Climate change is a global systemic risk (pdf), one that UC Investments incorporates into our investment decisions.
UC Investments’ climate change strategy is to: manage climate related risks to our investment portfolio; invest in transformational climate solutions; engage with portfolio companies to address climate related risks; and refine our strategy over time, based on evolving data. This strategy applies broadly to all our assets under management, including the UC Retirement Savings Plan..
In 2016, UC Investments signed on to the Financial Stability Board’s Task Force on Climate-Related Financial Disclosure (TCFD), in recognition of the fact that robust and consistent corporate and asset owner disclosure of climate-related financial risks and opportunities could help us make more informed investment decisions. Our 2021 and 2022 TCFD reports holistically integrate UC Investments’ climate related strategies, metrics and targets, including the carbon footprint of our investment portfolio, the results of our shareholder engagement efforts to reduce climate risk in our portfolio and highlights of our venture capital investments in climate solutions.
We manage the stranded asset risks associated with thermal coal, oil and gas by not investing in companies that own any amount of fossil fuel reserves (unless such companies are held in commingled accounts). publicly traded companies that own “proved and probable” reserves of thermal coal, oil and gas because we believe that they posed a long term risk to generating strong returns. UC Investments screens out companies that own any amount of reserves of thermal coal, oil and gas because we believe that they pose a long term risk to generating strong returns. We implement our approach by following the MSCI ACWI IMI ex Tobacco ex Fossil Fuel Index which is based on MSCI’s ex fossil fuels exclusions methodology (pdf).
We collaborate with other investors, including the Climate Action 100+, to engage our investee companies on quantifying – and developing strategies to manage - their climate risks. As described in our TCFD reports, we engage in in-depth constructive dialogue regarding the business risks of climate change with executives from hundreds of the companies in which we invest.
We also invest in new private markets opportunities– through venture capital, growth equity, infrastructure or related fund vehicles - that advance climate solutions. Since 2015, UC Investments has committed over $1 billion to sustainable investments, including renewable energy projects in the US, Canada, India, Japan and Ireland, totaling over 2.7 gigawatts of new solar, wind and geothermal electricity and battery storage (as of 2022).