Uploading fossil fuels

Canadian universities join movement to remove oil, gas, coal shares from endowment funds, despite warnings investment count be hurt

Gary Park

For Petroleum News

Students and faculty in universities across Canada are putting pressure on their boards of governors to eliminate fossil fuel related investments from their endowment portfolios.

Currently faculties at five universities - notably the University of Toronto, Canada’s largest, and the University of British Columbia - have endorsed divestment moves, as have students at 10 campuses.

So far, only three boards have held final votes, with two rejecting the proposals and Montreal’s Concordia agreeing to a limited phase out of C$5 million of petroleum and coal investments from its endowment of C$130 million.

But the campaign is continuing to gather pace, reaching the University of Calgary, in the heart of Alberta’s oil and gas industry, where corporations and corporate leaders have poured hundreds of millions of dollars over the years into campus facilities and programs.

It is estimated that more than 200 schools in the United States are grappling with the issue.

University of British Columbia mining Professor Erik Eberhardt, prior to the faculty vote earlier in February, tried persuading his colleagues that divestment would drive industry money away from important fossil fuel research, including methods of reducing greenhouse gas emissions from British Columbia’s liquefied natural gas sector.

He said continued research and education “directed at the safe and responsible development of shale gas resources not only represents an important opportunity, but a social obligation.”

Threats from alumni

The University of British Columbia said in a statement that its board of governors “recognizes the importance of responsible investment and has put a process in place that enables key stakeholder groups in the UBC community to provide well-considered and broadly-based input into this decision-making process.”

At the UBC, only 955 of 3,447 faculty members participated in the referendum, with 591 of those who voted - or 62 percent - supporting the recommendation for the UBC to sell off its holdings tied to fossil fuels within the next five years, making it the first Canadian university to fully divest its fossil fuel stakes.

Currently investments tied to oil and gas and coal companies make up about 10 percent of the university’s C$1.3 billion endowment fund.

Wayne Wachell, chief executive officer of Genus Capital Management, suggested that the best strategy for the UBC is to expand its international investments, noting that fossil fuel companies make up about 8 percent of global stock markets, compared with about 34 percent of the Toronto Stock Exchange.

George Hoberg, a UBC forestry professor and a leader of the divestment campaign, said the governors must at least consider the faculty and student votes.

“It’s time for UBC to take some action on divestment,” he said. “We spend a lot of time interacting with today’s youth and we know how strongly they feel about the need for a cleaner future.”

Kelsey Mech, national director of the Canadian Youth Climate Coalition in Victoria, B.C., said the choice for university “is clear: either invest in a dying fossil fuel industry that will commit us to environmental destruction, social injustice and economic failure. Or we can investment in our future.”

Following the student referendum, UBC produced an investment policy setting out five conditions that must be met before it would consider divestment from any sector, including proof that such an action would not harm the school’s financial interests.

The divest campaigns are also increasingly active in elementary and high schools, including a call in five cities within the Metropolitan Vancouver region to end C$565,000 of funding this year from Chevron Canada to support 470 projects involving 20,000 students in science, technology and math.