McGill University will divest from all direct holdings in fossil-fuel companies listed in the Carbon Underground 200 (CU200) for implementation in 2024 and completion in 2025 – one of eight commitments announced today in Phase 2 of the University’s results-driven socially responsible investment strategy.
This divestment will involve the liquidation of the remaining direct CU200 holdings within the McGill Investment Pool (MIP) – holdings which constituted just 1% of total MIP assets as of December 31, 2022*, after years of targeted decarbonization. At that point in time, more than 99% of the MIP was held outside the CU200, with a sizeable proportion held in sustainable investments.
Though divestment from the MIP’s minimal remaining direct CU200 holdings sends an important symbolic message, McGill has long held that maximizing its impact means minimizing its carbon footprint. This has involved shareholder engagement with companies on decarbonization targets, and focusing divestment efforts on firms that may not extract fossil fuels directly but use them in highly emissions-intensive industries (cement and steel manufacturers, coal and gas-fired electricity generators, and other firms that drive global fossil fuel demand).
That results-driven approach remains fundamental to McGill’s decarbonization plan and socially responsible investment strategy. This focus on curtailing emissions has already sparked a massive 49% reduction in the MIP’s listed equity portfolio carbon footprint between 2019 and 2022.
“From expanding our decarbonization target, to divesting from direct CU200 holdings, to doubling our investments in solutions to the global challenges outlined by the United Nations Sustainable Development Goals, McGill is proud to be leading sustainable investment across Canada’s university landscape,” said Maryse Bertrand, Chair of McGill’s Board of Governors.
“In just three years we’ve removed about 73,000 tonnes of annual carbon emissions from the MIP, the equivalent of removing more than 14,000 gas vehicles from the road every year,” added Sophie Leblanc, McGill’s Chief Investment Officer. “Now we are challenging ourselves to be even more ambitious and invest further in emerging clean technologies and renewable energy infrastructure.”
“While developing our new commitments,” Leblanc noted, “we carefully reviewed the socially responsible investment strategies of other major Canadian universities. We are confident that the breadth of actions McGill announced today will cement its place at the forefront of sustainable investment among our Canadian peers.”
These commitments, approved by McGill’s Board of Governors on December 14, include:
- Sustaining a carbon footprint at least 33% below emissions generated by companies in McGill’s listed equity and fixed income benchmarks, which are outlined within McGill’sStatement of Investment Policy.
- Allocating 10% of the MIP to Sustainable Investment Strategies aligned with the United Nations Sustainability Development Goals (SDGs) by 2029.
- Enhancing our engagement initiatives by broadening the scope of topics to encompass social and governance considerations, while continuing to address climate change.
- Continuing to offer a fossil-fuel-free fund to McGill donors – the first such fund in a major Canadian university endowment.
- Improving McGill’s United Nations Principles for Responsible Investment (UNPRI) score, the first such commitment for a major Canadian university endowment.
- Integrating an Environmental, Social & Governance (ESG) scoring system and risk metrics into our fund manager monitoring processes.
- Continuing to report annually on our progress.
A full list of these commitments is availablehere.
“McGill is committed to fighting the climate crisis not only in its teaching and research, but in everything we do,” said Deep Saini, President and Vice-Chancellor. “These new commitments provide yet another opportunity for us to demonstrate our values, and work toward a greener Quebec and a greener world.”
These investment commitments align with McGill’s broader sustainability strategy, which includes becoming a fullycarbon-neutraluniversity by 2040 and achievingzero-waste campusesby 2035. McGill has been repeatedly recognized as a global sustainability leader – most recently placing 13thout of 1,397 institutions worldwide in the2024 QS World University Sustainability Rankings.
TheCarbon Underground 200(CU200) is a globally recognized list of “the top 100 coal and the top 100 oil and gas publicly-traded reserve holders globally, ranked by the potential carbon emissions content of their reported reserves.”
This article wasfirst published on 15 December 2023 on McGill Newsroom.
* When this information was first published, our analysis indicated that direct investments in CU200 firms constituted 0.5% of McGill Investment Pool (MIP) assets on December 31, 2022, while indirect investments represented 0.4%. During a detailed review in January 2024, we discovered that direct CU200 holdings on December 31, 2022 had in fact constituted 1% of MIP holdings, with a further 0.7% in indirect holdings.
McGill University regrets this error and has implemented corrective measures to ensure accuracy going forward. Notably, we are working to have CU200 holdings verified by an external firm, and in the meantime will ensure that all calculations undergo rigorous internal verification involving two peer reviews. and McGill remains fully committed to itssocially responsible investing (SRI) goals– including its commitment to full MIP divestment from direct CU200 holdings by 2025.
