SMCC Foundation endowment investments paying off after switch to ESG funds

The Southern Maine Community College Foundation has shifted its endowment funds into sustainable investments that focus on companies’ approaches to environmental, social and governance issues ― and the move is paying off.

The switch into ESG (Environmental, Social, Governance) funds has aligned the Foundation’s investments with students’ wishes, while paying off with competitive returns.

“Students asked for a change in how we invest our endowment, and we have brought our investments in line with our values,” said SMCC President Joe Cassidy. “SMCC is committed to investing in companies that put a high priority on corporate governance, sustainability and the environment. So far we have exceeded the benchmark, and we are confident that we aren’t sacrificing returns for investing in a values-based portfolio.”

The SMCC Foundation’s change to ESG investments was sparked by a student petition several years ago that asked the Foundation to divest itself of investments in companies associated with fossil fuels. The Foundation has an endowment of about $1.7 million.

In response, the Foundation studied the issue and decided to funnel its investments into ESG funds. It then hired Harpswell Advisors of New Gloucester to manage the investments.

ESG investing has become increasingly popular in recent years, and research shows that it can reduce portfolio risk, generate competitive investment returns, and help investors feel good about the stocks they own. ESG factors range from climate change, carbon emissions and business ethics to executive pay, human rights and diversity.

Saman Baghestani and Jason Glynn were SMCC students when they spearheaded the student initiative to ask the SMCC Foundation to change its endowment investment strategy.

“I am glad our efforts had a lasting impact that is leading to positive gains ― for the Foundation and the environment,” said Glynn, who works as an educational consultant in Washington, D.C., after earning a bachelor’s degree in International Relations and Affairs from American University after SMCC.

Baghestani now works on sustainability issues for the Massachusetts Institute of Technology Sloan Sustainability Initiative, where ESG investing is a major focus. He earned a degree at Northeastern University in Finance and Entrepreneurship after graduating from SMCC.

“I’m glad to see that the board has made this decision and is seeing that our hypothesis and research were right: The endowment could do right by the environment while reducing portfolio risk and generating positive economic returns,” Baghestani said.

The SMCC Foundation is an independent, nonprofit foundation that raises money from businesses, civic groups, community leaders and individuals for academic programs, equipment and scholarships for deserving students. People can support the Foundation by calling the Foundation office at 741-5559 or through its website,