University of Waterloo to step away from fossil fuel investments

The University of Waterloo will be stepping away from fossil fuel investments in the coming decades.

Just under two weeks ago, the school announced a climate emergency, and a commitment to become carbon neutral by 2050.

Part of that commitment will be their strategy for pension and endowment investments. The school says they will reduce their related carbon footprint by 50 per cent by 2030, and achieve net-neutral investments by 2040.

The move isn't just all-virtuous in the name of climate, however: it also just makes good business sense, as the future of the fossil fuel industry is becoming less clear with each year that goes by.

“In recent years we have taken steps to becoming more sustainable investors and today we continue our journey to integrate climate risk into our investment policies,” said Cindy Forbes, chair of Waterloo’s Board of Governors. “To protect our investments, we’re making the decision that we will reduce our exposure to carbon. In doing so we are protecting our primary fiduciary duty to maximise pension fund and endowment returns using measurable science-based targets.”

The school also claims it has reduced active equity investments in the energy sector as a whole by 69 per cent since 2016.

An expectation by the Responsible Investing Advisory Group, which suggested the new targets, is for the University's equity managers to not hold any material positions in fossil fuel exploration and extraction companies by 2025. The school will also review progress in 2023 and 2026.

“The advisory group also recognized the contributions of students, faculty, and staff in laying the foundation for the establishment of the recommendations,” said a release in part. “More than 2,000 individuals and 25 groups called on the University to take measurable action on climate investments.”