The University of Sydney in Australia plans to reduce the carbon footprint of its listed share portfolio over the next three years by 20% relative to the footprint of its current listed equity composite benchmark.
The university conducted a review in helping to determine the best way to reduce carbon emissions in its equities portfolio, including whether to divest entirely from the fossil fuels industry. “It also highlighted the complexities of reducing an investment portfolio’s carbon footprint,” the university said.
“For example, divesting entirely from all companies with an interest in fossil fuels could result in divesting from companies that are also committed to building renewable energy sources. In addition, there are many companies that do not produce fossil fuels who are nonetheless heavy emitters.”
Based on the review’s findings, the university said it believes a whole of portfolio approach to reducing its carbon footprint is an effective and meaningful way to address climate change. It will ask its listed equity fund managers to build a portfolio of investments that enables it to reduce its carbon footprint by 20 percent in three years.