Oil and gas holdings a pittance of total investment
Following UBC’s faculty vote in favour of divesting from oil and gas holdings, a peek inside TRU’s own investments has revealed that the university holds only a small amount of investments related to fossil fuels.
UBC made headlines last month when 62 per cent of its faculty voted in favour of UBCC350’s proposal for the university to divest over $100 million from fossil fuel company investments within five years.
Students and faculty across 34 Canadian campuses are now lobbying their university administration to stop investing in fossil fuel companies, according to a report published by the Sustainability and Education Policy Network (SEPN).
Of the 34 universities undergoing divestment campaigns reported by SEPN, 10 have publically disclosed how much money they are currently investing into fossil fuel companies.
In terms of overall dollars invested, UBC is the biggest spender of the 10 universities, SEPN reports. Of its $1.1 billion dollar endowment, 10.9 per cent ($120 million) is invested into fossil fuel companies.
Trent University’s total endowment has the highest dependency on fossil fuels, with 82.93 per cent ($34 million) of its $41 million endowment fund invested into fossil fuel companies.
The University of Toronto’s endowment is the least dependent on fossil fuels. Of its $1.5 billion endowment fund, 2.2 per cent ($32,400,000) is invested in fossil fuel companies.
How does TRU stack up?
TRU vice-president of finance Matt Milovick revealed to The Omega that the university currently has $56.5 million invested overall: $37 million in bonds, $12.9 in equity and high yield portfolios and $6.6 million in endowments, according to holdings summaries produced by investment dealer Raymond James Ltd.
Of the $49.9 million invested into bonds and equity portfolios, Milovick said only 0.36 per cent ($179,640) of the investments are directly exposed to energy companies.
Of the $6.6 million invested in endowments, Milovick said roughly six per cent ($396,000) of the investments are directly exposed to energy producers.
“The six per cent does not include utilities, which may use nuclear, wind, and solar (in addition to gas and coal) and oil service companies (drillers, steel pipe producers),” Milovick said via email. “It gets hazy when you look at a company like General Electric, which produces oil drilling equipment, but is also one of the world’s largest water purification companies.”
Adding all the numbers together, roughly 1.02 per cent ($575,640) of TRU’s $56.5 million investment fund has direct ties to energy producers.
While divestment campaigns have popped up on other Canadian campuses, Milovick said no one has brought up the possibility of a campaign at TRU.
“The administration wanted to get ahead of this issue before a divestment campaign rolled onto our campus,” he said. “We’re currently working with the investment committee of the university to define a responsible investment policy or statement – and let’s not be confused, it’s not a divestment policy, it’s a responsible investment policy.”
According to Milovick, financial sustainability is a priority over environmental sustainability in TRU’s investments.
“No one at this institution has an appetite to simply say ‘We’re going to divest of oil and gas on ethical reasons,’” Milovick said. “With the Toronto Stock Exchange holding 20 to 23 per cent in energy companies, energy is difficult to avoid without sacrificing performance and diversification.
“By and large, green investments – wholly green investments – are not sustainable for our portfolio. The more concentrated [they are], the greater the risk, [and] they don’t have the same kind of returns. Performance for solar and green ETFs, for example, has been very poor.”
Editor’s note (March 31, 2016): A previous version of this article stated that TRU’s total investment exposed to energy producers was 1.2 per cent. That figure should have been 1.02 per cent and has been corrected in the above version of the article.