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The University of Southampton
Sustainability

Sustainable Investments

As part of the University Strategy - Sustainability, Goal 6 is to implement a sustainable and ethical investment policy.

Our aim is to develop this policy for all our investments and establish a transparent process of reporting on our investment decisions.

Investment Portfolio

The University currently has a combination of cash and investments through fund managers.  As at 31/12/2021 our fund managers and investment products were:

Aegon – Ethical cautious managed fund
Ruffer – Charity assets trust
Royal London Asset Management:
          - Enhanced cash plus fund
          - IG short dated credit fund
          - Short duration credit fund
          - Global bond opportunities fund
          - Sterling extra yield bond fund

 

Our approach to sustainable investments, within Finance Policy 22 – Treasury Management outlines our approach and beliefs in relation to ethical & sustainable investments:

- The Investment Committee (IC) recognises the importance of Environmental, Social & Governance factors.  As such, the IC will consider investing the University’s assets in line with the Paris Aligned Investment Initiative, with a commitment to reducing carbon emissions and will consider aligning its portfolio to the goals of the Paris Agreement, assuming Governments remain committed to this Agreement.  The IC will also consider other initiatives that enhance the commitment to the wider consideration of sustainability.  Where the assets are not currently invested in line with these initiatives, the IC will look to ensure a just and workable transition over time.

- The IC believes that the assets should be invested through a sustainable and ethical investment policy which is in line with the University’s objectives, as set out in the University’s Sustainability Strategy.

- The IC believes in Engagement over Exclusion in relation to incorporating financially material ESG factors. In particular, the IC seeks to engage with those assets which are currently behind their peer groups in terms of sustainability, but are actively in the process of transitioning. However, the IC reserves the right to use Exclusion as a mechanism for certain circumstances.

- The IC believes that Climate change is a key ESG risk which should be specifically addressed within the investment strategy.

- The IC believes that both financial and non-financial considerations should be taken into account when it comes to setting the investment strategy. An example of taking into account non-financial considerations is excluding investments on the grounds of ethical and moral views, rather than because you think those investments carry a high risk or may hinder performance.

 

Exposure to fossil fuel investments 


December 2021 
As at 31st December 2021, 0.9% of our portfolio was held within direct fossil fuel companies (0.8% as at 31/12/20), and a further 0.7% within indirect fossil fuel companies (0.8% as at 31/12/20). The movement between the two periods is small as a proportion of our total holdings, and is a result of a number of factors including: 
- Improvement in the value of these holdings (within the funds we invest with) 
- Active engagement by fund managers to invest responsibly in companies and industries who positively affect our world in three key areas: environmental, social and governance (ESG) 


December 2020 
As at 31st December 2020, 0.8 per cent of our portfolio was held within direct fossil fuel companies, and a further 0.8 per cent within indirect fossil fuel companies.  This represented a small proportion of our holdings at this date.  Nevertheless, we remain committed to reviewing and refreshing our investment policy, to ensure our investments represent the values of the University. 

 

Further Information

- Investment Committee Terms of Reference.

- Audits of exposure to fossil fuels:

December 2021 report

December 2020 report

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