Dear Â鶹AV community members,Ìý
Yesterday evening, Â鶹AV’s Board of Governors approved a second phase of ambitious socially responsible investment (SRI) commitments for the Â鶹AV Investment Pool (MIP), the University’s endowment fund. This will include divestment from all direct holdings in fossil-fuel firms listed in the Carbon Underground 200 (CU200).Ìý
These measures build on the extraordinary success of Phase 1, which saw the MIP’s listed equities carbon footprint decreased by 49% between 2019 and 2022, and direct holdings in the CU200 reduced to just 1%* of the MIP as of December 31, 2022.Ìý
In addition to divestment, the Board approved a series of socially responsible investment commitments, including:
- Sustaining a carbon footprint of its investments in listed equities and corporate bonds that is at least 33% below emissions generated by companies in Â鶹AV’s listed equity and fixed income benchmarks, as outlined in the University’s .
- Allocating 10% of the MIP to Sustainable Investment Strategies aligned with the United Nations Sustainability Development Goals (SDGs) by 2029.
- Enhancing our engagement initiatives by broadening the scope of topics to encompass social and governance considerations, while continuing to address climate change.
- Continuing to offer a fossil-fuel-free fund to Â鶹AV donors – the first such fund in a major Canadian university endowment.
- Improving Â鶹AV’s United Nations Principles for Responsible Investment (UNPRI) score, the first such commitment for a major Canadian university endowment.
- Integrating an Environmental, Social & Governance (ESG) scoring system and risk metrics into our fund manager monitoring processes.
- Continuing to report annually on our progress.
You can learn more about our commitments on the Office of Investments .
Our path to SRI progressÌý
Â鶹AV has long held that maximizing its impact means minimizing its carbon footprint. Often, this has meant focusing our divestment efforts on firms that may not extract fossil fuels but use them in emissions-intensive industries, such as cement and steel manufacturers, coal and gas-fired electricity generators, and other firms that drive global fossil fuel demand. That is why the MIP still includes some minimal direct holdings in CU200 firms. However, given the low exposure to these direct holdings, the time is now right to divest from them fully, sending a symbolic but nonetheless important message that our future must be fuelled by clean energy and sustainable technologies.Ìý
I applaud Â鶹AV’s Office of Investments and the Board’s Committee on Sustainability and Social Responsibility for helping make Â鶹AV an SRI leader among Canadian universities. Its task has been one of complex and careful balance – decarbonizing the endowment’s holdings while remaining mindful of the vital need to ensure it generates the annual investment returns that fund critical priorities such as research, student aid and internships. I hope it will inspire others to go further in their SRI goals. I also invite all of you to , Â鶹AV’s Chief Investment Officer.ÌýÌý
Â鶹AV is committed to fighting the climate crisis not only in its teaching and research, but in everything we do. These new commitments provide yet another opportunity for us to demonstrate our values, and work toward a greener Quebec and world.ÌýÌý
Sincerely,
Ìý
Deep SainiÌý
President and Vice-Chancellor
Â鶹AV
Ìý
Ìý
* When this information was first published, our analysis indicated that direct investments in CU200 firms constituted 0.5% of Â鶹AV Investment Pool (MIP) assets on December 31, 2022, while indirect investments represented 0.4%. During a detailed review in January 2024, we discovered that direct CU200 holdings on December 31, 2022 had in fact constituted 1% of MIP holdings, with a further 0.7% in indirect holdings.
Â鶹AV regrets this error and has implemented corrective measures to ensure accuracy going forward. Notably, we are working to have CU200 holdings verified by an external firm, and in the meantime will ensure that all calculations undergo rigorous internal verification involving two peer reviews. and Â鶹AV remains fully committed to its socially responsible investing (SRI) goals – including its commitment to full MIP divestment from direct CU200 holdings by 2025.