The University of Waterloo is committing to reducing the carbon footprint of its pension and endowment investment portfolios by 50 per cent by 2030, with the goal of achieving full carbon neutrality by 2040.
“With this new commitment, the university is . . . aligning its investment practices with its teaching, research and operations on climate change, while protecting our long-term financial investments,” said Feridun Hamdullahpur, president and vice-chancellor of the university, in a press release. “As an educational institution, we also recognize our responsibility to contribute to climate change mitigation to allow current and future generations of students to live in a sound environment.”
The move comes on the heels of the release of a new report to the university’s board of governors by an advisory group, which outlined several recommended changes in investment policies to address both the financial risks and opportunities associated with climate change.
The commitment is the next step for the university, which recently declared a climate emergency and has already reduced active equity investments in the energy sector by 69 per cent since initial responsible investing consultations in 2016, noted the release. With the focus on climate risk and the integration of environmental, social and governance considerations to support investment decision-making, the advisory group expects the university’s active equity managers won’t hold any material positions in fossil fuel exploration and extraction companies by 2025. The university said it will review its progress toward achieving its carbon reduction investment targets in 2023 and 2026.
The University of Waterloo has also enshrined ESG as a lens for its pension plan investments in its statement of investment policy and procedures, as well as in its investment guidelines for endowment funds since 2018, said the release. And in May 2020, the university became a signatory to the United Nations’ principles for responsible investing and has since signed the Investing to Address Climate Change Charter along with other Canadian universities.