Ethical Investing at CBU

By Doug Lionais

ethical investingOver the past couple of years there have been a number of expressions of interest for some form of ethical investing within the CBU pension plan. The policy and issues committee has undertaken some efforts to explore ways to bring an ethical approach to retirement savings at CBU.

The Pension Committee is responsible for overseeing the CBU pension plan. Over the past few years there have been some requests to include at least some ‘ethical’ or ‘green’ funds into the investment mix for CBU. Our pension plan provider (SunLife) and our pension consultant (Mercer) have indicated that it would be very difficult to bring in ethical funds and that they are not much different from typical funds in any case.

There were two primary reasons. First was because there are minimum investment amounts required to bring in a new fund and it is very unlikely that there would be sufficient interest at CBU to invest the minimum amount. Secondly, the ethical funds available use a very low bar of ethics. They use a method of negative screening where stocks related to (for instance) alcohol, drugs and tobacco are screened out. Therefore, and depending upon your ethical stance, there are numerous other corporations and industries with contested ethical approaches that would be included. At the time these inquiries were made, it was determined by the pension committee that providing such funds was not feasible nor did it achieve the desired result.

On December 3rd, 2010, the Policies and Issues committee hosted Peter Chapman from SHARE to present on responsible investing. Responsible investment is defined as investment that integrates environmental, social and governance (ESG) issues. Mr. Chapman outlined two broad approaches to responsible investment: asset selection and asset ownership. Asset selection involves the choice of assets in the plan and may use the following strategies:

  1. Screening – negative screening; positive screening; or best in sector screening
  2. ESG integration – ESG value weighting
  3. Double Bottom line – financial and social returns

The second approach, asset ownership, involves the active management of assets under ownership and includes:

  1. Proxy voting
  2. Shareholder engagement – active communication with corporations under control.
  3. Policy initiatives (market wide) – participating in advocacy networks (i.e. PRI)

What can CBU’s Pension Plan do?

  1. Become a Principles of Responsible Investment (PRI) signatory. PRI is a UN network that advocates for six basic responsible investment principles.
  2. Include ESG on service provider contracts.
  3. Ask managers (i.e. Sunlife) to have an ESG strategy.
  4. Review proxy voting.
  5. Request quarterly or annual report on ESG from manager.

There are also some for who any stock investing comes with ethical concerns, at least when purchasing large funds with numerous individual holdings. To that end the Policy and Issues committee has begun some explorations for avenues of retirement saving outside of the current pension plan structure. This option is the most challenging to pursue but the committee is exploring institutional precedents.

It would help the policy and issues committee to know what ethics you wish to apply to your pension plan. Respond to the poll below and/or send us an email to let us know your feelings.

Know More:
http://www.socialinvestment.ca/index.htm
http://www.socialinvest.org/resources/sriguide/srifacts.cfm
Woods, C; Urwin, R Putting Sustainable Investing into Practice: A Governance Framework for Pension Funds JOURNAL OF BUSINESS ETHICS, 92: 1-19 Suppl. 1 2010
Sethi, SP Investing in socially responsible companies is a must for public pension funds – Because there is no better alternative JOURNAL OF BUSINESS ETHICS, 56 (2): 99-129 JAN 2005

2 comments to Ethical Investing at CBU

  • Pam Seville

    Good luck with the recommended ethical changes to responsible investing. I strongly agree with your recommendations.

  • Doug Grant

    There are many options for ethical funds available in the open market. Among the most economical in terms of Management Expense Ratio are the no-load D-class Community Values funds from Phillips Hager North. The MER’s on these funds are at most 1.27%. Until Sun Life makes equivalent funds available, members could adopt the strategy of minimizing contributions to the pension plan itself, and maximizing contributions to an RRSP. It is unlikely that Sun Life would be able to offer such a fund with an MER as low as those on the existing funds they offer within the plan.

Upcoming Events

There are no upcoming events.

Instagrams

  • The CBUFA recognizes the International Day Against Homophobia, Transphobia & Biphobia #IDAHOTB #equality #support #justice #respect #protection #freedom #advocacy #inclusion #solidarity
  • Congratulations to the CBU Class of 2019 🎓 #CBUFA #CBUFAstudents #CBUGrad19 #CapeBretonUniversity #CBU #capebreton #novascotia #nspse #cdnpse #pse #highered #education #community #teaching #research #service #students #faculty #librarians #labinstructors #archivists #researchchairs #nursingpracticeeducators #unionproud
  • The Inaugural Lecture Series allows faculty members who have attained the rank of Full Professor to share selected insights garnered from a decorated career of notable achievements in research, teaching, and service with the university community. This event is hosted by the Office of Research and Graduate Studies. This event is open to all CBU students, staff and faculty as well as the wider community.  Abstract: After floods of revelations of horrifying sexual abuse against children by priests in this region and abroad, and cover-ups by many bishops, “responsible ministry protocols” were put in place (though still not everywhere), the properties of many parishes were liquidated to compensate abuse survivors and apologies were belatedly issued. But the secretive leadership structures remain in place. The concentration of power in a largely unaccountable clergy – including the power to deny sacraments, plus control over money and property –- is still the rule of the church. There is no system of regular, professional performance evaluations of clergy and no clear codes of conduct. There is no role for lay people to vet candidates for pastor or bishop. There are no synods representing the people of the church, not even at the diocesan level. Obedience to designated men, not professional due diligence, is still prized. Without renovation, the current Church structures of concentrated, secretive governance and management lend themselves to abuses of power well into the future.  As a political science professor, expert in governance, and a concerned Catholic with significant parish experience and crisis-management experience, Dr. Tom Urbaniak has been studying models of church governance and options for reform. He has visited Catholic communities that tried new methods of governance and accountability, sometimes thoughtfully defying authoritarian and spiritually impoverished bishops. In this lecture, he will try to answer key questions: Is there hope for the Catholic Church? Can concerned lay Catholics start somewhere? If so, where? Will the interventions make a difference?

Follow Us