University of Waterloo to Dump Fossil Investments, Take ‘Proactive’ Approach to Climate Risk
The University of Waterloo moved yesterday to drop all its fossil fuel exploration and extraction investments by 2025 and decarbonize its C$2.7-billion pension and endowment fund 50% by 2030 and 100% by 2040, capping a six-year campaign by Fossil Free UW and allied groups to push the school to divest.
As of December 31, UW held just over $29 million in fossil fuel investments, amounting to just over 1% of its portfolio, said PhD candidate Truzaar Dordi, a co-author of the school’s Carbon-Neutral Investment Strategy. That total was already down from $31.8 million in September, but still included $8.6 million invested in Calgary-based pipeliner TC Energy, $6.7 million in tar sands/oil sands producer Suncor Energy, $4.8 million in Pembina Pipeline Corporation, and $4.7 million in Canadian Natural Resources Ltd. (CNRL).
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“In recent years we have taken steps to becoming more sustainable investors and today we continue our journey to integrate climate risk into our investment policies,” said Cindy Forbes, chair of UW’s Board of Governors. “To protect our investments, we’re making the decision that we will reduce our exposure to carbon. In doing so we are protecting our primary fiduciary duty to maximize pension fund and endowment returns using measurable, science-based targets.”
“For over six years, students, staff, and faculty have called on the University of Waterloo to align its investment practices with a climate-safe future,” political science professor Angela Carter said in a Fossil Free UW release. “Today, our institution has finally committed to step away from fossil fuel investments, on the grounds that they are financially risky as well as the primary source of the climate crisis and its terrible human and ecological consequences.”
“While acknowledging the role of the fossil fuel industry in the climate crisis, carbon exposure doesn’t stop there,” Dordi added. “In our deeply interconnected economy, we need holistic solutions to mitigate these risks. Our decarbonization strategy addresses both the fossil fuel industry and its effects across our economy.”
Read more from Angela Carter and Truzaar Dordi on Canada’s “one eye shut” climate policy.
UW’s Responsible Investment Advisory Group, of which Dordi was a member, called on the board of governors to “take a proactive approach to incorporate climate risk when investing the pension and endowment funds in order to achieve the risk-adjusted returns necessary to deliver the purposes of the funds,” the university release states. In addition to avoiding “all material direct investments in fossil fuel exploration and extraction companies,” the approach includes a “carbon exposure reduction strategy” that phases out investments with significant climate risk, while investing in climate innovation and transition.
“I am proud that with this new commitment, the University is continuing to show leadership by aligning its investment practices with its teaching, research, and operations on climate change while protecting our long-term financial investments,” said UW President and Vice-Chancellor Feridun Hamdullahpur.
By the time yesterday’s decision was in the books, more than 2,000 students, faculty, and staff and 25 groups had called on UW to take “measurable action” on climate. “It feels wrong to be getting a degree in environmental studies and sustainability, only for the very school providing me this education to be actively investing in companies which have lied about and perpetuated the climate crisis,” said Fossil Free UW member Guy Brodsky, a former chair of the Waterloo Students’ Endowment Fund.