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Rye’s investments question ethics

In Business & Technology /

By Alfea Donato and Janelle Jordan

In classrooms, professors teach business ethics and green energy courses. Hand-grown gardens and water bottle refill stations are scattered throughout campus. An entire week devoted to social justice runs every year.

But Ryerson’s commitment to sustainability and anti-discrimination doesn’t appear to extend to its investments. Ryerson invests in companies accused of using child labour and unethical oil extraction methods, among other ethical controversies. The school uses its endowment fund, a fund made up entirely of donations, to do so.

In documents obtained by The Eyeopener, Enbridge Inc. and Nike are listed among 111 companies Ryerson invests almost $68.5 million in, through Fiera Sceptre, an external investment firm. Fourty four of the companies have been involved with ethical controversies that contradict Ryerson intiatives and policies.

Fiera Sceptre invests over $617,000 on behalf of Ryerson in Nike, Inc. In 2005, Nike, Inc. published a 108-page report detailing employee abuse and improper working conditions in almost 1,000 factories. There have since been ongoing reports of employee abuse.

This type of unfair treatment of employees contradicts Ryerson’s discrimination and harassment prevention policy, which states that “it is the responsibility of the University to exercise its authority to prevent discrimination and harassment, to penalize the repetition of discrimination and harassment, and to respond promptly to known or apparent incidents of discrimination and harassment.” From an electrical vehicle charging station to battery recycling centres, Ryerson has over 100 sustainability initiatives.

However, companies involved with oil sands controversy are in Ryerson’s energy portfolio. The most invested energy company is Enbridge Inc., Canada’s largest oil and gas pipeline company.

Fiera Sceptre invests $300,000 in Enbridge Inc. The Northern Gateway Pipelines Project is the company’s latest proposal to build a dual pipeline system from Alberta to British Columbia, which has created furor over the destruction of the environment due to oil extraction practices.

For environmentalist Torrance Coste, Ryerson’s policies should apply to companies the endowment fund invests in. He was involved with the University of Victoria’s student groups’ attempts to discontinue the university’s investments in fossil fuels.

“The dishonesty comes from outwardly presenting yourself as a university… where solutions are born on the one hand and contributing to these problems on the other,” Coste said. “That’s where the ethical contradiction is.”

By investing in these companies, Ryerson makes money from returns (earnings companies give). The higher the investment, the higher the return. Ryerson’s total investment income last year was almost $17.8 million. Only 3.5 per cent of that income went to student scholarships and bursaries.

Ryerson’s $99.5 million endowment fund is entirely made up of donations. Each donation made is a minimum of $25,000. Last year, $3.47 million was donated. The majority of donations are invested in the endowment fund.

The rest goes towards individual Ryerson faculties. Using 38 per cent of the income, faculties allocate the money wherever they wish, including student awards and academic programs. The Ted Rogers School of Management receives 22 per cent of the endowment fund, the largest for any faculty.

Rewards for donating include an undergraduate award named in the donor’s honour and can go up to naming a building after them, such as the Mattamy Athletic Centre.

After Mattamy Homes Ltd. founder Peter Gilligan donated $15 million, the athletic centre was named after his company.

Ryerson’s endowment fund is modest in comparison with York University’s $338 million and the University of Toronto (U of T)’s $1.5 billion endowment counterparts.

Fiera Sceptre pools Ryerson’s endowment fund with other institution’s funds, like U of T. Because of this, Ryerson cannot choose which companies it funds. However, Ryerson can try to influence investments through meetings with Fiera Sceptre two to three times a year.

“We can’t say you buy this stock,” said Adam Kahan, Ryerson vice-president of university advancement. “…We’ve entrusted the investments to the investment company.” Ethical problems with university investments are not new.

In 2011, York University student group Students Against Israeli Apartheid (SAIA) released a report showing the university invested in companies that made weapons for the Israeli military.

Since SAIA’s report, York University has removed two of its investment management firms and the Board of Directors of York University Foundation is no longer involved.

Divesting, which is when an investor discontinues investments, is difficult for universities that pool their endowment funds. It’s why student involvement and ethical guidelines are important for universities, said Omar Dominguez, co-founder of the Coalition of Universities for Responsible Investing.

“The truth is there is no perfectly ethical company,” Dominguez said. “A better approach for investors in general is to engage with companies to elevating the standards and behaviour of corporations.”

Ryerson only blacklists companies involved with tobacco, alcohol, pornography, weapon production and gaming, according to Fiera Sceptre’s Environmental, Social and Governance investment policy. Ryerson uses the same policy as Fiera Sceptre for investing.

“As there are no truly ‘black or white’ corporate entities, it is necessary to… choose those companies that on balance are employing sound social and environmental practices,” states the investment policy.

Policies alone don’t engage companies to improve their ethical practices, but public awareness and transparency can pressure universities to do so.

While York University and U of T have students involved with divestment campaigns and investing committees, Ryerson has no student groups that are pressuring change in endowment investments or calling for divestment.

When asked to comment on the ethics behind the endowment fund’s investments, vice-president of administration and finance Julia Hanigsberg suggested contacting companies directly.

“If you have questions about the business of any of those companies I think the best thing would be to speak with them,” Hanigsberg said.

Ryerson president Sheldon Levy couldn’t comment on specific ethical controversies, but said he supported Fiera Sceptre.

Comments

  1. If those environmentalists want to compensate the school for the lower returns from limiting to these social companies only, then fine. Otherwise why waste money?

    By the way, I have $11K invested in renewable energy sources. Choose investments for the investment, not for some small MINORITY (and yes, these people are a small minority) egos.

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