Visit the Foundation's Sustainable Investment page to learn more about our Endowment Fund Investment Policy.

The policy strives to strike a balance between the Foundation'svarious priorities. Inspired by best practices in the sector, it is informed by recent research on responsible and sustainable investment. The Policy will be updated at least every three years as knowledge in this area evolves.

The Foundation is firmly committed to helping INRS achieve its institutional objectives in terms of sustainable development. It has developed its Endowment Fund Policy with these objectives in mind, particularly with regard to obtaining STARS certification.

In line with its commitment to responsible and sustainable investing, the Foundation has integrated factors commonly referred to as "ESG" into its investment evaluations, namely the environmental, social, and governance practices of the companies involved. This inclusive approach will make the Foundation’s investments more responsible by giving equal weight to each of these three components and mitigating undesirable or unintended effects on all aspects of sustainable development.

The Foundation is the trustee of endowment funds entrusted to it as part of its mission to support the development of INRS and the research work of its student and scientific community. A significant proportion of this work addresses ESG issues, including climate change, the effects of human activity on biodiversity, the energy transition, and carbon footprint reduction.

The Foundation invests the capital of its endowment funds in long-term markets to generate income that enables it to meet its obligations and charitable objectives in a responsible and sustainable manner. Endowment capital is preserved for the benefit of future generations of students and scientists.

The Foundation aims to ensure capital sustainability and optimize return on investment while assuming an acceptable level of risk, whether economic or environmental, social, or governance (ESG).

The income generated by the endowment funds the Foundation holds provides members of the INRS student and scientific community with the means to achieve their goals: to make the world a better place through research.

The Foundation recognizes the urgency of the climate and the biodiversity crisis, and is determined to contribute to the fight. To this end, it has set itself objectives, that are quite bold considering its small size. It has put in place concrete means of achieving these objectives and is committed to evaluating them on an annual basis.

For example, the Foundation is comitted to not directly hold any shares in companies on the Carbon Underground 200 (CU200) list. The CU200 is an index of the world's 200 largest companies exploiting fossil fuel reserves.

When selecting its other types of investment, insofar as the products available meet the criteria of capital preservation and growth, and all ESG factors are taken into account, the Foundation will give preference to investments that exclude fossil fuels.

The Foundation is also committed to choosing portfolio managers who are signatories to the United Nations Principles for Responsible Investment (UN PRI) and Climate Action 100+, two strict, globally recognized frameworks for decarbonizing portfolios.

The Foundation requires its portfolio managers to measure and reduce the carbon footprint of their investments. The data will be published as part of the Investment Committee’s annual report.

• The Foundation’s Board of Directors and its Investment Committee share responsibility for ensuring that the Foundation’s Endowment Fund Investment Policy is implemented and followed.

  The Foundation’s Board of Directors is made up of thirteen individuals: three represent INRS and ten are leaders from the business and philanthropic communities, reflecting INRS’s research and training sectors.

  The Investment Committee is made up of at least three voting members with significant expertise in institutional investments, as well as non-voting members drawn from the Foundation and INRS’s student, faculty and administrative communities.

More and more investors are using an ESG grid in their decision-making. Incorporating ESG factors encourages companies to adopt more sustainable practices in a number of ways. Firstly, requiring companies to report on their ESG performance encourages them to take these factors into account in their decision-making, and to focus on long-term value creation rather than short-term gains.

Furthermore, investors can use their investment power to encourage companies to adopt more sustainable practices by favoring those with good ESG performance and avoiding those that fail to meet these criteria.

Finally, by integrating ESG factors into their risk assessment, investors can help raise companies’ awareness of the risks associated with climate change and other ESG issues, encouraging them to adopt more sustainable practices in order to mitigate these risks.

Investors have a number of tools at their disposal to assess companies’ compliance with ESG criteria. Some of the most commonly used tools include ESG ratings provided by independent rating agencies, such as MSCI, Sustainalytics and FTSE Russell, as well as sustainability reports published by the companies themselves.

Investors can also use ESG monitoring standards, such as the Task Force on Climate-related Financial Disclosures (TCFD) guidelines, to assess the quality of ESG information provided by companies. The TCFD was established in 2015 by the Financial Stability Board, an international regulatory body. Since then, the TCFD has received growing support from companies, investors, regulators and governments around the world. By 2020, more than 1,500 organizations had already declared their support for the TCFD’s recommendations, including over 500 companies worldwide.

The Foundation will select managers who are signatories to the United Nations Principles for Responsible Investment (UNPRI). The UNPRI are a set of voluntary principles that guide institutional investors to take ESG factors into account in their investment decisions.

To join the PRI, an asset manager must commit to the following six principles:

1. Integrate ESG factors into analysis and investment decisions
2. Be transparent about ESG practices and results
3. Encourage the companies they invest in to adopt ESG practices
4. Require companies to be transparent about ESG practices
5. Collaborate with other investors to improve ESG practices
6. Report on activities and progress in implementing ESG principles

The Foundation’s asset managers are expected to provide annual reports on ESG factors that include figures and benchmarks documenting how the responsible investment policy is being integrated, including the carbon and ecological footprints of portfolios.

Excluding companies from the fossil fuel industry may appear to be an effective solution for tackling greenhouse gas emissions. However, it is imperfect because of the following limitations:

1. Fossil fuel companies are often vertically integrated, which means they are involved in several stages of energy production and distribution, including renewables. Consequently, it may be difficult or undesirable to exclude them altogether
2. Divestment from fossil fuels necessarily implies that the investment will be taken over by an acquirer who does not share our decarbonization objectives and will seek to increase the productivity, profitability, and sustainability of the emissions-producing investment. Thus, the result of divestment may be the very opposite of our intended objectives
3. Divestment from fossil fuel companies can have significant social and economic consequences, particularly for the companies’ workers and their communities
4. Shareholding enables institutional investors (through the voting rights attached to the shares they hold) to influence an issuer’s strategy and encourage commitment to the energy transition, so a voice in favour of reducing emissions is not heard if it withdraws from the industry

Furthermore, simply exclusing fossil fuels might seem inconsistent given the efforts made by members of the INRS community to work with companies on scientific research to support them in innovation for the energy transition, for example.

It is therefore important to find more comprehensive and sustainable solutions to combat the greenhouse gas emissions that cause climate change.

Due to the size of their holdings, many major university foundations in Quebec and elsewhere in the country have access to a wider and more varied range of financial products, enabling them to select or exclude particular issuers of securities according to a variety of criteria.

Although growing rapidly, the young INRS Foundation is not yet at this stage of development. As a result, its investment options are much more limited, and do not put this kind of exclusion within its reach.

Nevertheless, the Foundation will give preference to investments that exclude fossil fuel investments in the cases and to the extent provided for in its responsible investment policy.