The UBC Endowment? - What s in it? - How is it managed? - What does it do? - Context of divestment?

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1 The UBC Endowment? - What s in it? - How is it managed? - What does it do? - Context of divestment? Justin Ritchie, UBC Institute for Resources, Environment and Sustainability

2 The UBC Endowment July st 31, 2013 Market Value: = $1.066 billion July 31st, Statement of Endowment Investments (holdings managed by UBC IMANT) - available at

3 The UBC Endowment July 31 st, 2013 Market Value: $1,066,324, Operating Budget 2013/ available at

4 Total UBC Budget = $944,697,000 Our focus Operating Budget 2013/ available at ì

5 $1.066 billion Endowment about 3.5% of the UBC annual budget Endowment required return changes each year but currently it is 5.15% = 3.5% spend rate +.65% IMANT fee + 1.0% inflation Goal is to provide financial resources to support the University s academic mission Supports research, endowed chairs and scholarships. Operating Budget 2013/ available at ì

6 Created in 2003 as a wholly owned subsidiary to manage the UBC investment portfolio. - The Board of Governors is the chief administrator for the investment portfolio - IMANT Board meets quarterly and is comprised of 11 directors 3 UBC members and 8 from the business community - Board members appointed by UBC BOG under recommendation of IMANT 2013 IMANT Report - available

7 IMANT Board is responsible for - Formulating investment beliefs to guide the development of investment policies - Recommend investment policies and risk tolerances - Ensure asset mixes - Approve asset class guidelines Return requirements and risk preferences are established by the university which factor into the investment policy recommendation. In summary: decide the acceptable level of risk and return and set the policy for UBC s investments

8 IMANT board recommends policies to the BOG and then implements the investment policy mix through a manager of managers approach. One policy example is the environmental and social governance policy announced in 2013

9 UBC Responsible Investment Strategy: 1. UBC has invested $382 million in student housing or GHG reduction projects from its operating fund 2. Join the Canadian Coalition of Good Governance and use ESG criteria to select funds 3. Task force recommend changes Annually UBC reports on its ESG investments these came from their operating funds: Student housing $265 million About 30% of this come from land proceeds since 2011 Environmental projects $117 million Nexterra, Steam to Hot Water Conversion 2013 IMANT and UBC ESG Report - available ubcimant_annual_report_2013.pdf

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11 What s in the endowment? Managers of managers: Top 5 Funds Endowment Manager Leith Wheeler SSGA US (2 funds) SSGA Canada Phillips, Hager and North TD Asset Management Market Value Managed $197 million 19% energy $111 million $93 million $92 million $87 million Significant Energy Component Beutel Goodman Kern Energy Partners $66 million $21 million

12 Total Endowment Fund Exposure by Geographic Region

13 How much of the UBC Endowment is in fossil fuel companies? The best estimate is that more than 10% of the 1 billion UBC endowment is in fossil fuel companies. This means about $100 million of UBC s endowment is in fossil fuel companies.

14 How much of the UBC Endowment is in fossil fuel companies? Out of the $100+ million:

15 Kern Energy Partners II - $15.5 million

16 SSGA S&P $9 million

17 Beutel Goodman - $9.7 million in oil, gas, mining

18 Kern Energy Partners I - $5.4 million

19 Some proposed alternative energy investments? GRID Clean Edge Smart Grid Infrastructure Index Fund TAN Guggenheim Solar ETF

20 Campus Carbon vs. Endowment Shadow Carbon UBC Campus 60,000+ tco 2 e emitted in 2012 UBC Endowment Approximately 550,000+ tco 2 e economic activity required to generate its $27 million in returns during 2012 Based on economic life-cycle input output assessment analysis Carnegie Mellon University Green Design Institute. US 2002 Industry Benchmark Model [Internet]. Econ. Input-Output Life Cycle Assess. [cited 2013 Aug 21]. Available from:

21 GHGs Shadow Carbon Relationship UBC Endowment $$ Economic Activity Shares of Company $ Decision to hold company shares Company Revenues EPS (Earnings per share) Campus Carbon vs. Endowment Shadow Carbon

22 Take home info: UBC Endowment is over a billion dollars IMANT is the organization that manages the UBC endowment and sets investment policy but the UBC Board is ultimately responsible More than 10% of the UBC endowment is in fossil fuel companies through a number of externally managed funds UBC has a carbon shadow that s about 9x the size of the campus carbon footprint

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