UCT celebrates formal launch of panel for responsible investment

The University of Cape Town (UCT) celebrated the formal launch of the University Panel for Responsible Investment (UPRI), and the university’s Responsible and Sustainable Investment Policy on 22 April. The launch followed the adoption of the policy by the UCT Council on 5 December 2020.

The formation of the UPRI as an advisory body on responsible and sustainable investment related to the university’s endowment funds was approved by Council in 2017. The UPRI also has the responsibility of engaging various UCT stakeholders on matters relating to responsible investment, which will be considered in how it shapes university policy on responsible investment.

Welcoming participants to the launch, Professor Tom Moultrie noted that the event, which took the form of a virtual conversation, coincided with Global Earth Day. Moultrie is a professor of demography and the director of the Centre for Actuarial Research at UCT. He is currently the chairperson of the UPRI, a position that he has held since January 2019.

The UPRI elected to make the debate on fossil fuel investment its first engagement with the university community. This is against the background that, as of mid-2020, fossil fuels exposure accounted for approximately 2.5% of the university endowment’s total assets, and approximately 5% of its domestic equity exposure. Investments in renewable energy account for approximately 1.8% of the endowment’s total assets.

The Council meeting in September 2021 will consider proposals from the UPRI based on its engagement with the university community.

A global perspective

The virtual conversation was moderated by former South African ambassador to the United States (US) Barbara Masekela, and included representatives from Yale University, the University of Oxford and UCT.

“Climate change … is an environmental obstacle which also exacerbates social obstacles such as inequality and poverty.”

The first panellist was Xolisa Dhlamini, a lecturer in sustainable and responsible investment at the UCT Graduate School of Business (UCT GSB). He is a chartered development finance analyst with over 13 years of professional experience working with institutional investors.

Dhlamini highlighted the importance of responsible investment practices as being imperative for the sustainability and survival of universities in developing economies. “Climate change, for instance, is an environmental obstacle which also exacerbates social obstacles such as inequality and poverty which collectively threaten the sustainability of socio-economic development,” he said.

In economies with higher levels of poverty and inequality, students are less likely to be able to afford fees to access higher education. This was highlighted by the #FeesMustFall movement.

Antonia Coad, the head of sustainability and corporate affairs at Oxford University Endowment Management in the United Kingdom (UK), the investment manager for the University of Oxford and its colleges, spoke about how they had integrated sustainability and environmental, social and corporate governance factors into their investment process.

The University of Oxford has limited investments in the energy sector and has only 0.4% exposure to fossil fuels. Coad, a graduate of the university where she studied geography, said that the university has a highly intelligent, informed and passionate group of beneficiaries in the academic body of the institution. Since 2014, there have been two divestment campaigns led by students and academics at the university.

Coad and her 25-person team manage over £5 billion in a globally diversified multi-asset portfolio. She has been involved in two reviews of the university’s approach to climate change and fossil fuels across its investments, and she sits on its Environmental Sustainability Committee.

Professor Jonathan R Macey, Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law at Yale University, and professor at the Yale School of Management, was another panellist who presented an international perspective. Professor Macey is the chair of both the Advisory Committee on Investor Responsibility and the Committee on Fossil Fuel Investment Principles at Yale University.

He said that Yale University has adopted a set of ethical investing principles that attempts to navigate the fact that the university depends on the endowment to fund the budget.

“The endowment contributes 34% of the operating budget. There is a tremendous amount of responsibility placed on the endowment to generate resources.” There is therefore a challenge to balance the returns on the endowment with the imperative of ethical investing.

A call for engagement

There were several comments and questions from other attendees at the event, signalling an opening of the process of engagement on the topic.

Masekela recounted the role that US and UK universities played at the forefront of apartheid divestment campaigns. She noted that there seemed to be a shift from human rights considerations to climate change issues. Professor Macey said that Yale University remains extremely interested in human rights principles in investing. He highlighted, for example, a divestment campaign centred on human rights abuses in Sudan.

“UCT is the first higher education institution in the Global South to start this journey.”

Moultrie said that for the UPRI to succeed it must be a sounding board for the university community. The UPRI will make their recommendations public in order to ensure greater accountability. In line with the launch event, they will also continue to build engagements with other higher education institutions.

This public launch was a landmark occasion. In her concluding remarks, Vice-Chancellor Professor Mamokgethi Phakeng said: “UCT is the first higher education institution in the Global South to start this journey.”

A website for the UPRI has been launched. It will be one of the platforms that will be used to engage members of the university community on responsible investment. The UPRI invites all interested parties to email submissions on matters relating to the above by close of business on 14 May 2021.

Emails can be addressed to the UPRI, using the email address: upri-group@uct.ac.za.

• Read more about the University Panel for Responsible Investment (UPRI).
• Watch the recording of the launch event.