The University of Sydney is to reset its $413 million share portfolio to fight climate change.
Australia’s oldest university’s aims to cut the portfolio’s carbon footprint by 20% over the next three years.
The move follows the Australian National University last year which divested about 5.1% of its Australian equity holdings after implementing a Socially Responsible Investment Policy.
Senior figures in the Federal Government said the move against companies employing thousands of Australians was “bizarre”.
A review of current global views on fossil fuel investments by the University of Sydney found reducing an investment portfolio’s carbon footprint is a complex business.
For example, divesting from all companies with an interest in fossil fuels could result in the punishment of those businesses also committed to building renewable energy sources. And many companies which don’t produce fossil fuels are heavy carbon emitters.
The university has decided to ask its listed equity fund managers to build a portfolio of investments which will reduce the carbon footprint by 20% in three years. The university will measure and publicly report progress towards this goal each year.
Sara Watts, the University’s Vice-Principal (Operations), says the strategy balances the university’s obligation to manage funds wisely with its desire to address climate change and protect Australia’s heritage.
“This strategy will give the university a legitimate voice in the conversation on how organisations can best address climate change risks,” she says. “The university’s strategy signals to the entire market that investors are concerned about the impact of climate change and expect contributing sectors to respond with plans to reduce their emissions.”
The University also joined the UN-led Portfolio Decarbonisation Coalition, a coalition of investors who collectively are committed to decarbonising $US100 billion of its investment assets.