Ethical Investment & banking

Ethical investment policy

1a. Does the institution have an active, robust and publicly available Ethical Investment Policy reported on at senior level?

Score 10%

Essential

 The policy should:
1. Apply to the full scope of institution’s investments or be integrated within any other investment policy
2. Be clearly signed off at a senior level
3. Contain evidence that it has been updated/reviewed within the last 5 years

Clarifications

• All three prerequisites must be fulfilled to receive marks on this question. E.g. no points can be awarded if a policy is found that applies to the full scope of the institution’s investments and has senior level sign off, but appears not to have been updated/reviewed within the last 5 years.

• People & Planet will look for the policy on the university website. A statement on the website about the university’s investment approach is not sufficient. If there is no policy, no points will be awarded.

• If no policy is found, the marker will move on to the Ethical Banking question as points cannot be scored on the rest of the Ethical Investment section without an Ethical Investment Policy.

• Senior level sign off needs to be explicit within the policy itself for marks to be gained. ‘Senior level sign off’ includes either sign off by a university committee, or a named individual at the senior level.

• People & Planet expect Ethical Investment Policies to apply to all investments managed by the institution itself and form part of the guidance provided to external fund managers investing on their behalf.

• The investments of external pension scheme managers that the university contributes to are not expected to be included.

• If the university employs a third party fund manager it is still required to have its own Ethical Investment Policy statement. The Ethical Investment Policy of a fund manager will not score points.

• Guidance for universities with no investments: People & Planet will look for an investment policy on the university’s website. Points can only be scored if a policy is found. A signatory to NUS and People & Planet’s Fossil Free Declaration is not sufficient to score points on this question. It is possible for universities with no investments to pass and review ethical investment policies before investing becomes an option. See an example from Wrexham Glyndŵr University here.

 

1b. Specifics within the policy:

Additional scores will be added for each of the following areas included in the policy:

Score 15%

• The university commits to including student representation on its investment committee(s). 5%

• There are clear ongoing opportunities for the wider student body and staff community to engage with the policy. 5%

• There is a commitment to publicly list all investments annually (at minimum, listing what percentage of the fund is invested in different sectors), with a link to or explanation about where that list can be found. 5%
  OR
  If the university does not currently invest, an explanation about where the list would be found in the future is presented. 5%

Clarifications

• Where a university does not have an investment committee, marks will be awarded for student representation on the finance committee(s). The policy should be clear about which committee holds/would hold responsibility for the oversight of investments.

• Student representation on the investment committee must be at the membership level for a policy to score points. As per our criterion for Student and Staff Engagement we do not accept observer only status. Student representation means voting power.

• The investments list might take the form of a financial report and/or investment portfolio provided by the university’s fund manager for the most recent financial year.

• Guidance for publicly listing all investments annually for universities with investments: see an example of best practice on this question from the University of Glasgow* by clicking on ‘Annual Investments’ here.

• Guidance for publicly listing all investments annually for universities with no investments: See an example of best practice on this question from Cardiff Metropolitan University*on page 4 here.

• Guidance for universities with no investments: People & Planet will score policies which detail the above criteria for the scenario of the university making investments in the future.  

NB

• *People & Planet has included exemplary policies following requests made in sector feedback for the 2021 People & Planet University League. These were deemed strong models at the time of writing (February 2023), but this does not exempt them from the 2023/24 assessment period or predict their scores in the 2023/24 People & Planet University League.

 

2. Commitment, in Policy, to Screen out Specific Sectors:

2a Fossil fuel companies

Score 30%

Fossil fuel companies: partial commitment (i.e. coal and tar-sands) 5%

OR

Fossil fuel companies: full commitment to screen out all fossil fuel companies 30%

2b Arms companies

Score 10%

Arms companies partial commitment (i.e. controversial weapons or sales to regimes). 5%

OR

Arms companies: full commitment to screen out all arm companies. 10%

2c Border industry companies 

Score 10%

Border Industry companies: partial commitment to screen all companies involved in border security and control, detention and/or deportation. 5%

OR

Border Industry companies: full commitment to screen out all Border Industry companies. 10%

2d Companies in violation of international law

Score 5%

Commitment to screen out corporations complicit in the violation of international law. 5%

Clarifications

• All screening commitments must be incorporated into an Ethical Investment Policy that meets the requirements of 1a.

• Universities that do not score on question 1a cannot score on any questions on industry exclusions.

• An example of how People & Planet defines the border industry (2c) is the People & Planet Border Industry Divestment List. A partial commitment involves the screening of all companies involved in any of the following activities: border security and control; detention; deportation. A full commitment also includes the screening of companies involved in the following activities: border surveillance; advisory and support.

• Guidance for universities with no investments and those who have never invested in the above sectors: points can still be scored by stating in an Ethical Investment Policy that meets the requirements of 1a, that they do not currently and never will invest in the sectors specified in questions 2a-d.

• Guidance for universities with no investments: Only signing the Fossil Free Declaration is no longer sufficient to score points on question 2a. As with all other divested universities divestment commitments must be enshrined in an Ethical Investment Policy.

Notes

• An example of a full exclusion of arms companies (2b) is the SIPRI arms industry list.

• An example of how People & Planet defines the border industry (2c) is the People & Planet Border Industry Divestment List.
   

3. Impact investment / (re-)investment of divested funds

Score 5%

3 Commitment to invest in low-carbon / renewable energy companies or funds. 2%

OR

3 Commitment to directly invest in community-owned renewable energy and/or renewable energy projects on campus 5%

Clarifications

• The policy must include specific exclusions around fossil fuel investments to be able to score in the impact investment / (re-)investment question. I.e. if there is no divestment related exclusion, then there can be no impact investment / (re-)investment points as the former is a prerequisite for the latter.

• What we mean by a commitment to (re-)investment into low-carbon / renewable energy companies or funds: the prioritisation of (re-)investment into companies or funds that support the transition to a low-carbon world. For example, Energy4All is a green energy co-operative that seeks to support the transition through the creation of renewable energy cooperatives and raises share offers that universities can invest in. Alternatively, following their divestment commitment the University of Edinburgh has prioritised impact investing, from creating local community grants to investing with Big Issue Invest. Further information on their approach can be found on their website, or in this blog where they call the wider Higher Education sector to similar action.

• What we mean by (re-)investment into community-owned renewable energy: the prioritisation of (re-)investment into renewable energy projects that facilitate energy democracy through community ownership. This might be in the university’s local community or in the Global South. For example, organisations such as the Yansa Group who work with “Indigenous, fisherfolk, and peasant communities to facilitate their collective welfare and social advancement,” through the provision of “technology, capital, training and management [...] to develop and maintain community controlled wind farms.”

• What we mean by a commitment to (re-)investment into community-owned renewable energy projects on-campus: the prioritisation of (re-)Investment into on-campus renewable energy projects that facilitate energy democracy through community ownership. For example, projects such as Solar SOAS. Whilst this wasn’t a direct reinvestment of divested funds, the project built from SOAS’ 2015 Fossil Free commitment, and we encourage divested universities to put divested money aside for investment into similar projects.

• Guidance for universities with no investments: People & Planet will look for an impact investment / (re-)investment commitment in the university’s investment policy. Points can only be scored if an impact investment / (re-)investment commitment within the policy is found. Universities can state in policy that any future investments in energy would be in renewable energy/low carbon/community renewable energy/renewable energy projects on campus. This ensures that any future investment approach is guided by institutional policy. This approach is the same for universities that never invested in fossil fuels, but do have investment portfolios. 

 

4. Ethical banking

4a. Does the institution have a robust and publicly available Ethical Banking Policy reported on at the senior level?

Score 5%

Essential

• People & Planet will look for the policy on the university website.

• The policy must apply to the full scope of services provided by banking institutions to the university, including but not limited to loan services, holding cash, deposit facilities, the provision of chip and pin and payment processing services.

• The policy must apply to the presence of banking institution facilities and/or services within university-run and/or university-owned property, including but not limited to bank branches and ATMs.

• The policy must be clearly signed off at a senior level of the university and within the last 5 years. 

Clarifications:

• The policy can be incorporated into the same document as the Ethical Investment Policy. It will need to score on all points in question 1  to be counted as a robust and publicly available Ethical Banking Policy.
   

• ‘Signed off at a senior level’ includes either sign off by a university committee, or a named individual at the senior level. 

4b. Does the policy exclude banks financing fossil fuels?

Score 5%

• The University commits not to have dealings (as outlined in 4a) with any of the top 60 largest fossil fuel funding banks internationally. 3%

• The University commits to have dealings (as outlined in 4a) only with banks that have an active policy to explicitly exclude finance for fossil fuel companies and projects. 5%

Clarifications

• The definition of top 60 largest fossil fuel funding banks internationally that People & Planet accepts is the annual ‘Banking on Climate Chaos’ report.

• A list of the banks currently financing fossil fuels can be found here.

 

5. Transparency and accountability:

Score 5%

The University website collates information in one place about investment practices and procedures in such a way that facilitates greater transparency and access to information for students, staff and the general public.

1% will be awarded for each of the following being easily accessed through a clearly identifiable section of the university website:

5a Ethical Investment Policy. 1%

5b Annual list of investments. 1%

5c List of committee members that oversee investments. 1%

5d Meeting minutes that provide updates on investment policy reviews and divestment/investment status if relevant. 1%

5e Ethical Banking Policy. 1%

Clarifications

• If any of the information requires presence/already exists on another part of the university website, way-finding links to the correct pages should be provided. E.g. “The list of committee members that oversee investments can be found on the governance pages of the university website here (with link embedded).”