UVic pension funds invested in Enbridge Inc. — activists call for ethical investment policies

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UVic’s 2011 Combination Pension Plan shows over $4 million invested in Enbridge Inc. and over $45 million in the tar sands, which make up the majority of the energy portfolio.

The board of pension trustees oversees the combination pension plan that manages retirement benefits for UVic faculty and administrative staff who are regular, full-time employees. The pension funds are not owned or managed by the university, but the board dictates investment policy, which currently does not address ethical investing.

Critics see the pension investments as diverging from UVic’s brand of climate change and sustainability research and work.

“UVic has a lot of researchers who are doing work in climate change, and then on the other hand they’re investing in the companies that are causing it, so it’s just very hypocritical,” says Elysia Petrone, a recent Lakehead University graduate who helped launch a petition in December addressed to Maclean’s magazine. The petition asked the publication to include an ethical investments category in its annual university rankings issue.

Leading climate change scientist and UVic professor Andrew Weaver believes that the university has a responsibility to show leadership in social and environmental responsibility.

“We stand up and we tell students what they should do, and we should model the behaviour we expect in others,” says Weaver. “If we’re branding ourselves as an institute known for sustainability, for its climate leadership, for its environmental stewardship, and we’re telling the world what we’re doing — well, you’ve got to do it. In some senses, there’s a moral of responsibility to practise what you preach.”

Enbridge Inc. is the Calgary-based company behind the controversial Northern Gateway Pipelines project that has faced severe public backlash for potential environmental damages. The Northern Gateway Pipelines project, if completed, would transport an average of 525 000 barrels of petroleum a day along a 1 177-kilometre route through northern B.C. forests from Edmonton to Kitimat, where it would then be shipped to overseas markets.

Greenpeace is one of the many environmental groups condemning the project, saying the pipeline would degrade waterways and forest habitats of numerous species. Public hearings on the project have been accompanied by anti-pipeline protests led by environmental groups and individuals concerned with the possible extent of ecological damage and the effect on First Nations communities in northern B.C.

Nexen Inc., Suncor Energy Inc. and Imperial Oil Ltd. are some of the other tar sands companies in which UVic pension funds are invested.

The priority of the investment policies is to generate a return for plan members when they are eligible for retirement benefits, in accordance with B.C.’s Pension Benefits Standards Act.

“The law is pretty clear, and as a trustee, our concern is always that we act in the best financial interests [of plan members],” says Kristi Simpson, a member of the board of pensions trustees for the combination pension plan. “Socially responsible investing is very complicated, and as much as we may have some plan members who would be very for that, we have a very diverse group of members, and we have to try and act in the interests of all of them at the same time.

“There’s lots of different ways to look at socially responsible investing, and I imagine every plan member we have would have a different view on that.”

The university does not manage the pension plan funds, but hires third-party management companies to do so. The investments — which support retirement benefits for staff (some of whom no longer work at UVic) and are separate from the operating costs of the university — are guided by policies set out by the board of pension trustees.

“That’s the problem; an individual pension board cannot say that this company is ethical, this one’s not,” says Weaver. “But there are fund managers who describe what they do when they seek a company that they’re going to invest in. To say ‘ethical investment’ is loaded, but various investing managers say what they look for in a company that they’re going to invest in, and they might look for [companies] that are not contributing to a risky environmental policy.”

In 2010, Weaver sent a letter to the board asking it to look into investing that addresses climate change. Weaver was not satisfied with the board’s response, but Simpson says Weaver’s request was forwarded to investment managers. She also notes that one of the combination pension plan managers is aware of and active in social investing, and that the board is in favour of proxy managers who encourage more responsible investments.

Still, several groups are pushing for UVic and other universities to pursue more socially and environmentally responsible investments.

Recently, the Wilderness Committee, a non-profit organization that advocates for wilderness protection, published a series of articles calling for UVic to divest funds invested in Enbridge Inc., tar sands and oil and gas operations.

In December, the Martlet reported on the efforts of on-campus group Common Energy to push UVic to make more socially and environmentally responsible investments with its endowment and pension funds.

UVic is not the only university to come under fire for its investments — the petition for Maclean’s magazine to include an investments category applies to all Canadian universities. The petition began in December and was headed by Petrone and two other recently graduated students, Kyuwon Kim from the University of British Columbia and Yasmin Parodi from the Ontario College of Art and Design. The petition has garnered nearly 10 000 signatures  as of press time, each of which were forwarded to Mary Dwyer, senior university rankings editor at Maclean’s.

“Currently there isn’t really a resource to make this information public,” says Petrone. “I think it would be a good tool for high school students who are making this important decision of what university to attend [for them] to have all the information on the school.

“But also I think it would be a good educational tool for people who aren’t even aware of the issue,” she says.

Maclean’s turned down the proposal but opened discussion by publishing two opinion articles on the topic. Though Petrone says her group is not completely satisfied with this response, she hopes to continue working on the petition, raising awareness and encouraging more ethical investments at universities.

Simpson says ethical investment is a topic that comes up frequently for the board. “I think it’s fair to say that given the heightened awareness about [socially responsible investing], it’s a conversation the board will likely have,” she says.

UVic’s pension board meets monthly and reviews its policy each year.

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