How Does AAG Screen its Investments?

By Antoinette WinklerPrins, AAG Council Treasurer

This is the fifth of a short series of perspectives by 2024-2026 Council Treasurer Antoinette WinklerPrins — a series designed to help illuminate some of the financial challenges a professional organization such as the AAG faces. In this column, she offers perspectives on the financial aspects of running the AAG Annual Meeting. Read previous columns.

Many nonprofit organizations care about where and how they invest the funds they have available for investment. Most organizations work with financial advisors and use mutual funds as a way of obtaining strong and consistent returns on their investment decisions. While it is a core obligation of the AAG to invest in such a way that it can support its programming and awards, nonprofit organizations also usually have strong missions, and usually seek to align their investment portfolio with their mission. One method of doing so is to use investment “screens,” a device that permits the investor to identify stocks that align with their core mission, and more importantly, to exclude investments that do not.

To manage its modest endowment, the AAG uses exclusively socially responsible screens known as ESG filters. ESG stands for “Environment, Social and Governance” and means that these screens select for investments in corporations that demonstrate concern about environmental issues, social justice, and ethical and transparent governance, and excludes investments in the fossil fuel industry, arms manufacturing, or occupied territories. This way the AAG investment portfolio aligns with AAG’s mission. The AAG has been 100% ESG invested since June 2022, working with its bank, Truist, through its Envestment PMC investment platform. This platform uses ESG screens from Morningstar Sustainalytics, which has conducted monitoring and research into ESG investing for more than 30 years. Clients such as the AAG select screens they wish to have applied to screen investments.

Truist offers a variety of different ESG screens, from which a maximum of three can be selected at any given time. In coordination with the AAG Finance Committee, the AAG Executive Director selected screens that screen out investments in fossil fuels and seek out the best-in-class choices for the environment. AAG also has chosen as its third screen, one that focuses on social justice, including attention to human rights and occupied territories around the world.  We feel that these screens reflect the values of the organization, and all of AAG’s investments are now automatically pushed through these screens to generate a portfolio to ensure consistency with these values.

The AAG is constantly seeking to balance its needs for investment success while underscoring the desire to invest in ways that match its members’ values. By selecting screens that square with our mission, we can assure our members that we lead with our values in our investment portfolio. As part of the work of the Finance Committee, which I chair as AAG Treasurer, there is periodic review of the selected screens to ensure that they are functioning as intended.

Please feel free to reach out to me or Gary Langham, AAG’s Executive Director with questions, comments, or concerns. Send your comments and questions with the subject line “Treasurer’s Corner” to [email protected].