Universities urged to adopt SRI practices

A new coalition group is calling on Canadian universities to introduce responsible investment practices. The newly formed Coalition of Universities for Responsible Investment (CURI) says the universities need to address risks affecting over $41 billion in pension funds and endowment investments.

"We are lagging far behind our American counterparts when it comes to incorporating environmental, social and corporate governance (ESG) risks into investment strategies," said Omar Dominguez, CURI chair and co-founder. "If ignored, these risks do more than harm a university's reputation. They endanger the growth of their endowments and pension funds.”

Dominguez says the financial crisis was a wake-up call for many university investment managers. The total value of U.S. universities' endowments fell by nearly a quarter between July 1 and November 30, 2008 – a decline of about $94.5 billion in assets. "It is now widely understood how, in the months leading to the crisis of 2008, poor corporate governance practices such as the securitization of toxic sub-prime mortgages exposed the entire financial system to excessive risk. Conventional investing strategies were not able to identify and mitigate those risks," said Dominguez.

In response, more than 40 American universities have since established responsible investment advisory groups. Only the University of Toronto has followed suit among Canadian universities, the coalition noted in a press release.

“Responsible investing provides a bridge between ethical concerns and financial performance,” the release states. “For years, university communities have used activism and antagonistic campaigns to influence their schools' investment practices. But by inviting their stakeholders along with RI professionals to the board room, universities can avoid the rancour of divestment campaigns and protect the long-term performance of their investments. RI also furthers universities' educational mandates by nurturing a constructive dialogue about complex investment issues.”

CURI will hold its first national symposium on June 21 in Victoria, in partnership with the Social Investment Organization and its national conference.