City of Nanaimo considering 'socially responsible' investments

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Nanaimo council is interested in updating the city’s current policy to make a portion of its investment portfolio “socially responsible.”

A motion to ask for a staff report on socially responsible investing was brought forward at a meeting Monday, July 8, by Coun. Ben Geselbracht, who argued the city’s current investment policy should better align with the goals and values of the city plan.

The intent is for city staff to consider equitable workplaces, fair labour practices and environmental impacts before making financial investments with surplus dollars. Most of the city’s investments currently sit in guaranteed investment certificates.

“We’ve got over $200 million of funds we’ve invested, and we don’t know exactly what we’re investing in, it’s just sort of in a GIC from a bank and that bank could be investing in, as one does, Barrick Gold,” Geselbracht said. “Barrick Gold moved 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.”

To meet this objective in the long term, Geselbracht suggested that in the future the city could hire a third-party environmental, social, and governance fund to research their investments. In the meantime, the city staff report would provide budgetary considerations for socially responsible investments at various per cent levels of the city’s portfolio, and update the city’s background on fossil fuel divestment and responsible investing with updated numbers including “a brief summary of practices of other local governments leading in responsible investment.”

Geselbracht compared socially responsible investing to the city’s sustainable procurement policy, which requires the city to consider sustainability priorities in purchasing decisions.

“This is really an extension of a social procurement policy, saying that these are the values we want to promote with our money and we can no longer be ignorant or blind to the fact that this [is how the] whole financial system operates, and we need to know where our money is going,” he said.

With an investment policy change, Geselbracht said the city could avoid investing in arms dealers, large tobacco companies and mining companies that negatively impact Indigenous communities.

Arguments at the council table included the financial impact, staff time, wide interpretations of “socially responsible,” as well as similarity to 2021 staff report on fossil fuel divestment. Councillors at that time debated withdrawing investments in the fossil-fuel industry, but in a narrow vote decided to move forward with their portfolio as it was. 

Laura Mercer, the city’s general manager for corporate services, asked about a past investment in a socially responsible fund in 2021, responded that the city invested $2 million at the time and sold it in 2023 at a loss of $33,000.

Mayor Leonard Krog, speaking in opposition to this week’s motion, said that while he appreciates the motivation, views of social responsibility differ from person to person.

“If we are going to decide which issues we take a position on in terms of investment policy, maybe for passionate religious people in town, they don’t want to see investments in drug companies that make the [birth control] pill? That’s a strong ethical position for people who are entirely pro-life,” Krog said. “Once you start down this path in any significant way and put aside the financial interests of the citizens of Nanaimo whose duty is ours to uphold, you’re down a long, and I would argue, a very problematic path.”

Coun. Ian Thorpe said council shouldn’t be “overly swayed by those who stray into the realm of personal ideology.”

“To me, ‘social responsible’ is in the eye of the beholder, it’s different things to different people. We have an excellent financial staff, they are limited in the areas where we as a city can invest,” Thorpe said. “I’m quite comfortable with the report that was done a couple years ago, comfortable with letting our staff go ahead and do their work without spending time on a new report.”

The motion passed with Krog and councillors Thorpe, Sheryl Armstrong and Janice Perrino opposed.