Universities Divesting in Fossil Fuels (Part 1)
11 November 2014 Leave a comment
As universities around the world are exploring how to embed sustainability into their programme offerings, curriculum and campus, a growing number of them are also looking deeper to see how they can ensure that they are being consistent in how they run their own operations. For example universities are increasing taking a closer look at their endowment funds and the kinds of companies that they invest or choose not to invest in.
One movement that has gained momentum this past year has been for universities to divest from fossil fuels. These universities individually and collectively hold endowments that invest millions, sometimes billions, into fossil fuel companies. Strong campaigns, lead by students and staff, focus on several reasons why their institutions should not be investing in fossil fuels. It is seen as a sound financial decision to take a closer look at an institution’s financial portfolio and the risks that certain investments decisions take for the university, but also for the planet. Universities have a responsibility to shape public discourse, change through influence and raise awareness about this topic.
The campaigns to divest from fossil fuels have been slightly different at each school, but generally push for some, or all, of the following points:
- To freeze any further investments in fossil fuel companies
- To divest from fossil fuel companies completely in five years
- Disclose the potential greenhouse gas emissions in the university’s investments
- Shifting funds to lower risk, ethical investments (such as renewable energy, local community projects, and so on)
- Calling on pension funds to exclude fossil fuel companies from their portfolios
- Cutting research, advertising and career ties with fossil fuel industry
- Create, strengthen and adhere to a Socially Responsible Investment Policy
- Publicly declare divestment in order to encourage other universities, institutions and individuals to do the same
Most of the campaigns are specifically looking at a group of 200 or so publicly traded companies that hold the vast majority of listed coal, oil and gas reserves. However, quite a few other schools have publicly stated that although divesting is a strong gesture, they do not see the necessity or utility in doing so. They argue that universities should keep their ownership in these companies and instead exercise leverage as a shareholder. The act of divesting will not have real impact other than raising awareness and that although it is inspiring to see the students organise such strong campaigns, divesting completely doesn’t actually make sense for the universities. Instead they are choosing to respond in a number of different ways including strengthening their Investment Policies and investing in alternative energy companies.
Despite mixed thoughts on the matter, the movement now also includes a number of companies (Ben & Jerry’s Foundation, Rockefeller Brothers Fund), religious organisations (a petition for the Vatican to divest is underway), cities (Seattle, Oxford) and countries (one of the Swedish national pension funds announced they are divesting from 20 fossil fuel companies) from around the world.
A number of toolkits and resources are available for students and staff interested in learning more including www.wearepowershift.org, www.gofossilfree.org, www.350.org, www.endowmentethics.org and http://www.asyousow.org.
Part 2 will look at specific examples from signatories in the US, Canada, UK and Australia.
Should Universities divest in fossil fuels or not? Share your thoughts and experiences in the comments box below.