The inaugural Coalition of Universities for Responsible Investing (CURI) Symposium took place on June 21. This event brought together students, investment professionals, university representatives, and responsible investment (RI) experts to discuss the state of responsible investing in Canadian universities, and how this can be improved. Gabriel Huppe, CURI co-founder, commenced with an overview of the current state of responsible investing at Canadian universities.
According to Huppe, Canadian universities are ahead of the rest of North America in terms of transparency. This is good news, as transparency is essential in determining the environmental, social and governance (ESG) impacts of an institution’s investment strategy. The bad news is that Canadian universities are lagging behind the rest of North America in the areas of investment priorities and shareholder engagement.
While the current state of RI at universities is concerning, there is also cause for hope. CURI has identified several opportunities to increase university RI. These opportunities include sharing information and collaborating between schools regarding adoption of RI practices; educating both students and trustees, including the incorporation of RI into curricula; and setting standards for university RI practices and frameworks. All of these opportunities were explored throughout the symposium.
Why universities and RI?
This question came up several times in one form or another throughout the symposium. Natalie Beinisch, Academic Network Manager at UN PRI, and Lisa Hayles of EIRIS provided a good overview of the links between universities and RI.
ESG is part of risk analysis, and incorporation of these considerations into decision-making reduces risk in managing university endowments and pensions. This was echoed by all of the asset managers during the “Decision Makers Forum.” The risk-management argument has even been used to justify RI as being in the best financial interest of an organization, and thus has helped to side-step legal concerns in some cases.
RI provides an opportunity to demonstrate leadership and enhance a “sustainable” reputation. Universities are presently making big shows of the steps they are taking toward sustainability, and they will not want to compromise their “green” identity by refusing to consider the systemic impacts of their investments. This may create momentum as other schools will not want to be left behind. As Martin Bourqui of the Responsible Endowment Coalition put it, “Universities don’t always want to be leaders. They just don’t want to be laggers.”
Due to the diversity of knowledge and understanding, and the capacity for research, universities are natural fits for RI. Coordination of the departments would provide the ability to use this knowledge for risk analysis. Universities are also the most likely producers of new economic or investment models, considering the amount of intelligent, passionate, and creative people who dedicate themselves to learning, teaching, and research.
Beinisch purposely avoided using a moral argument when asked why universities should adopt RI. Her experience, focusing on risk management, has been the best way to persuade certain stakeholders of the need for a change.
Hayles, on the other hand, was very passionate about values-based motivations for RI, insisting that we need to keep the “social” in RI. She maintains that it is better for society, communities and culture if we push the idea of social responsibility beyond financial outcomes. According to Hayles, the passion of the students may be a great driver for university RI and their motivation of a better future.
CURI Symposium Lessons
Overall the day was a great success, facilitating discussion between various stakeholders in the RI conversation from different schools.
In addition to the 40 or so participants present, there was also online participation through a live feed. This diversity of participants in a constructive environment enabled open dialogue in a spirit of camaraderie among individuals who, in other circumstances, may feel more defensive or adversarial.
There were many ideas shared throughout the day, but there were also themes that seemed to creep up and provided great opportunities for learning. These are the key lessons that can be learned from the shared experiences of the symposium presenters and participants:
- Don’t try to sell RI using a moral argument. Make a strong financial and reputational argument, and then the moral outcomes are just a bonus. The risk-management angle of adopting ESG considerations in decision-making is a great selling point and may combat the legal argument that finances must be managed for optimal financial gain.
- Advocating for transition to RI can be a slow and frustrating process because participants get sidetracked with details of what needs to be screened out. Instead of focusing on the details, concentrate on the process of developing a broader RI policy. Be patient. This is a shift in organizational culture and it will take time. Focus on the process and the dialogue as part of the solution instead of expecting instant results.
- There needs to be open conversation between all stakeholders in which they feel heard. Students get frustrated if their concerns about oil and gas investments are ignored, trustees get frustrated if their busy schedules and competing priorities are neglected, and donors get frustrated if their expectations for how their donation will be managed are not considered. Try to understand other stakeholders’ perspectives and make sure you speak each other’s language.
- Change in any organization requires a champion. Get one trustee on your side and start a conversation with them. Win them over with your research, and then be cooperative and respectful while not accepting no for an answer when you ask for the development of an effective RI policy.
The Symposium provided an excellent venue to acknowledge the opportunities that CURI has identified. Individuals from many institutions shared their experiences and perspectives on university RI, planting the seed for future collaboration between schools.
In addition, exploring the experiences of universities that have already begun the transition to RI and looking at existing principles such as the UNPRI is necessary to develop standards and frameworks for university RI. There is still a long way to go before Canadian universities transition to RI but the symposium stimulated conversation, and that is the first step in the process of change.