The WESEF board of directors has officially approved a motion initially brought forward at their general meeting Nov. 12 to divest the fund from fossil fuels. The original proposal received support from a large majority of those in attendance at the general meeting.</p>
According to Nick Manning, director of media relations and issues management at UW, the WESEF board of directors’ motion to divest the endowment fund will most likely be sent to UW’s board of governors finance and investment committee.
At the last board of governors meeting, Oct. 28, a motion was passed that stated that the board does not consider environmental, social, and governance (ESG) factors when choosing fund managers and the fund managers are not instructed to consider policies and practices of investments in relations to the ESG factors.
According to a statement from Manning, this change was made in response to changes made to the Pension Benefits Act in Nov. 2014. This change required pension plans to include a description of their approach to ESG factors.
“Waterloo has introduced ESG language in both its pension fund and endowment fund investment guidelines, although ESG language is not legally required in the endowment fund materials. We are forming a working group to review and recommend to the board of governors how ESG factors might be taken into account when making investment decisions for the pension and endowment funds. No decisions have yet been taken.
“Historically, the underlying investment philosophy has been to retain investment managers who invest in high quality publicly-traded companies. The investment assumption is that positive performance on ESG factors is closely aligned with strong financial performance over the long term and positive ESG factors reduce investment risk over time,” wrote Manning.
According to Manning, the ESG statement would not preclude the board of governors from acting on the WESEF request.
“The financial committees of the board will take a look at and consider it but it is too early to determine what course of action they will take,” said Manning.