Investment managers are monitored quarterly by the Investment Pool Committee in accordance with the Statement of Investment Policies and Procedures (“SIPP”) approved annually by the Board of Governors.

The Investment Pool uses both pooled and segregated Investment Manager mandates/products. Pooled fund investment products, with larger asset bases, often provide access to investments that would not be accessible directly using a segregated account and/or have lower costs because of their scale. While pooled investment products provide greater access to investment opportunities, McMaster does not have the ability to change the investment strategy since it is only one of many investors in the fund. All Investment Managers, including pooled fund managers, are hired for alignment with McMaster’s SIPP. The investment managers will use their ESG process, which is reviewed and accepted by the Investment Pool Committee, in the assessment of companies to determine which ones are added, maintained, or removed from their portfolio.

If investments/industry sectors are removed from a strategy the performance benchmark used to evaluate the investment manager may need to be changed at the same time.

The current investment managers and products used are listed below with links to the company’s website for further information.

The weighted average carbon intensity measures the Investment Pool’s exposure to potential carbon-intensive companies, expressed in tons of greenhouse gas converted to carbon dioxide emissions using the greenhouse gas protocol per million sales, written as tCO2e/$Sales. This metric is recommended by TCFD after global consultations involving over 1,100 organizations.

The weighted average carbon intensity for public equity is 54.3/tCO2e/$Sales based on 95% data availability. The Investment Pool’s public equity WACI is 40.7% lower than the WACI measure for the ACWI ex-Fossil Fuel Benchmark.

The weighted average carbon intensity (“WACI”) for the Investment Pool as at April 30, 2024 is 62.6 tCO2e/$MSales based on 78.5% data availability, as measured by MSCI. The Investment Pool’s WACI is 38.6% lower than the WACI measure for the All-Country World Index (ACWI) ex-Fossil Fuel Benchmark.

Where data is not available, Scope 1 and 2 carbon emissions are estimated using MSCI’s proprietary carbon estimation model.

The Investment Pool includes holdings in companies that offer clean technology solutions. MSCI measures the weight of these companies that offer clean technology solutions based on sales across the following categories: alternative energy, energy efficiency, green building, pollution prevention, and sustainable water. The Investment Pool weight of companies offering clean technology solutions is 25.5%, and across public equity holdings the weight is 32.4%.

The Investment Pool initiated a decarbonization strategy in 2018 aligned with the United Nations Principles for Responsible Investing. The Investment Pool tracks the weight of publicly traded holdings owning fossil fuel reserves and specific high impact fossil fuels such as coal, oil sands, shale oil and shale gas that are more exposed to stranded asset risk. Coal is by far the most intensive fuel emitting twice the emissions per kilowatt hour than natural gas. Stranded asset risk has focused on thermal coal, which is mainly used in power generation. While both thermal and metallurgical coal have a high carbon content, metallurgical, or coking coal is used in steel making and has few substitutes, so many investment managers believe thermal coal is more vulnerable to stranding whereas there will still be a future need for metallurgical coal since substitutes such as natural resources are insufficient in supply and durability.