The UBC Board of Governors has voted to double the university’s stake in the only portion of its endowment that is divested from fossil fuels.
On April 18, the Board voted to approve an additional $25 million contribution to the main fund in the Sustainable Futures Pool (SFP) over the next three years, bringing the total contributed to the pool to $50 million by 2022.
Bolstering the profile and attractiveness of the SFP is a key reason for the decision, championed by Board Chair Michael Korenberg. While the pool — composed of low-carbon and “green” investments — is performing at a higher rate than the endowment as a whole, only two donors have contributed to it so far.
“Increasing the SFP ahead of external donors would show a strong commitment, not only to the SFP as a viable endowment pool, but also further enhance and solidify UBC’s commitment to sustainability,” reads the submission to the Board.
The SFP was created in 2017 and represents less than one per cent of the university’s total investment portfolio.
According to Associate Treasurer Tor Album, it is normal for new funds to take a few years to develop because donors tend to want to invest in something specific and know how the fund is doing before deciding.
“It can easily be two or three years from starting an initial dialogue with a potential donor [until] all the money is in the bag, to put it that way,” said Album, noting that the upcoming review of the SPF in the 2021/22 academic year will help set a road-map for the fund once it is more mature.
UBC’s actions are part of a growing trend towards sustainable investing.
“In general, I think that the investor community is realizing they want to look at a full set of risks to their portfolios, and environmental and climate change risks are part of that set of serious risks,” said Christie Stephenson, executive director of the Dhillon Centre for Business Ethics at UBC Sauder School of Business.
Student groups have been urging the university for decades to fully divest its entire portfolio from fossil fuels. UBCC350, a student collective for climate justice, protested the April 18 Board meeting to call for full divestment, which UBC has not committed to.
“We are the generation that's going to be most impacted by climate change, and we're calling on our university to stand up to defend our future and fulfill its mandate to prepare us for success in this world,” said UBCC350 coordinator Kate Hodgson at the protest.
This month, UBC was named number one in the world for action on climate change by Times Higher Education.
Stephenson pointed out that there is a range of divestment options that UBC is working within, but that investment strategy is a huge part of overall sustainability.
“I think it would be amazing if we were striving to be the best in the world ... in terms of climate change action within our investment processes, or investment pools as well,” she said.
This article has been updated to correct a misquote from Christie Stephenson.