Investment policy targets climate change

The University of Victoria has adopted a responsible investment policy that targets the worst producers of greenhouse gases across all sectors, increases investments in clean technology and encourages low-carbon practices for a sustainable future. 

The Board of Governors approved the policy for the university’s $225-million short-term investments fund at its Jan. 28 meeting after months of extensive research, analysis, education sessions with external experts, and consultation with student groups, faculty members and others. 

“Climate change is the key global issue of our time and we have made a response to the climate crisis a central element in the stewardship of UVic’s financial assets,” says UVic President Jamie Cassels. “Through our research, academic programs, and sustainable campus operations, the university is dedicated to being a global leader in sustainability. This policy is one more way we can work together to have a measurable, effective impact.” 

Cassels said the passionate commitment, research and perspective shared by students and faculty in pressing the university to address climate change through its investments played an important role in the board’s deliberations. 

The Responsible Investment Policy will lower the carbon emissions also known as greenhouse gases across the entire portfolio by 45 per cent by 2030 in alignment with the targets set by the UN’s Intergovernmental Panel on Climate Change (IPCC) and Paris Climate Agreement to keep the global temperature rise to 1.5 C. 

The policy will result in the university divesting from high-carbon emitting companies regardless of their industry sector, including the fossil fuel industry. The policy’s reach across all sectors of the economy and the investment in renewable energy and other clean technology is a holistic, and comprehensive approach that also encourages low-carbon practices as society transitions to a greener economy. 

“While the 45 per cent reduction is an ambitious goal that will challenge the university, as this is a new and developing area, we believe it was an important goal to set,” says Gayle Gorrill, vice-president of finance and operations. 

Noting that data from the US indicates that 80 per cent of greenhouse gas emissions come from the consumption of fossil fuels and 20 per cent from the production of fossil fuels, Gorrill says UVic’s approach affects the demand side of climate change and the release of greenhouse gases by many different types of activities including consumer behaviour, deforestation and industrialization. 

In addition to materially lowering carbon emissions, the policy will allocate a portion of the funds to themed impact investments that align with the university’s Strategic Framework and further the UN’s Sustainable Development Goals. Impact investments seek to generate positive, measurable social and environmental impact along with financial return.

Investment opportunities would include Indigenous economic development, Passive House construction (the most rigorous global building standard for sustainability and energy efficiency), impact GICs and green bonds.

Other elements of the policy include: becoming a signatory to the UN Principles of Responsible Investment; participating in activities to encourage carbon emission reductions; evaluating the portfolio for physical, liability and transition risks associated with climate change; and encouraging better disclosure by our investment managers of carbon emissions and climate-related risks. 

This policy aligns the university’s investment management with its interests and values while also ensuring that cash is available to fund campus operations and to earn an appropriate risk-adjusted return. 

These investments do not include long-term endowment funds managed by a separate legal entity, the University of Victoria Foundation, which itself has taken many steps to establish and update its investment policy and transparency around investment decisions. The foundation will review the university’s renewed policy as it continues to evolve its approach on responsible investment. 

To view a FAQ on the policy. 

To view the policy as presented to the Board of Governors.

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