Lancaster University aligns investment strategy with climate emergency goals, including exiting from fossil fuels

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Following the Lancaster University climate emergency declaration, the University took further steps in its commitment to sustainability by moving all of its managed investment portfolios to two new funds.

The first is called a “Responsible Multi-Asset Fund” managed by Cazenove Capital and is designed to have a positive impact on people and the planet by avoiding damage through environmental, social and governance (ESG) integration and exclusions. , for the benefit of stakeholders through responsible business activities. This fund is specially designed for charities and aims to avoid damage by actively filtering investments, especially for climate change, tobacco and weapons.

The second fund is called the “Advance Strategy Fund” managed by Brooks Macdonald. This portfolio invests in funds that provide exposure to companies offering direct solutions to the sustainability challenges facing the world and is structured around eight main themes: cleaner energy, resource efficiency, water management and waste, sustainable transport, health and well-being, safety, education and financial inclusion.

Our selection criteria are based on the proportion of a company’s income derived from the extraction, production or production of electricity from fossil fuels. For our Cazenove portfolios, companies deriving more than 10% of income from fossil fuel related activities are reported as fossil fuel related and we have no exposure to fossil fuel companies based on this criterion. For our Brooks MacDonald fund where a lower threshold of 5% is set, we currently have 2.4% exposure to companies related to fossil fuels. However, we have chosen to host these companies because they were only selected when they meet the strict selection criteria of the sustainable development agenda and the Paris climate objectives. For example, when they supply natural gas to ease the transition from fossil fuels to renewables and plan to phase out natural gas.

We would like to thank the time and effort of the university’s finance division, the Lancaster University Extinction Rebellion (LUXR) group, the Lancaster University Ethical Investments campaign group, the People and Planet NGO to make this divestment a success. Many of our employees and students (past and present) were involved in this action. This action is a conclusion and a response to the Study 2020 published by the LUXR group on the amount of investments linked to fossil fuels by the university.

In addition to transferring all of our investments to these two new portfolios, the University has also signed the COP26 declaration on the climate expectations of asset management led by students organizing for sustainable development. Under this statement, the minimum expectations of asset managers include:

  • Strategy: An investment strategy to achieve net zero emissions by at least 2050 with at least 45% reduction in emissions from 2010 levels by 2030;
  • Asset allocation: an active commitment to invest in solutions to climate change, where the impact of environmental and social governance (ESG) is measured and reported alongside financial reports. These investments should focus on finding solutions to achieve a just transition to a low-carbon economy;
  • Active shareholding: a presumption of voting in favor of shareholders’ resolutions on climate change and the active engagement of shareholders on transition plans aligned with 1.5 ° C and;
  • Transparency: Regular disclosure of assets, voting records and engagement activity.

Lancaster Pro-Vice Chancellor Professor Simon Guy said: “Our teaching and research activities and our carbon reduction commitments are already well recognized as leading examples in the industry for support the challenges faced by climate change. So I am delighted that our investment strategies are now aligned with the University’s strategic vision to bring about transformative change.

“We recognize that this is a very important issue for our students and staff, past and present, and thank them for their commitment, support and encouragement to make it happen.”

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