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Inside UVic's decarbonization plans and their latest investment in Raven Indigenous Capital Partners – The Martlet

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Divest UVic says the university needs to do more to show a real commitment to reconciliation

File photo by Belle White.

In January 2020, the UVic Board of Governors passed a new investment strategy, called the Responsible Investment Policy, while protesters from Divest UVic voiced their disappointment. 

Now, a year after the policy was implemented, UVic has announced a $500 000 investment in Raven Indigenous Capital Partners’ Indigenous Impact Fund. Through investments in companies like the Raven Fund, UVic aims to reduce the carbon intensity of their working capital investment portfolio by 45 per cent by 2030. 

Divest UVic remains concerned, however, that the Responsible Investment Policy falls short of divestment from fossil fuels. The policy placed a focus on carbon intensity and thematic investments. Carbon intensity is a measurement of the estimated total emissions of UVic’s investment holdings across all sectors. Emily Lowan, the director of campaigns for the UVSS, says it’s a flawed metric. 

Diving into UVic’s working capital investments, the responsible investment policy, and the UVic Foundation reveals the complicated path UVic is taking to attempt to decarbonize. Meanwhile, Divest UVic maintains that a negative screening approach is necessary.

UVic invests in the Raven Fund

The Raven Fund was founded in 2019. It operates with Indigenous worldviews in mind, and in collaboration with Indigenous communities through storytelling and ceremony. 

The company hopes to pool investment support for Indigenous entrepreneurs — providing them with financial backing to start their small ventures. The fund has a focus on Indigenous social enterprises and aims for returns of six to eight per cent. Some of these businesses include Animikii Indigenous Technology, PLATO Testing, Cheekbone Beauty, VirtualGurus, and OneFeather. 

“This investment enables UVic to support Indigenous-led social enterprise and promote the development of financial tools that address critical social, financing, and policy barriers,” said UVic Treasurer Andrew Coward.

Before UVic’s decision to invest, MBA students in UVic’s Gustavson School of Business sustainable innovation program were tasked with studying the fund. UVic joins 32 other foundations, institutions, companies, and high net-worth individuals in investing in the Raven Fund. 

“It is an honour for the Raven Fund to be UVic’s first impact investment under its new responsible investment policy,” said Managing Partner Paul Lacerte, one of Raven’s three founders. “By pairing this investment with a robust case study and ongoing student engagement, we are role modelling the way that reciprocity can show up as a key feature of real economic reconciliation.”

Although Lowan says the Raven Fund is a great investment, she is cautious about praising the Responsible Investment Policy as a whole. 

“While this $500 000 investment is a good start, it doesn’t wash the university’s hands clean,” Lowan said. 

Inside the Responsible Investment Policy

There are two main investment pools relevant to UVic: the UVic Foundation’s endowment funds and the university’s working capital investments. The Responsible Investment Policy only applies to the working capital investments and the $225 million therein. The UVic Foundation manages over twice as much money ($470 million) and invests money donated to the university through endowed donations. 

The money invested in the Raven Fund comes from UVic’s working capital investments, and is therefore governed by the Responsible Investment Policy. The policy sets two substantial goals for the working capital investments pool: reduce the carbon intensity of the pool by 45 per cent by 2030 and invest at least 25 per cent of the portfolio in “thematic investments,” like the Raven Fund. Thematic investments are investments that “generate positive, measurable social and environmental impact alongside a financial return.”

Coward explained that the Board of Governors’s decarbonization working group has decided to measure the carbon intensity of their investments based on specific categories of emissions. These categories are scope one, two, and three emissions. 

The university is assessing carbon intensity by looking at only scope one and two carbon emissions. Coward explained that scope one and two emissions represent “direct emissions from owned or controlled sources” and “indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company.” 

Take a hypothetical car company that the university might invest in. The emissions the company releases during production count as scope one and the energy the company’s buildings use would be scope two. The energy used at later stages, like by all the cars the company sells to consumers, would not be included. 

Coward says that the data on scope three emissions, all other emissions not included in scope one or two, is not available yet. However, Coward says UVic is looking to expand their analysis if this information becomes available.

When it comes to fossil fuel companies, this means that UVic is considering emissions at the production stage, but is unable to incorporate emissions data from farther down the line. Lowan says this means the carbon intensity of a coal plant would actually measure better than a solar plant. 

divest uvic
Divest UVic organizers at a protest on-campus this fall. Photo by Colin Smith.

Under the policy, Lowan says UVic’s carbon intensity measures are “fundamentally misleading.”  

Lowan is campaigning for the university to divest from fossil fuel companies entirely. In the working capital investment pool, UVic has invested over $400 000 of the fund in TC Energy, the company that owns the Coastal GasLink pipeline. Wet’suwet’en hereditary chiefs oppose the pipeline, which goes through their lands. UVic is also invested in other fossil fuel companies including Enbridge, Pembina Pipeline Corporation, Union Gas, and Baltic Gas. 

The UVic Foundation

The UVic Foundation controls a much larger pool of $470 million in assets across 1 300 endowment funds. The Foundation supports various scholarships, bursaries, and research centres. In this academic year, $15.8 million will go towards these projects.  

UVic Foundation donors can choose to invest in the Fossil Fuel Free Investment Pool or the Main Investment Pool. Since 2017, this investment option has allowed donors to opt in to a higher-risk fund that “will not directly invest in investment instruments which are issued by companies that have proven and probable thermal coal, oil or natural gas reserves.” 

In the Main Investment Fund, the foundation holds various assets in the fossil fuel industry. 

The latest public financial statements, from March 2020, indicate unrealized losses from fossil fuel investments. For instance, the foundation lost $3 216 295 from investments in Husky and $1 252 490 on an investment in the mining company Teck Resources. Another significant loss was $2 164 518 from their investments in the energy company Shawcor. Though these investments have decreased in value, UVic’s losses are technically “unrealized,” as the university has not sold these shares.

However, the total reported unrealized gains and losses for all holdings equated to the foundation coming out on top, with its portfolio increasing in value by $8 074 653.

The foundation completes asset allocation studies to help inform their investment decisions. Since the last asset allocation mix study in 2017, the amount the UVic Foundation invests in the energy sector has decreased from eight per cent to two per cent in 2020. Coward says the decision was mostly financial, as the foundation’s investment managers attempted to mitigate risks. 

In their summary of investment beliefs, the foundation recognizes the threat climate change poses. Through investments, the foundation states that their processes will encourage companies to disclose “operational practices that reduce carbon emissions.” Additionally, they will invest in “impactful opportunities that reduce greenhouse gas emissions and capitalize on the transition to a low carbon economy.”

According to a 2020 Principle for Responsible Investment report, the foundation has committed to invest 10 per cent in thematic-impact investments. However, the report also indicates the UVic Foundation has not “targeted low carbon or climate resilient investments,” “reduced portfolio exposure to emissions intensive or fossil fuel holdings,” or “used emissions data or analysis to inform investment decision making.” 

The report asked for the foundation to disclose how much they invest in environmental- and social-themed areas. The foundation indicated it invests 0.1 per cent of its holdings in these areas, which can be attributed to a $45 million loan to UVic’s sustainable student housing project. Coward says there are other sustainable investments unaccounted for in this report, including sustainable investments made through investment pools like MacQuarie or PH&G.

Divest UVic advocates for negative screening

Divest organizer Juliet Watts at a protest in January 2020. Photo by Joshua Ngenda.

Divest UVic has been pushing the Board of Governors and the UVic Foundation to phase out their investments in fossil fuel companies. Lowan says the current model doesn’t align with UVic’s overarching values of sustainability and Indigenous reconciliation. 

“If UVic wants to claim a commitment to reconciliation, it needs to align all of its investments with its values,” Lowan said. “[Fossil fuel companies’] bottom line is fundamentally dependent on exploration and drilling.”

Lowan adds that there’s also room for nuance in a negative screening approach. She says UVic could support some companies that are investing in renewable energy more or have diversified holdings. UVic already uses positive and negative screening with the working capital investment fund, as part of their efforts to reduce the carbon intensity. The UVic Foundation does not negative screen.

The carbon intensity measurements are more appropriate for other sectors, Lowan says, but when it comes to fossil fuels they aren’t able to account for all of the emissions. Instead of the carbon intensity measurements, Lowan is advocating for a negative screening process, which would require UVic to screen investments for ties to the fossil fuel industry and not invest in those companies.

In the coming months, Divest UVic is planning to continue advocating for full divestment from fossil fuels at both the endowment and working capital investment levels.

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Rothschild Investment Adds to Grayscale Bitcoin Holdings – Yahoo Finance

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TipRanks

2 Biotech Stocks Wells Fargo Says Are Ready to Bounce

The biotech sector has started the year with a bang. The industry benchmark, iShares NASDAQ Biotechnology ETF (IBB), is up ~11% so far in January — far better than the S&P 500’s 3% return. Covering the sector for Wells Fargo, 5-star analyst Jim Birchenough is upbeat about what he sees. “Overall, we see roughly 20% to 30% additional upside for the sector by historical metrics and would argue that accelerating pace of innovation and greater pipeline de-risking should ultimately support higher returns on investment,” Birchenough noted. An environment like that will be manna from heaven for any investor interested in pharmaceutical stocks; an improved political climate will just add some icing to this cake. “While a split House and Senate supporting continued legislative inertia would have been best received, in terms of maintaining a positive status quo for biotechnology growth, we believe that value proposition for emerging biotechnology therapeutics should win-out under any administration and House/Senate mix,” Birchenough added. With this in mind, we wanted to check out some of Wells Fargo’s recent picks in the biotech space to see if the investment firm could steer us towards any game-changers. After running the tickers through TipRanks’ database, we found out that two recently scored Buy ratings from the rest of the Street, enough to earn a “Strong Buy” consensus rating. Karuna Therapeutics (KRTX) We will start with Karuna Therapeutics, a specialty pharma company whose focus is mental health. Specifically, Karuna works on the development of new drugs for the treatment of schizophrenia and dementia-related psychoses (DRP). With a potential patient base exceeding 2.7 million people, this is a large market. And the state of current treatment options is widely considered less than satisfactory. Medication side effects are severe, while therapeutic effects are less than desired. This leaves an opening for a company that can put a new, more effective, treatment on the market. Karuna is currently enrolling the pivotal Phase 3 EMERGENT-2 Study of its leading drug candidate, KarXT, for the treatment of acute psychosis in adults with schizophrenia. KarXT has showed a differentiated safety profile and efficacy in Phase 2 data. Furthermore, Phase 1b data in healthy elderly volunteers for DRP remain on track for 2Q21. This solid pipeline, with a new drug in multiple studies to treat several aspects of a serious disorder, has piqued Wells Fargo’s interest. Covering KRTX for the firm, analyst Jacob Hughes writes, “Karuna Therapeutics is our top idea in 2021. While KRTX shares have had an impressive run… we see a very attractive setup for the stock over the next couple years and several important catalysts in 2021 to drive the shares higher… We think the pipeline has been de-risked and we like the risk/reward at these levels as the value of KarXT is proved out.” To this end, Hughes rates the stock an Overweight (i.e. Buy), and his $163 price target implies an upside of ~59% for the coming year. (To watch Hughes’ track record, click here) It’s not often that the analysts all agree on a stock, so when it does happen, take note. KRTX’s Strong Buy consensus rating is based on a unanimous 6 Buys. The stock’s $138.80 average price target suggests a 35% upside from the current share price of $102.80. (See KRTX stock analysis on TipRanks) Zymeworks, Inc. (ZYME) Vancouver-based Zymeworks is a clinical stage biotech involved in researching new drugs for the treatment of cancer, autoimmune disorders, and inflammatory diseases. The company focuses on biotherapeutics, drugs precisely engineered for their target diseases. The company’s lead candidate, zanidatamab, has indications for biliary tract cancer, breast cancer, and gastroesophageal adenocarcinoma. The drug is in Phase 1/2 testing for these cancers. Zymeworks’ second clinical candidate, ZW49, like zanidatamab, is an HER2 bispecific antibody in early stage study as a solid tumor treatment. Initial data will be presented at an investor event on January 27. Based on Zymeworks’ recent study results, Wells Fargo’s Jim Birchenough writes, “[We] expect zanidatamab to differentiate from current HER2 standards by virtue of depth of response in both refractory and frontline patients and to attract a prominent partner to pursue neoadjuvant and adjuvant breast cancer studies, and for ZW49 go-forward dose to demonstrate consistent responses to support further development, with upside potential from additional dose escalation.” In line with his bullish stance, Birchenough rates ZYME an Overweight (i.e. Buy) and his price target, at $71, implies a ~47% growth ahead. (To watch Birchenough’s track record, click here) Turning now to the rest of the Street, it appears that other analysts are generally on the same page. With 4 Buys and 1 Hold assigned in the last three months, the consensus rating comes in as a Strong Buy. In addition, the $60.82 average price target implies ~26% upside from current levels. (See ZYME stock analysis on TipRanks) To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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EU sustainable investment rules need better corporate data: banking report – TheChronicleHerald.ca

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By Simon Jessop and Kate Abnett

LONDON (Reuters) – European Union rules aimed at defining sustainable investments should help reduce “greenwashing” by businesses, but better quality corporate data is needed to ensure they work effectively, a banking report said on Tuesday.

The sustainable finance rules will classify investments that can be marketed as sustainable, a move aimed at steering much-needed cash into low-carbon projects to deliver the bloc’s climate goals.

From January to August 2020, 26 of the region’s biggest lenders tested the EU framework across a range of core banking processes, including retail banking, trade finance and lending to smaller companies.

As the main providers of finance to companies across the EU, the ability of the banking system to track and report on whether corporate activities are sustainable or not could prove crucial in assessing the rules’ success or otherwise.

The lenders broadly welcomed the regulations as they seek to align their businesses with the transition to a low-carbon economy, the report by the United Nations Environment Programme Finance Initiative and the European Banking Federation found.

However, they also raised a number of issues, many of which were data-related and could require a phasing in of reporting requirements.

While many large companies are already required to disclose certain environmental and social information by law, the bulk of smaller and mid-sized banking clients are not, hampering banks’ assessment of their alignment with the rules.

Concerns over the quality, detail and standardisation of data is also an issue when looking at banks’ lending overseas, something that would be made more complex as other regions launch their own regulations.

The banks who tested the EU rules called on regulators to seek global alignment of regulations, and for better tools to manage data from clients, such as a centralised EU database.

While under no compulsion to lend to activities that can be classed as sustainable, banks see sustainable finance as a growth area that is likely to take on more importance in coming years should policymakers tighten environmental legislation.

With more investors globally looking to become shareholders of companies with a good record on managing environmental risk, banks are also likely to look to reduce their exposure to environmentally or socially harmful activities over time.

The European Commission is expected to finish the section of the rules covering climate change in the coming months, before they take effect in 2022.

(Reporting by Simon Jessop and Kate Abnett; Editing by Pravin Char)

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EU sustainable investment rules need better corporate data: banking report – The Journal Pioneer

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By Simon Jessop and Kate Abnett

LONDON (Reuters) – European Union rules aimed at defining sustainable investments should help reduce “greenwashing” by businesses, but better quality corporate data is needed to ensure they work effectively, a banking report said on Tuesday.

The sustainable finance rules will classify investments that can be marketed as sustainable, a move aimed at steering much-needed cash into low-carbon projects to deliver the bloc’s climate goals.

From January to August 2020, 26 of the region’s biggest lenders tested the EU framework across a range of core banking processes, including retail banking, trade finance and lending to smaller companies.

As the main providers of finance to companies across the EU, the ability of the banking system to track and report on whether corporate activities are sustainable or not could prove crucial in assessing the rules’ success or otherwise.

The lenders broadly welcomed the regulations as they seek to align their businesses with the transition to a low-carbon economy, the report by the United Nations Environment Programme Finance Initiative and the European Banking Federation found.

However, they also raised a number of issues, many of which were data-related and could require a phasing in of reporting requirements.

While many large companies are already required to disclose certain environmental and social information by law, the bulk of smaller and mid-sized banking clients are not, hampering banks’ assessment of their alignment with the rules.

Concerns over the quality, detail and standardisation of data is also an issue when looking at banks’ lending overseas, something that would be made more complex as other regions launch their own regulations.

The banks who tested the EU rules called on regulators to seek global alignment of regulations, and for better tools to manage data from clients, such as a centralised EU database.

While under no compulsion to lend to activities that can be classed as sustainable, banks see sustainable finance as a growth area that is likely to take on more importance in coming years should policymakers tighten environmental legislation.

With more investors globally looking to become shareholders of companies with a good record on managing environmental risk, banks are also likely to look to reduce their exposure to environmentally or socially harmful activities over time.

The European Commission is expected to finish the section of the rules covering climate change in the coming months, before they take effect in 2022.

(Reporting by Simon Jessop and Kate Abnett; Editing by Pravin Char)

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