2016 V&R Participant- Dr. Qing Bai

Sustainable and Responsible Investments

I participated in the Valley and Ridge workshop with the hope of incorporating sustainable, responsible and impact investing (SRI) into an Investments course I will teach next spring. SRI is an investment discipline that considers environmental and social criteria to generate competitive financial returns and positive societal impact. After the workshop, I have developed two modules for my course. In the first module, students will learn how to select public equity, fixed income, alternative investments and community investments for their portfolios. They will also learn how investors engage directly with corporate boards and management to address sustainability concerns.

In-class exercises for this module may include:

1. Discussing the relevance of sustainability issues from an investor perspective;
2. Evaluating Corporate Social Responsibility (CSR) reports of selected companies;
3. Constructing SRI portfolios and tracking performance against S&P 500 Index on a portfolio simulation platform; and
4. Conducting a mock shareholder/company dialogue and drafting mock shareholder proposals.

In the second module, students will apply the net present value (NPV) method introduced in class to Dickinson’s new residence hall project that features a sustainable design. They will visit the building site and collect data, then compare the increases in upfront construction costs to the present value of the energy cost savings over the life of the building. The goal of their analysis is to answer the following question: Does it make financial and economic sense to build a green building?