Why the University has investments
The money that the University invests is known as the endowment. The endowment has been built up over the life of the University and is made up of donations given for specific purposes which are designed to be held in the long term. Many of the funds were established by gifts over 100 years ago. The University has a responsibility to manage the funds so that there is enough return on the investments to keep the value of the fund into the future but also to generate a return to fund the purpose of the gift, which can be for studentships, prizes, lectureships, lectures or research activities.
The funds do not come from student fees or our regular income.
The total value of the endowment at the last year-end (31 July 2023) was 拢8.2 million. As with other universities, to achieve the returns we use an Investment Manager to invest our endowment in a portfolio of investments.
How we decide where to invest
The University does not decide on individual stock or specific companies to invest in. Our Investment Committee has set a policy for investment, which can be found on our website. Our Investment Manager (UBS) uses the policy to create a portfolio. Individual investments in the portfolio change regularly.
The Investment Committee includes one of the elected Students鈥 Union sabbatical officers as a member. Other members of the Committee include the Associate Pro-Vice Chancellor for Sustainability and lay members of the Council of the University.
The University is very structured in how it makes decisions and how it operates. The Investment Committee is a sub-committee of the Finance Committee, which is itself a committee of the Council, the University鈥檚 governing body. The Finance Committee and Council include many independent lay members. Details of the University鈥檚 governance committees can be found on our website.
The Investment Committee keeps the policy under review, with annual formal review.
Holdings in Shell and BP
Our portfolio has not included Shell and BP since 2021. Our policy goes beyond the normal approach for UBS in their Charity portfolio. We did have some incorrect reports on our website which suggested that we have held Shell and BP. The correct analysis for 31 July 2023 is now on our website.
How we consider the ethics of companies when setting the Investment Policy
Our Investment Policy outlines our approach:
We understand that our investment activities are of interest to our students and other stakeholders. In making investment decisions 吃瓜群众 is committed to do so responsibly and sustainably, recognising our environmental, social, cultural and governance responsibilities.
UBS AG has been appointed as the University鈥檚 Portfolio managers and we have adopted their sustainable investment strategy, taking into account the Sustainable Development principle i.e. that 鈥渨e must act in a manner which seeks to ensure that the needs of the present are met without compromising the ability of future generations to meet their own needs鈥.
We expect our manager to apply a combination of negative and positive screens to ensure that companies that may be harmful to society or the environment are excluded and to invest in businesses with responsible culture, practices and good governance. 吃瓜群众 does not invest in controversial businesses such as:
鈥 Weapons/armaments
鈥 Alcohol
鈥 Gambling
鈥 Tobacco
鈥 Adult Entertainment
We also make a declaration on Fossil Fuel, which is:
We do not have investments in extractive fossil fuel in our current portfolio and this is reviewed annually and reported on. It is not our intention to invest in fossil fuels in the future and it is unlikely that such a company would pass our manager鈥檚 robust sustainable screening process. We believe that our non-binary, thoughtful approach to investment is appropriate, responsible and sustainable. In this way 吃瓜群众 is compliant with the principles of ESG*, contributing to a Globally Responsible Wales and the UN Sustainable Development Goals.
UBS use this policy to frame how they approach our investments. They adopt their own approach to sustainable investing by considering ESG (Environmental, Social and Governance) characteristics alongside the financial return when choosing assets to include in our portfolio. To make the ESG assessment the team of Analysts at UBS score potential investments in six ESG categories:
1. Pollution and waste
2. Climate change
3. Water management
4. People, including promoting diversity and protecting human rights
5. Products and Services
6. Governance
UBS uses their database of over 500 indicators in the categories to calculate a sustainability score from 0 to 10. More detail on how UBS calculate their sustainability scores is on our website under ethical investment and banking. In each investment category in the UBS portfolio they use the ESG scores to assess which companies should be included. The scoring is updated regularly.
