By Cameron Jewell
3 April 2014 – Updated: Monash University has denied a decision has been made on whether it will reveal its climate investment risk after leaked correspondence showed it had been advised to ignore a request from the Asset Owners Disclosure Project, and that most other Australian universities were following suit.
The allegations, made last week on ABC’s Lateline, followed an email that was accidentally sent to the Asset Owners Disclosure Project’s Dr John Hewson, a former Liberal Party leader.
The AODP, whose mission is to protect retirement savings from the risks posed by climate change by improving disclosure, had sent an email questionnaire to 300 universities around the world as part of a project to rank institutional climate investment risk.
In an email Monash chief financial officer David Pitt sent to the vice chancellor, and accidentally to the AODP, Mr Pitt said:
“My recommendation is we let this through to the keeper… To pursue this would involve or imply ‘unbundling’ of our investment activities… and we might not score well anyway. Better not to respond so this group would have to rely on public information and we would simply be in a position to say that we are unaware of their scoring and did not participate.”
Dr Hewson said in a media statement that it was unfortunately “the tip of the iceberg” regarding institutional resistance to transparency.
In fact, the confidential email also stated that the issue was discussed at a recent Group of Eight (Australia’s top universities) meeting and most CFOs were not amenable to the idea of revealing their risk profile.
“We have discussed this area at a recent Go8 CFO meeting and most have not entertained letting others judge their efforts in this way,” Mr Pitt’s email stated.
Dr Hewson said on Wednesday that “the staggering lack of good faith exhibited by Australia’s leading Sandstone universities and their gross insults to their stakeholders has taught us that we must drive for answers if change is not to automatically mean chaos”.
“The transparency being requested of these funds was no ethical or environmental crusade,” he said. “It’s a justifiable enquiry into how these funds are adapting their investment risk methodologies to meet a unique challenge and as such not only warranted attention but collaboration and no little desire to prove to members and stakeholders that trustees and officers have got their eye on the ball.”
Professor David Karoly from the University of Melbourne, and formerly of Monash, told Lateline Monash was pitching itself as a “very green university” with high-level sustainability research, as well as actively campaigning for water and energy efficiency on campus.
- See our article University sustainability research: the latest update
However, he said, it also seemed the university was betting on the survival of the industries driving the climate crisis.
“It is critically important that Monash University, like all universities, walk the walk as well as just talking the talk, and yet Monash University is being seen to do only the things that are easy,” Professor Karoly told Lateline.
Dr Hewson said vice chancellors and their investment officers were trusted with money that didn’t belong to them, and had a duty to avert the risks to their investments posed by climate change.
“Universities are multi-stakeholder societal bodies that are supposed to be leading the thinking on how to manage this difficult low carbon transition,” Dr Hewson said. “They have staff, students, alumni all working to assist the transition whilst their own [management is] refusing to acknowledge the investment risks to the universities’ endowment – it’s extraordinary.
In a response to the Lateline segment, Monash associate director, media and communications Stacey Mair said:
“Monash university has not made any final decision on this issue, as such there is no firm university position.
“The university’s investment policy is determined by a sub-committee of the university Council’s Resources and Finance Committee and the vice chancellor has requested that the proposal from the Asset Owners Disclosure Project to participate in their rankings study be referred to the sub-committee for their consideration and advice.
“After the proposal has been properly considered, the university will make a decision on whether or not to participate.”
Monash’s participation, the statement said, would be dependent on many factors, including “the participation in the survey by other Australian and international research intensive universities”.
However, an AODP media release said that the confidential email showed the Go8 may have “colluded in a botched plan to avoid scrutiny over their long-term investment strategies”.
“The refusal of many funds to even disclose to their own members shows the sheer scale of institutional resistance,” Dr Hewson said. “Just how long can they hope to defend the indefensible?
“We have suspected for some time that these universities and other institutions are putting long-term stakeholder capital at risk by relying on short-term markets – how quickly they seem to have forgotten the sub-prime chaos.”
See the Lateline report.