The University of Manchester has, in a recent publication of its updated policy for Responsible Investment, confirmed that it has ended investments in coal, oil, and gas in order to respond to the climate crisis.
The University declared having stopped investments in fossil fuel companies, and companies producing tobacco, controversial weapons, or with poor environmental, social, and governance ratings. The University has also indicated that, towards its ‘Our Future’ strategy, it has reduced the carbon intensity of its investments by 37%.
The 2020 University’s Policy for Responsible Investments set the following targets:
- Almost complete (99%) disinvestment in fossil fuel extraction companies, and 30% reduction in weighted average carbon intensity (amount of electricity produced per KW hour of electricity consumed) in the public equity allocation in the investment portfolio by 2022.
- Reduction in weighted average carbon intensity of the remainder of the public equity allocation in the investment portfolio to a net zero target by 2038 or earlier.
In their 2021 Report, the University declared they have reached the first goal and are working towards attaining the second one. The 2021 Report confirmed that the University has exceeded its 30% reduction in weighted average carbon intensity target, by reaching a reduction of 37%. The University are still working towards the 2038 net zero target, which had been fixed in partnership with Greater Manchester Council.
Professor Nalin Thakkar, Vice-President for Social Responsibility, stated: “When we set out this policy we were clear that we wanted to be more radical than simply removing our investment from fossil fuel companies. We wanted to actively tilt our investment portfolio towards more carbon-efficient companies. While there is more to do, I’m really pleased that we’ve exceeded our target in our first year.”
The University’s investment portfolio, which is principally made up of endowment funds, such as gifts from donors, currently represents more than £200 million. The University invests these endowment funds across a myriad of asset classes (groups of investments that exhibit similar characteristics and are subject to the same laws and regulations) including public equities, private equity, property, cash, diversified growth funds and pooled funds. These investments’ income is supposed to support the university’s core services, and notably services including and concerning students.
The 2021 Report however also draws attention to more social-related issues. The University of Manchester is still investing in companies such as Microsoft, Barclays, Marks and Spencer, Nike and ArcelorMittal who have drawn controversy with previous records on business practices.
The policy is supposed to include the consideration of Environmental, Social, and Governance (ESG) questions relating to all investment choices. The University in the 2020 Policy for Responsible Investment said they are “particularly concerned about the key ESG issues”, and ready to “adopt investment strategies that seek to minimise or, ideally, eliminate investments in companies with corporate behaviour leading to human rights violations, racial or sexual discrimination, the exploitation of workers”.
The Policy for Socially Responsible Investment is set to be revised by the University’s Board of Governors once again this year, in 2022.