Amount the University of Edinburgh has under management
Amount carved out for social impact investment
Year by which its endowment will be the largest in the UK free of fossil fuel investment
In recent years, managers of university endowments have come under increased scrutiny about how their money is invested. There’s been a significant rise in fossil fuel divestment campaigns, calls to integrate environmental, social and governance (ESG) into endowment investment decision making, and a growing impetus on making investment delivering positive social impact.
University finance directors are faced with the challenge of ensuring their financial assets are invested to meet their current and long-term costs as well as ensuring that they are in alignment with the universities mission and values. They also have to respond to the concerns of stakeholders and students in their investment practices.
The University of Edinburgh has been a pioneer among UK higher education institutions (HEIs) in the strategic allocation of its endowment. It has around £1 billion under management, making it the third largest endowment of its kind in the UK.
The University’s social impact investments are targeting positive financial returns but are considered higher risk compared to traditional investments which have a longer track record. But the University considers this a risk worth taking when it comes to its long-term mission and the prospect of creating a positive impact on society.
Among its peer, the University of Edinburgh is leading the way in bringing its endowment investments in line with its mission and values.
The University has a dedicated £8 million carve out for social impact investment. In recent years, Edinburgh has made commitments to four social impact funds managed by; Big Issue Invest, Social and Sustainable Capital and Social Investment Scotland.
The University’s first step was a commitment of £1 million to Big Issues Invest’s Social Enterprise Investment Fund II, a fund investing in social enterprises and charities tackling issues such as homelessness, financial inclusion and youth unemployment. At the time, it was the largest financial investment made by a UK university.
Since then, the University has gone on to make a £1 million commitment over a five-year period to Social Investment Scotland’s Social Growth Fund, which provides flexible loan and equity finance for social enterprise sand charities and Scotland. And in May 2019, the University committed a further £1 million to Social and Sustainable Capital’s housing fund, providing loans to small and medium size charities that support vulnerable people. The University is also a key funder of the £1 million Big Issue Invest Power Up Scotland programme, supporting social enterprise start-ups across Scotland with loans and mentoring.
The University has also committed £60 million to businesses that directly benefit the environment. By 2021, it will be the largest university endowment in the UK to be free of fossil fuel investment.
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