It’s $2.9 billion worth of U of T’s money, but students and faculty are not allowed to know where it is being invested.
“We’re not at liberty to share that information,” said Louis Charpentier, the secretary to U of T’s Governing Council, when asked for a list of the university’s investments. “It’s proprietary because it’s competitive information.”
U of T used to release a list of its investments, but stopped doing so when it spun off management of its assets into a separate corporation, called University of Toronto Asset Management (UTAM) in 2000.
The last list released dates to September 1999. It includes tobacco giants like Philip Morris, weapons manufacturers such as Raytheon, as well as companies like Monsanto (a leader in genetically engineered crops) and Boliden (a mining company) that have taken heat from environmental groups.
U of T has an ethical investment policy, which allows concerned members of the university community to bring complaints forward about specific investments for investigation. That policy has only been used once, when U of T dumped its South Africa related stocks in 1988, as part of a campaign against apartheid.
The university set up an advisory committee in 1991 to consider the ethics of its tobacco stocks. The committee advised against divesting, saying that the university could get into legal trouble if they didn’t put good stock performance ahead of other considerations.
They recommended that the university’s ethical investment policy be reviewed, since at least in the case of tobacco, the law made it “inappropriate, if not impossible” for the university to divest.
Does that mean U of T’s ethical investment policy could never actually be enforced? Not according to U of T spokesperson Sue Bloch-Nevitte. “Do I believe the current policy is still active and functional? My answer to that is yes,” she said.
But Gil Yaron, a lawyer who sits on an advisory committee for the Ontario Securities Commission, and a member of the Shareholder Association for Research and Education, disagrees.
He said managers of money held in public trust, like U of T’s endowment and pension funds, can take social and ethical issues into account.
“The law doesn’t prevent the university from divesting, the issue is how it goes about it,” he said. He noted that universities like U of T could divest from various stocks for ethical reasons as long as they made sure that decision didn’t do financial harm to the fund.
Harvey Skinner, chair of U of T’s department of public health sciences, said U of T needs to get out of tobacco, in particular. “The tobacco industry in general is just so unethical. There’s no question from our perspective in public health sciences-it’s a no-brainer.”
Joanna Cohen, a U of T professor who led a study on Canadian university ties to tobacco, agrees. She points to universities in the United States, such as Harvard and Johns Hopkins, who divested more than a decade ago. “Those universities are still in existence and still have a pretty strong reputation,” she said.
George Luste, head of U of T’s faculty association, said he doesn’t understand why U of T can’t release its list of investments. He’s skeptical of the “competitive information” argument.
“That to me is nonsense. I mean, it is basically hiding,” he said.
The $76 billion Ontario Teacher’s Pension Plan publishes a list of all its investments over $20 million on its Web site. “The information is stale dated by about 8 weeks so we don’t feel we are giving away any secrets,” said Lee Fullerton, a spokesperson for the plan.
Chris Ramsaroop, a student representative on governing council said it’s high time U of T reviewed its investments for ethical reasons.
“The divestment policy has been put in place to ensure that there are some ethical standards,” he says. “The impact of those investments is not only being felt on campus but throughout the world.”
For their part, the Ontario Teacher’s Pension Plan says it would apply ethical screens to their investments if the government clarified the law and teachers gave them a clear mandate to do so.
“If teachers and the government can agree on an [ethical] screen and accept the resulting rate of return, we will apply the screen,” said Fullerton. “It would change our mandate…but it is totally their choice. We’ll do whatever is asked of us.”
The Ontario Ministry of Finance says it has no plans to review or clarify the law. “We are not actively reviewing it, but we welcome any specific proposals people may have,” said ministry spokesperson Boni Fox Gray.