The U of T Asset Management Corporation currently holds $9.8 million worth of shares in Royal Dutch Shell and $7.8 million worth in British Petroleum. Toronto350, an environmental activist organization, is calling on U of T to divest from the oil industry. I disagree.

The issue of divestment revolves around a few competing obligations for the university. We want to be a world leader in combatting climate change. At the same time, our university has a moral and legally binding fiduciary duty towards U of T staff and donors to maximize returns on investment made with their pension funds and donations. Furthermore, U of T is an academic institution and it should not be taking political stances. Toronto350 addresses these two concerns in its excellent brief, with copious amounts of supporting evidence. Nevertheless, I find their arguments unconvincing.

Anticipating future regulation of carbon emissions, Toronto350 argues that divestment from the oil industry is financially beneficial to the fund. I am unconvinced of this position; as developing countries across the world increase their demands for fossil fuels, impending regulation of the industry seems unlikely. I will concede the debate on financial viability. Even though divestment doesn’t help, given the abundance of available options, it is unlikely to hurt the fund either. More importantly, exceptions to fiduciary duty can and have been made before.

No matter the financial consequences, divestment is morally and legally justified if companies cause social injuries. In 2007, U of T divested from the tobacco industry on these grounds. Toronto350 is claiming the same ground this time. However, the case is not nearly as strong for the oil industry. In the US, tobacco companies were successfully sued for indemnities in the mid 1990s and they were forced to put health warnings on their packages as early as the 1960s. Despite all this, the first campaign to have the university divest from tobacco actually failed in 1991, because the responsible committee didn’t believe the definition of social injury had been met.

In contrast, it may well be true that climate change is causing recent severe weather events. No one has proven in court that they were harmed as a result or that oil companies should be held responsible for climate change. Therefore, a case for social injuries cannot be made. Indeed, a similar divestment campaign was rejected last year at McGill for this exact reason.

One might wonder whether pedantically sticking to the definition of social injuries is meaningful. It probably isn’t. Definitions and procedures can always be changed. However, in this case, this definition is protecting us from straying too far away from our core missions as an academic institution. Indeed, this definition delineates the level of activism we are willing to engage in; it tells activist organizations that an academic institution will not take any political stance unless there is overwhelming consensus on the issue.

That consensus is simply not there. As an institution, U of T is not taking the strong stance necessary for divestment. When divestment succeeded in 2007, tobacco products had already been banned indoors. In contrast, while we pride ourselves on keeping our carbon footprint per student well below the average of large institutions, fossil fuel is still vital to the functioning of our university. As students, while we are all conscious of the negative effects of global warming, few are outright condemning the use of traditional energy. Indeed, it would simply be hypocritical of us to condemn oil companies while using their products on a daily basis.

Divestment is an act of sanction that should follow a stance our university has already taken. It cannot lead the debate and precede that stance. I do not wish to defend the oil industry or argue against climate change. However, in working towards a greener world, we should not neglect our other principles and missions. Divestment from oil is not wrong. However, it should take place only after we agree to take a much stronger stand on climate change than we currently do.


Li Pan is a second-year student at Trinity College studying mathematics and economics.