UVic Foundation to update its responsible investing policy by end of year
On Sept. 23, UVic released two reports about their investments. The reports provide more information about the university’s ongoing efforts to decarbonize and make investments with a positive social impact.
There are two main investment funds under the university’s purview. The working capital fund supports the university’s short-term operational needs and the UVic Foundation manages endowments for the university’s long-term financial viability.
The report from the working capital fund highlights a steep decline in carbon dioxide emissions and the UVic Foundation promises to centre climate change in its upcoming responsible investment policy. However, students continue to advocate for full divestment from fossil fuels.
Both reports are the first of their kind, but will be released annually in the future. The university’s statement introducing the reports emphasizes a commitment to mitigating climate change.
“The University of Victoria (UVic) and University of Victoria Foundation (Foundation) are deeply dedicated to our collective responsibility to address climate and sustainability,” says the statement. “We are committed to engage and communicate with faculty, staff and students on this important issue.”
Working capital fund now fossil-fuel free
In 2020, UVic released its Responsible Investment Policy and set a goal to decrease the “carbon intensity” of its working capital fund by 45 per cent by 2030. The university measures carbon intensity in tons of carbon dioxide emissions per dollar of sales, but also looks at total emissions not adjusted by revenue.
This year, UVic reported decreasing its three-year rolling weighted average carbon intensity by 32 per cent from the year previous. Its total emissions decreased from 39 049 tons of carbon dioxide to 297. University Treasurer Andrew Coward says this is a result of transitioning to the fossil-fuel free fund in February.
However, carbon intensity is a complicated measure: the university only counts the direct emissions and utilities purchased by companies it invests in, not down-the-line emissions. For example, if UVic invested in an airplane manufacturer, only the emissions from producing the airplanes would be counted, not their own fuel consumption once they’re being used. This is because getting data on these more distant emissions is challenging.
The foundation’s investments
Unlike the fully-divested working capital fund, the UVic Foundation still has some money in fossil fuels. Currently, two per cent of the foundation’s $525 million total is invested in fossil fuels — about $10.5 million.
Though UVic has highlighted some of the responsible investing work done since 2020 in its working capital fund, the UVic Foundation hasn’t spoken publicly on its own practices to the same extent. Mary Garden, the chair of the foundation’s board, says the report is meant to start the process.
“The purpose of this report was really to begin a conversation and more transparency around the activities of the foundation with regards to responsible investing, [environmental and social governance (ESG)], which of course includes climate change,” said Garden.
In their efforts to release a responsible investing policy before the end of 2021, the foundation has examined other universities’ policies, talked to ESG consultants, and identified elements that need to be included in the policy.
Coward emphasizes that students have been heavily involved in this process. “Students provided a presentation to [the] Foundation Board, met with the Foundation Chair and Treasurer, and met and corresponded with UVic staff regularly,” he said.
Both reports highlight UVic’s and the foundation’s “impact investments,” which aim to support positive social change. For example, the working capital fund has invested in Raven Indigenous Capital Partners and both that fund and the UVic Foundation have invested in the student housing and dining centre being built on campus. Currently, 24.7 per cent of the working capital fund and 8.6 per cent of the UVic Foundation is invested in impact investments.
Finally, both reports say that UVic is participating in the University Network for Investor Engagement, which encourages companies that receive investments to decrease their emissions.
Divest UVic says more action needed
What are students looking to see in the foundation’s policy update? For Robin Pollard, UVSS director of campaigns and community relations and an organizer with Divest UVic, the answer is easy.
“Full divestment from fossil fuel companies and resource extraction,” said Pollard.
But the UVic Foundation won’t necessarily be taking that approach, says Garden.
“The foundation considers responsible investment as a strategy and divestment or engagement as outcomes,” she said. “Our approach has been engagement, aligned with our commitment to the Principles of Responsible Investing organization, and that will continue to be what is recommended in our policy.”