This page is here to raise awareness among students, faculty and staff about UW, and about ethical investment in general. Please keep in mind that it was last updated in April 2003.
SRI and
financial returns Other institutions Proposals -
preliminaries Proposals -
specifics Student council
motion Proxy voting guideline
resources Undue influence Listing of the
TSE 300 and
S&P 500
The University of Waterloo has over $600m dollars in its pension plan and endowments. The money is invested in the stock market by different investment companies. This has included investments in companies reportedly linked to the killing of civilians. This document explores the issue in more detail, and what we think can be done to change the situation.
We realise that the issue cannot be solved to everyone's complete satisfaction, partly because of legal restrictions, and partly because of divergent views - investments that some people find objectionable may be acceptable (or even desirable) to others. However, we hope that there would be a broad consensus about avoiding investments in, say, military dictatorships, as far as possible. Given the willingness, alternatives are available, if only for endowments and donations.
The possibilities for the pension fund are more complex, due to fiduciary responsibility, but we will discuss below why and how the pension plan investment rules can be changed. The pension plan members can and should be actively consulted on this. The concerns they identify may or may not agree with the sentiments of various people and organisations putting forward this proposal. Thus, strictly speaking, this is not a call for social justice, but an open-ended call for change; we trust that the pension plan members will likely adopt criteria that reflect some of our basic notions of social justice, while realising that there is no guarantee of this. Any use of terms such as "ethical" or "socially responsible" in this document are made with this caveat in mind.
The money
UW has over $600m in its pension plan; and about one-tenth that amount from donations and endowments; this makes it one of the hundred largest pension plans in Canada. The money is invested on the stock market by different investment agencies; when the returns on investment are good, some of the money is used to cover university expenses, or given back to pension plan members.
Two of the investment agencies are `passive' investors, tasked with choosing a representative sample from the TSE 300 (Toronto Stock Exchange) and S&P 500 (Standard and Poor). These agencies also exercise the university's proxy votes; it seems that they do not routinely inform university authorities of how the votes were cast.
The TSE 300 and S&P 500 include companies from many different sectors that are all potential investments; there is no guarantee that any particular one is in the university's portfolio at any one time, but it is virtually certain that every sector (e.g. services, utilities, consumer staples) is included to some degree. A current list of the firms on the
TSE 300 and
S&P 500 is available on-line.
Specific investments
Some socially responsible investors have told me they would consider most of the companies in the UW portfolio innocuous. One of UW's investment managers had also told me that there was little difference from the portfolios they managed for some religious colleges with social responsible guidelines.
There was even a company
Rio Tinto is a mining company whose environmental and human rights record includes: dumping 40 million tons of toxic waste in a river in West Papua, being sued for supporting the apartheid regime, and involvement in the deaths of 22 civilians near a gold mine in Indonesia. See the Asia-Pacific Human Rights Network report HRF/41/001 and an Oxfam report.
Talisman is an oil company that was in the news for many years up to late 2002 due to its operations in Sudan. The concerns of civilians being killed to clear space for oil pipelines were serious enough to prompt critical reports by the Canadian government in January 2000 (the
Harker report), and by Amnesty International [
1,
2], and contributed to Talisman selling its Sudan operation in October 2002. The Harker report concluded that "Sudan is a place of extraordinary suffering and continuing human rights violations ... and the oil operations in which a Canadian company is involved add more suffering". Amnesty's report said that "massive human rights violations by Sudanese [government and opposition] forces are clearly linked to foreign companies' oil operations"; Amnesty said that it was "concerned that there is little evidence that [Talisman] has taken effective action in its area of operations to protect human rights of civilians as well as to prevent violations".
Both Rio Tinto and Talisman were included in the university's portfolio in 2001, many months or years after concerns had initially been raised about their activities. To our knowledge, the university did not propose or vote in favour of any motion of censure, or enter into dialogue with these companies to change their activities. It is clear that the current investment and proxy voting strategies do not protect the University of Waterloo from association with disreputable companies; nor did it do anything to help civilians in Indonesia and Sudan that bore the brunt of Rio Tinto and Talisman's operations.
The university makes no effort to publish a list of its investments, although this is supposed to be public knowledge. We therefore do not have confirmation of other specific companies being in UW's portfolio recently. However, as Dennis Huber (VP Administration & Finance) has said, given the number of different stocks and shares held by UW, everyone is likely to find companies in the portfolio that they object to.
We note, in particular, that the Toronto Stock Exchange and Standard and Poor indices include tobacco and armament companies, as well as companies like Sears and Hudson's Bay. Both companies were among firms listed as sourcing from three factories in Lesotho where child labour, unsafe working conditions, sexual harassment, and other sweatshop conditions were alleged in reports prepared by non-governmental organizations as well as by Lesotho government investigators; both companies refused to amend their policies to conform to the International Labour Organization's Fundamental Principles and Rights at Work.
Banks also often come in for criticism for the way they invest their clients' money, although they are also praised for the treatment of their own employees. Thus, for example, in November 2002 Real Assets Investment Management and Ethical Funds filed shareholder resolutions with Royal Bank, Bank of Montreal, Bank of Nova Scotia, Toronto Dominion Bank and the Canadian Imperial Bank of Commerce to report on how social, environmental, and ethical issues impact their business and what they're doing to manage these risks. At the same time, these banks are all on the Jantzi Social Index, a benchmark of 60 Canadian companies that meet a set of social and environmental criteria.
Correspondence with UW authorities
WPIRG (Waterloo Public Interest Research Group) and several faculty members raised the issue of investment in Talisman in April 2001. The Pension and Benefits Committee reviewed the matter on 8 May 2001 and concluded that "it was not in the best interests of the members and beneficiaries to restrict UW's investment managers, and that doing so would be counter to its fiduciary obligations to the Pension Fund."
(See report in the Daily bulletin for June 21, 2002).
An e-mail by Dennis Huber (Vice-President, Administration and Finance; 7 November, 2001) further specified that:
"UW has not invested on the basis of `socially responsible investing' for a number of reasons:
1. as trustee of the funds, we have a fiduciary obligation to maximize investment returns (trustee must set aside personal interests and views and place the financial interest of investment ahead of other considerations)
2. no hard data exists that socially responsible investing provides better returns (in fact, results in fewer investment managers to select from)
3. it is very difficult to satisfy everyone's definition of socially responsible investing
4. endowment committee members receive a listing of investments held in the portfolio and can raise concerns about individual investments at the annual meeting with the investment manager"
Socially responsible investing
The standard investment approaches taken by people concerned about companies like Talisman or Rio Tinto are collectively termed socially responsible investing (SRI). It includes all the financial decision-making processes that are a part of a prudent investment management approach; it also includes the selection and management of investments based on peoples' ethical, moral, social or environmental concerns. There are three basic approaches to socially responsible investment:
Positive and negative screening is the application of social and environmental guidelines or "screens" to the investment process. Portfolios with negative screens will avoid investments in, say, tobacco or military production, companies operating with sweatshop or child labour, or the manufacture of alcohol or pornography. Portfolios with positive screens may seek out companies making a contribution to social, economic or environmental sustainability, or industries with exemplary employee practices. such companies. A portfolio may have a combination of positive and negative screens.
Community Investment is the investment of money into community development or micro-enterprise initiatives that contribute to the growth and well-being of particular communities. The idea is to reverse the drain of capital and income that debilitate low-income communities.
Shareholder Advocacy is the process of using shareholder influence to help to bring about positive social environmental change at corporations. This can include corporate engagement (communicating with management on particular issues), filing shareholder resolutions, and/or using the threat of divestment to bring about positive change.
Financial returns
Is it costly to implement SRI? This is a natural concern for pension plan members, for the trustees who oversee the plan, and for the university that also reaps some of the financial benefits when returns are good. Actually, mutual funds that employ screens and/or shareholder advocacy can perform as well as, or better than other funds.
As noted by Kinder, Lyderberg and Domini, it seems logical that companies with better social and environmental records would perform at least as well as polluters and firms with poor employee relations - probably better. Many Wall Street analysts argued otherwise - including social and environmental considerations into investment decisions would limit the investment universe, and therefore limit returns. They did not acknowledge that traditional money managers are paid large sums of money to do just that - limit their investment universe to a profitable portfolio of stocks.
We reflect a small sample here of the many arguments and quantitative studies about the financial performance of SRI funds. For more detailed information, go to
www.sristudies.orgThe Domini 400 Social Index is a list of US companies that meet certain social and environmental criteria. This benchmark, roughly comparable to the S&P 500, was launched in 1990. Over the 10 years to June 30, 2001, the index returned an annual rate of 16.3%, as compared to the 15.1% returned by the S&P500. SRI mutual funds have also consistently been more likely to receive Morningstar's highest rankings (four or five stars) than the overall universe of US mutual funds. The Domini Social Equity Fund that tracks the DSI 400 now has over US$800 million in assets, and is offered as an option by the Ford Motor Company, and California and Massachusetts state retirement plans.
In recent years, many other screened indices have been launched - the Jantzi Social Index in Canada, the Dow Jones Sustainability Index and Calvert Social Index in the US, Ethical Index in Europe, and NPI Social Index and FTSE4Good in the UK.
The Jantzi Social Index, an index of 60 Canadian companies selected on social responsibility criteria, was launched in February 2000 and therefore does not have a long-term track record. However, historical data showed that the value of the JSI stocks increasing by 18.9% over a five-year period, compared to the TSE 100's growth of 18.1% and the TSE 300's 17.4% over the same period.
A Canadian study (Socially Responsible Investing: Better for Your Soul or Your Bottom Line?, Paul Asmundson and Stephen Foerster, Ivey School of Business, University of Western Ontario; Winter 2001 Canadian Investment Review) compared the financial returns of the TSE 300 to socially-screened mutual funds invested in Canadian equities with five- and 10-year performance histories. Funds with 10-year returns were Ethical Growth and Investors Summa. Funds with five-year returns were Ethical Growth, Investors Summa, Desjardins Environment and Clean Environment Equity. The analysis included mean excess returns (fund returns versus the benchmark) as well as two measures of risk-adjusted returns (Sharpe ratio and Jensen's alpha).
The study found that the fund returns underperformed the benchmark but that this underperformance was not statistically significant. Moreover, the funds slightly outperformed in terms of the Jensen's alpha and were almost identical to the benchmark in terms of the Sharpe ratio. "The results suggest that those who engage in SRI through investing in Canadian SRI mutual funds, on average, are neither giving up anything nor gaining anything in terms of financial returns," Asmundson and Foerster wrote. "At this relatively early stage, it appears that investing for the soul may not hurt the bottom line, particularly when risk exposure is taken into account."
A comparative study of 65 European securities concluded that returns from ethical stocks were "at least comparable with those for more traditional equity investment" (Bank Sarasin). The performance of ethically screened funds can also be less volatile than funds in the mainstream market. An October 1999 EIRIS study in the UK showed that annualised volatility (the measure of risk) was 10.4% for ethical funds and 10.9% for non-ethically screened funds.
The field of socially responsible investing probably wouldn't be growing too fast if it offered poor performance. In the UK, retail ethical funds went from 200 million in assets in 1989, to £3.7 billion in 2000, to a projected £10 billion in 2003. In the US, over US$2.3 trillion, or nearly 1 in 8 professionally managed dollars is involved in socially responsible investing, and the SRI sector is growing 50% faster than the overall mutual fund market.
In Canada, the retail market grew 75% from $5.9 billion (June, 1998) to $10.35 billion (June, 2000), compared to 30% growth (from $322.7 billion to $420.8 billion) for the mutual fund market as a whole over the same period. When institutional investors are included as well, SRI accounted for $49 billion in assets in June 2000.
Finally, we note that Invesco, one of UW's current investment managers, already manages SRI portfolios for other institutions, and one of its CEOs said explicitly that there was no difference in the rate of returns.
Possibilities: other institutions
Other institutions at UW - the Federation of Students and the church colleges - have all implemented some form of SRI for their investments. The fact that their combined investments are barely 1% of those of the University of Waterloo did not deter them from doing what they could to avoid harming others with their investment. Many other institutions in Canada, the US and the UK, some of them with far more assets than Waterloo's, are also using their voice to improve company activity.
University of Montreal
The University of Montreal conducted a year-long study, and is set to adopt changes to its proxy voting policy to back social change with its votes. It is the first large Canadian university to do so. See [
1,
2,
3] for a news release, the student union proposal (in French), and the UMontreal official report (in French and gzipped - you will need pkunzip or gunzip to open it).
USS
The Universities Superannuation Scheme (USS) is among the ten largest private sector pension funds in the UK, managing £20 billion in assets for academic and non-academic staff of higher education institutions across Britain. It announced its commitment to a socially responsible and sustainable investment (SRSI) approach in 1999 and further elaborated this with a detailed SRSI strategy in 2000. At the time of the initial announcement Professor Sir Graeme Davies, USS Ltd chairman, said: "Today no properly run public company - or fund manager - should be unaware of the importance of public opinion and ethical issues." Their web-site goes on to say:
"We use our influence as a large £20 billion fund to encourage socially and environmentally responsible corporate behaviour and good standards of corporate governance, and wherever appropriate, we work with other powerful shareholders to achieve this objective."
USS has entered into dialogue with oil and gas companies on environmental and social issues, with pharmaceutical companies about affordable access to HIV drugs and, along with eight other financial institutions that have a total of £400 billion under management, had dialogue with companies about the risks involved in investing in Burma. USS publishes a snapshot of its portfolio on-line every quarter, along with the value of its investment in the 100 largest holdings.
Many pension funds are moving in a similar direction to USS. A recent study of the UK's top 500 occupational pension funds identified that 59% of the funds (representing 78% of the assets) now have some form of policy on Socially Responsible Investment. US public pension funds are major players in the debate about corporate governance and environmental performance, and a concern for "sustainability" is increasingly evident amongst EU investors. USS' sister funds in the US (TIAA-CREF) and Australia (UniSuper) have also made similar decisions. TIAA-CREF, for example, has a Social Choice Account, giving its members the option of putting pension money in a screened portfolio - they have in fact invested $4 billion in this account.
www.ethicsforuss.org.uk
CalPERS and other large investors
The California Public Employee Retirement System, is the largest public retirement system in the US, with $128 billion in assets and an active
corporate governance program. Every year, it reviews the performance of the US companies in its stock portfolio, and identifies those that are among the lowest long-term relative performers. The review results in a "long list" of companies that may potentially be publicly identified as a CalPERS Focus Company. CalPERS then meets with the directors of each of these companies to discuss performance and governance issues.
A Wilshire Associates study of the "CalPERS Effect" of corporate governance activities examined the performance of 62 companies targeted by CalPERS over a five-year period. Results indicated that while the stock of these companies trailed the Standard & Poor's 500 Index by 89 percent in the 5-year period before CalPERS acted, the same stocks outperformed the index by 23 percent in the following five years, adding approximately $150 million annually in additional returns to the Fund.
Calpers announced in February 2002 that it would sell its investments in Thailand, the Philippines, Malaysia and Indonesia after conducting a review of its funds using criteria including social issues and human rights (the Philippines decision was based on outdated information, and was overturned in May, before any stocks were actually sold). It also avoids investments in India, China, Russia, Venezuela, Colombia, Pakistan, Sri Lanka, Morocco, Jordan, and Egypt.
As regards transparency, it is notable that the Ontario Teachers' Pension Plan (with $68 billion in assets) and to some extent, the Ontario Municipal Employee Retirement Scheme ($33 billion in assets) list their portfolio on-line.
UW colleges and the Feds
Feds
The Federation of Students' investment policies includes the following:
"To avoid companies that are involved with arms production, nuclear power production, petroleum production, tobacco production, companies who use genetically modified organisms and companies who use sweatshops. Other things we consider, but are of less importance are: companies who invest in education, Canadian companies and low-risk investments."
Chris Di Lullo, VP Administration and Finance, confirmed in November 2002 that the Feds investment manager was following these guidelines.
Conrad Grebel University
Conrad Grebel's investment policy specifically mentions that CGR "wishes not to invest in companies or industries whose primary focus is production for military purposes, which are involved in the production of alcoholic beverages, or which are related to the tobacco industry. It is understood that these investment restraints will eliminate a number of opportunities which could result in reduced investment returns."
In 2002, Grebel's investments were transferred to Meritas, a socially responsible mutual fund; we note that Conrad Grebel uses Mennonite Savings and Credit Union (MSCU) for most of its banking needs, partly because Grebel is a Mennonite college, but also because MSCU is more likely to avoid investing in, say, armament companies.
St. Jerome's University
The president, Dr. Michael Higgins, has explained that St. Jerome's portfolio is scrutinised every three or four months to make sure that the choice of companies does not violate the university's principles. The investment policy says simply that "All University investments shall endeavour to adhere to the principles of social justice". Dr. Higgins said that three companies had in fact been dropped for ethical reasons from the portfolio, but the managers have a good idea of what companies STJ finds unacceptable. The investment managers had informed him that the effect on returns was minimal, but he emphasised that, in any case, ethical concerns are never over-ridden by financial considerations.
St. Paul's United College
Principal Graham Brown said in August 2002 that "the Investment Committee of the College's Board of Governors selects individual investments that are consistent with the policy and other considerations, such as ethical concerns, as they may arise in particular cases."
Our proposals - preliminaries
We now turn to our proposals for the changes we would like to see at the University of Waterloo. The proposals are in two categories:
First, transparency - publishing an annual snapshot of the portfolio on-line, along with the university's proxy voting record, investment principles and proxy voting guidelines.
Secondly, acknowledgement that there is an issue with the activities of some companies in the university portfolio, and steps to mitigate this. These steps could include omitting these companies from (parts of) the portfolio, voting for resolutions that address the activities of concern, or engaging in dialogue with the company management. A separate possibility is to use banks that guarantee to consider similar issues in their investments (e.g. they might guarantee that they will not finance projects run by military dictatorships).
Besides the fact that different people may advocate passionately in different directions, there are legal restrictions on what the university can do, and some people will raise doubts about the effect that one institution can have. We urge the university to make the effort to invest responsibly, to the best of its ability; it would not be alone - much smaller institutions at UW itself, and as well as large universities in North America, have already taken similar steps.
The university rightly takes a stand against intolerance and human rights abuses; it employs full-time staff to scrutinise research proposals for ethical reasons, it has an office of Ethical Behaviour and Human Rights, and courses on both ethics and human rights. Changing its investment policy would mean putting its money where its mouth is, and would enhance the university's reputation, possibly making it more attractive to donors.
Donations and banking
There are legal issues concerning pension funds that we will address further on. We will therefore focus first on steps that the university can take with its non-pension money. Money from various donations and endowments are currently all pooled and invested together with the pension money. The university could set up a separate portfolio with a socially responsible investment agency, and give donors and alumni the option of having some or all of their money put in this portfolio.
This portfolio may, initially, be quite small, and would involves certain overheads; similar issues have not stopped the Federation of Students or Conrad Grebel from appointing socially responsible managers for their own small pot of money, and we hope they will not stop the university from setting up a similar separate portfolio. One way of reducing overheads is to have a passive portfolio that tracks a screened index, such as the Jantzi Social Index, or the Domini Social Index in the US. We also note that Invesco, one of UW's current investment managers, already manages SRI portfolios for other institutions, and one of its CEOs said explicitly that there was no difference in the rate of returns.
Setting up such a portfolio would send an important message that UW as an institution is aware of the unintended effects it has on people around the world, and that it is making an effort to minimize such effects and be a responsible investor.
It is important that part of the portfolio be put into community investment (such as the Seed Loan fund in Kitchener, or the Mennonite Sarona Global Investment Fund), to promote local economic development and tackle poverty at its roots. Community investment does not usually offer a rate of return comparable to the stock market, but donors would be able to choose how much of their donation (if any) to invest this way. By way of comparison, the F.B. Heron Foundation invests 18% in community projects (6% at below-market rates, and 12% at market rates), Williams College in the U.S. reportedly has a socially responsible option with 10% of the money in community investment, while Meritas (a Canadian mutual fund) puts around 2% of its assets into community investment. The Domini Social Bond Fund also devotes up to 10% of its assets to direct community investment.
Another possibility is to ask banks for guarantees that UW's money will be invested responsibly. There is a Canadian bank (Citizens' Bank) that offers such guarantees, although it is still quite small (with maybe $100m in assets) and offers on-line service only. Using credit unions would also be a positive alternative, as credit union profits are given back to local community members. No single credit union, nor Citizens Bank, could probably currently provide for all of UW's banking needs, but UW already has loans with different banks (CIBC and RBC) for its construction projects; so it can, as a matter of principle, start taking out small loans with Citizens' Bank or credit unions, with a view to expanding its involvement with "ethical banks" in future years.
Faculty and staff also have the option of investing some of their pension money in RRSPs, instead of with the university pension plan. Group RRSPs with socially responsible mutual funds would make this easier.
Pension funds and socially responsible investing
Pension fund trustees have a legal obligation (fiduciary responsibility) to put the pension plan members' interests before their personal beliefs and opinions. If excluding a particular company, no matter how notorious, is certain to hurt the pension plan's financial performance, the trustees could be sued. This is sometimes taken to mean that pension funds cannot engage in any form of socially responsible investment, unless there is total agreement from all pension plan members.
There are, however, many socially responsible funds that outperform the market. Besides, companies whose activities harm the environment or violate human rights run the risk of punishing lawsuits, or costly changes to keep up with new environmental regulations; lax environmental and humanitarian practice, not to mention illegal activities, are also often an indication of bad management. Scrutinising a company's social and environmental performance is thus entirely consistent with fiduciary responsibility, if not actually mandated by trustees' duties to protect the interests of plan members.
In any case, the pension fund can propose or vote for motions to monitor and improve a company's social or environmental performance. The investment strategy could also specify preferences for companies that meet certain social or environmental standards, so long as
(a) they perform as well as other companies (that is, non-financial considerations must be secondary to the financial criteria), and
(b) this strategy is laid out in the Statement of Investment Policies and Procedure, and clearly communicated to the stakeholders.
A detailed legal argument relevant to Canadian law is given by Gil Yaron, LL.M. in
The responsible pension trustee: re-interpreting the principle of prudence and loyalty in the context of socially responsible institutional investment,
Estates, Trusts and Pensions Journal 20 (2001) 305-388.
Cowan v. Scargill
One of the cases most often cited against pension fund involvement in SRI is actually from the UK, and there are a few differences worth pointing out.
The dispute arose between the trustees of the British coal workers' pension fund after Arthur Scargill, then leader of the National Union of Miners (NUM), proposed to exclude all overseas investments and divest from any industry which could be in direct competition with the coal industry. The judge ruled that such a scheme would be financially dangerous and of no obvious benefit to the pensioners, and was illegal. The judgement is often cited as placing severe limits on trustees right to limit investments. It should be noted, however, that Scargill's proposal was quite extreme -by excluding all overseas investments it would have severely limited the diversity of the fund's holdings. Besides, the case took place within the context of bitter and highly politicised disputes between the NUM and the Coal Board.
More recently, British law was amended to require pension funds to disclose the extent to which they take social and environmental criteria into account. This change was a sign of support for SRI by the British government. In fact, Lee Coates, a Director of the Ethical Investors Group (U.K.), has said that:
The Scargill case does not apply to general ethical investment. It only applies where investment decisions are being made IRRESPECTIVE of financial concerns. The official UK Government line is that investing ethically produces the same return as non-ethical investment, so trustees of charities and pension funds can invest ethically with the same due diligence as any other form of investment.
We propose that the university:
A. Transparency
1. Publish on-line its statement of investment policies and principles, and proxy voting guidelines.
2. Publish on-line an annual snapshot of the university portfolio, or an annual list of the companies which the University had investments in at some point during the previous twelve months (this is already supposed to be public knowledge, but in practice it is not easily available).
3. Publish on-line, on June 1 of every year, a list of the proxy votes cast (and whether they were cast for or against) by the university in the previous 12 months.
B. Policies
4. Give donors, and people making endowments, the option of having some or all of their donation or endowment invested with a socially-responsible fund manager.
5. Give donors, and people making endowments, the option of having up to 10% of their donations or endowment placed in community investment, to directly help alleviate poverty.
Current and future donors should be informed of options 4 and 5, and given basic information about socially responsible investing and community investment.
6. Use credit unions or ethical banks for its banking needs (or at least some of its banking needs, initially).
7. Set up group RRSPs with socially responsible mutual funds such as Meritas and Ethical Funds.
8. Actively consult its pension plan members, and seek expert advice, before changing its investment policy and/or its proxy voting policy, to take into account the social and environmental impact of company activity
The consultation process
We propose that the university strike a committee to conduct the consultation process mentioned above, and report back in one year. Besides wide public consultation among stakeholders about the changes they do or do not wish to see, the committee's deliberations should include public engagement with the larger university community, the publication of a discussion paper and a conference drawing on the expertise of other universities and university pension plans. The process should consider all aspects of socially and environmentally responsible investment, including positive and negative screening, engagement (shareholder activism), proxy voting, and economically targetted investment.
Expert advisors may be brought in from other pension plans (such as the Universities Superannuation Scheme in the UK, or the California Public Employee Retirement System), and relevant organisations (such as the B.C. based SHARE - Shareholder Association for Research and Education, Michael Jantzi Research Associates or the Social Investment Organisation in Toronto). There may be co-operation with like-minded universities. There should also be space for comments from organisations and individuals in the university at large; such organisations and individuals would not have any say in the final decision, but they would have the opportunity to put forward their researched opinions.I would like to put forward a motion that the Grad Students' Association formally back a call for changes to UW's investment policy. There are more details below about what changes are being requested, the reasons for them, and other background information.
Transparency in investing
This is the text of a motion adopted by Student Council at UWaterloo, on February 9, 2003.
Transparency and Investing
(motion proposed by A. Cassar; adopted 16-0 with 4 abstentions)
BIRT: Student Council officially encourage The University of Waterloo to require that all university endowment funds
Publish on-line the following information:
1. its Statement of Investment Principles and Policies
2. a complete list of the companies it had investments at the end of the fiscal year.
3. An list of how any proxy votes in the previous twelve months were cast.
4. Audited financial statements.
BIFRT: that Student Council encourage
The University of Waterloo to provide the following information to pension plan members concerning their respective pension plan:
1. its Statement of Investment Principles and Policies
2. a complete list of the companies it had investments in at the end of the fiscal year.
3. An list of how any proxy votes in the previous twelve months were cast.
4. Audited financial statements
For information on the discussion, and a similar motion regarding the Federation of Students' finances, see the February and March Student Council documents at www.feds.ca/government/documents.html
Resources: proxy voting guidelines Model proxy voting guidelines are available from
SHARE (Shareholder Research and Education), based in Vancouver.
Some Canadian institutional investors are active in proxy voting and/or have posted their guidelines on the internet. OTPP includes a record of its proxy votes on-line. Note that they explain how they put profits first, and take human rights and the environment into account as a subsidiary goal (Ethical Funds p. 2, OMERS Section E, BCIMC p. 21, OTPP Section 1.3):
Ethical Funds (based in Vancouver),
OMERS (Ontario Municipal Employees Retirement System)
BCIMC (British Columbia Investment Management Corporation)
OTPP (Ontario Teachers Pension Plan)
The CALPERS site (California Public Employees Retirement System).has lots of information, but I did not find a single document called "Proxy Voting Guidelines"
Undue Influence
While we're urging the university to disclose its investments, it makes sense to put in a link to a web-site www.undueinfluence.com that details the sources of funding for various (American) environmental and social justice groups. I do not agree with the site's interpretation that such groups are harmful in various ways. I do agree with fiscal transparency.
This page:
members.lycos.co.uk/afarrugia/sri-prop.html Last modified: 4 April, 2003.