Last updated: December 11, 2012 9:20 pm
UVic student organization pushes for socially responsible investing
VICTORIA (CUP) — Pension funds of big public institutions such as universities manage billions of dollars of investments. Common Energy, a student organization at the University of Victoria (UVic), has started to push the university to make more sustainable investments.
Last year, Common Energy tried to work with the departments responsible for investing at UVic including the University of Victoria Foundation board, which is in charge of the endowment fund and UVic’s pension office, which manages the pension fund.
“We actually sent out a letter — it would have been in January last [school] year, something like that — to both the head of the Foundation board and the head of the pension office. And we got no response from the pension office, but we did get a response from the Foundation board,” said Matt Hammer of Common Energy.
He said that the group had already been working with the Foundation board, so they decided to focus on that department and come back to the pension office at a later time.
The UVic Foundation board passed a resolution this summer, which was a positive step in the direction of making socially responsible investments.
“As long-term investors, the Foundation Board believes responsible investing, taking environmental, social and governance (ESG) factors into consideration, can have a positive effect on long-term financial performance and investment returns. We delegate this responsibility to our investment managers and request proxy voting reports quarterly and annual disclosure by investment managers regarding the processes by which ESG factors are incorporated into the investment decision making process,” wrote Lisa Hill, chair of the UVic Foundation, in a statement to The Martlet.
UVic’s endowment totals around $270 million currently, and the market value of its pension fund investments totalled around $678 million at the end of last year.
According to Common Energy, both the endowment and pension funds invested in corporations that engage in controversial practices, such as human rights abuses and fossil fuel development.
“In assessing the risk/reward potential of any investment, the pension fund’s external investment managers will consider many factors. These include whether there are social, environmental, or governance risks that may impair the future value of the investment, since these risks inevitably affect a company’s prospects,” wrote Susan Service, the director of pensions and investments at UVic in a statement to The Martlet.
“Also, in common with most pension plans, the trustees review proxy votes to monitor good governance and [social] policies. This type of approach is widely used by the major Canadian pension plans and is detailed on their websites. It is important to note that under pension and trust law, pension trustees must ensure that the pension trust funds are invested in the best financial interests of members and other plan beneficiaries.”
Common Energy wants more engagement between UVic’s academic and social mission and the management of the university’s funds. To achieve that, Common Energy is asking for the adoption of principles of responsible investing and the formation of institutional structures that allow the university to thoughtfully exercise these principles.
“We’re not really at this point pushing the university towards divestment,” said Kelsey Mech, director of Common Energy. She said that if UVic were to simply move its investments to more socially responsible companies, other investors would buy up their old stocks, which doesn’t really make a long-term impact.
Instead, Common Energy focuses more on shareholder engagement both at UVic and beyond.
In September, the student organization launched a survey on how faculty and staff feel about socially responsible investment of the pension fund, which is in its early stages. They are hoping to get some feedback for their project.
“Some people are worried. It’s their pensions; it’s their money,” said Hammer. “So there are definitely those opinions out there, but largely the responses that we’ve got have been really positive.”