A committee formed by the administration of McGill University has rejected the argument from Divest McGill that the school should sell its stock in “corporations involved with the production, refining, transport and sale of fossil fuels” and “financial institutions which have not adopted a policy of making no further loans to corporations that produce, refine, transport of sell fossil fuels”.
Rather startlingly, the committee concluded that: “Since the Committee is not satisfied that ‘social injury’ has occurred, no action was considered or is recommended.”
Given that climate change is the ‘greatest market failure the world has ever seen’ the case that fossil fuel companies are doing social harm is very strong. While the committee’s decision is disappointing, it is useful for Toronto350.org insofar as it shows what sort of things the committee that will eventually be formed here is likely to focus on. For instance, no discussion of science and a strong emphasis on law. Knowledge that we derive from this response will help us make our own brief stronger.
We are also calling for a different set of actions from the University of Toronto, which I think will make it easier to establish our case. Specifically:
- Make an immediate statement of principle, expressing its intention to divest its holdings in fossil fuel companies within five years,
- Immediately stop making new investments in the industry,
- Instruct its investment managers to wind down the university’s existing holdings in the fossil fuel industry over five years, and
- Divest from Royal Dutch Shell by the end of 2013.
This seems easier than asking a Canadian university to divest from all financial institutions which invest in fossil fuel companies, which probably includes all those in Canada.
The McGill committee never got to questions of practicality or financial impact on the university, since they rejected the basic claim that fossil fuel companies are doing social harm. If we are able to establish the second point to the satisfaction of the University of Toronto, we will still need to address concerns in the first two areas.
Our brief still requires a lot of work, so if you know anyone in Toronto who would be willing to help, please encourage them to get in touch with us. We could especially benefit from anyone with expertise in law or finance.
McGill reviews petition to stop investments linked to oilsands
MONTREAL — McGill University is considering a request to stop investing in companies involved in Canada’s oilsands operations.
Divest McGill, a group of students and alumni, presented the university’s board of governors with a petition of more than 700 signatures asking the governing body to remove companies that develop, transport, refine or sell oil from the oilsands from the university’s financial holdings. It also asked McGill to no longer invest in financial institutions that invest or loan money to oilsands companies.
Most of the world’s remaining reserves of fossil fuels would have to stay in the ground in order to reduce the amount of greenhouse gases, such as carbon dioxide and methane, that are released into the atmosphere, said economics student Christopher Bangs, a member of Divest McGill.
McGill Professors Battle Over Divestment in Annual Debate
The Economics Students’ Association teamed up with Divest McGill on March 26th to host the annual “Battle of the Profs” in Leacock room 232. The topic of this year’s debate was whether McGill University should divest from its holdings in companies that extract fossil fuels. Holly Dressel, Peter Brown, and Dror Etzion argued in favour of divestment, whilst professors Licun Xue, Jiro Kondo, and Chris Ragan argued against divestment.
In the first round, Professor Brown laid the foundation for divestment by making an ethical argument that a fossil fuel-based economy is “inherently immoral” given its detrimental effects on climate change. “Reliance on fossil fuels will continue to have severe cost ramifications for fertilizer prices, which will only worsen food shortages and global hunger,” Brown asserted.
In his response, Professor Kondo shifted the focus of the debate towards the costs associated with divestment. He argued that removing fossil fuels from an investment portfolio weakens the portfolio’s overall profitability because it removes an important economic sector, thereby damaging diversity. Kondo explained that the advantages of portfolio diversification are most strongly felt in times of economic uncertainty. Thus, he concluded that divesting would be particularly costly in today’s uncertain economic climate.
Malgré la grogne, McGill garde ses investissements
Charles Côté
La Presse
L’Université McGill conservera ses investissements dans le pétrole, le charbon et le gaz, et en particulier ceux dans le secteur controversé des sables bitumineux, en dépit de la demande des trois associations étudiantes de l’institution.