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UWaterloo Responsible Investing: Incorporating Environmental, Social and Governance
On May 29, 2019, the University of Waterloo’s Secretariat announced that the University will be taking steps to ensure that investment decisions will take into consideration the environment, social, and governance (ESG) factors the contribution will hold.
The University is taking responsibility to consider the environmental and ethical impacts of investment, including whether the companies use ethical governance, such as not participating in bribery, and consider the social impact of their decisions, explained Feds Vice President Operations and Finance Seneca Velling.
“By investing based on ESG factors, the University of Waterloo is committing to prioritize corporate social responsibility, environmental sustainability, and governance/ethics in the decisions as to where the University’s funds go,” said Velling. “Money talks in the business world, and the University represents a multi-billion dollar decision-maker for investment. ESG considerations and management [with the new investment fund manager] make sure the University factors in and prioritizes these considerations in the investment process.”
Last June, the institution’s Responsible Investing Working Group (RIWG) submitted the motion, insisting that the Board of Governors adopt their recommendation on how to best incorporate ESG factors. The recommendation is based off of a year-long investigation that the RIWG carried out, which included input from multiple stakeholders of the investments such as students, faculty, staff, alumni, retirees and donors. Having all these stakeholders involved allows for the fullest and most diverse array of perspectives from the University to be considered.
In summary, the RIWG recommends that the Board of Governors commit to the following:
- Formally adopt ESG factors as an important lens to be integrated into endowment and pension investment decision-making;
- Make amendments to the Pension Statement of Investment Policies and Procedures (SIPP) and to Investment Guidelines to reflect the adoption of ESG factors;
- Prepare a plan for the Board of Governors, outlining the cost and requirements for monitoring and reporting;
- Explore potential investments that have an opportunity to generate positive social impact;
- And commit to reviewing the progress of implementing these recommendations.
This announcement serves to inform our entire community that the University is continuing to implement these recommendations. Some of the steps they’ve taken include embedding ESG capabilities when selecting a new investment manager for the endowment fund, requiring enhanced reporting on how investment managers reflect ESG practices in decision making, and evaluating steps required to be in good standing with the UN Principles for Responsible Investment to table a proposed implementation plan to Board of Governors.
For more updates on UWaterloo’s policies and procedures, visit their Secretariat page.