Northwestern Sets New Fossil Fuel Investment Guidelines

Northwestern University has adopted new investment guidelines concerning fossil fuels, greenhouse gas emissions and climate change. The new strategies will limit certain investments in fossil fuel industry companies while supporting investments in companies that are committed to cleaner energy technologies, according to a news release.

The university’s board of trustees considered a range of investment policies to ensure the investments of its $14.9 billion endowment are consistent with growing concerns regarding climate change, says the release. The board also considered the potential unintended consequences that could result from policies that target energy supply without addressing demand.

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“These include concerns about the sharply higher costs of energy and electricity, which disproportionately impact people with lower incomes and by extension exacerbate inequality,” J. Landis Martin, chair of the board of trustees, said in a statement. “The board believes its guidelines will help address climate change without causing undue harm to vulnerable populations.”

Under the new guidelines, the board directed Northwestern’s investment office to restrict future direct investments in the energy sector to companies that produce alternative or sustainable transition fuels with lower levels of greenhouse gas emissions. It also instructed the investment office to divest as possible from direct holdings of public or private companies that are deemed to have poor practices regarding greenhouse gas emissions, energy production, or climate-change disclosure and research.

The directive also orders the investment office to seek out and support investments in technologies that accelerate the transition to a carbon-free energy future, promote energy efficiency and reduce atmospheric carbon. It also requires the investment office to adopt a system to compile the endowment’s overall carbon footprint, and for it to actively engage with company management teams and investment managers to reduce its carbon footprint. Additionally, the office must report annually on progress toward reaching net zero emissions status.

The investment office, led by CIO Amy Falls, will initially measure and report on the carbon footprint of the endowment’s top public holdings, and will seek to expand the monitoring as possible over time, according to the release.

“Active investment in new energy technologies and infrastructure to promote a greater supply of fossil fuel alternatives, coupled with the efforts of the administration and university research and programming, paves the way for real change,” Falls said in a statement.

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Tags: Alternative Energy, Amy Falls, chief investment officers, CIO, Climate Change, ESG, Fossil Fuels, Greenhouse Gas Emissions, investment guidelines, J. Landis Martin, Northwestern University

Rising inflation and interest rates are threatening to erode Canadians’ retirement security, particularly for those younger than 35, according to a report released by the Healthcare of Ontario Pension Plan.

The 2022 Canadian Retirement Survey, conducted by market research firm Abacus Data, polled more than 1,700 Canadian adults and found that they are increasingly worried about their financial future. The responses suggest the retirement security for younger Canadian workers is increasingly in jeopardy due to barriers to home ownership and saving capacity, which the survey report says are being worsened by deteriorating economic conditions.

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The survey found that 55% said they were concerned about having enough in retirement, which is a six-percentage-point increase from last year’s survey. And 66% cited the day-to-day cost of living as a major concern, which was up 11 points from last year, while 62% cited “income keeping up with inflation” and 56% said “housing affordability” were weighing heavily on their minds.

“Retirement and savings concerns have been high every year we’ve done the Canadian Retirement Survey, and now they’re being exacerbated by rising interest rates and inflation,” Steven McCormick, senior vice president, plan operations at HOOPP, said in a statement. “Well over half of Canadians expect these factors to cause financial challenges and force them to retire later. At the same time, funding retirement through the sale of a home is becoming a less viable strategy for many individuals. It raises the question of whether Canada’s younger generations are headed for a perfect storm on retirement security.”

Although saving for retirement was cited by respondents as their second-highest priority, the survey found that many of them were having difficulty accomplishing that goal, as 32% said they have not yet saved anything for retirement, while 38% said they have saved nothing for retirement in the past year.

The survey also found that 45% of Canadian homeowners expect to rely on the sale of a home to provide for retirement funds, but the report notes that that is becoming increasingly risky in the current economic environment. In addition to housing affordability concerns, 58% of non-homeowners said they are worried about how rising interest rates will affect their ability to buy a home, and 58% of homeowners are worried about their ability to sell their home as they approach retirement.

“The general outlook for retirement security in Canada is darkening,” David Coletto, CEO of Abacus Data, said in a statement. “Seventy-five percent of all Canadians agree there is an emerging retirement crisis in Canada and 72% feel that saving for retirement is prohibitively expensive — both up seven points over last year. And if current trends continue, it will be tougher for younger generations.”

The Healthcare of Ontario Pension Plan serves more than 420,000 participants among over 620 employers within the province’s hospital and community-based healthcare sector.