University of California, Santa Barbara
PA-10: Investment Disclosure

https://www.universityofcalifornia.edu/press-room/university-california-joins-un-supported-principles-responsible-investment The University of California today (Sept. 22, 2014) announced that it has become a signatory of the United Nations-supported Principles for Responsible Investment, the first American public university to join the leading international network of institutional investors committed to including environmental, social and governance factors in their investment decision making. By adding its name to the other 1,270 signatories who have agreed to put into practice six principles for responsible investing, UC has formally endorsed an investment framework that aligns with President Janet Napolitano’s systemwide sustainability initiative. The signatories of the PRI, as the network is known, collectively have some $45 trillion in assets under management. “By publicly agreeing to adhere to the Principles for Responsible Investment, the University of California is demonstrating its commitment to invest in solutions to global challenges today, tomorrow, and years down the road,” Napolitano said. “This kind of collaboration among large investors will help support sustainability and environmental responsibility worldwide.” The PRI was formed in 2005 when then-UN Secretary General Kofi Annan asked a group of the world’s largest institutional investors to help draft the Principles for Responsible Investment. The 20 people in the investor group — drawn from institutions in 12 countries — were supported by an additional 70 investment, governmental, social and environmental experts and the PRI was launched in April 2006 at the New York Stock Exchange. “We are pleased to see the University of California join the Principles for Responsible Investment,” said Fiona Reynolds, the managing director of the network. “It takes a forward thinking organization to acknowledge the risks posed by the management of environmental, social and governance (ESG) issues, and I applaud the commitment of organizations that actively face these risks.” The Principles for Responsible Investments, voluntary and aspirational, aim to further understanding of the implications of sustainable investing and support signatories to incorporate ESG issues into their decision making and ownership practices. “Long-term investors face many systemic issues that are difficult to quantify let alone measure,” said Jagdeep Singh Bachher, UC’s chief investment officer. “To maximize the long-term return per unit of risk, we need to consider such systemic issues as climate change that will undeniably affect investment portfolios in the future. Adhering to the PRI is just one way that we are positioning our portfolios for the long-term.” The six key principles are: We will incorporate ESG issues into investment analysis and decision-making processes. We will be active owners and incorporate ESG issues into our ownership policies and practices. We will seek appropriate disclosure on ESG issues by the entities in which we invest. We will promote acceptance and implementation of the principles within the investment industry. We will work together to enhance our effectiveness in implementing the principles. We will each report on our activities and progress towards implementing the principles. ----------------- https://www.universityofcalifornia.edu/press-room/uc-combat-climate-change The University of California today (Sept. 10, 2014) announced a series of measures to make UC a national leader in sustainability, efforts that range from proposals to actively use its $91 billion portfolio to invest in climate solutions to a major agreement to boost solar energy use. Among the findings of the president’s Task Force on Sustainable Investing, scheduled for discussion at the UC Board of Regents’ Committee on Investments meeting Sept. 12, are recommendations to: Allocate $1 billion over five years for direct investments in solutions to climate change. Adhere to the United Nations-supported Principles for Responsible Investment (PRI), the largest university and the first public American university to do so. Establish and implement a framework for sustainable investment with the goal of completion by the end of the current fiscal year. Integrate environmental, social and governance (ESG) factors as a core component of portfolio optimization and risk management. Evaluate all strategies for achieving ESG goals as soon as practical, including whether to use divestment. In addition, as part of President Janet Napolitano’s goal of bringing university operations to carbon neutrality by 2025, the university has signed agreements to secure substantial solar energy for the university for the next 25 years. The agreements with Frontier Renewables, a company that develops photo-voltaic solar power projects, include the use of two solar fields to be constructed in Fresno County. The project will enable the university to put 206,000 megawatt-hours per year of solar energy back into California’s electrical grid — enough to power 30,000 homes and avoid more than 88,000 metric tons of carbon annually. “Today’s announcements show the very real commitment of the University of California to invest our human and financial assets in finding solutions to global climate change,” Napolitano said. "From our research scientists, to our students, to our investment professionals, we are tackling these problems with vigor and determination.” Earlier this year, Napolitano established the President’s Global Climate Leadership Council, which brings together external and internal stakeholders, including students, faculty, and staff, and experts on sustainability research and practices. The group convened for the first time in June to guide UC sustainability efforts and meet the 2025 carbon neutrality goal, in part by reexamining the energy sources powering the university’s 10 campuses and five medical centers. The university became an energy service provider (ESP) in 2014, which allows it to procure energy on the wholesale market and supply electricity to some of its campuses and medical centers, potentially as early as next year. The ESP registration will allow UC to use more renewable energy resources and will create more energy price transparency for the campuses, ensuring a steady supply of cost-effective, climate-neutral electricity. In June, the 11-member Task Force on Sustainable Investing began meeting to consider issues related to the university’s investments in fossil fuels. The task force, headed by Chief Investment Officer Jagdeep Singh Bachher, included three UC regents, faculty and student representatives, and experts in finance and sustainability from within and outside the university. While the task force unanimously agreed that climate change is a serious issue that must be addressed, the majority of members were opposed to advocating that UC immediately divest its fossil fuel holdings, which account for about $10 billion in assets. The majority believed that addressing and accounting for this issue in a holistic way would produce the best possible returns in the long-term and align the university’s investment practices with its demonstrated commitment to sustainability. “We believe we now have an effective plan of action to both protect and bolster the long-term returns for the university and to make a significant contribution to climate change solutions,” said Bachher. “We could have made a narrow divestment decision, but the university is not in the business of taking the easy route. This is a more difficult path but one we feel will be more effective over time.” The task force held four meetings as a group and had an ongoing dialogue that involved the sharing of information and data throughout the process, which members estimated covered hundreds of hours over four months. The task force was supported by an internal working group that measured the university’s exposures, engaged third-party consultants to back test performance, estimated transaction costs, reviewed literature and spoke with leaders in the field. After the task force recommendations are discussed at the Committee on Investments meeting, they will be scheduled for a vote by the full UC Board of Regents on Sept. 18.