On April 26, Mount Allison University issued a press release announcing the Board of Regents’ approval of several recommendations made by the Responsible Investment (RI) subcommittee, a subsidiary of the Board’s Nominating and Governance committee. These recommendations are the result of a year-long deliberation process sparked by a report calling for the creation of a policy regarding socially responsible investing (SRI) submitted to the Board by Divest MTA in early 2016.
The Board’s executive committee approved five main recommendations concerning responsible investment: to update applicable investment policies to consider environmental, social and governance factors (ESG), provide University donors with the option to invest in a fund that excludes or limits investment in certain sectors, become a signatory to the United Nations Principles for Responsible Investment (UN PRI), make a list of the underlying stock and bond holdings of the University’s pooled funds publicly available, and produce an annual report on responsible investment.
Divest MTA began calling on the University to divest – to remove its holdings from the top 200 publicly traded coal, oil and natural gas companies over the course of five years – in 2013. In February 2016, the group submitted a formal report to the Board calling for the creation of a procedure to evaluate the social impact of new investments.
The report recommended that the university establish a SRI committee to advise the Board on issues of socially responsible investment. In March 2016, the Board’s executive committee established terms of reference for a RI subcommittee with a less specific mandate that allowed them to focus on matters of responsible investing rather than socially responsible investing.
Divest MTA expressed frustration with the broadening of the subcommittee’s mandate, stating in a press release that it “allowed the subcommittee to reframe larger questions of ethical responsibility in terms of conventional forms of shareholder engagement that do not lead to meaningful change in investment practices.”
According to the University’s recent press release, the RI subcommittee looked into the possibility of divestment, but concluded that it is incompatible with the Board’s understanding of fiduciary responsibility. The subcommittee ultimately recommended against divestment, and the Board accepted this recommendation.
According to Canadian trust law, “the university as trustee of [endowment] funds is not permitted to apply its own values if those reduce the effectiveness of the funds,” said Bruce Robertson, a professor in the classics department who sits on the Board and was the faculty representative on the RI subcommittee.
Robertson believes that the limitations of trust law can be overcome by giving future donors to the University the option to invest in ethical funds, as recommended by the RI subcommittee. “[The establishment of an ethical fund] is a kind of drip-by-drip divestment,” Robertson said. “We can encourage future donors to strongly consider this option.”
Divest organizer Alex Lepianka said that adherence to trust law “perpetuates a legal institution that is fundamentally racist and classist and is for everything that the university, as a public institution, should be against.” He does not see the RI subcommittee’s recommendations as substantive.
“[The recommendations] are in fact quite superficial and do not address the root issue, which is the inability of anybody but administrators to decide what the university does and the principles against which it measures itself,” Lepianka said. “[Divest MTA is] trying to rebuild the decision space from the ground up. We are trying to get rid of these structures that have allowed us to hold investments in the fossil fuel industry in the first place.”
The report submitted by Divest MTA requested that any established committee make sufficient efforts to include the University community in their deliberation. The RI subcommittee had one student and one faculty representative, Willa McCaffrey-Noviss and Robertson, respectively. However, McCaffrey-Noviss resigned midway through the process, citing her lack of knowledge surrounding investment as her reason for doing so. McCaffrey-Noviss was later replaced by Lepianka, as per her recommendation.
“While I do think it was hard for me to be a good representative on the [sub]committee, I am not sure whether that was because of inaccessible governance structures or if it was because I was not the best person for the job considering my lack of knowledge of investment, so I stepped down and allowed a student with more knowledge on the issue to take over,” McCaffrey-Noviss wrote in an email to the Argosy.
Robertson said that while some of the reports the subcommittee looked at were long and complicated, members of the subcommittee had resources such as Vice-President Finance and Administration Robert Inglis and representatives from the University’s financial consulting firm to answer questions they may have had.
Lepianka believes that the inclusion of a student in the subcommittee “is more symbolic than anything else.” He expressed dissatisfaction with the dynamics of the RI subcommittee meetings and said that the majority of each 90-minute meeting was devoted to the administration’s interpretation of reports or policy, with little time allotted to critical discussion.
“Even if you have a student member who is able to keep up with the technical discussion that is being had…how can you call it meaningful engagement when 75 minutes out of a 90-minute meeting are being taken up by the administration?”
Robertson and Inglis both felt that having a student on the subcommittee was beneficial. Inglis said that the subcommittee made attempts to consider student and faculty voices, citing a panel on divestment hosted in 2016 and a meeting between subcommittee members and Divest MTA in September 2016 as examples.
Inglis said that he is looking forward to implementing the recommendations of the RI subcommittee.
“I don’t see any friction on a level of willingness,” Robertson said. However, he also noted that the establishment of a new ethical fund is a great deal of work. “I think we as a community have to not be excessively impatient.”
McCaffrey-Noviss was also optimistic about the results, writing “these are great wins, but I also hope to see greater movement in this direction.”
Lepianka feels that the subcommittee’s recommendations do not sufficiently address the issues raised by Divest MTA. “The decisions made by the Board do not at all reflect the principles we have been advocating for….Our primary concern is to radically change the mentality that is behind all of these governance decisions,” he said. “What we’re seeing right now is an insulting and unwavering commitment to a status quo that is fundamentally unjust.”
The Board also approved three recommendations from the governance operations subcommittee, which was struck at the same time as the RI subcommittee. These recommendations include making Board meeting minutes publicly available, encouraging continual professional development and training for Regents, and committing to hosting at least one open meeting (meaning any individual can attend) per year.