3.10 York University Endowment Fund *Updated information for this profile will be available soon. Fund overview Size of fund: $326.4 million (2011) The York University Endowment Fund is composed of gifts and bequests from donors, capital from matching programs, and quasi-­‐endowments, which are funds invested for the long term to support priorities designated by 1
the University. The Fund includes endowed gifts and matches received by York University Foundation (23% of the total amount) during the period of 2002-­‐11, as were transferred to the University in late 2011 subsequent to a 2
favourable ruling to this end by the Ontario Superior Court. Asset mix (Target, 2011)3 Fund management The York University Endowment Fund is managed externally. Each Investment Manager is expected to invest assets of the Fund in accordance with the Policy and the Investment Manager’s Mandate and to report on portfolio 4
holdings and performance on a monthly basis. Fund governance The pool of investments is governed by the objectives and constraints specified in the Statement of Investment Policies and Procedures (Policy). The Board of Governors of York University (the “Board”) has ultimate responsibility for the performance of the Fund. The Board annually reviews and approves the Policy and 5
investment strategy for York University’s endowments. An Investment Committee, appointed by the Board of Governors oversees the Policy, investment strategy and the external portfolio managers. According to the latest annual financial report, “The Investment Committee meets four times a year and conducts activities in accordance with the responsibilities described in the Statements of Investment Policies and Procedures. The Committee’s duties are principally in the domain of fund governance and investment strategy. These include regular monitoring of assets and performance, oversight and selection of portfolio managers, ongoing revision and development of the investment strategy and asset mix, review of fund 1
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20111231.pdf p.1
Ibid.
3
http://www.yorku.ca/univsec/board/committees/investment/documents/20120101-SIPP.pdf
4
http://www.yorku.ca/univsec/board/committees/investment/documents/20120101-SIPP.pdf pg 4
5
Ibid.
2
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expenses, and reporting to the Board. The Committee additionally undertakes and oversees further initiatives that 6
are in the best interests of the Endowment Fund and its beneficiaries.” These functions are affirmed in the 7
Committee’s Terms of Reference. Currently, the Committee comprises of seven members that include the chair of the Board and the university President. It is not specified whether these two members participate in an ex-­‐officio capacity only. The Office of the Assistant Vice President Finance and Chief Financial Officer fulfil day-­‐to-­‐day management 8
functions in relation to the Fund as follows : • Allocate Fund assets, including the direction of contributions into and distributions out of the Fund, and periodic rebalancing between Fund accounts, as required. • Conduct Investment Manager searches as required and provide recommendations to the Investment Committee • Perform periodic oversight and due diligence reviews of existing Investment Managers and reporting any concerns to the Committee. • Ensure compliance by each Investment Manager to the investment guidelines contained in their specialty mandate (“Mandate”), reporting any concerns to the Committee. • Develop and improve each Mandate as appropriate to overall investment strategy and/or changes in the external environment or best practices. • Communicate general guidelines for shareholder voting in Mandates for actively managed equity held in segregated portfolios. • Provide the Committee with monthly reports concerning the status of the Fund, the investment performance, and the Investment Managers. • Ensure that the Fund is managed in accordance with this Policy and complies with all applicable legislation and regulatory requirements. • Ensure that all investments in the Fund are recorded in the financial records of the Fund in accordance with generally accepted accounting principles and that the auditors review the investments annually. York University Endowment Fund Governance Structure York University Board of Governors
Investment Committee
Office of the VP Finance &
Administration
External Asset Managers
Sustainability snapshot Policies and commitments to sustainability “York University is helping to shape the global thinkers and thinking that will define tomorrow. York’s unwavering commitment 9
to excellence reflects a rich diversity of perspectives and a strong sense of social responsibility that sets us apart.” 6
Ibid. pg 9.
http://www.yorku.ca/univsec/board/committees/investment/index-investment.html
8
http://www.yorku.ca/univsec/board/committees/investment/documents/20120101-SIPP.pdf pg 3-4
9
http://news.yorku.ca/2013/01/31/york-university-president-mamdouh-shoukri-appointed-to-order-of-ontario/
7
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Mamdouh Shoukri President and Vice-­‐Chancellor -­‐ York University 2013 The York University Sustainability Policy (approved 2011) is a concise document describes the University's responsibility for and commitment to sustainability, provides the framework for ongoing implementation of the policy and assists the University Community in incorporating Sustainability into decision making. The President’s Sustainability Council Report 2008-­‐09 provided a series of sustainability recommendations that provide as an implementation framework for sustainability initiatives four key areas: Organizational structure, curriculum, social & human rights and campus operations & development. The university is implementing sustainability initiatives in the following sectors: 1. Buildings & Land: The University has adopted a building, renovation and campus grounds management strategy that focuses on design efficiency, target performances, water efficiency, energy conservation, reduction of emissions, material and resource selection, green construction practices, indoor 10
environmental quality and site re-­‐naturalization. 2. Curriculum: York has close to 400 courses across several faculties that focus on sustainability and the 11
environment. 3. Energy: York University has undertaken a variety of energy management programs over the past 10 years. These programs have yielded good returns on investment, and the University is now planning to expand on these successes to implement a broader, more comprehensive energy management program to further reduce operation costs, improve environmental performance and to help renew aging infrastructure. For example, The Yorkwise program is investing $39.5 million in building and infrastructure renewal, design technology and training solutions, to promote energy conservation and reduce utility 12
costs. 4. Food: York University has a variety of ongoing sustainability initiatives relating to food, from fair trade 13
coffee to organic and healthy food options to community gardens. 14
5. Purchasing: As part of the York University Policy on Procurement of Goods and Services , the University normally gives preference to suppliers of environmentally friendly products and services, and does not purchase apparel, including items with the University logo or trademark, from suppliers under investigation or being monitored by an external monitoring agency or third party for violating fair labour practices. In accordance with this policy, York currently purchases only FSC certified paper and Energy Star rated appliances and electronics. 6. Transportation: Despite the growth in enrollment in recent years, Transportation Services has managed to increase the percentage of York community members commuting to both campuses by means other than single occupancy vehicles. Currently, more than 75% of York university students, faculty and staff use alternative means of transportation to campus. By comparison, the average for the Greater Toronto Area 15
is 36%. 16
7. Waste: The University runs a zero-­‐waste program for waste reduction and green cleaning. 8. Water: York University has a number of campus-­‐wide initiatives aimed at water conservation, from green 17
building design and retrofit to grounds maintenance to the installation of water refill stations. It plans to phase out the use of bottled water by 2015. Of relevance to the endowment, is that the aforementioned report found that there is widespread support among 18
the university’s stakeholders to “increase the orientation of York’s investment towards sustainable practices.” 10
http://www.yorku.ca/susweb/whatyorkisdoing/buildings.html
http://www.yorku.ca/susweb/whatyorkisdoing/curriculum.html
http://www.yorku.ca/susweb/whatyorkisdoing/energy.html
13
http://www.yorku.ca/susweb/whatyorkisdoing/food.html
14
www.yorku.ca/procurement
15
http://www.yorku.ca/susweb/whatyorkisdoing/transportation.html
16
http://www.yorku.ca/susweb/whatyorkisdoing/waste.html
17
http://www.yorku.ca/susweb/whatyorkisdoing/water.html
18
http://digital.yorku.ca/issue/27846 pg.10.
11
12
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York University is an institutional member of AASHE and is a signatory to the Talloires Decaration, Climate Change Statement of Action for Canada and the Universitas21 Sustainability Declaration. The university’s pension fund is a signatory to the Carbon Disclosure Project and the Canadian Coalition for Good Governance. Institutional support and coordination for sustainability York University does not have a dedicated sustainability office, although support for sustainability is well-­‐
institutionalised through the President’s Sustainability Council with working groups on curriculum development; administration; social justice and human rights; and campus operations and development. The council also includes a student sub-­‐committee. In addition, the York Institute for Research and Innovation in Sustainability coordinates research across campus. Sustainability reporting The President’s Council for Sustainability produces Annual Sustainability Reports commenting on progress against 2010 recommendations in for key areas: curriculum development; administration; social justice and human rights; and campus operations and development. Sustainability performance York University is not rated by STARS. It received an overall rating of B+ in the 2011 Campus Sustainability Report 19
Card. RI Review Investment beliefs
The University’s Statement of Investment Policies and Procedures (2012) explains that the primary investment objective of the York University Fund is to preserve the fund capital in real terms in order to provide a flow of income to endowment beneficiaries in perpetuity. An additional investment objective of the Fund is to provide a 20
rate of return sufficient to support stable expenditures over time. The statement describes the fund’s investment philosophy as being influenced by the following factors: • Equities are expected to outperform bonds in the long term. • Higher expected investment return is positively correlated with higher expected investment volatility. • Diversification increases the long term risk-­‐adjusted return potential of the total fund. • Skilled active management can provide superior risk-­‐adjusted return above the benchmark. • Integration of environmental, social, and governance (ESG) factors in the investment selection and evaluation process is consistent with the expectation that endowments shall provide sustainable payout 21
over the long term (emphasis added). RI policies York does not have a formal responsible investment policy, although the university has actively championed efforts in this area in recent years. In 2008, the university initiated a “Responsible Investment Project”. The Research and Education phase of the project indicated a convergence of views and conceptual principles on this issue. “Subsequently, the Investment Committees received a set of draft guiding principles for the Responsible Investment Action Plan. A number of action items were proposed that would focus the efforts of the university administration and as a result, the University expanded its membership in the Canadian Coalition for Good Governance to cover endowments and 19
20
21
http://www.greenreportcard.org/report-card-2011/schools/york-university
http://www.yorku.ca/univsec/board/committees/investment/documents/20120101-SIPP.pdf pg 3
Ibid. pgs 3-4
Page 4 of 6
pensions, and became a signatory of the Carbon Disclosure Project and the Extractive Industries Transparency 22
Initiative.” In 2012, the University joined the Social Investment Organization, which provides research and analysis on responsible investment for Canadian institutional investors. In 2009, the university reported that Phase 2 of the project had commenced to establish objectives and a framework for responsible investing. It also reported that this approach had been expanded to cover all university-­‐
invested assets. Specifically, these activities were “expected to include the drawing of proposed guiding principles for the Responsible Investment Action Plan and a review of the practices of the broad community of Canadian 23
universities, to assist in shaping the direction forward”. The aforementioned Guiding Principles for Responsible Investment are not yet publicly disclosed. It also appears that the university followed through on its intention to review best practices, as captured in the April 2012 review 24
of campus sustainability initiatives by the President’s Sustainability Council. Between 2011-­‐2012 the university focussed its responsible investment activities on the proxy voting process and corporate engagement through its investment managers. It further reported that a process is underway for developing a structure and terms of reference for an advisory committee on responsible investing in collaboration 25
with the President’s Sustainability Committee and Office of the Vice-­‐President Administration and Finance. RI practices Selection of managers: In line with York University’s investment philosophy, the university does consider ESG factors in the investment selection process. In 2011 the university stated that “the state of progress toward integrating sustainability factors into valuation and selection process varies among managers. With several, 26
sustainability features high.” In 2011 York replaced a long standing manager with one that has an integral ESG approach that includes specific engagement with corporate management. Asset selection: ESG issues play a role in asset selection procedures used by York University’s investment managers, albeit to varying degrees. In terms of strategy, the university confirms that none of York University's 27
managers screens for ESG factors. Proxy voting guidelines: Proxy voting is delegated to investment managers, who are expected to adhere to a set of voting guidelines. In 2011, proxy-­‐ voting specific procedures were incorporated into the mandates for three new 28
managers. In 2012 the university introduced guidelines for the proxy voting process, specific to each manager, 29
their portfolio exposure, and the form of that exposure (segregated or pooled). Proxy voting disclosure: Votes cast on proxy resolutions on a company-­‐specific level are made available to trustees 30
and senior administrators. Members of the school community and the public may request this information. Corporate engagement and dialogue: Based on annual financial reports from 2008-­‐2011, there is strong evidence to suggest that York University supports corporate engagement as a responsible investment strategy. The latest report claims that the “Administration’s stance on proactive and responsible investing has gelled to encompass the 31
engagement model for communication directly with managers and indirectly with corporate managements.” Furthermore, the university’s report to the Green Report Card Survey in 2010 explains its’ “preference [over ESG screening] is for the manager to engage in valuation oriented discussion that promote corporate responsibility and 22
http://www.yorku.ca/secretariat/board/committees/investment/documents/AnnualInvestmentReports/20081231.pdf pgs 7-8
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20091231.pdf pg 9
24
http://www.yorku.ca/susweb/resources/documents/BestPracticesFinalGuidePDFDoc.pdf
25
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20111231.pdf pg 11
26
http://www.greenreportcard.org/report-card-2011/schools/york-university/surveys/endowment-survey
27
http://www.greenreportcard.org/report-card-2011/schools/york-university/surveys/endowment-survey
28
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20111231.pdf pg. 11
29
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20111231.pdf pg 11
30
http://www.greenreportcard.org/report-card-2011/schools/york-university/surveys/endowment-survey
31
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20111231.pdf pg 11
23
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32
good governance from corporate management.” Divestment: There is no evidence regarding the university’s use of a divestment strategy since 1986 when it voted to denounce apartheid by withdrawing investments worth approximately $8 million from South African-­‐linked 33
companies. York students have engaged in divestment campaigns. In 2007, the York Coalition for Responsible Investment 34
expressed interest in lobbying the university about its investments in Burma, based on human rights concerns. The coalition appears to have taken a broader approach more recently, submitting a responsible investment 35
proposal to the President’s Sustainability Council in 2011 that asked the university to undertake the following: • Actively vote its proxies and disclose proxy votes. • Create a multi-­‐stakeholder Advisory Committee on Responsible Investment, reporting to the Board of Governors’ Investment Committee. • Create an Executive Committee on Responsible Investment, within the Board of Governors Investment Committee. • Actively participate in investor coalitions and policy debates on responsible investment. • Develop and implement a responsible investment strategy to guide York University’s investment managers. It is not clear if this group is currently active at the university. York University's Students Against Israeli Apartheid (SAIA) released a report in March 2011 that found that York University has investments with corporations like BAE Systems, Northrop Grumman and Lockheed Martin, all arms 36
manufacturers that do business with the Israeli military. While the University did have some small holdings in these companies, in February 2011, the University replaced the manager who had these holdings with a new manager and holdings are no longer in the University’s portfolio. In January 2012, the university confirmed that none of the arms related companies that SAIA had were owned by the University’s endowment. In March 2013, the York University Students’ association passed a Boycott, Divestment and Sanctions (BDS) motion regarding the university’s investment in companies operating in Israel. As of November 18, 2012, York had 580 shares in Northrop Grumman and 290,600 shares in BAE Systems Group, but no holdings in the other companies 37
named, according to Trudy Pound-­‐Curtis, York’s assistant vice-­‐president of finance and chief financial officer. The York Graduate Students Association, University of Toronto's Graduate Students Association (GSA), Concordia GSA and undergrad student unions of U of T Mississauga, Trent, Carleton and Regina have recently passed similar 38
motions. Directed Gifts: At present the fund does not offer donors the option of directing gifts to an investment fund that 39
considers sustainability factors. RI Advisory Committee: At present York University’s Endowment Fund does not invite multi-­‐stakeholder input on responsible investment issues through a dedicated Committee. However, the university reports that in 2012, members of the Administration met with members of the President’s Sustainability Council (PSC) to discuss opportunities to develop a structure incorporating viewpoints of the broader York community on the university’s 40
investment practices. 32
http://www.greenreportcard.org/report-card-2011/schools/york-university/surveys/endowment-survey
http://rabble.ca/news/2010/01/looking-back-carletons-divestment-south-africa
http://ycri.wikispaces.com/Burma
35
http://www.yorku.ca/susweb/documents/MinutesSustainabilityCouncilMeetingApril52011.pdf
36
http://oncampus.macleans.ca/education/2011/03/19/utoronto-and-york-students-launch-bds-campaign/
37
http://oncampus.macleans.ca/education/2013/04/01/york-federation-of-students-endorses-israel-boycott/#more-53870
38
http://rabble.ca/blogs/bloggers/campus-notes/2013/03/york-federation-students-pass-divestment-resolution-against-isra
39
http://www.greenreportcard.org/report-card-2011/schools/york-university/surveys/endowment-survey
40
http://www.yorku.ca/univsec/board/committees/investment/documents/AnnualInvestmentReports/20111231.pdf pg 11
33
34
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