UCT’s approach to responsible investment

The University of Cape Town (UCT) Council has approved the Responsible and Sustainable Investment Policy, which sets out the approach to be taken by the university regarding the stewardship of its financial endowments. The University Panel for Responsible Investment (UPRI), which formulated the policy, is now ready to engage the UCT community on a number of questions. A formal launch is being planned for 22 April when the new policy will be presented to the university community.

The UPRI was established in 2017 as a formal committee of UCT. It is an internal committee that is representative of the university community but with invited members who are external to the institution. It is primarily an advisory body to Council.

It sets policy and advises the university on responsible investment matters related to UCT’s endowment funds. It also has the responsibility of engaging various UCT stakeholders on matters relating to responsible investment.

The UPRI came about in response to questions about whether UCT’s endowments were being invested responsibly. The financial endowments of the university include its financial assets, which encompass the UCT Foundation, the UCT Account and UCT cash portfolio, as well as the Allan Gray donation, the Isaac Greenberg Trust Fund and the Shari’ah portfolio.

“UCT’s commitment to sustainability includes making responsible choices, including how we invest our endowment fund. I congratulate the UPRI for developing UCT’s policy for responsible investment. I also thank the Council for supporting this policy. We will work together to ensure that the endowment funds are invested in responsible, sustainable portfolios,” said Vice-Chancellor Professor Mamokgethi Phakeng.

Professor Tom Moultrie added: “Since UCT’s endowment [was] established in order to support UCT in perpetuity, it must invest in sustainability.”

Moultrie, who is professor of demography and the director of UCT’s Centre for Actuarial Research (CARe), was appointed as the chairperson of the UPRI by the vice-chancellor in January 2019. As the chairperson, he is an ex-officio member of the Joint University / UCT Foundation Investment Committee (JIC), which reports to Council and the trustees of the UCT Foundation.

Investment in a fossil-fuel-free world

The climate change crisis has pushed responsible investment to the forefront, especially as it relates to investments in fossil fuels. However, human rights concerns, in general, have also contributed to the debate. While there has been a broad upsurge in engagements on responsible investment over the past 10 to 15 years, some of the roots of the debate can be traced to the disinvestment campaigns focused on ending apartheid in South Africa in the 1980s.

The policy was written with the vision, mission and values of the university in mind. It is therefore closely aligned with the university’s strategic Vision 2030, with its focus on sustainability, on producing research that answers the complex problems of today and tomorrow, and thought leadership on social justice.

“UCT is the first higher education institution in sub-Saharan Africa – and probably the Global South – to walk the path of responsible investment.”

Moultrie said that the UPRI is now ready to engage with the UCT community on a number of questions. A virtual launch event, which will include speakers from other institutions who will reflect on their respective journeys to responsible investment, will be held on 22 April at 18:30. Full details will be communicated to the university community in the coming days.

“It’s worth celebrating,” said Moultrie, “that UCT is the first higher education institution in sub-Saharan Africa – and probably the Global South – to walk the path of responsible investment.”

Call for engagement

He added: “In advance of the launch, the UPRI will issue a call for engagement on the issue of investment in fossil fuels. There are extreme views in the debate but there is a series of responses which, along a continuum, must be taken on board in order to ensure a just transition to a fossil-fuel-free world. This will be the first major issue that will be tackled by the UPRI. In a few months’ time, the UPRI hopes to make a recommendation on UCT’s response to investment as it relates to climate change.”

A website for the UPRI has been launched – it will be one of the platforms that will be used to engage members of the university community on responsible investment.

“This is not a once-off campaign,” Moultrie said. Other issues, such as investment in alcohol and tobacco, will also be addressed.

The UPRI has adopted an expansive view of responsible investment, addressing not only the impacts on the economic value of the investment but also the impacts that environmental, social, and corporate governance factors have on the environment and society.

Overarching this is a commitment to the global development agenda set out through the United Nations’ Sustainable Development Goals, and the university’s articulation of a vision of contributing to the creation of a fair and just society in which the university seeks to redefine and co-create a sustainable global future.