BY JASON KIRBY • Who says universities don’t offer hands-on instruction? Students at the University of Toronto who demanded the school sell off its investments in tobacco companies have learned that it’s possible to bend a multi-billion-dollar investment fund to their will. The bigger lesson may come later, as U of T grapples with the implications of caving in to student pressure.
According to a student group called E-BUTT, U of T President David Naylor has ordered University of Toronto Asset Management, which oversees the school’s pension funds, endowment and scholarships, to sell any tobacco stocks. The money manager has already sold off its direct holdings in two companies, Altria Group and Rothmans. The last, Japan Tobacco, will be divested soon.
E-BUTT head Tyler Ward hailed the president’s decision as a “monumental step forward,” while Robert Steiner, a U of T spokesman, said the school encourages students to “take the lead and this is a good example.”
But any student of Economics 101 knows the risks of politicizing arm’s-length pension funds. Special interests tend to trump sound investment decisions. Socially responsible investment strategy is fine, but who sets the criteria? Steiner said this was a unique situation, adding the students gathered 300 signatures from a mix of U of T stakeholders, won over a panel and then the president.
But with 63,000 students, 8,000 staff and 370,000 alumni, other groups could easily meet that first hurdle if they object to the school’s investments. The group Global Warming Activists may not like U of T’s stake in Exxon Mobil, while human rights activists at Investing in Integrity would cringe knowing the school props up Halliburton. It will be up to Naylor to say why one stock is worthy and not another—that’s the slippery slope he stepped onto when he indulged E-BUTT. M
The story you want is part of the Maclean’s Archives. To access it, log in here or sign up for your free 30-day trial.
Experience anything and everything Maclean's has ever published — over 3,500 issues and 150,000 articles, images and advertisements — since 1905. Browse on your own, or explore our curated collections and timely recommendations.WATCH THIS VIDEO for highlights of everything the Maclean's Archives has to offer.