UBC’s endowment currently holds about $3 million worth of shares in Kremlin-controlled fossil fuel companies and a majority state-owned bank.
The international financial scramble following the latest invasion of Ukraine has exposed long-standing investments in Russian corporations with ties to Putin’s regime that have persisted despite Russia’s track record of human rights abuses in Syria, Georgia and Crimea.
UBC has investments in majority state-owned oil and gas giants Gazprom and Rosneft, as well as Lukoil and Sberbank, according to a 2021 transparency disclosure. UBC Media Relations Director of University Affairs Matthew Ramsey told The Ubyssey that fund managers employed by UBC’s Investment Management Trust (IMANT) have been moving to divest from Russian positions, although suspension of trading has presented a stumbling block.
While the current estimate is three million, UBC’s investments in Russian holdings as of the last transparency release sat at over four million.
The push to divest from Russian holdings is further complicated by the structure of UBC IMANT’s common pool investments.
Ramsey said in a written statement that “the current estimated weight in Russian companies is “around 0.12 per cent.” UBC’s main endowment portfolio is $2.5 billion.
Gazprom, Rosneft and Sberbank all have well-established ties to Vladimir Putin. Rosneft’s CEO Igor Sechin, a former deputy head of Putin’s administration, is facing sanctions from the European Union.
While IMANT’s investment in Russian companies with ties to Moscow precede the Russian invasion of Ukraine, they were in place much after Russia’s 2008 invasion of Georgia and 2014 annexation of Crimea.
UBC IMANT did not respond to requests for an interview from The Ubyssey, however, when asked how these events aligned with IMANT’s Active Ownership Guidelines and corresponding environmental, social and governance principles, Ramsey responded that the university reviewed the “endowment emerging market portfolio and the investment manager universe” in 2021.
“In our review, we didn't encounter any pooled funds that specifically excluded Russia from the fund mandate. However, being invested in active fund mandates enables our managers to adapt to changing market and geopolitical environments,” Ramsey said.
Armand Llereza-Gill, a UBC student organizing against Russia’s invasion of Ukraine questioned why divestment from Kremlin-associated companies has taken so long.
“In 2014, we saw the Russian invasion of Crimea. So I'm shocked that [UBC investments in Russian companies] still has been going on up to the present day of 2022.”
These comments come in the recent context of intentions to divest from numerous financial actors, including Norway’s Sovereign Wealth Fund, Alberta’s Investment Agency and BC’s Pension fund, which announced it was pursuing divestment from Russian companies and assets on March 1 after significant public pressure.
Divesting UBC’s endowment from fossil fuel companies has proved thorny in the past, due to UBC’s strategy of putting its endowment into pooled investments.
“UBC IMANT selects fund managers based on key criteria, which includes risk, rate of return and adherence to environmental, social and governance (ESG) principles, among other considerations.”
This means UBC does not directly invest, but instead employs fund managers to put UBC’s endowment into pooled funds. Ramsey said that UBC does not have the ability to instruct its managers to divest from individual stocks, but added that, due to the extreme nature of the situation UBC has been “actively engaging” with fund managers.
“When the attack started on February 24, we swiftly connected with our fund managers to discuss their action plans regarding Russian stocks,” Ramsey said. “While some managers had already sold off Russian positions before trading was halted, those with remaining positions are actively working on exiting or are in the queue to exit when trading can resume.”
Share prices for Rosneft, Gazprom and Lukoil all declined as tensions on the Russia-Ukraine border escalated, before plunging on February 24, after the Russian invasion commenced.
Ramsey said IMANT was unable to provide a timeline for divestment from Russian holdings.