Your Net-Zero Strategy

Getting to net-zero for endowments

clock 5 minute read

Higher-education endowments are sharpening their focus on the risks and opportunities of climate change, which by threatening the well-being of people and communities runs counter to their mission of support for institutions that provide education for millions.

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The stakes for educational institutions

With hundreds of billions of dollars under management and a mission to support purpose-driven institutions, college and university endowments constitute some of the world’s most influential institutional investors. As such, their decisions to consider the risks and opportunities of climate change in their portfolios may play a critical role in combating climate change and help to propel the transition to a more sustainable society.

Several factors are motivating endowments to put their portfolios on a net-zero pathway, according to the Intentional Endowments Network (IEN), a network of higher-education endowments that aim to create a sustainable economy. Endowments are considering such factors at the:

  • Portfolio risk, where consideration of climate change can reduce the risks of stranded assets that could come with the transition to a net-zero economy.
  • Systemic risk, where climate change creates systemic risk that may impact every asset class.
  • Business risk, in which a commitment by endowments to consider climate risks focuses attention on the need for companies to decarbonize and, in some cases, rethink business models.

Several endowments have committed to net-zero emissions in their portfolios. They include Arizona State University, Cambridge University, Harvard University, the University of Michigan, Oxford University, the University of Pennsylvania, Princeton University, Stanford University, the University of Sydney and the University of Waterloo.

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Net-Zero Endowments Initiative. An IEN-sponsored initiative to support endowments in committing to net-zero across their portfolios.

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