HSBC and RBC files show divestment choices make little change to investment portfolio.
By Kier-Christer Junos
April 2014 minutes from a Kwantlen Polytechnic University Board of Governors (BoG) meeting shows that the board defeated a staff-and-student initiative to divest university money from fossil fuel investments.
However, research presented by HSBC and RBC showed that divesting would have little impact to investment yields.
In response to questions asked by the BoG, HSBC explained that, “Excluding investments in fossil fuel securities will have a negligible impact on the risk profile or the returns of the portfolio,” and that “The exclusion of fossil fuel issuers will not have a material impact in the portfolio’s risk profile, as the portfolio will continue to be well diversified.”
“The board that we had there, that was active at the time, weren’t favourable of supporting a divestment movement on campus,” says Richard Hosein, a BoG student representative who helped present the initiative in April. “There’s a few board members that have changed since then. In fact, [during that BoG roster] a couple of the board members were working for oil and gas, and they outright spoke out against the motions and amendments to the motions—which was sort of expected.”
The university—and factions within it—still maintain eco-friendly practices to reduce KPU’s carbon footprint. The 2013 Carbon Neutral Action Report created by KPU facilities services shows that Kwantlen was able to reduce its total greenhouse emissions by 4.5 per cent from 2012. The report cites various actions the university has taken to reduce emissions: upgrades in energy conservation lighting technology reduced annual lighting expenses by $13,486, in maintenance costs; the university had the boiler systems adjusted, now optimized for efficiency and a reduction in natural gas use; and the infrastructural upgrades in the Langley horticulture building allow for better energy monitoring in greenhouses.
The Kwantlen Student Association (KSA) has passed plenty of policies on fossil fuel divestment—some of which were directed at the BoG—and have budgeted $80,000 for lobbying and campaigning in 2014. Some of those lobbying funds sent student politicians to divestment conferences across the country. KSA vice-president of finance Gaurav Bhulla explains that the KSA has long since divested from fossil fuel investments, ever since the KSA’s revenue allowed their participation in CIBC’s external brokerage firm (called Wood Gundy), they were able to tailor their investments to exclude fossil fuel companies. Bhulla found the same reflection in their choice to divest.
“We removed the names of the companies that we didn’t want,” says Bhulla. “And the one question as a business minor was if that would affect our interest revenue . . . but the thing is, KSA is not-for-profit. And fortunately, [divesting] doesn’t even affect our interest revenue. We’re still getting the same interest revenue.”
The student association, on students’ behalf, are amicable towards sustainability policies, and various university factions feel the same. But the lack of political cohesion between KPU’s BoG—the highest legislative body in the university, with two-thirds government appointees—and internal university factions doesn’t make sense to some KPU community members.
“You said it wouldn’t make much of a difference to [divest]?” asks first-year criminology student Gabriele Ghag. “That’s kind of stupid. I don’t know, why not be more eco-friendly? What’s wrong with that? It’s not changing anything on [the university’s] behalf. It doesn’t make any sense to me.”
“In my opinion, I think KPU should follow up its concern with environmental issues by aligning their environmental concerns with their investment portfolio,” says Marti Alger, a learning strategist in the KPU Surrey learning centre. “[They should] basically follow through on sustainability and education.”
Hosein sees the dissonance, too. “Yeah I would, personally I would love to see some cohesion there,” he says. Hosein adds that political alignment would ensure more cohesion in other aspects of university community life that involves multiple internal factions. He suggests cohesion would generally get things done more efficiently.
“But obviously there’s a fundamental difference when we have elected officials—let’s say, the KSA who are elected by students—and we have appointed members of BoG by the provincial government,” says Hosein, “Whose mandate we know is liquefied natural gas (LNG), pipelines, or any other type of fossil fuel paradigm that they want to engage in. And it’s evident with the government’s latest budget release strategy, they’re pushing LNG at the forefront of almost everything.”