Divesting to Invest in Cleaner Energy
Concordia Announces New Million-Dollar Investment with American Firm
Almost a year since the Concordia University Foundation board announced they would divest $5 million from fossil fuels, they have chosen to reinvest the money into American fund Nelson Capital Management.
The foundation board chose Nelson Capital because of its strategy of investing in companies with environmentally sustainable practices, according to Bram Freedman, University Vice President of External Relations.
An investment fund like Nelson Capital is essentially a firm that manages money for its clients and reinvests into assets of other companies.
On its website, the Nelson Capital leadership team—which has seven managers—states they pursue “socially responsible investment” by identifying companies with “positive performance on environmental, social and governance issues.”
“We literally custom-tailor the portfolio to the clients for their own needs, wants and desires,” said Scott Benner, President and CEO of Nelson Capital. This could include making investment choices based on a company’s fossil fuel, religious or animal testing practices, he explained. Benner declined to comment on the specifics of their contract with Concordia due to confidentiality.
The California-based fund was the best option available, but there weren’t many to choose from, Freedman says, adding that divestment is a relatively new area. “We know they don’t invest in fossil fuels,” he said.
The history of Nelson Capital suggests their knowledge about socially responsible investments, according to Concordia Student Union President Terry Wilkings.
“It’s definitely something we’re happy to see happen,” he said.
“It’s definitely something we’re happy to see happen.”— Terry Wilkings
Following the announcement last year that the foundation would divest $5 million, the issue of transparency emerged. The percentage Concordia invested into fossil fuels was unknown, even to Freedman.
He estimates now that approximately 10 per cent of the foundation money is invested in fossil fuels. The foundation is comprised of donations to the university. Maximizing returns from investments helps support student financial aid and research, Freedman said.
The foundation currently invests its money into about a dozen other investment firms, which then invest into a variety of American and Canadian shares, he added.
“Nobody is trying to hide anything,” he said.
Transparency is a challenge because these firms reinvest the money from the foundation into upwards of 50 different shares and don’t provide detailed breakdowns, according to Freedman.
To continue the oversight of fossil fuel divestment and investment into renewable, cleaner energy, an agreement between student groups, faculty and administration to form a “joint sustainable investment advisory committee” is being finalized, Freedman said.
So far the only student group involved in preliminary discussions is the CSU. Despite sitting on a working group last year to evaluate possible divestment, the Graduate Student Association (GSA) and Divest Concordia aren’t in talks for committee membership at the moment.
According to Jenna Cocullo, a Divest Concordia member, the university didn’t inform them of the Nelson Capital relationship or the forthcoming committee. Both the GSA President Alex Ocheoha and VP Mobilization Bhavreet Gill said they weren’t told as well.
“It would be my hope that GSA and Divest Concordia would be part of the committee,” Freedman said. One of the committee’s purposes would be to review quarterly reports from Nelson Capital, which is expected to provide detailed breakdowns, he added.
“It’s a big step for us,” he continued. “We never before gave detailed reports before a joint committee involving students and faculty.”
After a motion from its council of elected representatives last semester, the CSU’s investment account is currently in the process of being fully divested, Wilkings says. “It takes a while to find homes for different investments,” he said about not fully deploying divestment yet. The CSU has
$5 million in this divestment fund, which is operated by an asset manager firm, he added.
Allowing the committee to have multiple contributors, including the GSA and Divest Concordia, is an initiative the CSU is pushing for, Wilkings said. He added that he hopes the committee’s mandate is action-oriented in pursuing more divestment.
“We’ll see how that goes over a couple of years,” Freedman said. “If the returns are comparable we’re open to a discussion about further divestment.”