Divestment activists at prominent Canadian universities faced a string of defeats this week after the University of Toronto and McGill University administrations both officially rejected divestment proposals on the basis of economic and environmental pragmatism. These two top-tier universities are the latest in the country to follow reject divestment, following on the heels of the University of Calgary, Dalhousie University and the University of British Columbia who also previously decided against divestment.
In an official Presidential Response entitled, “Beyond Divestment: Taking Decisive Action on Climate Change,” Toronto president Meric Gertler noted that divestment from fossil fuel firms would have no tangible impact on lowering emissions, stating:
“…such firms only account for one-quarter of Canada’s greenhouse gas emissions, with the balance produced by other sectors such as transportation, housing and manufacturing.”
Instead, the university has recommended a comprehensive engagement strategy as a more effective way of “meeting the challenge of climate change, while fulfilling our fiduciary duties to the University’s pension and endowment fund beneficiaries.” The university plans on bolstering Climate-Change Related Research and Education Initiatives, decreasing the university’s carbon footprint, and dedicating substantial funds towards initiatives like the Carbon Disclosure Project.
A week prior to Toronto’s announcement, McGill Principal Suzanne Fortier also announced that the Board of Governors decided not to divest McGill’s holdings in fossil fuel companies. Taking on a more critical tone on divestment, McGill’s Committee to Advise on Matters of Social Responsibility (CAMSR) advised the Board that there was, “no advantage or benefit for McGill to engage in action that would have negligible impact on climate change.”
The CAMSR also highlighted the benefits of fossil fuel energy resources and the “disconnected” hypocrisy of divesting from fossil fuel companies while continuing to consume them every day. According to their report:
“Continuing to explore or refusing to keep unburnable reserves underground does not directly have grave injurious impact on individuals or the natural environment…Climate change is an injurious impact primarily due to the burning of fossil fuels by end-users rather than activities of fossil fuel companies.”
These rejections are good news for students, faculty, and university staff alike. Combined, the University of Toronto and McGill have an endowment of roughly $3.4 billion. Based on a study by University of Chicago Professor Daniel Fischel, divestment would risk these universities roughly 23.8 million each year in lost revenues due to increased trading, compliance and diversification costs.
In addition to leading universities, religious institutions in Canada have also voiced their opposition to divestment in recent weeks. At the spring Council of General Synod in March, Terry Leer, Anglican archdeacon for mission development in the Athabasca diocese, questioned whether divestment is an “appropriate Christian response” to climate change when considering the thousands of jobs that have been lost from the downturn in oil prices in 2014. He states,
“While divestment appears to be an easy action to take, the process behind it has neglected and hurt people…The actions of some seem to cast aside the needs and futures of many Anglicans, and in fact have driven some away from the church.”
And Canada’s energy needs are only expected to grow over the next couple of years. According to the EIA, Canadian petroleum production is expected to increase through 2017 due to increased oil sands production. Furthermore, direct employment as a result of oil sands investments is expected to grow from 151,000 jobs in 2015 to over 350,000 jobs in 2035.
Together, religious and academic voices have questioned the effectiveness of divestment on a moral, environmental and economic basis. As divestment critics across the spectrum in Canada have pointed out, oil production in Canada remains a crucial element in supporting country’s economic and energy needs. Divestment would prove little in terms of tackling emissions while offering little more than a symbolic gesture that does more harm than good to those that divest.