of student opportunity in US Higher Education and with a proposed $2 million in investment capital, UK will be among the largest of these funds.
How’d we get here?
Several years ago, UK students formed a new student organization to make the case for divesting the University of Kentucky’s endowment from fossil fuel-based companies. This approach, known as a negative screening process, has gained attention in recent years as efforts to combat climate change have ramped up and diversified. These students met consistently with UK Administrators for many months.
Ultimately, University leaders determined that divestment was not the right strategy for our institution, but the students were able to contribute to several initiatives at the intersection of sustainability and the endowment. This included a rebuild of the University’s endowment website to make information about how UK’s endowment is invested and how the returns are used, more accessible to the campus community.
In 2020-2021, UK Greenthumb – a student environmental club – absorbed the campaign and continued advocacy at this important intersection. Under the student leadership of Alyssa Archer, Austin Hinkel, Ava Weyrich, and Dilni Abeyrathne, Greenthumb shifted the focus of the campaign to an initiative to integrate the concept of responsible investing – a practice that strives to include environmental, social, and governance (ESG) factors in investment decision making – in both student experience and UK’s Endowment Management.
With this new focus, students and administrators found common ground and this traction and momentum increased following a meeting with Gatton College of Business and Economics Finance Instructor Jon Chait. Mr. Chait, a retired finance professional, was already teaching one of UK’s two Student Managed Investment Fund (SMIF) courses and quickly endorsed the importance of teaching students with aspirations for careers in finance and investment about the emerging focus on ESG in the finance world. He agreed to teach a new course with this focus provided the University’s Investment leadership – primarily UK’s Chief Investment Officer and the Investment Committee of the Board of Trustees – were in favor of allocating a portion of the endowment to the course.
The leadership of the College of Business and Economics were consulted and expressed their support for the new course. A formal recommendation to create the proposed $2 million fund is scheduled to be presented to the Investment Committee for approval in a February 2022 meeting.
Another important aspect of this initiative was making the course available to students from all majors and everyone involved supported this approach. Based on Mr. Chait’s expertise in finance, and UK Sustainability Officer Shane Tedder’s insights and experience with sustainability-focused courses at UK, it was determined that the new course would have two prerequisites: Finance 300 to ensure students had a foundation in financial and investment concepts; and a course from a list of sustainability-focused courses to ensure shared knowledge of key principles and challenges in sustainability.
With all these pieces in place, efforts are currently underway to communicate and promote this new course to academic advisors across the campus with the goal of offering Finance 490 – Responsible Investing: A Student Managed Investment Fund Course for the first time in the fall of 2022. This exciting development in UK’s curriculum would not have been possible without student leadership and advocacy.
If you are interested in learning more about this course, please contact your academic advisor or course instructors Jon Chait (jon.chait@uky.edu) and Shane Tedder (shane.tedder@uky.edu).
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