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Βι¶ΉΣ³» among founder signatories of new COP26 declaration for net zero asset management principles
By: Neil Vowles
Last updated: Monday, 8 November 2021
The Βι¶ΉΣ³» is in the first wave of organisations to make clear today their minimum climate expectations of those who manage their investments.
The 24 founding signatories to the COP26 declaration: asset owner climate expectations of asset management, launched at the UN Climate Change Conference (COP26) in Glasgow, commit to use its eight minimum standards in investment manager reviews and tenders to help establish them as market norms.
The University is joined by Friends Provident Foundation, WWF UK, Jesus College Cambridge, The Health Foundation, Newcastle University, Jesuits in Britain, and Joseph Roundtree Charitable Trust.
Allan Spencer, Director of Finance at the Βι¶ΉΣ³», said: “We have ambitions to be one of the world’s most sustainable universities and in order to achieve that, we want every aspect of our operations to be aligned with our sustainable and ethical values.
“Our socially responsible investment policy launched in 2017 resulted in all our investment funds being transferred to assets which make a positive impact on the world. The change has been remarkably effective and delivered outstanding results both financially and environmentally.
“By being among the founder signatories of this declaration we are calling on the asset management sector as a whole to grasp this moment of opportunity that COP26 has delivered and bring about powerful, long-lasting and meaningful change in their operations to help bring about a better world.”
Research has consistently shown the asset management industry failing to address the climate crisis with appropriate urgency.
Last week’s Net Zero Asset Managers Initiative’s (NZAMI) progress report revealed that, on average, only 35% of assets under management were committed to be managed in line with net zero.
Last year it was found that only 21% of the 75 largest managers had a dedicated climate policy, and only 16% had a coal exclusion policy.
The Βι¶ΉΣ³»’s own responsible asset management, launched in partnership with the Liontrust in 2017 to positively screen its global investments in companies that meet high standards of environmental and social responsibility, has delivered significantly on its aims.
The University’s internal estimates suggest that our investments in the fund emit 76.1% less C02 than the market benchmark.
The University’s own investments must pass a strict criteria in relation to Impact and Sustainable Development Goals; encouraging sustainable use of plastics; anti-bribery & corruption; responsibility in apparel supply chains; promoting gender diversity; encouraging corporate tax responsibility; ensuring privacy & data security and value creation in the healthcare system.
With COP26 bringing more asset manager climate commitments and claims of leadership, the declaration of climate expectations aims to help other asset owners, journalists, civil society, and politicians to judge what is good practice and what is greenwash.
In summary, the declaration states:
• Asset managers should adopt an investment strategy covering all assets under management to achieve net zero emissions by at least 2050.
• Asset managers should exclude coal and tar sands, at a minimum, and actively seek investments in solutions to climate change.
• Asset managers should have a default position to vote in favour of all climate resolutions bought by shareholders at company AGMs and provide an explanation for any votes against.
• Asset managers should engage in active shareholder engagement on 1.5°C aligned transition plans, with short and medium-term science aligned targets; and implement robust engagement escalation policies, including votes against directors and co-filing shareholder resolutions.
• Asset managers should regularly disclose all investment holdings, voting records and engagement activities.
The initiative has been co-ordinated by Students Organising for Sustainability (SOS-UK) and Friends Provident Foundation, in partnership with the Charities Responsible Investment Network (CRIN) and Responsible Investment Network – Universities (RINU).