Following over three years of student led advocacy and the striking of a Presidential Advisory Committee on Divestment from Fossil Fuels, the University of Toronto will not be adopting recommendations to divest immediately from firms complicit in anthropogenic climate change, according to a copy of the official administrative response obtained by The Varsity.

Instead, Gertler proposed taking a “firm-by-firm” approach, which advocates a targeted and flexible approach to divestment. This approach includes incorporating environmental, social, and governance-based factors (ESG) “instead of a blanket divestment approach.”

The decision

“So we’ve decided to operationalize or really move the work of the committee in three ways,” said Gertler, in an interview with The Varsity. “One [of the ways] is by accepting the idea of targeting, in which we have singled out particular firms, egregious firms. The second is that the university’s position on whether or not to invest in firms could change over time, if [a blacklisted firm] changed its behaviours, they could be considered eligible for investment.”

The third way, according to Gertler, is to reconcile the university’s need to uphold its judiciary responsibility with its desire to do something positive for the planet, by incorporating ESG factors into the analysis of climate risk.

“There is growing acknowledgment of the idea that those firms that adopt sound ESG practices reduce risk over time and may offer better long term value for investors,” reads a portion of the president’s report.

According to the report, the main advantage of such an approach is that it would tackle the effects of climate change, while fulfilling the university’s fiduciary obligations.

Gertler explained that the work done to assess the ESG factors wouldn’t necessarily be done by the UTAM itself. “What’s happened in the last few years is that we’ve seen new companies bringing up and developing new lines of businesses. They assess the ESG factors of firms that they might use in their investment portfolio and have developed the tools to do so, tools that we can use. At the same time, people in central and influential places such as Michael Bloomberg, Mark Carney, the Financial Stability Board have started a new project to develop a standard set of tools and metrics to determine climate related risks in investments in a consistent way.”

Gertler hopes to use investments to influence behaviour in the fossil fuel-producing sector and in other areas of the Canadian economy. “We are really struck by the fact that fossil fuel firms are only generally about one quarter of greenhouse gases, if we’re focusing on those, we’re ignoring three quarters of emissions that come from elsewhere.”


UofT350, a student-led environmental justice advocacy group, condemned Gertler’s ESG factor-based approach to climate change.

“The President’s recommendation totally ignores the urgent need to act on climate change, suggesting that tactics like ESG, shareholder activism and carbon disclosure are sufficient to encourage rapid societal shifts to carbon free economies. We cannot develop more fossil fuel reserves, we cannot pretend that fossil fuel companies like Exxon Mobil, who engaged in climate change denial and fund climate science misinformation, are interested in combatting climate change and we cannot ignore the many frontline communities that are already suffering the devastating effects of climate change and have their rights systematically violated by the fossil fuel industry,” the group wrote in a public statement posted to their Facebook page.

“The ESG-approach is a form of greenwashing rooted in the assumption that we should reward fossil fuel companies for doing bad things well,” said Clement Cheng, a UofT350 member. “With respect to fossil fuel companies, ESGs simply mean that they can continue their fundamentally injurious practices albeit in a well-governed, transparent manner… Nonetheless, ESGs and divestment are not mutually exclusive principles and, when applied together, they actually amplify the message to move away from fossil fuels,” he added.

Amanda Harvey-Sanchez, UofT350 media coordinator, said that the ESG approach misses the point of divestment. “Divestment is an opportunity to take a really strong moral stance on an important issue in a time where there is a lot of urgency around climate change, this is a serious issue and the response needs to have equal intensity to the problem. [Gertler’s] response is weak and simply not enough,” she stated.

Both Cheng and Harvey-Sanchez expressed dismay at the president’s rejection of the advisory committee’s recommendations. “The president’s own committee served our university’s leaders the opportunity for moral leadership on a silver platter. Unfortunately, President Gertler cowardly chose not to take it,” said Cheng.

Although Gertler praised the committee for its “intellectual energy and integrity that so distinguishes our academic community,” Cheng condemned the president’s decision not to trust their expert recommendation. “Instead, he formed four new, unannounced working groups comprised of unknown members from his senior administrative team to revise the committee’s findings in the span of just three months,” Cheng said, alleging that the meetings were sealed from the committee and that the content and attendance at them remain undisclosed.

Fossil fuel divestment march at U of T. CC Flickr by Milan Ilnyckyj.

Fossil fuel divestment march at U of T. CC Flickr by Milan Ilnyckyj.

“[Gertler] has made no commitment at present to any actual changes in the investment, which is incredibly different from what his own advisory committee has recommended,” said Harvey-Sanchez. “What’s almost as appalling as his decision is that the president and the administration and UofT news is actually trying to pin this as a victory which is a misrepresentation of facts and dishonest.”

Cheng countered the president’s reasons for not divesting. “Gertler’s assertion distorts the fact that this 25 per cent share from the oil and gas industry represents the biggest and fastest growing contributor to Canada’s emissions. More importantly, 25 per cent only describes the emissions released from the extraction of the fossil fuels and entirely neglects the much larger portion of emissions caused by burning them,” Cheng said.

The president’s second reason is associated with shareholder activism, which Cheng said is a common argument against divestment.

“Shareholder activism ignores the industry’s longstanding track record of environmental degradation, human rights violations, funding of climate science denial and the ongoing extraction of reserves that contain five times more fossil fuels than we could ever safely burn,” Cheng countered.

Cheng expressed concern with Gertler’s decision to delegate the task of defining ESG criteria to the UTAM. William Moriarity, UTAM CEO, received a 57 per cent raise this year, bringing his compensation to $1.48 million. UofT350 alleges that this increase demonstrates where the university’s priorities lie.

According to a leaked email posted to UofT350’s Facebook page, the president’s office mandated a shutdown to prevent any sit-ins similar to those that took place at McGill University following the institution’s rejection of fossil fuel divestment in late March. “This person, who I will not name, replied back saying ‘oh, you were accidentally cc’ed in this email. I hope I can count on your integrity and graces to keep it confidential,” said Harvey-Sanchez of the email.

“The fact that email was sent shows that the administration is aware that the president’s response is inadequate and unaccountable to the university community and that there are going to be repercussions for those actions. It shows that they’re afraid and it shows that people have the power to make them scared and they have good reason to keep their doors locked. I cant say exactly how we’re going to be acting but they should be expecting repercussions as they are,” Harvey-Sanchez continued.

When asked about the email leak, Gertler said that he is not party to all of the discussions that take place around security matters at U of T.

“Our hope is that we can continue to discuss these issues in a civil and peaceful manner,” Gertler said. He then praised UofT350’s engagement with fossil fuel divestment. “I’ve been so impressed by UofT350, by the way that they have engaged these discussions in a civil and calm and rational way and I hope we can continue that.”

Committee recommendations

In the December 2015 report, the advisory committee advocated for an immediate divestment from firms that derive more than 10 per cent of their revenue from non-conventional or aggressive extraction: firms that knowingly disseminate information on climate change science or distort science or public policy to thwart or delay changes in behaviour or regulation, and firms that derive more than 10 per cent of their revenue from coal extraction.

The committee left it to the university to define what would count as “non-conventional or aggressive extraction.” 

“Frankly it doesn’t need the sort of dictionary definition, as what I liked about the assessment was that they were advocating for some kind of flexibility,” said Gertler when asked about defining “non-conventional or aggressive extraction.”

He added that the university currently does not have any direct investments in the firms mentioned in the committee’s report. “There is reasonable evidence that such investments could indeed carry increased financial risk, and have a reasonable prospect of lower long-term investment outcomes, making them unattractive as long-term investments by the University,” he wrote in his report.