Navigating the Investment Portion of STARS v3.0 – The Sustainability Tracking, Assessment & Rating System

By Anne Duggan

This whitepaper was written for educational institutions who already participate in or are interested in exploring the higher education sustainable rating system STARS (The Sustainability Tracking, Assessment & Rating System). AASHE, the Association for the Advancement of Sustainability in Higher Education, created STARS in 2007 in response to calls for a consistent sustainability rating system. STARS is a transparent, self-reporting framework of criteria designed to evaluate sustainability performance across an entire educational institution (e.g., light blubs, water usage). 4% of STARS is related to investments. This paper reviews how the investment component of STARS works, including changes from the Q2 2024 update, and offers considerations for institutions with respect to the STARS investment criteria.

This paper shares observations that the investment component point weighting in STARS v3.0 mirrors what Partners Capital is seeing more broadly in the sustainable investing industry. There is an evolution to more importance on sustainable outcomes into the investment pool, while reducing importance on more policy, governance, and industry participation. Policy and governance activities such as having a sustainable policy or a dedication to discussing sustainability through an Investment Committee are now viewed “table stakes,” or minimum acceptable activities, to be viewed as participating in the sustainable conversation. Now the industry is focused on action and accountability (via transparency), highlighted by an increased focus on moving dollars in the investment pool or sharing information broadly. This holds true for both asset owners and asset managers. 

This paper also offers considerations for institutions to consider as it approaches this component of the institution’s broader STARS submission. STARS can help drive robust Investment Committee values and goals discussions but should not define them prescriptively. In addition, institutions need to be realistic as to how much time and effort goes into meeting the criteria. Finally, for the transparency element, institutions need to consider the trade-offs of disclosure.

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