Embedding Values & Taking an Active Stance – Haas Socially Responsible Investment Fund in 2018

Praised as ambitious and groundbreaking, the Haas Socially Responsible Investment Fund (HSRIF) is the first and largest student-led SRI fund within a leading business school. It offers our MBA students real-world experience in delivering both strong financial returns and positive social impact. Since 2008, the student principals have more than doubled the initial investment to +$3M, learning through experience about SRI and ESG investment strategies and practices.

The annual performance was impressive, the articulation of strategy to align with the Haas Principles very savvy, and most importantly it came through quite clearly that this was a truly impactful and educational experience for the principals.”


– Michael Pearce, Cambridge Associates (MBA 08 & HSRIF Founding Principal)

The 2017-18 HSRIF Principals recently announced their annual summary of activities. They successfully produced another year of steady performance, with one advisory committee member noting that “the amount of risk to return has been strong, even heroic, in recent years.” In addition to strong returns, the 2017-2018 Principals were able to define and act on several news initiatives that enhanced the values that inform investment decisions. They successfully applied the four Berkeley Haas Defining Principles to guide future investments and leveraged their role as investors to advocate for changes at Facebook in the wake of recent privacy concerns.

Included below is a summary of key highlights from the 2017-2018 HSRIF Annual Report, in particular the Fund’s performance and values-driven activities:

2017-2018 Performance

Performance for the 2017-18 academic year was very solid, with the overall portfolio returning 14.8% in the year and the equities sub-portfolio up 21.1% in the same period. This compares to 13.6% for the Russell 3000 and 11% for an 80% Russell 3000 / 20% Barclays Aggregate portfolio.

Investment Beliefs and the Defining Principles

Ten Years of Standing for What We Believe In

This year, the Haas Socially Responsible Investment Fund marked a decade of student-led socially responsible investing. As we look forward to the next ten years, the HSRIF Principals wanted to ensure that the Fund continued to be a vehicle not only through which students could learn about the principles of socially responsible investing, but that would also be an outward example to the business world of the Berkeley Haas values. Learning from the journey of other leaders in ESG and fund management, the HSRIF undertook the process of clarifying the components of the Investment Beliefs that will stand as a guide for future HSRIF Principals.

Their Investment Beliefs draw directly from the values of a Berkeley Haas Leader and the four Defining Principles that are so thoroughly engrained in the students who are educated here at Haas: Beyond Yourself, Question the Status Quo, Confidence Without Attitude, and Students Always. The following description of their Investment Beliefs comes from the 2017-18 Annual Report:

Investment Beliefs

  • Fundamental approach, with ESG qualifier
    Fundamental analysis is used to uncover the value of each investment for both learning and prudence purposes. Invest only in companies that are good or high potential to improve from an ESG perspective. Regardless of the financial return, HSRIF will not consider a business with poor ESG performance due to the belief that ESG factors drive long term value as a “high quality” company.
  • Intermediate time horizon
    To avoid the impairment of perpetual value, the investment is made on securities that have upside in a longer term, offset by the fact that a new class of principals will come aboard to reevaluate the portfolio each year. A typical investment analysis time horizon is around 2-3 years, although the fund typically is a longer term holder of high quality equities.
  • Beyond Yourself
    We believe that companies should be accountable to a wide set of stakeholders – from their overseas employees to their end consumer – and have a strong commitment to human rights of all people. As an institution, we have a rich history of supporting Anti-apartheid and Free Speech movements, and in advocating for the rights of the underrepresented and disadvantaged. As a fund, we commit to investing in companies that go “beyond themselves” to integrate a wider group of stakeholders into their management beliefs. (e.g. Starbucks)
  • Question the Status Quo
    Prevailing economic theory has done little to incorporate environmental externalities into the valuation of companies. At HSRIF, we question this stance, believing firmly that incorporating analysis of the environmental effect of a company’s activity is a more accurate assessment of the holding’s long-term value. Through our portfolio of holdings, the HSRIF seeks to advance Berkeley’s tradition of climate justice by supporting companies that minimize humans’ effect on natural resources. (E.g. Canadian National Railway)
  • Confidence Without Attitude
    Company leadership should be strong and inclusive, whether this is in the form of participatory voting rights, or a true commitment to diversity and representation at senior levels on boards. With strong governance and leaders that embody “confidence without attitude” we believe companies will not only hold themselves to more ethical standards, but also perform better financially. As the HSRIF, we invest in companies that have governance models that allow for participation, diversity, and responsibility. (E.g. Unilever)
  • Students Always
    We are always learning, and we expect the companies we invest in to be as well. As investors, we look for companies that are actively managing their ESG and continually looking to improve the long-term viability and impact of their company. We take an activist role in companies that have improvements to make in ESG, but which are committed and open about their path to doing so. (E.g. Facebook)
  • Fund Diversification across Asset Classes
    To provide downside protection, liquidity to fund the CRB draw and reflect that there are periods where it is harder to actively manage the portfolio (reflecting the nuances of the student calendar), the fund will be diversified between Fixed Income and equity , with the equity portion split between the individual equities portion of the portfolio and passive equity indices.

Facebook – An Active Investment Opportunity

A note from the 2017 – 2018 Principals:

“This year’s HSRIF Principals have engaged Facebook as an active investment opportunity within the portfolio (more details on the active versus passive in the annual report).

As principals, one of the tools at our disposal is our collective voice. The current challenges facing Facebook present an opportunity to use our voice to drive positive change as it relates to ESG metrics and ratings, further securing the company’s economic moat and our investment.

Please note our participation in the attached Open Letter to the CEOs of Facebook’s Largest Institutional Shareholders as it is intended to amplify our voice by calling for action.

The letter illuminates ideas to be presented in Facebook’s upcoming annual shareholder meeting that resonated with our Principals, including:

  • A shareholder resolution filed by Arjuna Capital and co-filed by The New York State Common Retirement Fund, Illinois State Treasurer Michael Frerichs, Baldwin Brothers, Inc., and Harrington Investments seeks a report on how the company is managing content governance (including election interference, fake news, hate speech and online sexual harassment propagated by the platform).
  • A shareholder resolution filed by Trillium Asset Management on behalf of the Park Foundation, calls for the board to appoint a Risk Oversight Committee, the presence of which may have anticipated and mitigated today’s crisis.
  • A focus on disclosure pointing to research by Ranking Digital Rights that revealed that Facebook disclosed less about how it handles user information than six of its peers: Twitter, Google, Microsoft, Oath, Apple, and Kakao (a Korean company).
  • The company’s board should be reconstituted with new independent directors who are experts in data usage and ethics to oversee company practices, and that the roles of Chairman and CEO be split and for Mr. Zuckerberg to step aside and let new leadership reinvent Facebook, while instituting best practices in good governance.

This public letter is our first step in engaging the company and we intend for this to be an active debate for future Principals to further engage. Please feel free to provide any questions, comments, concerns or suggestions as we move forward.”

Read the letter in full here.


2018 Patagonia Case Competition Top 10 Finalist Teams

As a company, Patagonia consistently stands at the forefront of sustainable business, implementing environmental solutions to its mission statement and serving as a model for other companies. This year, Patagonia is aiming to disrupt the carbon emission effects of production, consumption and disposal. Partnering with the Center of Responsible Business at the Haas School of Business, the environmental company hosted its third annual Patagonia Case Competition to allow diverse teams of graduate students from across the United States to tackle the negative effects of carbon. These teams share a common goal: carbon neutrality by 2025.

The top 10 teams presented their solutions to a panel of Patagonia judges on April 20th at the Haas School of Business. After stellar presentations from all 10 participating student groups, team Hoos Green from the University of Virginia took home the top prize. Team Lead the Change from Bard College took home second place, followed by team Everything Plus the Carbon Sink from Yale University in third.

The Center for Responsible Business congratulates all 10 teams on their tremendous efforts in developing innovative solutions. Below is a short summary of each team’s pitch at this year’s case competition (in alphabetical order):

Patrick Kelly, Madeline Omeltchenko, Alexandra Grant, Caroline Bales, Harry Ashforth“We truly believe that Patagonia has the ability to influence change beyond their own footprint” -Team Carolina Tar Heels

The team from the University of North Carolina at Chapel Hill stood out because of their holistic view on how to approach to the challenge. They stressed the importance of reaching all the way to Scope 3 emissions to influence stakeholders from the supply chain to customers. In order to influence emissions beyond Patagonia’s direct footprint, they argued that the company needs to begin with an “all of the above” approach. Their suggested solution centered on a Patagonia Green Fund to invest in carbon cutting programs.


Kathy Tian, Matthew Carney, Madeleine Carnemark, Neal Patel, Tae Lim

“Any good mitigation strategy requires a few things: excited consumers about carbon neutrality, find direct mitigation strategies, create offsets strategically, and move forward to a carbon negative future” -Team CO 2 Fast 2 Furious

At the heart of Patagonia is product. Team CO2 Fast 2 Furious’ design centric approach resonated with the Patagonia judges. They presented a ‘Net Neutral Collection’ that centered on product design and branding to empower customers to directly support the path to carbon neutrality via their purchases. The University of Michigan has been represented in the top 10 finalist teams for three years in a row.


Stephanie Hsiung, Greg Chung, Jessica Harpole, Perry Leung, James Souder, Emily Auerbach

“By creating its own carbon offset, Patagonia would transform what it means to be truly carbon neutral” – Team Everything Plus the Carbon Sink

Team Everything Plus the Carbon Sink from Yale University took an overall ecosystem approach to the challenge. They received accolades for the broad context they applied to a carbon tax concept. According to judges, Patagonia has struggled to figure out how to effectively address carbon tax and pricing opportunities. Yale’s approach presented ideas around how the company can figure it out in “a unique and Patagonia way”. Yale is the only university to be represented in the 10 finalist teams three years in a row and also finish in the top 3 each year.


Bryan Shadron, Stephanie Roe, Ben Strickland, Andrew Neils, John Tomko

“Patagonia can lead the industry and develop a roadmap for others to follow” – Team Hoos Green

Team Hoos Green from the University of Virginia emerged at the top of the pack with a model that “implicitly changed the [case] challenge, the very nature of the question” according to Dean Carter or Patagonia. Thinking about the problem not only as reaching carbon neutrality, but preventing the warming of the planet by 1.5 degrees reframed the conversation in a holistic way. The primary concepts of their proposed model were actionable and detailed, with real-world examples and a roadmap of partners who could help Patagonia reach their goal. Core to the presentation was drilling down on the functionality of the product to impact quality, durability, and carbon emissions; a tactic that struck at the heart of Patagonia’s ethos. The University of Virginia has been represented in the top 10 finalist teams for three years in a row, and half of the team members are participating for the second year in a row.


Cory Skuldt, Alistair Hall, Sam Brundrett, Lindsey Strange, Savannah Parsons

“Traditional [carbon] offsets are so 20th century” -Team Lead the Change

Students representing Bard College tackled Patagonia’s carbon emissions through a model that drives growth through circularity. At the initial design phase, team Lead the Change proposed designing products for recycling, not just repair. A leasing model, particularly for children’s ware, would increase the product lifespan. And finally, a self-imposed production cap would challenge Patagonia to stick with their values at the most fundamental level. Judges felt the team “kicked them in the pants in regards to their values” and what it really means to do no harm.

Sachi Sobti, Claire Glossop Irani, Haesun Jessica Seok, Abdelrahman Alfahham, Charles Wurzer, Aishwarya Katta Adiseshaiah“Without cooperation with others, Patagonia will fail to address climate change on a meaningful level” – Team Neutrality Reality

Finalists from the University of Pennsylvania presented what Dean Carter of Patagonia called “powerful ideas for making change.” Their suggestions targeted scope 3 emissions, which make up 88% of Patagonia’s total emissions. Via corporate power purchasing agreements and increased recyclability of materials, team Neutrality Reality proposed a collaborative path forward on the road to carbon neutrality.

Derek Fodor, Jonathan Deffarges, Andrew Slotnick, Katherine Siu, Itamar Wigoder, Priya Ghosh“Leaving no carbon trace by 2025 is an ambitious goal that requires equally ambitious solutions” – Team PataGoNYU

Through three key ideas – manufacturing, materials, and social empowerment – team PataGoNYU believes that Patagonia will reach their goal of carbon neutrality by 2025. Beyond assuring that factory processes are profitable and sustainable, they looked to social empowerment as a primary component of their plan’s framework with education as a tool to reduce greenhouse gas emissions. Patagonia judges acknowledged they could have an extraordinary impact on the people they do business with in the world and that they need to lean into social justice more.

Ryan Stirling, David Garber, Roshan Vora, Alana Skorniakoff, Chris Harding, Julian Ortiz“It doesn’t take an MIT nerd to know that .000001 is a small number––and that is Patagonia’s carbon footprint” -Team PataSLOANia

There is a clear distinction between “good” vs. “bad” offsets. Team PataSLOANia from MIT took great care to ensure their suggestions are additive, permanent solutions. The presentation focused on a mirco-carbon accounting system that extends carbon data down to each product line and individual garment. The judges loved the detail and visual examples of what this program could look like and felt it might work uniquely for Patagonia. The team also addressed that Patagonia has already made significant strides on the path to carbon neutrality and has an opportunity to stand as a role model in helping the broader industry make progress. MIT has been represented in the top 10 finalist teams for three years in a row.

Griffin Klement, Katie Seeley, Kirsten Galbraith, Alfredo Costilla-Reyes, Philip Hinson, Benjamin Eckholm“1% for the planet, and a little more for carbon neutrality” – Team Net Zero Aggies

Team Net Zero Aggies from Texas A&M dug into cutting-edge solutions that “can and should happen” according to Patagonia judges. Their presentation showed how Patagonia can leverage cutting-edge technology such as blockchain to better track their carbon footprint. Using this increased transparency, Patagonia can empower customers and incentivize suppliers to support and feel ownership over specific impact areas and initiatives.

Bryan Young, Lyndsay Gordon, Nick Ferderer, Olivia Jacobs, Austin Morton“As an activist company with a long history fighting large companies and governments, Patagonia is able to lead the charge in allowing consumers to understand the true impact of their purchase.” – Team UW United

Team UW United from the University of Washington centered their presentation around a model customer named Emily. Emily is a young woman who, in 2025, discovers the steps Patagonia took to become carbon neutral. Team UW United’s vision to carbon neutrality centers on green transportation methods, patents on the development of bio-based textiles, regenerative agriculture and land management, and the creation of a carbon unit.

To watch the final announcement of this year’s winners, visit our Youtube channel at: https://bit.ly/2G6nlsP

Achieving Carbon Neutrality Through Collaboration

By Nuria Marquez Martinez, Masters of Journalism candidate & CRB Editorial Writer

Leaders in sustainability and responsible business met Thursday April 19th to discuss their carbon neutrality goals and the collaborations necessary to reach those goals. Part of the Center for Responsible Business’ Peterson Speaker Series, the cross-industry panel was made up of Marisa de Belloy, CEO of CoolEffect, Paul Hendricks, Environmental Responsibility Manager of Patagonia, Sunya Ojure, Senior Manager of Sustainability of Salesforce and Arjun Patney, Policy Director of the American Carbon Registry.

The conversation varied, but at the forefront of the discussion was the sense of responsibility that companies have for the effects of climate change that directly correlate with business practices. “Climate action is integral, not in opposition to business success,” said Hendricks. He urged businesses to take the lead in environmental action and serve as a hub to bring people, governments, companies, and universities together. Patagonia’s climate strategy is to push their operations to mirror their political advocacy.

De Belloy of CoolEffect, a nonprofit that funds and advocates for innovative projects in sustainability, talked about the problems that come with changing people’s behaviors and beliefs. She said CoolEffect tries to engage people who accept climate change is happening. But even then, emissions are largely invisible making it hard to convince people of the urgency. “We’re trying to bring it home to people to really convince them to change their behaviors.” One way CoolEffect is doing this is through their carbon camera which visualizes carbon as it’s released into the atmosphere. De Belloy also spoke about offsets. She said some companies are only looking to buy offsets “for the heck of it,” but aren’t actually interested in making a real change.

A pivotal part of the discussion was how policy affected business operations. Hendricks made it clear that business leaders need to push policy makers to make bigger strides in sustainable, environmentally responsible policy. “If those gates were lifted off in the U.S., we’d see that type of radical change that we need to see in society,” he said. But, Patney said, a big problem is the lack of transparency from certain businesses which helps make sure that everyone is on the same playing field. After all, he said, it’s up to the industry to make the changes that lawmakers will want to uphold.

Sunya OjurePatney used the aviation industry as an example. Airlines are under agreement to limit CO2 emissions from international flights. The industry is pushing this agreement forward, so they aren’t seeing resistance from the federal government. He said it’s crucial for companies in any industry to be completely transparent about their goals and operations so that policymakers will follow. Ojure agreed: “It would be a blessing to have someone establish a reporting framework and have everyone stick with it.”

As the Senior Manager of Sustainability at Salesforce, Ojure has been tasked with developing strategies to avoid emissions. She said people often think storing their data in the cloud is totally emission-free. But data centers and the sites that support the internet have a huge sustainability impact, she said. Their main strategy is to look for infrastructure that exists on a cleaner energy grid and produce additional renewable energy. “As a cloud leader we have a responsibility to run the cloud on completely renewable energy,” she said.

As the discussion concluded, Hendricks and Ojure discussed the importance of partnering with organizations who understand the culture of their organizations. Hendricks said most people know the mission of Patagonia and if they choose to partner with them, sustainability has to be a part of their DNA. In the technology industry, Ojure sees companies that “live and breathe innovation” which created a culture of taking on new challenges. She’s been a part of the change of conversation that puts more focus on community, environmental and labor issues in the tech industry and beyond.