Divestment and local credit unions offer solutions
Emily Kelsall (she/they) // Contributor
Chelle Lussi // Illustrator
The Royal Bank of Canada is Capilano University’s bank, storing and investing student tuition. Over the years, RBC has given generously to the campus. In 2022, RBC donated $300,000 for the Early Childcare Centre. There’s also the recurring RBC Future Launch scholarship that students can apply for.
RBC and CapU are joined at the hip, and there’s a compelling case for the university to reevaluate the relationship.
About RBC
RBC is the primary financier of fossil fuels in the world. In 2022, the bank spent $42 billion dollars funding fossil fuels. Since the 2015 Landmark Paris Climate Agreement, they’ve spent upwards $250 billion in total. RBC financed the now completed Coastal Gaslink pipeline and is backing the controversial TMX pipeline. However, according to the International Energy Agency, in order to keep global warming within a safe threshold, there can be no new fossil fuel developments.
Coastal Gaslink and TMX have been criticized by the UN Committee for the End of Racial Discrimination. The committee has written three letters pointing out that Canada failed to obtain the free, prior, and informed consent from First Nations.
By funding CGL and TMX, RBC has supported the criminalization of Indigenous land defenders. They’ve contributed to raids, military occupation of unceded territory, and snipers pointed at Wet’suwet’en matriarchs. TMX has plans to cross through Musqueam, Squamish and Tsleil-Waututh territory. CapU acknowledges Indigenous sovereignty, but actively undermines it by partnering with a company that ignores the demands of Land Defenders.
CapU’s Investments
The money any individual or institution stores in a bank isn’t stationary. Banks use their clients’ cash to make investments. Simply by banking with RBC, tuition money is spent funding fossil fuels. But CapU doesn’t just store cash away for a rainy day. Around $60 million is actively invested in the stock market. through a firm called Phillips, Hager & North, which is a subsidiary of RBC. Information about CapU’s investments is available through CapU’s Investment Policy, Board of Governors Meeting Notes, and Audited Financial Statements.
Ethical Investing
The Courier reached out to CapU for comment. They responded by pointing out their investment managers are signatories to the United Nations Principles for Responsible Investment (UNPRI), which is a set of voluntary and aspirational guidelines created to encourage businesses to include environmental, social and governance (ESG) factors into their investment practices. If a company has a good ESG score, in theory, it is one that is environmentally and socially responsible and ethically governed.
Being a signatory of UNPRI means that companies make a commitment to incorporate ESG into their business models and report their progress. However, one study from the Georgia Institute of Technology and Northwestern University found virtually no change with an ESG score after obtaining a UNPRI membership.
Even if being a UNPRI signatory meant institutions earned better ESG scores, ESG scores themselves aren’t always accurate representations of a company’s performance. A 2022 report from a Stanford researcher found that “while ESG ratings providers may convey important insights into the nonfinancial impact of companies, significant shortcomings exist in their objectives, methodologies, and incentives which detract from the informativeness of their assessments.”
For example, the MSCI is one of the most popular ESG rating systems. RBC’s has an AA ranking with them. That’s the second highest you can get, which makes them a “leader” in their industry.
TC Energy, the company behind the Coastal Gaslink Pipeline—the one that launched a military invasion against Wet’suwet’en dissent, and the one that’s been chastised by the UN—also has an AA rating. This rating comes even after MSCI acknowledges that TC energy’s emissions are on track to warm the world between two and three degrees.
Even if ESG ratings were accurate, CapU’s investment policy doesn’t require them to be taken into account. It reads: “The University supports and encourages its Manager(s) to incorporate ESG factors, along with other conventional analytical tools, when evaluating investment opportunities and risks. It should be noted that ESG factors are only one aspect of analysis and should not be used as an exclusionary screen to eliminate specific entities or sectors from consideration.”
Potential Solutions
Top universities around the world have pledged full divestment including Princeton, Rhode Island School of Design and Harvard. Locally, both UBC and SFU have pledged to divest, and some believe that CapU should do the same.
Scotiabank, TD, BMO, CIBC and the National Bank of Canada are all financing the TMX pipeline, alongside RBC. Big commercial banks are for-profit institutions that are beholden to their shareholders. However, there is an alternative in locally-based and globally-minded financial institutions. They operate just like a bank except they’re member-owned. They are the BC credit unions such as Vancity, Coast Capital and Blueshore Financial. None of them loan money to fossil fuel companies. Coast Capital makes a point not to trade in unjust projects. Vancity is very vocal about climate justice, and all of their mutual funds are fossil fuel-free. This doesn’t mean they don’t care about making money; they just do it while upholding progressive values and meeting climate targets.
On its website, CapU says that it’s a “community where we value innovation fueled by curiosity and imagination. We are committed to Truth and Reconciliation through the principles of Indigenization and decolonization.” CapU current investments do not seem to align with its goals. Students work hard for a better future, and their tuition money should do the same.