VANCOUVER (September 20, 2021) — UBC Investment Management Trust Inc. (UBC IMANT) is pleased to report it has committed, on behalf of The University of British Columbia’s (UBC) endowment fund, $120 million to seed a Paris Aligned reduced carbon global equity fund. This commitment, in combination with the $110 million funding of a sustainable Global Opportunities Strategy announced in March, is part of UBC IMANT’s Responsible Investing Strategy in conjunction with UBC’s commitment to a low carbon, sustainable future. In 2020, UBC announced plans to divest the endowment of fossil fuel investments and a 45% reduction of portfolio carbon emissions within 10 years.
The $120 million commitment to a quantitative equity strategy enhances UBC IMANT’s focus on sustainability and innovation to achieve client goals. Historically, identifying quantitative managers that embed climate change into the investment process has been a challenge due to the limited history of available ESG data. To address this challenge UBC IMANT re-imagined how and when a quantitative investment manager could incorporate a climate change-based market index in the portfolio construction process.
Through this process, UBC IMANT has partnered with Arrowstreet Capital, a leading quantitative investment firm and selected MSCI’s Paris Aligned Index as the benchmark for their portfolio construction and investment process, along with embedding sustainability-based proxy voting requirements into the portfolio. UBC IMANT seeded this investment on June 30, 2021 with assets that represent approximately five percent of UBC’s Endowment. The investment reduces carbon intensity by 70 percent relative to a cap weighted benchmark and establishes an annual carbon reduction glide path needed to achieve the 1.5°C target by 2050.
“This significant investment demonstrates UBC IMANT’s targeted and ongoing approach to addressing the impacts of climate change,” says Yasir Mallick, Senior Portfolio Manager at UBC IMANT. “We are thankful to our investment partner for working with us to incorporate a carbon risk budget aligned with the 2015 Paris Climate agreement in their portfolio construction and optimization process.”
“When we think about our investment process and portfolio construction at UBC IMANT, it does not start with identifying the limitations we see in the market, it begins with our clients’ goals.” adds Dawn Jia, UBC IMANT’s President and CEO. “We seek out partners – both our peers and investment managers – that share this mindset and are willing to be innovative in tackling complex problems.”
About UBC IMANT
Formed in 2003, UBC Investment Management Trust Inc. manages over $5 billion of investment assets on behalf of The University of British Columbia and related entities, including UBC’s endowment fund, Staff Pension Plan, Working Capital and other investment portfolios associated with UBC. UBC IMANT’s team of investment professionals is complemented by an independent Board of Directors.