{"id":100269,"date":"2017-08-22T02:47:40","date_gmt":"2017-08-22T00:47:40","guid":{"rendered":"http:\/\/www.myza.co.za\/south-african-universities-need-to-rethink-how-they-invest-their-millions-the-conversation\/"},"modified":"2017-08-22T02:47:40","modified_gmt":"2017-08-22T00:47:40","slug":"south-african-universities-need-to-rethink-how-they-invest-their-millions-the-conversation","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/south-african-universities-need-to-rethink-how-they-invest-their-millions-the-conversation\/","title":{"rendered":"South African universities need to rethink how they invest their millions | The Conversation"},"content":{"rendered":"

South African universities need to rethink how they invest their millions<\/a>: <\/p>\n

The Rhodes Must Fall movement accused the University of Cape Town of having blood on its hands for investing in the mining company Lonmin. <\/span> Ian Barbour\/flickr<\/span><\/span><\/figcaption><\/figure>\n

Universities are no longer simply institutions of learning. Over the past 50 years, they have also become important players in global financial markets. They have become institutional investors. <\/p>\n

Universities have to decide what to do with the pension fund contributions of their staff. They also receive large monetary donations from alumni and other private donors. This money \u2013 millions, sometimes billions of dollars \u2013 goes into university investment funds. These can be managed internally or delegated to investment managers. <\/p>\n

Harvard University in the US has the biggest endowment fund in the world with USD$ 32.7 billion, while university endowment funds in the UK hold between \u00a32.5 million and \u00a31 billion. Pension funds in the US and UK are even more substantial. For example, the California University pension fund boasts more than USD$ 70 billion.<\/p>\n

University funds in southern Africa are much smaller, but some are still significant. According to our calculations, the universities with the largest endowments are all in South Africa, with the top five representing a little less than USD$ 1 billion collectively. The pension funds of the top 10 universities in the region come to around USD$ 3,6 billion. <\/p>\n

The question of how universities choose to invest all this money is increasingly coming under scrutiny. In the US, Europe, Australia and New Zealand universities\u2019 pension funds and endowment funds are starting to align their investment portfolios with the social concerns of their students and staff.<\/p>\n

Putting assets to work for a better world<\/h2>\n

In the 1970s student and staff activists at US universities put serious pressure on their managements to stop investing in companies involved in the Vietnam war or, later on, in apartheid South Africa.<\/p>\n

Today climate change is the issue that\u2019s increasingly dominating the activist agenda on university campuses. Since 2012, 350.org, a climate change activist movement, has been pushing for total disinvestment from fossil fuels \u2013 with some significant victories . Student activists in the US have also called successfully for disinvestment from prisons.<\/p>\n

In 2005 the UN established a responsible investment coalition called the Principles for Responsible Investment. Signatories pledge to invest according to six principles, aiming to achieve long-term sustainable investment returns and benefits for society as a whole. So far over 1000 investment managers have signed up, making it the biggest coalition of this kind in the world.<\/p>\n

A few academic institutions have signed up too. Harvard\u2019s USD$ 35 billion University Endowment Scheme joined in 2014. And at least four retirement funds, endowment funds or foundations linked to tertiary education institutions in the US and Europe signed up this year. As was the case with Harvard, this has often happened under pressure from student activists. <\/p>\n

Progress at South African universities<\/h2>\n

So far no universities in South Africa or Africa have signed the principles. But there are signs that the idea of responsible investment is starting to gain some traction \u2013 especially within the heightened activism at South African universities.<\/p>\n

For example, the South Africa fossil free disinvestment campaign has made significant progress at the University of Cape Town. After a four-year campaign, the university\u2019s convocation of alumni and students this year voted to support a motion to disinvest from fossil fuels.<\/p>\n

The Rhodes Must Fall movement also brought the issue of workers\u2019 exploitation into focus. It accused leadership at the University of Cape Town of having blood on its hands for being invested in Lonmin at the time of the Marikana Massacre.<\/p>\n

This was closely followed by nationwide Fees Must Fall protests. Protesters called on government to provide free education for all. In doing so, they challenged the idea that universities should operate as businesses according to free market principles. They also challenged the role of the university in society by calling for decolonisation of the institution.<\/p>\n

Since then the University of Cape Town\u2019s council has agreed to design a responsible investment policy. This makes it the first known Southern African university to do so.<\/p>\n

Paradigm shift<\/h2>\n

For this movement to truly take off in Southern Africa\u2019s universities, there needs to be a paradigm shift at the level of university management.<\/p>\n

As stressed by the University of California, becoming a responsible investor is not about giving up on financial returns. Rather it\u2019s about finding ways to achieve these while addressing societal challenges and opportunities. A responsible investor can decide to disinvest from environmentally and socially harmful sectors, but also to support new investment opportunities such as renewable energy. <\/p>\n

An institutional investor that takes its responsibility towards future generations seriously should reflect on its values to take informed decisions on how financial returns can be better achieved. Fortunately it\u2019s becoming easier to do this thanks to a surge in innovative investment strategies and funds that seek to achieve both good financial returns and positive social impacts. The African Investing for Impact Barometer \u2013 a research project that we run for the Bertha Centre for Social Innovation and Entrepreneurship at the UCT Graduate School of Business \u2013 charts the rise of opportunities like this and shows that impact investing on the continent is booming. <\/p>\n

This trend, combined with activism, can persuade universities to become more proactive, creative and responsible investors. <\/p>\n

Student and staff activists have clearly begun to interrogate the links between social and environmental issues and their universities\u2019 investment choices. For university management, these questions present an opportunity to think about how their investment portfolios can be used address the social concerns of their students and staff. Universities \u2013 being both institutional investors and places of education \u2013 can ultimately find improved investment solutions that create a more sustainable future for the generations of learners to come.<\/p>\n

\"The <\/p>\n

Stephanie Giamporcaro receives funding from Government of Flanders<\/span><\/em><\/p>\n

Xolisa Dhlamini is on a Bertha Scholarship for his PhD Studies funded by the Bertha Centre, a specialized unit within the UCT Graduate School of Business. Xolisa volunteers as a member of the investment subcommittee at the Institute for Retirement Funds Africa (IRFA). <\/span><\/em><\/p>\n

Source:<\/strong> The Conversation \u2013 Articles (AFRICA)<\/a><\/small>
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South African universities need to rethink how they invest their millions: The Rhodes Must Fall movement accused the University of Cape Town of having blood on its hands for investing in the mining company Lonmin. Ian Barbour\/flickr Universities are no longer simply institutions of learning. Over the past 50 years, they have also become important […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4584],"tags":[3050,8890,6516,4956,3953,8887,3576,2434,3756,7763],"class_list":{"0":"post-100269","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-africa-news-2","7":"tag-african","8":"tag-conversation","9":"tag-invest","10":"tag-millions","11":"tag-need","12":"tag-rethink","13":"tag-south","14":"tag-their","15":"tag-they","16":"tag-universities","17":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/100269","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=100269"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/100269\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=100269"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=100269"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=100269"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}