Updated: Feb. 26, 2018 at 10:15 a.m.

The Board of Trustees agreed to create a $2 million environmentally friendly investment fund this month – the first time officials have moved to directly address student demands for a more sustainable investment portfolio.

The fund, to be announced Monday, will invest a small portion of the University’s $1.7 billion endowment in sustainable companies, with all profits being funneled into student financial aid, officials said. Student leaders, who helped create the fund, said it’s a step toward making GW’s investments more socially conscious after years of student advocacy for GW to divest from fossil fuel companies.

Logan Malik, the Student Association’s vice president for undergraduate student policy, said he initially proposed the idea of a sustainable investment fund to SA leaders in September after searching for a path forward on the campaign to divest from fossil fuels – a proposal administrators have rejected. He said the move, a result of partnerships with officials across multiple departments, indicates a “very real step” toward a re-evaluation of University investments.

“It’s the first time in history that students have affected the overall investments of the endowment, so just making that first step is why this is really significant,” Malik said.

The money for the fund was set aside from the University’s endowment – the financial foundation, comprised mostly of investment income, that funds major campus projects and academic priorities. The endowment grew by more than 10 percent last fiscal year.

Malik said he and other SA leaders worked with several administrators in the sustainability office, the treasury management department and the Board of Trustees to make the proposal a reality last semester. He said officials eagerly got on board with the plan because of the fund’s opportunities to involve student activists.

The fund was initially approved by the Board of Trustees’ subcommittee on endowment and investments last month, and the decision was confirmed at the Board’s meeting Feb. 8.

“They were excited about the fact that there was going to be a change in the culture of giving here at GWU – not by divesting in something but from positively investing in putting our community’s efforts into something that can really show our commitment to change,” he said.

In 2015, the SA Senate approved a referendum allowing students to vote on whether the University should divest from its holdings in fossil fuel companies. In SA elections that year, more than 70 percent of voters cast ballots in favor of divestment, which administrators quickly shot down, saying that divestment is not part of the University’s investment strategy.

GW does not release details – like whether money is invested in fossil fuel companies – of its investment portfolio.

In 2016, the senate backed the referendum results, voting in favor of a resolution supporting divestment because senators said the move was needed to combat climate change. Fossil Free GW, a student organization supporting climate activism, formed to rally for fossil fuel divestment and launched regular protests outside Board of Trustee meetings.

Malik, who has participated in Fossil Free GW over the last several years, said the money hasn’t been invested in the new fund yet because the University’s financial advising company, Strategic Investment Group, first needs to evaluate where to send the funds for a return. He said the $2 million will be invested by late March.

The group will evaluate which companies to invest in using environmental, social and governance criteria – a set of standards evaluating aspects like a company’s energy use, waste and pollution to assess if organizations are socially responsible, Malik said.

Meghan Chapple, the director of the Office of Sustainability, said officials decided on the $2 million figure because it crossed the “threshold at which you can have a financially meaningful fund.” She said profits from the fund will be directed toward the University’s $297 million financial aid pool.

“It was another thing that the students brought to the table, and the idea of supporting future generations and their education really aligns with the idea of sustainability and creating a more sustainable world in the future,” she said.

Student leaders also said they are planning to create a matching donation, where the University would take an equal amount of money from the endowment for every dollar that is donated to the sustainable fund. Chapple said GW has no firm plans for a matching donation yet because the project hasn’t been implemented.

She said the fund isn’t a direct response to calls to divest from fossil fuels, but that Fossil Free GW was “certainly an important voice at the table.” She said divestment isn’t the only way to address climate change and that this fund is another way to demonstrate GW’s commitment to sustainability.

“Universities are where young people come to learn, you are the future, so I think it sends a message to people that this is how the future thinks and this is what the future values,” Chapple said.

She added that given the size and structure of GW’s endowment, a sustainable investment fund was the right move for the University, though the trend of having similar funds at other universities is relatively rare.

Schools like the University of British Columbia, Middlebury College and Brown University also have sustainable investment funds that use similar eco-friendly criteria.

SA Executive Vice President Sydney Nelson said she hopes the fund will grow over the next several years. Both she and SA President Peak Sen Chua supported fossil fuel divestment in their platforms last year.

She said the fund can inspire students and alumni to donate more to the University, since their donations would be invested in sustainable initiatives and the success of the fund goes back to students.

“Student aid is a really powerful vehicle to ensuring that other students can join us here at GW, and we’re creating kind of this future generation, so we’re also invested in the future of GW and the environment,” Nelson said.

Although the fund doesn’t accomplish direct divestment from fossil fuel companies in the entire endowment, Chua said it still puts University dollars into a sustainable initiative “that reflects the values of students.” He added that he hopes the fund is expanded to represent 1 percent of the entire endowment – about $17.3 million.

“It makes sense to protect our environment, it makes sense to find more efficient ways to reduce energy and to collect energy,” Chua said. “We, as students, should ensure that those ideals and those trends and those patterns are reflected in our endowment.”

Leaders of the fossil fuel divestment movement said the fund is a step toward a more sustainable GW, but the overall budget for the fund is relatively small and they plan to still push for divestment from fossil fuel companies.

Nikolas Michael, a member of Fossil Free GW’s coordinating committee, said the group was updated as SA leaders pursued the fund and ensured that “the vision stayed true to what they originally wanted to do.” But he said there is still more work the SA and Fossil Free GW can do.

“We’ve been communicating to the administration basically the entire time we’ve run this campaign, and it’s been basically stonewalled at every turn,” Michael said. “The SA kind of felt that this was the only give they could get from the University in this regard, and I think it’s an important symbolic victory for us at least.”

Lillian Bautista, Sarah Chadwick, Liz Konneker, Will Lennon, Johnny Morreale, Sarah Roach and Meredith Roaten contributed reporting.