An estimated 12 per cent of UFV’s $10-million endowment fund is invested in the fossil fuel industry.
Phillips, Hager & North Investment Funds Ltd., the company which manages UFV’s endowment portfolio, released a snapshot of UFV’s investments for a Freedom of Information (FOI) request.
On Oct. 31, 12.3 per cent of the portfolio was invested in various companies related to the fossil fuel industry. The exact percentage and companies invested in varies day to day for UFV, but UFV’s investments have remained relatively steady over the last five years in both amount and industry, according to the FOI.
In 2019, UFV’s endowment fund totalled just under $10.5 million, an increase from $9.9 million in 2018 and $8.65 million in 2015. UFV currently has approximately $1.3 million invested in the fossil fuel industry and has invested over $1 million per year for the last five years.
According to the FOI, the only investment UFV has in the fossil fuel industry is through its endowment portfolio.
An endowment fund is an investment fund commonly held by universities, among other not-for-profits. Donations to the university are held and invested; generally the primary donation is maintained and the returns are used for initiatives, though some endowments are slowly used over time.
At UFV, the endowment portfolio returns help fund a variety of scholarships, bursaries, and leadership awards.
UFV was contacted for comment on their investment strategy and the university’s thoughts on divestment, but did not comment in time for publication.
The discussion around divestment
There has been a worldwide push for certain institutions to divest from the fossil fuel industry as part of climate change action from a variety of sources, including activists, non-government organizations, and governments.
On Jan. 10, UBC released a letter announcing its divestment from the fossil fuel industry following a five-day hunger strike on campus from members of the UBC branch of the Extinction Rebellion.
This was announced as the next step in the wake of UBC president Santa Ono’s declaration on the “climate emergency” in December. At the time, UBC was investing around two per cent of its $1.71-billion endowment fund in “the extractive fossil fuel industry,” according to Yale Loh, UBC treasurer.
The discussion around divestment at UBC began in 2016, with protests from students and a vote for their student union to divest, which passed. The UBC board of directors rejected the idea of divestment in 2016 as “not a viable option” after taking financial council. The board instead created a sustainable future pool, where under one per cent, or $16 million, of the endowment fund was actively invested in sustainable initiatives.
It has been argued that divestment is not an effective policy to combat climate change. Bill Gates was quoted by ***Financial Times as saying that divestment “probably has reduced about zero tonnes of emissions.” Instead, companies should use their money to “promote progress” and invest in companies that are making environmental impacts.
Some activist groups and organizations disagree. The United Nations backs divestment “as it sends a signal to companies, especially coal companies, that the age of ‘Burn what you like, when you like’ cannot continue,” said Nick Nuttall, the spokesman for the UN framework convention on climate change (UNFCCC). Valérie Plante, mayor of Montreal, urged pension funds to divest from fossil fuels last May as part of the city’s fight against climate change.
