SFU adopts investment policy grounded in United Nations’ Principles for Responsible Investment
Decision responds to SFU’s Sustainability Strategy and Student Engagement
Burnaby, BC – The Simon Fraser University Board of Governors has approved adoption of a responsible investment policy that includes becoming a signatory of the United Nations Principles for Responsible Investment (UN PRI). SFU is only the second Canadian university to move in this direction, SFU’s Vice President of Finance & Administration Pat Hibbitts has announced.
“SFU is acutely aware of the responsibility we have to our current and future students and we know that our $367 million endowment is a crucial asset in supporting the university’s teaching and research mission,” Hibbitts said, adding that, “we have a dual responsibility to meet investment objectives that serve the university’s interest and to also serve the public interest.”
A number of factors guided SFU in updating its investment policy. First, SFU’s Sustainability Strategic Plan 2013-2016 advocated that the university should adopt the UN PRI. Second, a student group, DivestSFU, had recently made a presentation to the Board calling for divestment, over the next five years, of direct ownership in funds that include fossil fuel public equities and corporate bonds.
“The DivestSFU students made a compelling case about the role of investment in economic policy and we considered their request seriously,” Hibbitts said. “This new policy provides for governance of our investment strategy consistent with the UN PRI and our investment objectives. In Canada’s — and in particular B.C.’s — resource-based economy, we need to avoid inadvertent damage to energy companies that, from a climate-change perspective, may be part of the solution.
“The UN Principles for Responsible Investment give us a proven template for taking a more activist position grounded in application of environmental, social and governance (ESG) factors and an evidence base.”
Adopting the UN PRI and encouraging investment managers to become signatories and engaging with companies based on ESG criteria, rather than screening or avoiding stocks, enables the university to be in a position to influence companies in which it invests. Said Hibbitts: “Research by other universities, including Harvard and Oxford, has shown that divestment has relatively little impact in the financial markets, while investor activism can be an important mechanism to change corporate behaviour.”
SFU’s existing investment policy had been set by provincial legislation. Section 57 of the University Act states that the University: “must, when investing…make investments that a prudent person would make.” That was interpreted to mean maintaining a diverse portfolio that would offer a reasonable expectation of a fair return or capital appreciation.
SFU President Andrew Petter stated: “As an institution committed to a vision as Canada’s engaged university, we recognize a responsibility that reaches beyond our three campuses.” President Petter noted the new policy aligns with other SFU initiatives that contribute to its institutional sustainability values, including, for example, the recent sustainable mining collaboration with the University of B.C. and École Polytechnique de Montréal, through the Canadian International Institute for Extractive Industries and Development. “SFU is committed to turning its every asset and capacity to community betterment. This investment policy is perfectly in keeping with that approach,” President Petter said.
The UN PRI is the leading global network for investors to demonstrate commitment to responsible investment, with 1,266 signatories representing nearly $35 trillion in assets under management. Two Canadian universities are currently signatories, the University of Ottawa and SFU.
UN PRI investors commit to the following:
Incorporate environmental, social and governance (ESG) issues into investment analysis and decision-making processes.
- Be active owners and incorporate ESG issues into our ownership policies and practices.
- Seek appropriate disclosure on ESG issues by the entities in which we invest.
- Promote acceptance and implementation of the principles within the investment industry.
- Work together to enhance our effectiveness in implementing the principles.
- Report on our activities and progress towards implementing the principles.
Simon Fraser University is consistently ranked among Canada's top comprehensive universities and is one of the top 50 universities in the world under 50 years old. With campuses in Vancouver, Burnaby and Surrey, B.C., SFU engages actively with the community in its research and teaching, delivers almost 150 programs to more than 30,000 students, and has more than 130,000 alumni in 130 countries.
Simon Fraser University: Engaging Students. Engaging Research. Engaging Communities.