Dalhousie University
PA-9: Sustainable Investment

At Dalhousie: • 24 out of 25 funds managers representing 90% of our funds have formal (online) ESG policies and or/ are signatories to the UNPRI • ESG factors are included in the assessments of investment opportunities. Reports on ESG factors are provided to the Dalhousie Investment Committee. Managers use their own rating systems and services such as Sustainalytics. Strategies include selecting companies that are performing well to meet return targets and factors such as ESG. No negative screen is being used (ex. Divestment policy). • The University does not currently have an internal rating system or framework for what constitutes exemplary business sustainability performance thus the following proxy calculation has been created. At Dalhousie all investment decisions should be including ESG factors. o 90% of funds will be included as the base number as 10% of our funds are not being managed by a firm that has from ESG policies. (525.6 million) o The 2018 Ceres - Corporate Progress on the Ceres Roadmap for Sustainability was used to assess exemplary status. Nine of the 10 criteria listed in the report was analyzed. The last criteria of senior level accountability was not included as it was achieved by almost 100% of companies. The performance percentage of companies who made more refined commitments and actions were included. The total created indices resulted in 22% being in the exemplary category (above average/leadership). In educational rating systems A or 80% or higher is considered exemplary (20%). o 20% was applied to 525.6 million to arrive at $105,300,000 value. The renewable energy investment stocks previously reported were taken off this amount for a final total of 101,500,000 Information on investment types and managers is available in the annual investment report: See additional reports: http://www.dal.ca/dept/university_secretariat/board_of_governors/reports.html Community development financial institutions (CDFI) or the equivalent: No CDFI holdings as The University does not benefit from this tax investment strategy Socially responsible mutual funds with positive screens or the equivalent: Do not invest in mutual funds. Green revolving loan funds $0 from the endowment; however, money is invested annually from operations related funding for on-campus sustainability projects. Since 2009, $93 million has been invested in sustainability related projects.

Environmental, Social and governance principles (ESG) are incorporated in the University’s investment policy. Five clauses in the policy highlight specific action around ESG that this committee addresses. They include: “5.7 The Endowment Funds shall be invested in a manner to maximize risk adjusted returns. Dalhousie University believes that over the long term, companies that exhibit responsible corporate behavior with respect to environmental, social and governance (ESG) factors will have a positive impact on long-term financial performance. The assessment of ESG factors along with the assessment of the business, management and financial metrics will enhance the identification of good investment opportunities and to help mitigate risk to the Endowment Funds. 5.8 The Endowment Funds will encourage its external investment managers to develop and enhance their ESG assessment capabilities. The Administration will include ESG assessment progress and capabilities in each investment manager’s annual review. 5.9 The Endowment Funds will include ESG assessment capabilities when evaluating investment managers for new mandates. 13.6 The Investment Committee or Administration will require the Investment Managers to provide a summary of how proxies have been voted. This report shall also disclose any ESG issues that may have arisen and how this ESG issue has impacted positively or negatively the exercise of any proxy vote 15. 2 b. Investments i. Confirm adherence to policy guidelines (compliance report) ii. Provide any comments or suggestions regarding constraints, guidelines, etc. iii. Discuss any changes to investment strategy or process iv. Report on any environmental, social and governance (ESG) risks they have discovered in their portfolio. The report shall also include information on any ESG issues that have been identified and discussed with the management of any of the companies that are in the portfolio or information on ESG issues that are made available through industry publications or events.”

In the Dalhousie University’s investment policy section 5.8 identifies “The Endowment Funds will encourage its external investment managers to develop and enhance their ESG assessment capabilities. The Administration will include ESG assessment progress and capabilities in each investment manager’s annual review.”

The Investment Policy provides direction for investment managers to report on ESG proxy voting. “Section - 13.6 The Investment Committee or Administration will require the Investment Managers to provide a summary of how proxies have been voted. This report shall also disclose any ESG issues that may have arisen and how this ESG issue has impacted positively or negatively the exercise of any proxy vote” Ex. votes related to climate change

Dalhousie encourages external investment managers to include ESG factors in their evaluations. Managers do not utilize negative screening

Dalhousie participates in the Responsible Investing Association and CAUBO sessions on sustainable investment and other conferences as on-going.