Why Divestment?
Humanity confronts a grave and urgent crisis in climate change. The evidence that we are hurtling towards a future dangerous for humankind is persuasive. Immediate, dramatic actions are required. We have a moral duty to address the climate crisis. We are asking for UoG to immediately forgo further investments in fossil fuel companies, and divest from all existing fossil fuel holdings within five years. Action on climate change requires a rapid transformation of our energy system away from fossil fuels, and divestment can help promote this.
It is wrong to profit from wrecking the climate. Although some are concerned that divestment might hurt the current income UoG receives from the endowment fund, this doesn’t need to be the case. There are many opportunities in the market for an endowment to make equivalent or better returns on the money being invested, and studies designed to measure the impact of divestment have found little or no impact on returns. With increasing concerns regarding the “carbon bubble”, significant financial risks to investments in fossil fuels is a large possibility. The money invested assumes that the oil will be extracted although it is not currently being removed, and should not be due to the climate not being able to cope with such a drastic output of CO2 into the Atmosphere. As a result, divestment is consistent with UoG’s duties as a trustee.
We call on UoG to use the endowment as a living laboratory: design a profitable fossil free portfolio, and use it as a model to inspire sustainable investing behaviour at other institutions. We recognize this will be a complex and challenging task, which is why we have included a five-year timeline for full divestment. Although, as mentioned before, some are concerned this may hurt the university’s ability to raise money, we believe demonstrating a strong commitment to sustainability and becoming a global leader in combating climate change can help UoG attract additional donations and funding.
Some would prefer UoG to maintain ownership and exercise leverage as a shareholder. Because the business model of fossil fuel companies is so reliant on carbon reserves that humanity can’t afford to burn, working through shareholder channels is inadequate to achieve the transformative changes required. These urgent times demand rapid and significant changes in our energy system, and we believe those changes would be better fostered through the more dramatic action of divestment. Additionally, to be an effective partner that can influence change, one cannot be benefiting financially due to the conflict of interest that arises. Moreover, divestment calls attention to the pollution of politics fostered by the fossil fuel industry, including campaigns to mislead the public about climate science, as well as efforts to block, dilute, or delay the adoption of meaningful climate policies.
Although it is commonly believed that we need fossil fuels to live and thrive, which is no doubt true in the short term, we wish to advocate a shift to a clean energy economy, something engineers, scientists, and economists have called achievable, practical, and affordable. The current economic model is built upon a short term solution with devastating effects that needs to become sustainable, long term and adaptive. By divesting, UoG can show leadership in fostering this necessary transformation and demonstrate its commitment to sustainable, long lasting change. Some have questioned the efficacy of divestment as a strategy. In addition to highlighting the fossil fuel industry’s role in perpetuating carbon pollution and political pollution, divestment can reduce a company’s stock price, pressuring companies to shift their investment to clean energy such as wind and solar power.
A single divestment campaign won’t make a difference; that’s why we’re part of hundreds of fossil fuel divestment campaigns across North America and Europe. Divestment efforts were a major factor in building the international campaign that helped end apartheid in South Africa. We are proud of UoG's reputation for sustainability. The time has come for the university to take the next step, and live up to its ideals.