SFU's Responsible Investment Committee has published a draft revision to its Responsible Investment Policy. While we applaud the Committee's efforts to specify the conditions under which the university would divest from certain corporations (and fossil fuel companies in particular), the draft revision in its current form is inadequate and would make divestment all but impossible. Please add your name at the bottom as a co-signer on ours and SFU350's open letter.
Dear Responsible Investment Committee of SFU,
We, the undersigned, applaud the SFU Board of Governors response to the community’s calls for a divestment policy through the further development of the Responsible Investment Policy. However, we have a number of suggestions and concerns with the current draft policy that warrant consideration.
SFU’s investments should be aligned with the university’s policies and goals. Specifically, we believe that investments from the endowment fund should be consistent with the Paris Pledge for Action that SFU has signed onto, which calls for immediate action to limit world temperature rise to 2 degrees celsius and strive for 1.5 degrees celsius.
Additionally, the decision to divest should be based on the social and environmental impacts of a corporation’s practice rather than the anticipated political repercussions of divesting. This will guide SFU’s decisions to be rooted in science and ethical values.
Furthermore, any group presenting to the Responsible Investment Committee on divestment should warrant a formal consideration process. The divestment policy should specify a process to deal with the request that includes a reasonable timeline and consultation with an interdisciplinary group of SFU students, staff, and faculty.
With regard to the first point of Section 5.5.1, we would argue that the power of divestment lies in making a statement that companies that cause social harm are not supported by respected institutions. SFU can still have an impact by making the commitment to divest the holdings in those companies – regardless of whether the University has small or large investments in companies that cause social harm. It should not matter how much of the endowment is invested in the particular entity if it is against our values as a university.
In response to the second point quantifying significant social injury, we argue that ten percent is an arbitrary number and we should instead focus on the injury of the practice rather than the amount of it. If an entity commits even 9% of practices we classify as serious social injury, then we should still divest from it.
We also take issue with the third point requiring proof that divestment would be more effective than shareholder engagement. Divestment is a powerful movement as it helps to remove the social license that certain companies have to operate in society. It would be extremely difficult to gather “reasonable evidence” to prove that particular impact, as this cannot be predicted. SFU should therefore not rely on this unreasonably high standard that cannot be met to make a divestment decision.
Finally, with regard to the last point on whose interests should be considered, it is the fiduciary responsibility of the Board of Governors to ensure the endowment functions in the interest of all the beneficiaries, not all stakeholders. The trustee’s duty is not to maximize returns, but rather to optimize returns, with risks taken into account.
For these reasons, we urge you to ensure the policy revision better reflects the wishes of faculty, students, and staff. Although we applaud the decision to further develop the Responsible Investment Policy, we are confident in our assessment of the draft revision and believe that it undermines the wishes of the university community.