UBC to hold Referendum on divestment of holdings in fossil fuel assets

[WestCoastRunner]

Early next year, the University of B.C. faculty will vote in a referendum calling for the university’s complete divestment of all its holdings in fossil fuel assets.

"This is a similar approach when the apartheid campaign began in getting major institutions to divest (of their South African assets) and in influencing U.S. foreign policy against the South African regime. That’s kind of the model the fossil fuel divestment movement is inspired by.”

If this is successful, UBC will be the first Canadian university to divest its fossil fuel assets, organizers said, and it would rank as the most comprehensive such divestment in the academic world.

Again, the 'left coast' is leading the way in innovative ways to tackle climate issues.

[Hal 9000]

A university taking a left wing agenda, what's next, cops voting to go to a doughnut shop? I won't care until I have to start paying taxes for nothing that end up in the pockets of who knows which NGO.

[Boges]

I wonder where the government gets a lot of its revenue to give the students such a generous subsidy on their education?

[Keepitsimple]

I wonder where the government gets a lot of its revenue to give the students such a generous subsidy on their education?

Talk about ironic idiocy.

[Big Guy]

I am against any organization which depends on public financing to use investment capital to support a non financial agenda. I expect that any area in which I place a personal investment has a strategy based on getting the best return on my funds. If that includes investment in oil, armaments or agent orange then that is their choice - and my choice is to trust them with my money. If I do not like where/how they are using my money then I switch investments.

If I want to support a cause then I will do so directly and not through some organization that is catering to minority or special interest groups.

Federal and provincial grants provide about 55% of University operating costs. If a University decides that it is prepared to prioritize a specific agenda over getting the best return for their investment dollar than I would suggest that the government review how much funding it is providing to that University and make adjustments accordingly.

Edited November 20, 2014 by Big Guy

[overthere]

This kind of twaddle is exactly why our family ignores pleas for funds in begging letters sent to alumni .

[overthere]

UBS should also hold referendums on condemning Israel and serving only vegan food in the cafeteria.

[On Guard for Thee]

The most important thing is to maximize profit. At the end of the day why would anyone care how they made their money? It looks the same as any other money. Well nowadays most people use credit/charge/debit cards but still.

So you're alright if I go into the bootlegging business and sell hard liquor and maybe a little pot while we're at it to your kids?

[Wilber]

Another case of people telling other people how to invest other people's money with no responsibility or consequences or outcome. The endowment fund provides part of the university's funding and as such needs to be run in a businesslike manner by business like people, not by social activists.

Even if the university were to divest itself of these shares for business reasons, getting rid of energy shares when energy prices and share values are low, is an idiotic strategy for a long term investor. Most energy companies (including Suncor) are paying dividends in the 3.75 to 4% range. Two year GIC's are paying 2%. How do these worthies plan to make up the income and capital lost incurred by divesting shares that pay a handsome dividend, at a low market value? Perhaps it can be made up with staff pay cuts and higher tuition fees.

When these hero's stop using fossil fuels to run their vehicles and heat their homes and university, perhaps I will pay attention. Till then, they are just indulging themselves in a feel good exercise that others will have to pay for.

Edited November 23, 2014 by Wilber

[WestCoastRunner]

Federal and provincial grants provide about 55% of University operating costs. If a University decides that it is prepared to prioritize a specific agenda over getting the best return for their investment dollar than I would suggest that the government review how much funding it is providing to that University and make adjustments accordingly.

Even if the university were to divest itself of these shares for business reasons, getting rid of energy shares when energy prices and share values are low, is an idiotic strategy for a long term investor. Most energy companies (including Suncor) are paying dividends in the 3.75 to 4% range. Two year GIC's are paying 2%. How do these worthies plan to make up the income and capital lost incurred by divesting shares that pay a handsome dividend, at a low market value? Perhaps it can be made up with staff pay cuts and higher tuition fees.

Perhaps you should provide stats to back that up. UBC has stats to back up their decisions:

"There are many opportunities in the market for an endowment to make equivalent or better returns. A study by S&P Capital IQ found that if universities had divested 10 years ago from the stocks recommended by Fossil Free, their endowments would be even larger than they are now. A study by the Aperio Group (an investment management firm) shows that fossil fuel divestment would have a miniscule (0.0034%) impact on returns. There are also increasing concerns about a “carbon bubble,” that the business model that provides the basis for the fossil fuel industries’ current value is unsustainable because much of their wealth is premised on fossil fuel reserves that can’t be used if we are to maintain a safe climate.

"Fossil fuel free funds already exist. In addition, when large investors such as university endowments express a desire for fossil-fuel free funds, the financial industry will respond to offer more such funds. In this way UBC and other large investors can wield its influence to open up sustainable investment options for smaller investors and individuals."

The reaction here is typical of individuals not supportive of the best interests of our environment and planet.

You can read more here.

[Bonam]

If UBC was aware of better returns elsewhere, they should already have pursued those returns. Furthermore, the relative performance of sectors over the past decade says very little about their relative performance over the next decade. Right now, oil is at a long time low, while the stock market is at all time highs. Reversion to the mean suggests oil is gonna go up, and right now is a very bad time to get rid of your oil holdings.

Lastly, divestment from oil stocks has absolutely no effect on oil production and consumption. Shares already out on the market are from companies that already raised capital through their IPOs, the trade in shares between different entities now actually contributes no additional capital to the company's coffers, nor does it affect their production or operating costs. Therefore this is nothing but a "feel good" publicity move, with little or no actual impact on the issue at hand.

If the purpose of this campaign is to reduce the consumption of fossil fuels, UBC would be better served spending its energies in other ways, such as enhancing zero-emission transportation options between campus and the city. As it is, the daily commute to and from UBC, and the hundreds of daily gas-guzzling bus trips on the 99 line, are huge sources of emissions. You can see giant plumes of black smoke coming out of those things whenever they pull away from a stop. Get the Skytrain link to UBC built already.

Edited November 23, 2014 by Bonam

[WestCoastRunner]

If UBC was aware of better returns elsewhere, they should already have pursued those returns. Furthermore, the relative performance of sectors over the past decade says very little about their relative performance over the next decade. Right now, oil is at a long time low, while the stock market is at all time highs. Reversion to the mean suggests oil is gonna go up, and right now is a very bad time to get rid of your oil holdings.

Lastly, divestment from oil stocks has absolutely no effect on oil production and consumption. Shares already out on the market are from companies that already raised capital through their IPOs, the trade in shares between different entities now actually contributes no additional capital to the company's coffers, nor does it affect their production or operating costs. Therefore this is nothing but a "feel good" publicity move, with little or no actual impact on the issue at hand.

If the purpose of this campaign is to reduce the consumption of fossil fuels, UBC would be better served spending its energies in other ways, such as enhancing zero-emission transportation options between campus and the city. As it is, the daily commute to and from UBC, and the hundreds of daily gas-guzzling bus trips on the 99 line, are huge sources of emissions. You can see giant plumes of black smoke coming out of those things whenever they pull away from a stop. Get the Skytrain link to UBC built already.

So now UBC is being blamed for not pursuing alternative investment strategies. Unbelievable!

And transportation to UBC along the Broadway corridor is being built. And as far as investment advice. I would prefer to listen to professionals instead of posters on this forum.

[Wilber]

Perhaps you should provide stats to back that up. UBC has stats to back up their decisions:

"There are many opportunities in the market for an endowment to make equivalent or better returns. A study by S&P Capital IQ found that if universities had divested 10 years ago from the stocks recommended by Fossil Free, their endowments would be even larger than they are now. A study by the Aperio Group (an investment management firm) shows that fossil fuel divestment would have a miniscule (0.0034%) impact on returns. There are also increasing concerns about a “carbon bubble,” that the business model that provides the basis for the fossil fuel industries’ current value is unsustainable because much of their wealth is premised on fossil fuel reserves that can’t be used if we are to maintain a safe climate.

"Fossil fuel free funds already exist. In addition, when large investors such as university endowments express a desire for fossil-fuel free funds, the financial industry will respond to offer more such funds. In this way UBC and other large investors can wield its influence to open up sustainable investment options for smaller investors and individuals."

The reaction here is typical of individuals not supportive of the best interests of our environment and planet.

You can read more here.

They don't have stats, they have opinions, conflicting ones at that. I have no problem with UBC not investing in energy stocks as long as it is done for sound investment reasons.

Do you honestly think energy companies aren't looking at the future and planning other strategies than fossil fuels? Perhaps supporting those that are would be a better strategy than damming them all. http://business.financialpost.com/2013/02/28/solar-may-eclipse-oil-in-fifty-years-shell/?__lsa=c9ef-140f

The financial industry will do what every other industry does, sell products people want. They will build a portfolio that suits whatever prejudices you have. That doesn't mean they are any good, but what do they care, it's not their money.

[WestCoastRunner]

They don't have stats, they have opinions, conflicting ones at that. I have no problem with UBC not investing in energy stocks as long as it is done for sound investment reasons.

Well, it seems they have sought professional advice.

[Wilber]

Well, it seems they have sought professional advice.

So have the people managing the money.

[WestCoastRunner]

So have the people managing the money.

I'm certainly not going to argue with you on financial advice. UBC has every right to determine where to invest their money and they have shown that divesting of fossel fuel companies will not harm their portfolio and will in fact perhaps improve it. Their vision:

“As one of the world’s leading universities, the University of British Columbia creates an exceptional learning environment that fosters global citizenship, advances a civil and sustainable society, and supports outstanding research to serve the people of British Columbia, Canada and the world.”

UBC deserves great credit for recognizing its leadership role, and in expressing that through its sustainability commitments. But it is wrong for

UBC to continue to profit from its investments in an industry whose core product inevitably and significantly perpetuates dangerous climate change. Supporting such a destructive industry is inconsistent with UBC’s core values of sustainability, leadership, and innovation.

As President Gupta said in his installation speech: “Each generation has a responsibility to take the world as we find it and do our utmost to make it better.”48 UBC cannot live up to that promise when it is invested in an industry that poses a direct threat to the well-being of future generations,

including our own students. If it is wrong to wreck the planet, then it is wrong to profit from doing so."

https://d3n8a8pro7vhmx.cloudfront.net/ubcc350/pages/43/attachments/original/1414421298/UBC_Fossil_Fuel_Divestment_-_Responsible_Investment_Proposal_October_27_2014.pdf?1414421298

[bush_cheney2004]

I'm certainly not going to argue with you on financial advice. UBC has every right to determine where to invest their money and they have shown that divesting of fossel fuel companies will not harm their portfolio and will in fact perhaps improve it.

Wait a minute...do mean that if divesting fossil fuel companies would have hurt their endowment portfolio it would not happen ?

[Wilber]

I'm certainly not going to argue with you on financial advice. UBC has every right to determine where to invest their money and they have shown that divesting of fossel fuel companies will not harm their portfolio and will in fact perhaps improve it. Their vision:

“As one of the world’s leading universities, the University of British Columbia creates an exceptional learning environment that fosters global citizenship, advances a civil and sustainable society, and supports outstanding research to serve the people of British Columbia, Canada and the world.”

UBC deserves great credit for recognizing its leadership role, and in expressing that through its sustainability commitments. But it is wrong for

UBC to continue to profit from its investments in an industry whose core product inevitably and significantly perpetuates dangerous climate change. Supporting such a destructive industry is inconsistent with UBC’s core values of sustainability, leadership, and innovation.

As President Gupta said in his installation speech: “Each generation has a responsibility to take the world as we find it and do our utmost to make it better.”48 UBC cannot live up to that promise when it is invested in an industry that poses a direct threat to the well-being of future generations,

including our own students. If it is wrong to wreck the planet, then it is wrong to profit from doing so."

https://d3n8a8pro7vhmx.cloudfront.net/ubcc350/pages/43/attachments/original/1414421298/UBC_Fossil_Fuel_Divestment_-_Responsible_Investment_Proposal_October_27_2014.pdf?1414421298

Then president Gupta should figure out how to rid his university of its fossil fuel addiction. Until it does, it is invested in the industry no matter how much smoke and mirrors it indulges in.

[eyeball]

At the end of the day why would anyone care how they made their money?

Their ethics, virtue, principles - things that are obviously more important to them.

It looks the same as any other money.

Money is just a thing, it's what's done with it and how that counts.

[WestCoastRunner]

SFU has also joined the movement to divest of fossil fuel investments:

"More than 100 faculty members have signed an open letter asking the board of governors to stop investing in fossil fuels with the university’s endowment money."

"The campaigns are part of a growing movement across the country that saw the Concordia University Foundation in Montreal announce last week a partial re-investment of $5 million of its assets into sustainable investments that don’t include fossil fuels, weapons or tobacco."

http://www.vancouversun.com/news/simon-fraser-university/move+join+growing+divestment+campaigns/10442135/story.html#ixzz3LkWAFrgF

I'm glad this thread was finally unlocked.

[Wilber]

SFU has also joined the movement to divest of fossil fuel investments:

"More than 100 faculty members have signed an open letter asking the board of governors to stop investing in fossil fuels with the university’s endowment money."

"The campaigns are part of a growing movement across the country that saw the Concordia University Foundation in Montreal announce last week a partial re-investment of $5 million of its assets into sustainable investments that don’t include fossil fuels, weapons or tobacco."

http://www.vancouversun.com/news/simon-fraser-university/move+join+growing+divestment+campaigns/10442135/story.html#ixzz3LkWAFrgF

I'm glad this thread was finally unlocked.

So they want to sell their energy stocks when prices are rock bottom. Brilliant business decision. You can tell who isn't paying the bills.

[WestCoastRunner]

So they want to sell their energy stocks when prices are rock bottom. Brilliant business decision. You can tell who isn't paying the bills.

Not exactly. They proposed this way back in the spring of this year.

http://sustainablesfu.org/actionareas/climate/fossil-fuel-divestment/press-release-march/

[WestCoastRunner]

I don't understand the backlash against universities proposing this. It will certainly contribute to investment in cleaner energy research and isn't that a good thing for our planet? Isn't that what we all should be aiming for?

[Wilber]

I don't understand the backlash against universities proposing this. It will certainly contribute to investment in cleaner energy research and isn't that a good thing for our planet? Isn't that what we all should be aiming for?

The backlash is against making business decisions for ideological reasons. These funds exist to provide income for the university. If a good business case can be made, then go for it, if not,, then don't. Whether university endowment funds hold energy stocks will have no effect on peoples use of fossil fuels. My vehicles use gasoline and diesel. I heat my home and water with natural gas. Universities use fossil fuels as well. The day I divest my energy stocks and claim to be saving the world is the same day I will wear a T shirt with HYPOCRITE printed on the back.

[WestCoastRunner]

The backlash is against making business decisions for ideological reasons. These funds exist to provide income for the university. If a good business case can be made, then go for it, if not,, then don't. Whether university endowment funds hold energy stocks will have no effect on peoples use of fossil fuels. My vehicles use gasoline and diesel. I heat my home and water with natural gas. Universities use fossil fuels as well. The day I divest my energy stocks and claim to be saving the world is the same day I will wear a T shirt with HYPOCRITE printed on the back.

You have seen the evidence from financial advisors that investing in companies other than fossil fuel companies produce the same or better returns than fossel fuel companies.

You are just spouting off without investing any energy on your part to see if it's a good thing. Again, I repeat, why the backlash. You say it's for ideological reasons. But why not? And in the meantime, if they can get better returns and encourage companies to invest in alternative energy solutions, why not? You have not provided a good reason for them not to divest of these investments.

Edited December 13, 2014 by WestCoastRunner