As part of its ongoing commitment to fighting climate change, McGill University’s result-oriented strategy has accelerated the effective decarbonization of its investment, and further reduced its exposure to large users of oil, gas, and coal, as well as fossil fuel producers. By taking a holistic approach that looks beyond the traditional carbon-intensive energy sector, the University has achieved a nearly 53 per cent absolute reduction in the carbon footprint of its two-billion-dollar endowment portfolio in just two years.
This is one of the many accomplishments included in the University’s 2021 Socially Responsible Investing (SRI) annual report issued this month by McGill’s Investment Committee. “McGill University’s bold strategy has reduced the carbon emissions of its endowment investments by 78,000 tons annually, which is equivalent to taking approximately 16,800 gasoline-powered passenger vehicles off the road,” said Sophie Leblanc, Chief Investment Officer & Treasurer at McGill University. “This is about four times more than what could have been accomplished by divesting from top oil and gas reserve owners alone.”
McGill’s commitment to sustainability goes back several decades. As evidenced by the sustainability statements it has signed, the University is committed to helping shape a future in which humans can thrive in a way that respects the planet.
“Adopting a more carbon-conscious investment approach complements McGill’s far-reaching climate change and sustainability goals as well as efforts to achieve carbon neutrality across the University’s operations,” concluded Principal Suzanne Fortier.
In April 2020, McGill’s Board of Governors approved an eight-point implementation plan for how the University will decarbonize its endowment portfolio, based on recommendations put forth in the final report of the Committee to Advise on Matters of Social Responsibility (CAMSR).
The 2021 SRI report tracks key accomplishments in implementing the CAMSR recommendations “across all asset classes, such as equities, fixed income, real estate, and infrastructure.”
The University has reached its target of increasing Impact Investments to five per cent, including a commitment of US $25 million in a Global Renewable Energy Fund. In total, McGill has engaged more than $100 million in investments to help transition to a zero-emission economy, covering everything from renewables to electrified transport, carbon capture, and sustainable solutions. McGill has also increased its investments in fossil-fuel-free funds to $10.8 million – more than double the initial commitment made five years ago.
Other highlights of the implementation status (as of Dec. 31, 2021) include:
The Office of Investment places critical focus on ESG integration when selecting investment management firms. As a result, 99 per cent of MIP assets are managed by managers who follow an ESG Policy or are signatories of the UNPRI. Only 70 per cent of assets were managed according to these principles in 2016.
See the full progress report for more details.
The same week that McGill released its latest SRI report, the C.D. Howe Institute independent think-tank released its own report card for Canadian universities, noting that although divestment “can help to reduce the carbon footprint of a portfolio, it does not necessarily help to decarbonize the economy… and that carbon footprint-reduction targets must be carefully balanced, particularly as renewable energy technologies require significant amounts of fossil fuels in their production.”
The C.D. Howe Institute report, called “Put to the Test: Ranking Canada’s Universities on Their Climate Change and Endowment Activities,” places McGill in the top five of 16 Canadian universities who signed the “Climate Charter for Canadian Universities” and have “made commitments to manage their assets while taking climate change into consideration.” The report singled out McGill as the only signatory to include climate-related targets directly in its investment policy.
“One statement of investment policy stood out among the rest,” noted the report. “McGill University’s Statement of Investment Policy includes both its emissions-reductions targets and its targets for environmental impact investments. We would not expect to see all commitments expressly stated in investment policy statements, but, as we have noted, the gravity of climate change is such that it merits special mention.”
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Article courtesy of The McGill Reporter
Article courtesy of The McGill Reporter