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Investment

Making sustainability a key part of our investment decisions

We will increasingly focus on the investment incentives open to the School to ensure the transition to a low carbon economy, making environmental sustainability one of the top aims of our ESG policy.

Theme lead

Mike Ferguson, Chief Financial Officer

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Since 2015, LSE has adopted a Environmental, Social and Governance Policy (prevously called Socially Responsible Investment policy until November 2022) which applies to the £200m of endowment funds originating from grants or donations and the long-term investment of retained surpluses (School endowments). The endowments are invested across circa 15 managers. The School is committed to working to improve the Environmental Social and Governance (ESG) behaviours of its fund managers. Read more about our approach to responsible investment.

Make an impact

We will incentivise changes in corporate behaviour by selecting fund managers who actively engage with the companies they invest in, encouraging transitions to low carbon business models.

 

Communicate our approach

We will actively communicate our approach in an open and transparent manner.

 

Cooperate with others

We will leverage and extend our external partnerships, using our influence to advocate for positive change.

 

Examples of supporting initiatives:

  • Increase the emphasis of our ESG policy towards managers who embed climate change in their company selection using for example, the LSE’s Grantham Research Institute led Transition Pathway Initiative (TPI) due diligence process or other comparable research.
  • Strengthen our negative screening filters to limit our exposure to the most polluting fossil fuels alongside the production of tobacco and indiscriminate weapons.
  • Consider switching to newly formed index tracking indices employing TPI diligence disciplines (e.g. Russell FTSE TPI Transition Index).
  • Make further materials available on our website which explain our approach to responsible investment.
  • Make our fund managers’ responsible investment evaluation process more public, strengthening its impact.
  • Work with student representatives on the LSE’s Investment sub-committee to create materials that illustrate most effectively our School’s responsible investment policies.
  • Form a closer relationship with the Grantham Research Institute for LSE to support the implementation of the Transition Pathway Initiative (TPI) disciplines and ratings across the investment sector.
  • Share our responsible investment practices with other universities.
  • Support through our annual disclosures the UN Principles for Responsible Investment (UNPRI). 

     

  • In 2022, LSE launched its Sustainable Finance Framework (SFF), to raise private finance to fund environmentally and socially sustainable projects at LSE. S&P Global Ratings provided a Second Party Opinion confirming the framework’s alignment to international Green and Social Bond Principles. 

  • The School has undergone an assurance review of its impact and allocation report to July 2023 for private placement funds issued under the SFF. The impact and allocation report to July 2023 is linked here and the DNV's assurance statement on the report can be found here. 

 

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