The timeline for the implementation of the recently approved Sustainable Future Fund (SFF) has been relaxed after a meeting and consultation session on October 13.
Last month, the UBC Board of Governors' Endowment Responsible Investment Policy Committee heard presentations from UBCC350, the climate change advocacy group that originally advocated for the divestment referendum, and MSCI — a company that offers an index through which UBC can create a sustainable investment portfolio for the SFF. After this meeting, it was decided that the timeline for the actual creation of the fund would be extended by an unspecified amount.
The Sustainable Future Fund is intended to be an investment fund slated specifically for investments in sustainable initiatives — which differentiates it from UBC's other investment portfolios. The definition of sustainability in question may vary.
According to Aaron Bailey, one of the student representatives on the Board, this is so they can“really get to the roots of the offerings and the products that are available, as well as what the community is asking from us.”
Bailey noted that the subcommittee is now looking at whether to stick with the low-carbon high ESG (environmental, social and governance) rating model initially proposed, or to switch to a fossil fuel free fund.
“I wouldn’t say that they’re ruling out the low carbon fund (index categorization) as an option … but my take on the meeting is that we’re really going to be listening to the community throughout this process,” said Bailey.
“We’d rather slow down the process and get it right,” he said.
The subcommittee heard from both groups in a meeting on October 13, heavily attended by UBCC350 members. During the meeting, both groups presented their case and Alastair Fraser, a PhD student in environmental economics, was also given the opportunity to ask MSCI questions about the methods used in calculating environmental impact and voice other concerns that UBCC350 had about the presentation.
“Our main argument going into the responsible investment committee [was] the fact that the Sustainable Future Fund, in its designation of being low carbon, still includes some really big fossil fuel companies,” said Stephanie Glanzmann, the student coordinator of UBCC350, in an interview following the meeting. “Because the creation of the Sustainable Future Fund was what we saw [as] a counterproposal to divestment, it was just a hard blow because it was so far from what students and faculty asked for.”
Priti Shokeen, one of the two representatives for MSCI who presented at the meeting, had a different view of UBC’s proposed use of a low carbon emissions model.
“We have two main approaches [for these funds]. One is the exclusion approach in which you basically eliminate any companies which have fossil fuel reserves. From a stranded assets perspective, that is something very desirable,” said Shokeen. “From a real impact perspective, we also want to be taking into account current emissions. So the low target carbon index is taking both the current emissions as well as the reserves equation into account, and we’re reducing the overall impact.”
Despite the outcome, UBCC350 said they were encouraged by the event and felt like the Board was doing a better job of listening to them then in the past.
“I feel like, and I don’t want to pre-emptively say this, but I feel like it was a little bit of turning the corner,” said Glanzmann. “In the past dealing with UBC governance, it’s been such an uphill battle, and it was very cool to enter the room and actually feel like you’re being heard for the first time.”