8 Jul 2024 Council meeting Economy

Councillor Geselbracht Motion re: Update of Current Investment Policy

Motion
That Staff provide a report with options to update the current investment policy to include a percentage of the City’s portfolio be in socially responsible (ESG) and low GHG investments. Report to provide: 1. Budgetary considerations for socially responsible investments at 10%, 30%, 50%, 75%, 100% of total City portfolio; and, 2. Updated background on fossil fuel divestment and responsible investing with updated numbers from the October 2021 Staff report and brief summary of practices of other local governments leading in responsible investment.
Minutes, page 12
Sources
Agenda itemCity agenda
Put forward by Ben Geselbracht Source

Ben Geselbracht Yes

Thanks. Just some clarity. I think the questions raised by Councillor Armstrong and Councillor Perino sort of are exactly what the issue is, is that we've got over $200 million of funds that we've invested, and we don't know exactly what we're investing in. It's just sort of, you know, a GIC from a bank, and that bank could be investing, for example, one does, in Barrick Gold. And Barrick Gold, you know, moved, you know, a large number of indigenous people off their lands in a very bad way to expand a gold mine in Tanzania. But we'd never know that because it's just a GIC from X bank. Now there are not a ton, but there are these ESG funds, which are environment, social, governance funds that basically the fund provider does the homework for the organization and says like these, this fund meets a certain standard around environmental stewardship. It meets a certain standard about social responsibility in terms of like equitable workplaces or labor forces. It's got a board of governors that's separated from the, from the executive. The executives, you know, one thing is like overcompensation of the executives so that you're, you know, paying millions of dollars to an executive director of a company which is just it's not an investment so they do their homework on if it meets a certain standard of social responsibility to make it easy for an organization to be like you know we could choose between this fund that we have not know nothing about because we can't tell what it's actually invested in or we can choose this fund that has it all laid out and we can see whether it's aligned with their values or not and I think that it's important that we do that because you know it's like in the 80s of our funds to the more socially responsible ones and I think we just need to see what would it be like if we move 10% in or 20% 30% so that we can be sure that the values around environmental sustainability around equity, fair labour practices are being played out we're choosing and we do have a social procurement policy that does exactly that and this is really an you know saying that these are the values we want to promote with our money and we can no longer sort of like be ignorant or blind to the fact that this whole financial system operates and we need to know where our money is going. I think that's the responsible thing to do so thank you.
I just I just heard Councillor Sorp say that he was okay that if we're investing potentially blindly in arms dealers and large tobacco companies in mining companies that potentially are you know disturbing indigenous communities and you know if ex-councillors think that it's okay it's probably why they're an ex-councillor so I appreciate you raising that point but I where we can't be willfully ignorant of where our money is.

Paul Manly Yes

Manley then Councillor Thorpe. Thank You Your Worship. Yeah I would just echo what Councillor Gesselbrock has said there's there are a lot more of these funds coming on board. They are well managed and they are monitored, the ESG funds, and they are monitored by third parties that look for compliance to ensure that investors aren't investing in child labor or, you know, in weapons or tobacco or things that are detrimental to human well-being.
Councillor Manley. Thank you. I just wanted to add that I saw a very interesting documentary about how investors in the financialization of the housing market were actually driving up the cost of housing, buying up low income housing units, tearing them down and putting up condos and destroying what was affordable housing markets in places around the world. And it's important to know what your money is doing when you're investing, especially that you're working in and when you're facing complex problems you don't want to be investing in things that are actually in conflict with what you're trying to achieve. And in that case I will send you a link to the documentary. It was very interesting and in some cases unions were investing in this same process where their own workers couldn't afford to live in the houses that were being taken away from them and replaced by luxury condos and luxury luxury buildings where affordable housing used to stand.

Ian Thorpe No

It's different things to different people and so we have an expert financial staff. They are limited in the areas where we as a city can invest. I'm quite comfortable with the report that was done a couple of years ago, comfortable with letting our staff go ahead and do their work without spending time on a new report.

Janice Perrino No

going to be in agreement of something and that's okay. The reason why I'm voting against this is that our staff did a report not all that long ago and so I just feel that their expertise is what I lean on learning from and listening to and you know they did this report and I don't think they need to do it again just yet and I just want to remind people that if you support for example our mayor our major airline in this country you're supporting the use of fossil fuels so you know like you got to be careful what you're talking about but this is our staff and they know what they're doing

Leonard Krog No

But, you know, one person's view of this can be different from another. Tell me, do we think it's ethically irresponsible, for instance, to invest in an arms company that's supplying weapons to the dear and good people of the Ukraine to defend against Russian aggression? Would you like to send them pamphlets wishing them well or saying we send you our prayers, but in the meantime, Mr. Putin can destroy your democratic government? That's over the top. I agree. But we heard a little bit of an exchange here between Councillor Thorpe and Councillor Gesselbrock. So let's bring this back to reality. Who knows how many loans are out there by the Royal Bank of Canada? But if you deposit a dollar, they get to loan that dollar actually ten times it out to whoever they wish within reason. Most of the chartered banks in this country have access to some ethical policies. Most of our money is in term deposits, we've just heard. What are we possibly going to expect the limited staff of the city of Nanaimo do in support of this request for an updated report, which probably won't say anything different than it did before? Fossil fuel is not the only issue in the world. And if we are going to decide which issues we're going to take a position on in terms of our investment policy, maybe for, you know, passionate religious people in town, they don't want to see investments in drug companies that make the pill. That's a strong ethical position for people who are entirely pro-life. Once you start down this path in any significant way and put aside the financial interest of the citizens of Nanaimo, whose duty it is ours to uphold, you're down a pretty long and, I would argue, very problematic path. I'm not aware that we're investing in blood diamonds or anything of an untoward nature. We have money in our banks. We have investments that returned a good return to The tax increase the citizens had this year would have been higher if we'd done something more. If we'd sunk all of our money into the financial fund through MFA, we'd have less assets today than we did in 2021. I'm sorry, but this is an ideological, feel-good kind of motion, which, in my respectful opinion, has no place in council. So, having said that, Councillor Hemmonds, you've got the last word. Thank you very much. All those in favour of Councillor Gesselbrock's motion. Councillors Eastmere, Gesselbrock, Hemmins, Manley and Brown. And those opposed. Councillors Armstrong, Mayor Krogh, Councillor Thorpe, Councillor Perino.

Questions and answers

Councillor Janice Perrino
Speaker identificationConfident
No

asked
Thank you. Councillor Prino? Thank you Your Worship and a question through you to Ms. Mercer. A report was done in it was at 2021 is the last time and are when you invest into different groups are you able to tell whether or not they're fossil fuel organizations or have a part of the I guess what I'm so
Laura Mercer
Speaker identificationConfident
answeredGeneral Manager, Corporate Services
Mean, how would you ever know? Yeah, so through your worship to Council Prino, some funds are very clear specific. Right, and there isn't a lot of those. There's few with... there's two with the MFA yes that are specifically fossil fuel free investments. Some of the other like... there it's been a couple of years since we've looked, but there are still not as many out there what we would have to do a dig and see what was out there as far as other sustainable or socially
followed up
Responsible investing investment. I again, I mean the report was done not long ago; it's certainly good enough for me at this time. I think you know it might be something that we would consider in another three to five years, or you know certainly in a time period that staff felt was appropriate, but I can't see the... I can't see the reason for it and we certainly don't have the time of the budget for it, so I'll be voting against this as well. Thank you.