The University of Victoria’s decision to divest its working-capital fund of fossil-fuel investments is being heralded by groups that have been advocating for the move.
UVic announced Tuesday that it is transferring $80 million to a short-term bond that reduces the “carbon intensity” of its investments. That follows the approval of a policy last year to lower carbon emissions, represented in the entire $225-million portfolio, by 45 per cent by 2030.
“We are acting on our commitment to address climate change in every domain at UVic, including through our investments,” said UVic treasurer Andrew Coward. “The opportunity to invest in renewable power is clear and it aligns with UVic’s responsible investment strategy, allowing for support of future technologies while also ensuring a strong financial return.”
The investaments allow the university to lower the carbon footprint of its investments, he said, “which helps to mitigate the investment risk associated with climate change as society transitions to a greener economy that is focused on reducing greenhouse gas emissions.”
Both the UVic Students’ Society and Divest UVic called the development a “major victory” following an eight-year fight to stop the university from investing in the fossil-fuel industry.
“It was honestly a shock, the timing of it,” said Emily Lowan, a UVSS director and lead organizer for Divest UVic, one of 18 such divestment groups across Canada.
She said she is impressed with how quickly new UVic president Kevin Hall, who began his five-year term Nov. 1, is taking action on student concerns. Students held a demonstration in favour of divesting shortly after Hall took office.
Lowan said the effort to effect change in investing has picked up momentum in the past two years. “Overall, it’s really been a focus and a priority for the UVic community since 2013.”
UVic said that its policy decision on the working-capital fund was influenced by “the passionate commitment, research and perspective” shown by proponents who pushed for the university to address climate change through its investments.
“The students, staff and faculty played an important role engaging with the university,” Coward said. “I’d say they were a key contributor as we developed our responsible-investment policy in January.”
The changes didn’t happen right away, he said.
“It has taken some time as we’ve carefully considered what the students have been asking us,” Coward said. “We do have our fiduciary duty in order to achieve certain financial goals.”
He said the working-capital fund is important to the university, as helps to fund operations.
The commitment to sustainability includes an investment of $10 million in the BlackRock Global Renewable Power III Fund, which backs such projects as an onshore wind facility in Norway and a floating solar farm in Taiwan.
All of the fund’s projects are in alignment with United Nations Sustainable Development Goals.
The UVSS and Divest UVic aren’t done fighting, however, and are urging the University of Victoria Foundation to follow UVic’s lead and remove fossil fuel investments from its Long-Term Endowment Fund.
Coward said the foundation has its own responsible investment policy “that continues to evolve.” He said the foundation has taken steps to establish and update its investment policy and be transparent about its investment decisions.
Investments in fossil fuel equity holdings have been reduced to two per cent in 2020 from eight per cent in 2017, he said, as a result of the foundation’s “responsible investment belief.”