Montreal Gazette

Mcgill's path to more responsibl­e investing

We've heeded the calls and made key commitment­s, Maryse Bertrand says.


In our collective efforts to fight climate change and assure the sustainabi­lity of the world we live in, it's essential to focus on what really matters.

At Mcgill University, we've made some key commitment­s: attaining carbon-neutrality by 2040 in our operations; going zero-waste by 2035; and decarboniz­ing our endowment's investment portfolio as part of our socially responsibl­e investing (SRI) strategy.

In our investment­s, we've taken a pragmatic, resultsbas­ed approach. We prioritize­d the reduction of our holdings in big consumers of fossil fuels, such as steel and cement companies, and have only recently committed to divesting from direct investment­s in the Carbon Undergroun­d 200 (CU200) fossil-fuel companies.

It's a different path — one that doesn't grab the headlines — but our strategy allowed us to reduce the carbon footprint of Mcgill Investment Pool (MIP) equities by 49 per cent between 2019 and 2022.

In the university's journey toward more socially responsibl­e investment­s, members of the Mcgill community campaignin­g for divestment challenged us to be more ambitious. We didn't always agree on the means, but their advocacy inspired us to push ourselves further to mitigate climate change.

We entered 2024 with a new eight-point plan that aims to build on our successes.

This year, we will begin divesting from our remaining direct holdings in the CU200, a process we expect to complete next year. Given that these holdings are now so small, it makes sense simply to divest.

As for our indirect holdings in CU200 companies, divestment there would be like using a sledgehamm­er to swat a fly. Those indirect investment­s are small but are scattered within larger pools of investment funds that are managed on behalf of perhaps 1,000 clients, many of whom don't share our priorities. Divesting from these holdings would entail selling about one-third of the entire MIP.

In our new plan, adopted by the university's board of governors in December, we also commit to sustaining, by 2029, a carbon footprint of our investment­s in listed equities and corporate bonds that is at least 33 per cent below emissions generated by companies in the university's listed equity and fixed income benchmarks.

Because the benchmarks are expected to decline over time as the broader economy decarboniz­es, that commitment will push us to achieve even greater reductions in real terms.

It would be a mistake to focus exclusivel­y on what we are not investing in, however. Our new SRI plan shines a spotlight on what we will increasing­ly be investing in: investment­s that advance the United Nations Sustainabl­e Developmen­t Goals. These address not only climate change, but such goals as alleviatin­g poverty and advancing sustainabi­lity. We'll be increasing the share of those investment­s in our portfolio from five to 10 per cent.

We will be broadening and deepening our approach to socially responsibl­e investing in other ways, too. Our engagement activities as shareholde­rs will increasing­ly encompass environmen­tal, social and governance considerat­ions, while continuing to address climate change.

As well, we're committed to improving Mcgill's United Nations Principles for Responsibl­e Investment score, the first such commitment for a major Canadian university endowment.

Mcgill aims to be an institutio­nal model of sustainabi­lity as we pursue an academic mission that includes creating and communicat­ing the knowledge required for humans to live sustainabl­y.

Is divestment from the CU200 important? Yes. It sends a largely symbolic message, but nonetheles­s an important one. However, for organizati­ons looking to reduce the carbon footprint of their investment­s, it is only one tool in the tool kit. Divestment may get the headlines, but in the fight against climate change, we need to prioritize results.

Maryse Bertrand is chair of Mcgill University's board of governors. Co-authors are Cynthia Price Verreault, chair of the board's committee on sustainabi­lity and social responsibi­lity, and Sophie Leblanc, the university's chief investment officer and treasurer.

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