A Palestinian flag flies over the pro-Palestinian encampment set up at the University of Toronto campus, in Toronto, on May 26.Frank Gunn/The Canadian Press
A resolution to the pro-Palestinian encampment at the University of Toronto may rest on how far administrators are willing to go to provide more information about where university money is invested and whether they will consider divesting from companies connected to weapons manufacturing.
The University of Toronto, where an encampment has been in place for more than six weeks, has a multibillion-dollar endowment. But where the university invests its money is not entirely clear.
The university’s administrators have been willing to engage with student demands for disclosure and divestment, but have so far been unable to reach an agreement to end the protest on King’s College Circle.
Encampments at McMaster in Hamilton, Ontario Tech University in Oshawa, Ont., and the University of Quebec at Montreal were resolved through negotiations that included language about greater transparency. The University of Alberta, which called in police to dismantle its encampment, announced Tuesday that it will make its endowment pool holdings public, following a vote of its board of governors.
McGill president Deep Saini announced Tuesday that he’s breaking off negotiations with protesters, saying it’s clear the talks won’t bear fruit. But McGill still intends to examine divestment from weapons companies and plans to increase the transparency of its holdings, Dr. Saini said.
U of T, which has an endowment of about $4.2-billion, as of Dec. 31, 2023, handles its money through the University of Toronto Asset Management Corporation (UTAM), which is governed by a board nominated by the university.
UTAM doesn’t have direct investments in individual companies but places the university’s money with 44 different fund managers around the world, including in Canada, the United States, the United Kingdom, France and Brazil. The fund managers invest the university’s money in pools of assets made up of large numbers of underlying stocks or other assets, and they treat the specific mix, which can change frequently, as a corporate secret.
Trevor Rodgers, U of T chief financial officer, said that even when the fund managers tell UTAM where its money is invested, it can’t make those details public due to restrictions in their agreements.
“This level of confidentiality allows UTAM to access best-in-class investment firms and funds,” Mr. Rodgers said in a statement.
The University of British Columbia, like U of T, uses fund managers to handle its endowment, estimated at $2.8-billion. But UBC also provides disclosure at the individual equity level. According to its website, there were more than 1,100 equities in its endowment with allocations greater than 0.01 per cent of the portfolio, as of June 30, 2023. Microsoft was the largest equity holding at 1.28 per cent of the portfolio and more than 900 companies made up between 0.01 and 0.05 per cent of the portfolio.
McGill, with an endowment of about $2-billion, makes public its holdings that are greater than $500,000. According to this year’s disclosure, it has more than $500,000 invested in about 270 companies, with the vast majority of those holdings under $2-million.
U of T has said it is willing to discuss providing more disclosure and transparency, as long as it doesn’t compromise its legal obligations or undermine the fund managers’ competitive advantage.
In May, a coalition associated with the protest movement at U of T produced a report looking at what the university’s fund managers have disclosed in their filings to the U.S. Securities and Exchange Commission. It found that some of the fund managers had investments in arms manufacturers. But as Mr. Rodgers points out, that doesn’t necessarily indicate anything about the subset of investments held by U of T.
The protesters have been demanding universities offer greater transparency and pull their funds from anything connected to weapons manufacturing.
But where to draw the line can be complicated. Companies that derive income from weapons sales might seem a straightforward point for universities to consider, but there are large companies that make aircraft or electronics that have civilian and military uses.
U of T says it abides by the UN-supported Principles for Responsible Investing, which makes environmental, social and governance factors central to its investing strategy. The university said it also upholds those principles when selecting its investment managers and in its reporting and disclosure.
The protesters have cited the successful campaign to divest from South Africa in the apartheid era, and more recent decisions around tobacco and fossil fuel divestment, as examples that prove what they’re demanding can be done. The process of divesting from South Africa took several years, but the campaigns attracted public attention and focused a broader policy agenda, which is often the goal of divestment movements.
In a recent offer to encampment leaders, U of T said it would commit to reviewing whether it has direct investments in companies that provide military goods and services and, if so, to disclose immediately.
But the process for arriving at disclosure and divestment decisions has been a sticking point in negotiations, which appear to be at an impasse. The protesters have said they want commitments, not committees. That’s difficult to reconcile with a university divestment policy that explicitly runs through committees.
“The protesters have been invited to pursue the process clearly specified in the university’s divestment policy, but they have thus far chosen not to do so,” University of Toronto president Meric Gertler said in a statement. “We cannot override our policies and procedures and adopt a pre-determined conclusion guided by only one viewpoint.”
The court process could provide an impetus for further talks.
Lawyers for U of T will be in Ontario Superior Court Wednesday seeking a court order that would authorize police to dismantle the encampment following the issuance of a trespass notice last month.