Peter Wall Institute steers endowment investment away from fossil fuels

As the movement for UBC to divest its endowment from fossil fuels grows, the Peter Wall Institute for Advanced Studies (PWIAS) has taken a step in that direction.

On September 23, PWIAS announced its investment strategy will ensure 60 per cent of the endowment that is normally allocated to direct investment in public shares is 100 per cent fossil fuel free. This accounts for $24 million out of its $40 million endowment.

UBC Treasurer Yale Loh explained that the other 40 per cent is in the form of “money market and short-term fixed-income securities.”

Dr. Kalina Christoff, the interim director of PWIAS and a UBC psychology professor, explained that the investable portion of the endowment was not previously invested in fossil fuel companies, and when the investable portion grew a decision on where to invest needed to be made.

“Recently the investable portion of the endowment has increased, said Christoff. “So ... that investable portion of the Peter Wall Endowment has actually never been invested in fossil fuel companies.

According to Christoff, the decision factored in PWIAS’s desire to act on environmental responsibilities while also maintaining its financial fiduciary duty.

“There were two main components of the decision: one is what is the best financial decision? And second, equally important: what is our responsibility towards the current [climate] challenges that humanity is facing?” she said.

Research by Wall Scholars also influenced the decision. Christoff cited a study on the environmental impacts of academic conferences as one of the main projects that helped guide the decision to guide endowment investment away from fossil fuels.

“The issue of climate change is a recurrent issue that comes up,” she said. “Every year, there’s a new cohort of Wall Scholars that are coming from different disciplines to address the big questions of today and the issues of climate change.”

Overall, Christoff hopes PWIAS’s decision will serve as an example and help stimulate conversation around financial roadblocks institutions face with divestment and how they can overcome them.

The UBC Board of Governors set up a sustainable endowment fund, the Sustainable Futures Pool, made up of “green” investments but it has not divested the rest of UBC's endowment largely because of the financial risk.

According to Loh, PWIAS is not expecting its financial security to decrease from the decision.

“The trustees were comfortable that the increased risk ... and higher annual cost to maintain the fossil fuel free portfolio was acceptable given similar expected returns to the portfolio that included fossil fuel exposure,” wrote Loh in a statement to The Ubyssey.

“My hope is ... this will serve as a public example and as a step forward,” Christoff said. “In principle, [divestment] can be done, and it can be done without sacrifice to the financial interests of the university.”

This article has been updated to clarify the investable portion of the PWIAS endowment was not invested in fossil fuel companies previously.