2021/22 Responsible Investment Report

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Background

In November of 2017, the Board of Governors approved six recommendations related to the responsible investment of Laurier’s investment funds:

1. Enhance environmental, social and governance (ESG) risk-management strategies.
2. Develop a responsible investment annual report.
3. Develop a fossil free/impact investing endowment fund.
4. Seek out and create collaborative relationships with other institutions to advance responsible investing/ESG strategies.
5. Continue to support research into the effects of climate change, the sustainability of ecosystems and ESG-related issues.
6. Continue to implement strategies to reduce carbon emissions on campus and promote the principles of sustainability.

These recommendations were an outcome of a comprehensive review of responsible investing which involved various stakeholders across the university.

Updates

Update of the work done since 2017 under each of the six recommendations (updates since last report in bold):

1. Enhance environmental, social and governance (ESG) risk-management strategies.
   • The Investment Oversight Sub-committee, the Joint F&I and Pension committee, and Financial Resources staff received training from Hub Proteus on various responsible investing topics. These topics included Environmental, Social and Governance (ESG), Socially Responsible Investing, and Impact Investing.
   • The investment oversight committee began asking investment managers to provide periodic updates on ESG. As of December 2021, ten of Laurier’s investment managers reported being signatories of the UN PRI (United Nations‐supported Principles for Responsible Investment).
   • All RFPs for investment managers now have questions related to ESG along with shortlist presentations.
   • In June 2021 the Board of Governors approved a motion to set a target of a 40% reduction in the carbon footprint (intensity) for equities held within the University Endowment Fund, to be achieved by the end of 2030 (based on levels as at December 31, 2019). As of Dec. 31, 2021, this target has been achieved.
2. Develop a responsible investment annual report.
   
   • Annual reports have been brought forward to the Board since the 2018-2019 year.
     Laurier also developed a responsible investment website under the public accountability section.
3. Develop a fossil free/impact investing endowment fund.
   
   • In June 2021 the Board of Governors approved a motion to explore establishing a separate fossil free / impact investment endowment fund.
   • A Statement of Investment Policies & Procedures for the planned fossil free / impact investment endowment fund has been finalized.
   • In April 2022 the Board of Governors approved a motion to retain Jarislowsky Fraser to manage the newly created Fossil Fuel Free Fund through their JF Fossil Fuel Free Global Equity Fund and Bond Fund. The initial seeding of this fund is expected to occur in Fall 2022 and will be for approximately $4 million.
4. Seek out and create collaborative relationships with other institutions to advance responsible investing/ESG strategies.
   
   • Laurier became a member of the Responsible Investment Association in 2019, which will provide the university with an opportunity to collaborate with other organizations on responsible investing and get access to research on the topic.
   • In November 2021 Laurier became a signatory to the Climate Charter signed by other universities in June 2020.
5. Continue to support research into the effects of climate change, the sustainability of ecosystems and ESG-related issues.
   
   • See 6 Below.
6. Continue to implement strategies to reduce carbon emissions on campus and promote the principles of sustainability.
   
   • Laurier continues to be a leader in sustainability on campus and in research, which is detailed in the Sustainability Action Plan 2018-2022, the Strategic Research Plan 2020-2025, and the Laurier Strategy: 2019-2024.

Update on Carbon Intensity

Laurier has committed to a 40% reduction in the carbon footprint (intensity) for equities held within the University Endowment Fund, to be achieved by the end of 2030 (based on levels as at December 31, 2019). The following is the progress as of Dec. 31, 2021:

The primary cause of the decrease over the 2 year period was that the Investment Oversight Committee made a decision in 2020 to replace an underperforming investment manager with a new investment manager. The previous manager was more invested in fossil fuels than the replacement manager.

Update on CU200 Exposure

Laurier continues to monitor its exposure to the Carbon Underground 200’s list of publicly traded securities, which identifies 200 of the largest coal, oil and gas publicly traded reserve holders globally:

Investment Managers and Responsible Investment

Laurier’s investments are managed by investment managers in pooled funds and limited partnerships.
Many of Laurier’s investment managers have publicly available policies on ESG, and they must report on the topic each year to Laurier’s Investment Oversight Sub-committee.

As of December 2021, ten of Laurier’s investment managers reported as signatories of the UN PRI (United Nations‐supported Principles for Responsible Investment).

The UN PRI is the one of the most well-known organizations in the world for responsible investment, and signatories have committed to working to achieve the following six principles:

1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.