Queen’s commits to reduce carbon footprint of university’s investment portfolios by 2030
March 9, 2022
In line with Queen’s commitment to make a real and lasting impact in the fight against climate change, Queen’s Board of Trustees has endorsed its Investment Committee’s Final Report on Climate Change Action Task Force (CCATF) Recommendations, which includes a commitment to lower the carbon footprint across the university’s investment portfolios.
The Investment Committee report set targets to maintain at least 25 per cent lower carbon emissions than the global equities benchmark by the year 2030.
“Queen’s University is deeply committed to making a global impact in advancing sustainability through its responsible investing,” says Jim Keohane, Chair of the Investment Committee. “We are aligned with students, faculty, staff and the administration in engaging on this issue. The recommendations we have brought forward will have a lasting positive impact on Queen’s and our planet.”
The targets set out in the recommendations are impactful and designed to align Queen’s with Canada’s net zero commitments. With a target of at least 25 per cent below the broader global market’s emissions, the university will decarbonize its portfolios ahead of the market and without singling out specific industries. The benchmark target reduction approach is aligned with those taken by many large best-in-class institutional investors.
“We will work closely alongside our investment managers to drive carbon reduction with all companies within our portfolios,” Keohane says. “We will ask a lot of our investment managers and we will be tough markers to effect real change.”
“We have recommended a holistic, collaborative and comprehensive approach to the de-carbonization of our investment portfolios because we believe it is the most effective approach, and simply the right thing to do,” says Don Raymond, who chaired both the CCATF and the Energy Transition Subcommittee that was tasked to look at how to implement the recommendations.
This approach will allow the funds to achieve strong, sustainable returns while enabling the university to do its part in working with other responsible shareholders to influence the companies in which it is invested to also decarbonize. The University Board and administration have listened to student input and reflected this in their decisions and actions.
“We believe the recommendations put forward and approved by the Board are a significant step for the University to be taking,” says Aria Goldin, Co-President, Queen’s Backing Action on Climate Crisis, a climate change activism organization run by Queen’s students. “We look forward to working with University Investment leadership to provide our input on the progress of these important commitments.”
The recommendations are notable in Queen’s broader strategy to tackle climate change, supporting Queen’s overall commitment to the United Nations Sustainable Development Goals (SDGs).
The Board of Trustees approved the following three key recommendations of the CCATF final report:
- Reduce the carbon footprint of the Pooled Endowment Fund (PEF) and Pooled Investment Fund (PIF) and sustain by the end of 2030 a public equity portfolio (and real assets and private equity where data are available) with 25 per cent lower carbon emissions than the equities benchmark.
- Allocate at least 15 per cent of the PEF to a Queen’s Climate Action Allocation (QCAA) by the end of 2030, comprising investments across asset classes that are expected to outperform with the transition to a lower carbon economy. In taking this targeted allocation approach, the committee no longer recommends including the previously planned donor direction program.
- Queen’s should become a signatory to the United Nations Principles for Responsible Investment (UNPRI).
A key to achieving the targets set out in the plan is the establishment of a Queen’s Climate Action Allocation (QCAA), made up of investments with significantly lower carbon emissions than the equities benchmark. The recommendations target an allocation of at least 15 per cent of the PEF into the QCAA by the end of calendar 2030. The QCAA was kickstarted in December 2020 with a US$30 million investment within the PEF into Pattern Energy, a private wind and solar company with operations in North America and Japan. That investment represents just over three per cent of current PEF assets.
Principal and Vice-Chancellor Patrick Deane noted the recommendations also complement many of the other initiatives undertaken by the university, including the commitments expressed in Investing to Address Climate Change: A Charter for Canadian Universities, to which Queen’s was one of 15 founding signatories in June 2020.
“This work undertaken by our former Board Chair and the subcommittee will be a lasting legacy,” says Principal Deane. “The recommendations signify real action to address our ongoing commitment to combat climate change and have placed Queen’s at the forefront of investment transparency.”
More information on Queen’s Responsible Investing can be found online.
Today’s decisions are just one of the ways Queen’s is advancing sustainability and responding to the world’s most urgent challenges. For more details on Queen’s contributions to the UN Sustainable Development Goals are available here.