News  How McGill invests its $849.2 million

Jessica Lukawiecki investigates the structures of environmental accountability that monitor McGill's endowment

McGill’s endowment had a market value of $849.2 million in 2010. This money – which includes the University’s bequests, donations, and assets – is placed in the hands of various investment managers approved by the McGill Board of Governors (BoG) Investment Committee.
According to the Report on Endowment Performance for 2009-2010, the objective of investing the endowment is to “obtain a total return necessary to provide a dependable and optimal source of income for endowment beneficiaries, to cover the annual costs of the endowment, and to preserve the capital of the endowment within the social and ethical norms of the University.”
However, there is currently no system in place to monitor whether the commodities and corporations in which this money is invested engage in practices that are damaging to the environment.
Although there is an ad hoc BoG committee – The Committee to Advise on Matters of Social Responsibility (CAMSR) – to review investments with potential implications of “social injury,” it has not met in over two years, and does not review the environmental impact of McGill’s investments.

The Investment Committee
The McGill Board of Governors, the highest governing body of the University, is composed of 25 voting members and two observers, and generally meets six times per year.
There are several committees within the BoG, including the Investment Committee, which is responsible for overseeing the investment of McGill’s endowment.
The 14 members who sit on the Investment Committee were appointed, according to the terms of reference, “on the basis of their expertise and interest in investment, business, and economics.” The committee, which includes BoG Chair Stuart Cobbett and Principal Heather Munroe-Blum, regulates which investment managers and commodities are part of the endowment portfolio.
According to SSMU President Maggie Knight, one of two student members on the BoG with voting privileges, “there is no student representative on [the Investment Committee], so obviously it can be a little opaque in terms of exactly what happens there, but of course, it operates according to its terms of reference.”

The Committee to Advise on Matters of Social Responsibility
CAMSR, which was formed in the 2004-2005 academic year, allows any member of the McGill community to initiate expressions of concern by providing a fully documented brief identifying the “social injury” that should influence investment decisions, as well as a petition of at least 300 signatures from fellow community members.
CAMSR defines “social injury” as: “The injurious impact which the activities of a company is found to have on consumers, employees, or other persons, particularly including activities which violate, or frustrate the enforcement of, rules of domestic or international law intended to protect individuals against deprivation of health, safety, or basic freedoms.”
This framework does not commit the BoG to any standards of environmental responsibility.
PGSS President Roland Nassim, the other student member of the BoG with voting privileges, was involved in defining the terms of reference for CAMSR. Nassim explained that “essentially, investment purposes can go against such policies, and that’s the unfortunate reality if you are investing to make money. So, I’m not surprised that there may be some push to not meet or discuss these things, because it just doesn’t make sense in a business mindset.”
McGill’s report on endowment performance – which is available on the website of the Office of Investments – lists the names of investment managers and commodities in which McGill money is invested, but does not name specific companies. This information, according to Senior Treasury Officer of Endowment Accounting & Reporting Wanda Leah Trineer, is available to anyone who files an Access to Information Request (ATI). Trineer added that community members have filed such ATIs in the past.
According to the report, $10 million of the endowment is invested in commodity commitments, which include two North American natural resource funds of funds (FOF) and one Canadian early stage oil and gas fund.
This number does not include money that individual managers could be investing in organizations that engage in environmentally destructive business practices, such as oil suppliers, or banks that invest in tar sands.

Under review
Knight, who has been on CAMSR since September 1, explained her concerns about the committee.
“Technically, any member of the McGill community can be aware of the fact that this committee exists and that they could get it to meet,” she said. “But, as we all know, there are a lot of documents on the McGill website that people may or may not know about. So, evidently either everything about McGill’s investments is perfect, and no one is worried about it, or people aren’t sufficiently aware of the process.”
She compared McGill’s committee to the University of Toronto’s Responsible Investing Committee.
The Responsible Investing Committee, which monitors the investment of the university’s over $1 billion endowment, states in the first line of its terms of reference: “The University recognizes that certain principles related to social, environmental or governance matters may be established to supplement our investment strategies without compromising our fiduciary obligations.”
The committee is also required to meet regularly, regardless of whether there is a specific complaint filed.
SSMU Sustainability Coordinator David Gray-Donald told The Daily that, for now, CAMSR deals “mostly about injury to humans fairly directly.”
“That’s not all injury – there could be injury to landscapes and animal populations – but it’s already promising that they’ve set a precedent and that there is some consideration at least, so it doesn’t seem inconceivable that environment could be integrated into that,” he continued.
Knight agreed, explaining that she would like to see CAMSR meet regularly in the future, regardless of whether there are formal complaints.
McGill Secretary-General Stephen Strople, another member of CAMSR, explained in an email to The Daily that “the committee’s terms of reference are currently under review, and discussion has begun about including environmental considerations in the mandate. The discussion will continue into the coming months, and it is expected that revisions to the terms of reference will be proposed to the BoG in 2012.”