The first step in beginning to ensure that Corpus's investment portfolio is properly aligned with its charitable objects was taken in 2019, when the College adopted a sustainable investment policy. We envisage this will be progressively widened and intensified as longer term illiquid investments roll out of our investment strategy. More broadly the College is committed to reducing its carbon footprint and impact on the environment.
Following a search for a bespoke and cost-effective solution for our indexed equity sub-portfolio within the Endowment, Corpus is delighted to announce our partnership with Clare College, Cambridge and Amundi Asset Management to develop a customised low-carbon ESG index fund that is entirely fossil-fuel free.
The Amundi ESG Global Low Carbon Fund is a cost-effective index-tracker, carefully designed to offer an improved sustainability profile to address the financial risk of climate change. It is more ambitious in its goals than most standard index funds and with a low fee of 0.09% offers extraordinary value for the College.
The strategy seeks to replicate the performance of the MSCI All Countries World Index (ACWI) while incorporating a number of ESG-focused objectives. It will remove all fossil fuel reserves, energy sector stocks and thermal coal companies. It will look to improve green revenues by 50% and reduce carbon emission intensity by 30%, while removing the risk of exposure to areas such as controversial weapons and companies deriving >0% of their revenue/power generation from thermal coal, tobacco and adult entertainment. It will offer the opportunity to engage with investee companies.
The Fund is unusual in that it will also monitor value factor exposure to ensure it does not deviate significantly from the benchmark and to reduce the risk of any unintended bias. It was important to the College that divestment did not lead to other unwanted biases within the portfolio.
The Corpus and Clare College investment teams will continue to work with Amundi to evolve the Fund over time in response to the ever-changing ESG investment landscape. This dynamic approach will ensure it continues to be positioned to deliver optimal risk-adjusted returns.