Toronto350, a student activist group, is asking U of T to divest its direct stock holdings from fossil fuel companies. On March 6, Toronto350 presented their case in a 20-minute lecture delivered by renowned lawyer Dimitri Lascaris, followed by a brief panel discussion. Toronto350 argued that U of T has an ethical obligation to divest. U of T president Meric Gertler, who sent a representative on his behalf to the presentation, said that he is “leaning in the direction” of appointing an ad hoc committee to consider Toronto350’s requests.
The presentation summarized a 190-page divestment brief, in which Toronto350 asked U of T to declare its intention to divest from fossil fuel companies and stop making new investments in the industry. They also asked the university to divest all its direct stock holdings from Royal Dutch Shell and 200 other companies with large fossil fuel reserves, within one year and five years of receiving the brief, respectively.
“It is the future of our children and our grandchildren that hangs in the balance,” said Lascaris. “Climate change is, to borrow the words of UN Secretary General Ban Ki-moon, the defining challenge of our time. Future generations will judge us according to how we rise or fall in the face of this challenge.”
In 2012, The University of Toronto Asset Management Corporation (UTAM) listed U of T’s two largest single-company holdings as $9.8 million in Royal Dutch Shell PLC and $7.8 million in BP PLC. UTAM also listed a $5.8 million investment in Rio Tinto PLC, which is a mining company with large fossil fuel reserves. UTAM does not list all investment quantities. William Moriarty, president of UTAM, did not respond to request for comment as of press time.
U of T’s Governing Council adopted the Policy on Social and Political Issues with respect to University Divestment in 2008. This policy says that the university president can appoint an ad hoc committee to consider a divestment request once presented with a convincing brief endorsed by at least 300 signatures. The committee would “consist of individuals with relevant expertise from among the teaching staff, students, administrative staff and alumni.” If the committee is called, the Executive Committee of Governing Council would need to approve appointments recommended by the president.
Many prominent student groups endorsed Toronto350’s divestment brief. These include the University of Toronto Students’ Union, the University of Toronto Graduate Students’ Union, the University of Toronto Environmental Action, the Victoria University Students’ Administrative Council, Trinity College Meeting, and the Muslim Students’ Association. Environmental activist and academic David Suzuki, former Toronto mayor David Miller, and American Indian environmental activist Winona Laduke have also endorsed the brief.
Gertler was originally supposed to attend the presentation, but chose to attend the National Scholars Dinner, held on the same night. Dr. Anthony Gray, director, strategic initiatives and research, attended the event in his stead.
In a sit-down interview with The Varsity the following day, Gertler said that he acknowledges the seriousness of the climate change problem: “I will say, for the record, that I am not a climate change denier. I am personally increasingly convinced by the science that underlies the climate change debate.”
Gertler said that the university must respect the balance between considering social and political issues with the responsibility to seek the maximum return on its investments. “The purpose of this exercise is not to decide whether or not there is something called climate change and that it poses real risks. The purpose is to decide the appropriate course of action for the university to take in this regard, particularly with regard to the question of its investment practices,” he said.
Toronto350 argues that the business models of fossil fuel companies do not take into account the safe limit of fossil fuel-burning to avoid dangerously raising the planet’s temperature. They cite limits established at a 2009 UN climate change conference, in a non-legally binding agreement called The Copenhagen Accord, which was signed by 114 parties, including Canada.
“Much of the value of these companies is illusory, based on an outdated assumption that we can use the atmosphere as a free dumping ground for CO2. The energy sources of the future need to be compatible with a stable climate,” reads Toronto350’s divestment brief.
David Williams, head of media relations for Shell Canada, would not comment on the company’s business model relative to the Copenhagen Accord. Williams said that, in the short to medium term, Shell is committed to increasing natural gas — a lower-carbon fuel — in their production profile. Currently, he said, Shell’s global production is approximately 50 per cent oil, 50 per cent natural gas.
In the longer term, Williams said that the key to taking carbon out of the atmosphere is to introduce carbon capture and storage (CCS) technologies. Shell is currently constructing what will be one of the world’s first industrial scale CCS projects, connected to their oil sands operation in Alberta. He also highlighted Shell’s $12 billion joint venture with Cosan in Brazil, called Raizen. “Raizen produces and sells over 2 billion litres a year of the lowest carbon biofuel commercially available — ethanol made from Brazilian sugar cane,” he said.
Toronto350 argues that fossil fuel companies’ primary business practices, and continuing investment in new fossil fuel infrastructure, makes it unlikely for them to seriously address the climate change problem. As such, they argue, investor activism alone is not enough, and responsible investors must move away from fossil fuel companies towards renewable energy infrastructure.
Gertler said that he will likely decide whether to appoint an ad hoc committee within one or two weeks. He declined to offer details on who would be appointed to sit on the committee, or how the student representative would be selected. He further said that it would be impossible to say, at this point, how long the committee would take to reach decision, since the 2008 divestment policy has never been put into practice before.
Clarification Monday March 10 2014: Toronto350 originally claimed to have been endorsed by the Scarborough Campus Students’ Union. This is not the case, this article has been updated to reflect this fact.